Sunday, January 11, 2009

in the bubble

photo taken by a local college student
I am the last person here that should write about the little economic bubble that we live in here in my city. I expect that it reaches most of Alberta, but because I haven't done the reading and can't quote sources, I'll leave that to someone else.
What I do know is that certain people (farmers, oilfield personnel, realtors, natural gas consultants, retail managers, mutual fund dealers) have been been talking about this since 2006. So many people had predicted the recession that it came as no surprise when shit hit the fan last fall.
This was confirmed at my company's AGM, where the Regional VP congratulated our area for taking a conservative stance on investments as a measure of damage control. There were devastating losses, but at least most of them were 15% lower than elsewhere.
During this entire time, I haven't been as worried as others have been. For one thing, I have no extra money to invest so it's not like I've lost anything. My house isn't worth $320,000 anymore, but one of my neighbours recently sold theirs for $285,000, which is still $115,000 more than I paid for mine.
The cost of fuel has leveled out, and that has helped us leverage our household budget. Consumers are shopping just as often as they were before the crash, and in fact, I have never seen so much traffic in our two malls as I have in this past two months. Clothing and electronics are still just as popular as before, and if we see those prices drop, that's even better. Real estate sales have dropped but they're still building and buying and selling and we expect the market to return to normal as early as 2010.
So while the rest of the world is seeing millions of lay offs, I have to say we're incredibly lucky here. There might have been some companies who have had to lay off about 20% of their workers, but many of them are hiring them back on a contractual basis (to avoid paying the benefits, I'm sure) but that makes it better for me - I will sell them personally owned benefits! Then maybe I can start buying some of these stocks and mutual funds, while they're still low.


  1. Good to hear. I have often thought Alberta would make a dandy State. In fact I often wish Quebec would secede and the US could then annex from Ontario west.

    Never figured out what to do with the Maritmes though. No plan is perfect.

  2. That IS amazing. Like living in a TwilightZonish land where nothing seems to touch it.

  3. Hah. Last summer, for the first time in my life, I was persuaded that I had enough money in my current bank account to transfer some of it to a savings account. Now it looks as if I’ll be paying them interest instead of the other way round…

  4. My area of the state is somewhat enclosed in a bubble, as well. The gas prices affected us most but the economy here is based off of what is going on at the nuclear power plant nearby.

  5. Anonymous - then the bubble would disappear. It's the people that have created it.

    Tuesday - good news for the every day person. I guess it's the ones that actually have money to begin with that were affected the most.

  6. Kingston, Ontario had a drop in unemployement, from 4.6%, to 4.3% unlike the rest of Canada, which saw an overall rise in unemployment. Most of the jobs lost were in Ontario and Alberta. We are sheltered by all the government offices, prisons and the university here, not to mention one of the largest Forces bases in Canada.

  7. Doug - I wonder if most of the Alberta jobs were in Fort Mac and on the rigs that were running up north? I know that Calgary was hit hard, but their industries are so different than the rest of Alberta.

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