Toronto is doing fine

This quote is from Warren Buffett in 1979. The world’s most successful investor sums up the simple reason why 1% of the world controls over 50% of the wealth. It is that 1% that moves boldly when others sit on their hands, worrying about what could go wrong.

Honestly, the constant barrage of negative media attention with regards to real estate and equities has become absurd. Nowadays, there is too much media, an endless void that needs to be filled by vacuous talking heads. It is hard for regular people to gain perspective with the constant media backed threat of bubbles and crashes. I have been at this for 23 years and I have seen 3, perhaps 4, recessions of one kind or another and I can tell you with certainty that never before has there been so much media time devoted to this subject, and it is not due to any fundamentals; it is due to the need to fill air time. They have to talk about something.

The time to buy anything is when people are selling; the time to sell anything is when people are buying. These two simple laws are how one can create great wealth, following them is another thing. The other factor that is vital is time, and patience.

I am amused by the idiotic reporting I’ve seen lately in the local and national newspapers. The Toronto Life magazine recently published a “Bubble Trouble” feature on the cover, and of course BNN has been hammering home misleading facts and statistics about the national and local level real estate markets for months.

The truth sells less ad space and reduces circulation because it is less catastrophic. Does anyone really believe Toronto’s real estate market is due for a large correction? This is the most patently absurd theory I’ve heard in 10 years. Why, after a debilitating, horrific 9 month economic meltdown did our local market bounce back so fast? And why now would it collapse? Those of you sitting on the sidelines are going to miss the boat again, as you have for the last 19 years. I suggest you wait until you get a clear sign that you should buy; however, you may be interrupted in the meantime by death. How sad, putting a hold on one of life’s best experiences; owning a home, to wait for a clear sign from above that now would be the right time to buy.

As for the recent misleading stats and facts, I’ve been witnessing for months now, I will summarize what I believe to be true. Many properties are selling for more than the asking price, most for full price. For July 2010, the average central Toronto sold price to asking price ratio was 98%. It was 98% for August as well. In July, the time to sell was 33 days, and 36 days for August. If you listed your condominium this summer for $250,000, it was very likely that it sold for $245,000 in one month. C’mon people, does that sound like a problem? The volume of MLS sales in July 2010 may be down 34% over July 2009, but this needs to be kept in perspective. July 2009 was the best July on record, beating the previous best July by 11%. If we based all of 2010 on July’s 6564 sales, we would have 78, 768 sales, or the 7th best year on record and August numbers were similar. Of course, that won’t happen because this summer, like virtually every other summer was slower than the spring and it will be slower than the fall. I expect 2010 to finish up with 88,000 sales. Only 2007 will go down as a better year overall.

The new development market is still very busy and will likely stay busy for the foreseeable future as we struggle to find a way to deliver the required 50,000 homes per year to keep up with the real population growth.

Our city is in great shape. Our real estate market is in great shape. The media is filled with journalists trying to put bums in seats. Scary economic news sells. We are through the worst and if anything, expect prices to rise for the next several years in Toronto.

Source: Brad J Lamb | torontocondos.com

And even if starting up a new business when the economy is shrinking does prove to be a baptism of fire, it could strengthen you in the long run. If you survive, think how well you’ll perform when the good times return.

Here are some of the ways you can withstand a recession when you start a new business.

Sell food

Some goods are a necessity, meaning people will buy them in about the same quantities irrespective of whether their income rises or falls. So businesses that sell essential goods or services generally perform as well in lean times as they do in boom time.

The most obvious necessity is food, being, as it is, pretty much fundamental to our survival.

However, there’s a difference between what you need to eat to survive and the amount of food we in the Western world actually eat. People can and do cut back in less bountiful times.

A food retailer might consequently think differently about how to market its goods in a recession. For example, instead of Two-for-One offers consumers might prefer getting a single item for half the price.

People don’t just cut back in terms of volume. While sales of premium ranges could drop, value ranges might conversely fare better.

