Finance Minister Flaherty decides to take $25 billion in mortgages off banks’ books to loose credit. He claims that this will enable banks to drop their prime lending rates, as they only passed along a 1/4% drop to their consumers when the Bank of Canada cut the prime lending rate by a lot more. Maybe they will, but I’ll believe it when I see the announcement. The banks are more concerned with their bottom line then they are with consumers at the moment.
The other economic news the Conservatives are trying to play up is the fact that 107 000 new jobs were created last month, but unfortunately, that’s a bit of old news, given most of this occurred before the current market crisis, and the fact the jobs are mostly part-time:
…almost all of this increase was in part-time work, representing 97,000 positions. “That’s not what you want to see in job creation,” Taruc said. “What you want to see is more full-time jobs because there are more people gainfully employed.”..Despite the increase, the unemployment rate was unchanged at 6.1 per cent, as there were 113,700 more Canadians actively looking for work in the month.
Unfortunately, the TSX hasn’t been impressed with this move or the job figures: The TSX as of this posting is down another 457 points as of this blogpost - a 4.8% drop.
“Buying opportunities” for Canadians are growing better and better, eh Harper? This is the reason the Conservatives jumped on the language difficulties of Mr Dion last night. They’re looking for any bit of distraction to the media and to the voter over the real issues they don’t want to face flack over - the economy and their so far “don’t worry, be happy” approach to it being the main issue.
UPDATE @ 12:42 pm - Dion responds to the mortgages announcement:
“After months of saying no action was required and his approach was sufficient, it appears, four days before Election Day, Stephen Harper has now had a change of heart,” said Mr. Dion. “It is no surprise that many Canadians will believe that the Conservatives are playing partisan politics with their mortgages and savings in the dying days of a federal election.” “After saying my concrete proposals for action were wrong, it appears Stephen Harper has finally woken up to the fact that a Prime Minister should and must take action to help Canadians instead of lecturing them on buying opportunities available in a collapsing market,” added Mr. Dion.
UPDATE 2 @ 2:24 pm: Ugh. The TSX plunged through the 9000 points barrier, but has rallied a bit since. Still down 587 points on the day.
If you want to pick certain portions from a script, here’s a portion from the above quote that you “conveniently” forgot.
“We’ve been so used to seeing the manufacturing jobs disappear and there in one month almost 20,000 manufacturing jobs created. That is an extremely encouraging sign and with the Canadian dollar slipping the way it has been below 89 cents; this is good news,” Kane said.
Also, the International Monetary Fund just yesterday declared that Canada would out perform every G7 country next year.
Mr. Dion’s “the sky is falling” approach is so out of touch, I can’t believe Canadians are going to fall for it. But, lets wait until Tuesday, shall we?