B.C. folks brace for economic slowdown
Stock markets in Canada and around the world took another alarming dive Monday, with economists warning that the U.S.-led financial crisis will hit Canada hard. Economists advise Canadians to sit tight with their money. “Don't worry about investing in the market, keep your RRSP and, above all, lighten up the monkey on your back â€" pay down your mortgage and high-interest loans like credit ...
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Stock markets in Canada and around the world took another alarming dive yesterday, with economists warning that the U.S.-led financial crisis will hit Canada hard. Bay Street's benchmark S&P/TSX composite index, which fell by more than 1,000 points during the day - a record - eventually closed down 572 points at a three-year low of 10,230, following the worst week in eight years on the TSX. Wall Street's blue-chip Dow Jones Industrial Average ended the day down 370 points. View Larger ImageHow are families coping with the current economic uncertainty? Province reporter Suzanne Fournier talked with some experts as well as moms and dads to find out what they will do to cope. Pictured is Mary Macintyre with Tai Ly, 3, at the Eastside Family Place in East Vancouver.Jason Payne - The Province
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"It's like a big traffic accident on a major highway, but ambulances can't get in so no one can determine the extent of injuries or even find out how many are injured and who they are," said David Hobden, economist for Central 1 Credit Union, the financial facility for 48 B.C. credit unions and more than 100 in Ontario. Hobden said lending practices are tightening up and "it's getting more and more expensive for anyone to borrow money." The $700-billion U.S. government bailout of its financial system has failed to reassure investors in other countries, he said. Most economists agreed that, although Canada has sounder lending practices and is in better shape than the U.S., Canada will be dragged into the global slowdown. Scotiabank economists yesterday forecast "recessions in both countries." Swiss-based UBS AG investment bank agreed, predicting that "the Canadian economy, which has been only barely above water for nearly a year, [will] not escape the global undertow and is now expected to post an official recession." Economists agree that anyone with a manageable mortgage, RRSPs, some emergency savings and a pension plan should just sit tight. "Don't worry about investing in the market, keep your RRSP and, above all, lighten up the monkey on your back - pay down your mortgage and high-interest loans like credit cards," said Adrian Mastracci of KCM Wealth Management Inc. Mastracci noted the job market is still sound for most people, key to surviving any recession. At Eastside Family Place yesterday, many parents regarded the worsening economic weather with alarm. "Poverty is a huge issue and this economic crisis is going to be even more devastating - 80 per cent of our families are headed by single parents already reeling from the cutbacks to social assistance that force mothers to work, even though they can't afford decent child care," said executive director Mary Johnston. Mary Macintyre, a cafe owner and mother of two small sons, noted she is facing higher costs for basics such as coffee, sugar and flour while her customers "might be cutting back on cafe visits with the economy getting worse." Macintyre and her husband, Phi Ly, bought their eastside single-family home "before the boom and we had a large down payment, so I'm not as worried about our home as I am about our business." Said Joe Fronzo, playing with 18-month-old son Giancarlo at Family Place: "You see these big banks admitting they invested in bad loans but their top guys are still raking in the millions, while those of us who just want to invest a bit and have a good family life pay the price." Fronzo said he owns his own eastside home as w