However, ‘luxury’ foods aren’t always sacrificed on the alter of belt-tightening. Haagen Dazs ice-cream, for example, sold well during the early 1990s recession because although it was luxurious, it was still affordable to the average person.

Sell affordable “luxury” goods

People do not wish to forgo all pleasure during economic downturns. They will cut back on inessential expenditure, but cherish what remains even more as a result.

This means that businesses which offer slimmed down versions of luxury goods can prosper, as Jim Surguy, senior partner at Harvest Consulting explains: “When times are hard people will search for value, so the response should be to make smaller versions of the same things they always buy – drinks in half-sized bottles, or seeds not plants, or holidays lasting five days instead of seven days.”

Instead of cutting back, people can substitute their luxury goods for cheaper versions. For example, someone might buy some Cadbury’s chocolate from the newsagent instead of going to a premium chocolatier such as Hotel Chocolat. Or they might rent a DVD instead of going to the cinema. Or they might substitute a holiday in the States with a holiday in France.

To sate your customers’ wish for luxury goods in lean times, then, you need to sell them more cheaply. This means you should make them more cost-effectively, by sourcing cheaper materials/ingredients or having a more efficient production process. Or you could just accept tighter profit margins.

Start or buy a funeral parlour or healthcare business

Illness and death are implacable even in the face of recession. Therefore anything to do with healthcare – such as manufacturing, delivering supplies or providing services – and funeral parlours are immune to the effects of high interest rates, high inflation, and tumbling house prices.

Start or buy a debt collection business

Not much explanation needed for this one, where the amount of business you get almost certainly goes up in times of hardship.

Start or buy a legal services business

The same goes for family-law solicitors. The industry as a whole is pretty much immune to a recession (neither crime nor litigation abate in a downturn), but family solicitors are, if anything, likely to bring in more business. Recession is stressful, stress causes friction in marriages – divorce rates go up.

Buy a school

It seems strange to think of a school as a business and pupils as customers. But in a sense they are, so long as you’re talking about independent schools.

And if you own a school you can count on plenty of repeat business, even in a tough economic climate.

“Schools keep their customers for up to seven years,” says Peers Carter, co-owner of a school and partner at STC, the School Transfer Company, which specialises in selling education businesses. “Parents make a strong commitment to their children’s education and do not abandon it or change schools lightly. They will, quite rightly, give up luxuries such as holidays or new cars to keep their children in a good school.

“In the last major recession between 1989 and 1996, most independent schools survived and thrived – indeed there were more independent schools after the recession than before it!”

Start or buy a business in home maintenance

If you have a leak in your roof, are without electricity or have a mice infestation then something must be done. And even if people have non-essential maintenance jobs they’re often loathe to delay them until the economy improves, because the problem can, if left, worsen and ultimately become more expensive to fix.

So, if you’re a plumber, electrician, roofer, or are skilled in another area of home maintenance, then you have less to fear from economic uncertainty than most.

Sell goods or services popular with over-50s

Richard Denny, a business-development adviser, explains this one: “In an uncertain economic climate, the one section of the community that is still growing is the over-fifty marketplace. They have equity in their property, they have savings and they earn a bit more as interest rates rise.

“They are continuing to spend on holidays, on hobbies, on sports and keeping fit, on interests, on lifestyle, on health and diet. So anything in those directions is a very big market.”

Buy a franchise

By no means do franchises always thrive in a downturn. Indeed, some are very much susceptible to recession by dint of the nature of the industry they’re in.

However, in general, an established franchise will stand a better chance than most. Many are old enough to have been around during previous downturns, and since they survived them, they’re in a good position to withstand fresh economic turbulence.

When demand across the economy recedes it’s more likely to be small businesses than experienced franchise chains that suffer. Franchises have the time-honed, streamlined systems and processes to ensure that they’re among the majority of businesses that survive a recession.

Sell Your Stuff Online
Kiplinger’s senior editor Jeffrey Kosnett and his wife recently made $200 selling flatware they no longer used through the popular online auction site eBay. You, too, can unload everything from furniture and furnishings to collectibles and clothing on eBay or Craigslist.

Sell your old, unwanted books on Amazon. Kosnett’s wife, Deborah, says the key to selling your wares on the Web is to research similar merchandise that has been sold recently through the site and price competitively.

Be a Shopping Spy
You can get paid up to $20 if you agree to browse a store and provide feedback on customer service, merchandise quality, and other quality-control metrics. Start by visiting the Mystery Shopping Providers Association’s Web site (www.mysteryshop.org) to see a database of jobs with legitimate companies. Sign up with several companies because it can take a while to be contacted. If you like to shop, can pay close attention to detail and can be dispassionate, this could be a good money-making opportunity.

One word of warning: Watch out for scams that require you to pay a fee or wire a cashier’s check.

Operate a Call Center From Your Home
You might consider a job (for up to $14 an hour) with a virtual call center, such as Arise Virtual Solutions (www.willowcsn.com), West Corp. (www.west.com) or Alpine Access (www.alpineaccess.com). As an independent contractor (or, in some cases, an actual employee with benefits), you would provide customer support for companies such as Office Depot, Sears, J.Crew and even the Internal Revenue Service.

In general, you must provide your own computer, designated telephone line and high-speed Internet connection — and, in some cases, pay for your training to become a certified agent. But if you have the time, companies need “operators standing by.”

Tutor Students
Some parents are willing to pay big bucks to see Junior and Janie succeed. So if you speak a second language, such as Spanish or French, or have great math, science or writing skills, you might be able to earn extra cash imparting your knowledge to kids — even college students — for $20 to $30 an hour.

Check with local schools and universities to see if you can advertise your services on their bulletin boards. Or post your services on Craigslist.

Join a Street Team
This is a relatively easy way for young adults who are outgoing and articulate to earn some fast cash. Street teams promote products, films, albums, events and more by handing out samples, interacting with people on the street, or dressing as mascots.

To get a job at $17 to $25 an hour, sign up with a company such as Street Team Promotion.com or A.D.D. Marketing. Actually, if you sign up with several companies, you’re more likely to get a steady flow of jobs, says James Aquafredda, managing director of Street Team Promotion.com. Make sure, though, that the company has a contract that specifies when you’ll get paid.

Walk the Dogs
Why not get a little exercise while you earn anywhere from $15 to $30 an hour? Working folks will pay plenty for you to take Rover or Scruffy on a daily stroll while they’re at the office.

If you don’t want to brave the elements, you might consider pet sitting for people while they’re on vacation. Advertise your services in veterinarians’ offices and on Craigslist.

Be a Babysitter
Just graduated and can’t find a job? Retired and looking for a little extra dough? Like children? From full-time gigs to occasional stints, babysitting can be a fun way to put money in your pocket. In big cities such as New York and Washington, expect to earn up to $20 an hour as a babysitter or nanny. (In small and midsize cities, the going rate is closer to $7 to $10 an hour.)

Advertise your services on Craigslist, the bulletin board at your local house of worship, or by word of mouth.

Write for the Web

Sorry, Kiplinger.com isn’t hiring. But plenty of Web sites are looking for freelancers to write blogs, commentary, and reviews for about $15 to $30 an hour or article. For example, if you know a lot about a particular subject or region, you might be able to be a “guide” and write articles for About.com (http://beaguide.about.com/ ).

In all major U.S. cities, Craigslist has ads for writing gigs. Demand Studios (www.demandstudios.com) offers freelance work for writers, copy editors and filmmakers.

Make Your Hobbies Pay Off
Amateur photographers are in demand to shoot weddings and events, especially in a recession when people are reluctant to hire high-priced pros. If you’re a great cook, you could hold a workshop or prepare meals for a busy family. Tech-savvy? You could teach classes on Web design.

See what your services might fetch by checking out ads on Craigslist or in your local paper or community Web site. Then hang out a virtual shingle.

Sell Your Unwanted Gold Jewelry
Although the price has dropped a bit since the beginning of 2009, the going rate for this precious commodity is still near $900 an ounce. That’s a pretty penny for jewelry you no longer wear or bling that reminds you of a best-forgotten suitor.

Gold-buying shops are popping up at malls across America.

Adjust Your Tax Withholding
This is probably the fastest and easiest way to put more cash in your pocket. If you got a big refund this year, you’re not alone: The average refund so far this year is $2,700. But think about it: You’re letting Uncle Sam hold on to your money for a whole year and paying you 0% interest.

Source: Yahoo.com

1. Cash in those bank rewards travel points
Citibank, Chase and Capital One have been hit hard with the financial crisis, and they’re watering down the value of credit card rewards points as a result. If you have 20,000 or fewer points (or miles) in any of the major credit-cards rewards programs, consider cashing then in before they’re devalued further.

2. Save money on fancy restaurants
Go to Restaurant.com and buy a $25 gift certificate for a fine restaurant near you (or at your destination) for only $10. Hundreds of eateries are willing to sell $25 gift certificates for only $10 because it helps encourage customers to dine at their establishments.

3. Packages can offer the best savings but a new Web site helps verify the quality of any given deal,
To fill rooms and seats, hotels and airlines will resort to rock-bottom prices, but they don’t want to publicize these discounts. So they sell a certain number of rooms or seats to companies that bundle them in packages. How good of a deal are these packages? Dealbase.com trawls the Internet for package deals. Its computers then figure out how much it would cost to book the component parts of the package (such as the hotel room and spa credit) separately, estimating for you how much you will (or won’t) save by booking the package.

4. Use envelopes for easy budgeting during a trip
If you have trouble sticking to your budget or keeping track of numbers, try putting cash into different envelopes marked for each day. Only spend the cash in your envelope. Use your debit card for emergencies only.

5. Try a ‘supermarket souvenir’
Instead of loading up on $20 T-shirts nobody likes, seek out local supermarket staples that may seem exotic back home. Examples include chocolate-covered macadamia nuts from a Safeway in Hawaii or a nicely-packaged box of tea from a Tesco supermarket in Britain. Check out our gallery of inspiring supermarket souvenirs from our staff and our readers.

Source: msnbc.msn.com

On Monday alone, companies across the employment spectrum announced more than 65,000 job cuts in the United States and around the world, a stark sign that businesses are enduring a painful, protracted downturn.

Monday’s toll included 20,000 cuts at Caterpillar, the world’s largest maker of construction and mining machinery; 8,000 jobs at the wireless provider Sprint Nextel; 7,000 workers at Home Depot, and 8,000 from the expected merger of the pharmaceutical makers Pfizer and Wyeth. The beleaguered automaker General Motors announced that it would cut shifts at plants in Michigan and Ohio, where the downturn has hit hardest, eliminating some 2,000 jobs.

And Texas Instruments said after the market closed on Monday that it would cut 3,400 jobs or 12 percent of its work force through 1,800 layoffs and 1,600 buyouts or retirements.

In Europe, the banking and insurance group ING said it would cut 7,000 jobs; the electronics company Philips, 6,000; and the steel maker Corus, 3,500 worldwide.

“We’re now into the danger zone,” said Brian Bethune, chief United States financial economist at IHS Global Insight. “It really becomes pernicious because the uncertainty increases, corporate confidence is badly battered, and you get these severe measures being taken.”

President Obama cited the layoff announcements in remarks Monday morning as he urged action on an $825 billion economic stimulus package of tax cuts, emergency benefits and public spending projects.

“These are not just numbers on a page,” Mr. Obama said. “As with the millions of jobs lost in 2008, these are working men and women whose families have been disrupted and whose dreams have been put on hold. We owe it to each of them and to every single American to act with a sense of urgency and common purpose. We can’t afford distractions and we cannot afford delays.”

The United States economy has dropped some 2.59 million jobs since the recession began in December 2007, and unemployment rose to 7.2 percent last month. Economists worry that the economy could now be losing as many as 600,000 jobs a month, and they said Monday’s layoff announcements served to underline the stricken state of the labor market.

Last week, the government reported that first-time unemployment claims had risen to 589,000 for the week ending Jan. 17, tying a record high set in December.

The latest job cuts — and the additional announcements likely to come in a cascading pattern as job losses through the economy cause demand to shrink further and thus lead to more layoffs mean more pain for states, as unemployment insurance claims rise and deplete state coffers.

The Obama administration has proposed setting aside $43 billion to help blunt the problem and provide for new recipients of unemployment insurance and existing ones. That money is intended to raise the weekly benefits, to extend how long people can collect those payments and to cover more types of workers, like part-timers. It is largely based upon an estimate that the unemployment rate will peak at 8.3 percent in 2010. But if unemployment reaches the double-digits, as some economists expect, the funding will almost certainly not be enough, economists say.

“The economy is deteriorating at a faster clip than even the most dreary forecasts had expected,” said the economist Joseph Brusuelas. “At the current trend, $43 billion will not be sufficient, should we breach 9 percent unemployment and maybe reach into the double digits.”

Monday’s announcements only added to a grim parade of job cuts from Wall Street to wireless providers to computer companies to retail stores.

Last week, Microsoft announced it would cut 5,000 jobs over the next year and a half; Sony in Japan and Ericcson in Sweden each announced 5,000 layoffs; and the motorcycle maker Harley-Davidson said it was eliminating 1,000 jobs. Carmakers in Japan, South Korea and Europe have also cut jobs in recent months as did the cellphone maker Nokia.

“It steepens the whole downturn,” said Harry Holzer, a labor economist at Georgetown University and the Urban Institute. “The magnitude of these layoffs indicates that the downturn in the labor markets seems to be accelerating.”

“This is a big deal,” said Dean Baker, a director of the Center for Economic and Policy Research. “We’re losing jobs at an incredibly rapid rate, and even with that, I’m worried they’re accelerating. We’re seeing a much more rapid rate of layoff announcements.”

Caterpillar, which has been hurt by falling orders for construction and mining machinery, said Monday morning that it would cull 20,000 workers through layoffs and buyouts. It said it would make “sharp declines” in overtime and eliminate scores of temporary and contract jobs.

The company said 2009 would be one of its weakest years since World War II.

“These are very uncertain times,” the chief executive, James W. Owens, said in a statement. “While it’s painful for our employees and suppliers, it’s absolutely necessary given economic circumstances. We expect to have most of the actions needed to lower employment and cost levels in place by the end of the first quarter.”

“We were whipsawed in the fourth quarter as key industries were hit by a rapidly deteriorating global economy and plunging commodity prices,” Mr. Owens said.

The wireless provider, Sprint Nextel, said its 8,000 job cuts were part of a plan to trim labor costs by $1.2 billion, and said most of the cuts would be completed by March 31. About 850 of the job cuts are expected to come through buyouts, which will cost the company $300 million in severance costs and related expenses.

“Labor reductions are always the most difficult action to take, but many companies are finding it necessary in this environment,” Sprint’s chief executive, Daniel R. Hesse, said.

Home Depot, the country’s largest home-supply chain, said it would cut 7,000 jobs, about 2 percent of its work force, and would close its higher-end Expo Design Center business, which includes 34 stores.

Carol B. Tomé, Home Depot’s chief financial officer, said in a telephone interview that the company began exploring ways to save its Expo business months ago, but “as we kept looking at alternatives the business kept getting softer and softer.”

With no sign of consumers cracking open their wallets anytime soon, executives simply realized, “we can’t fix it.”

Souce: Nytimes.com