Popularity of websites, online shopping make victims easy prey

Joey Thompson
Province

Alexandra Straub’s short, daffodil-blond hair, fair skin, fine features and staunch German surname are hardly the characteristics of an aboriginal.

Yet in the space of three days, a woman described as heavy-set with a native status card had wheedled six reputable retailers into opening accounts under Straub’s name.

Ben Moss Jewellers, Linens-N-Things, Bell Mobility, Rogers Wireless, Home Depot and Wal-Mart handily extended the credit to the impersonator on the strength of an outdated address, Straub’s social insurance number and a fake, laminated status-Indian card.

“I thought it could never happen to me,” the chic 26-year-old victim of identity fraud said during a work break, having struggled for four months to remove the stain on her good name and credit rating.

“I’m still not sure how this girl got hold of my information. I’m also baffled as to why anyone would give credit to someone with a laminated photo ID. Are they that desperate for business?”

PhoneBusters, Canada’s sole clearing house for telemarketing and identity-theft complaints, says the criminal activity is “growing explosively,” due in part to the thousands of websites requiring registration, a profile or sign-in, as well as the proliferation of online shopping and social networking websites that angle for personal details.

Straub, export co-ordinator for a Vancouver shipping firm, recalls a trendy cafe where she worked years ago telling employees that a bundle of their T4 slips had gone missing in transit. She figures they may have fallen into the wrong hands.

Indeed, restaurants, bars and gas stations are ripe for rip-offs — anti-crime experts advise patrons to swipe their own credit card to prevent a shady clerk from accessing the information or swiping twice.

They also advise customers not to give out personal information by phone, electronic mail or voice machines and to carry as few ID documents around as possible.

Also, protect access to mail and check the accuracy of billing statements, even small purchases. And take Straub’s advice: burn or shred unwanted personal financial data.

A call from Home Depot’s fraud department confirming her new account was the first sign. Then Ben Moss checked to see if she was happy with her new $1,700 purchase.

By the time Straub put the phone down, she was on the hook for more than $3,500 in goods, including four BlackBerry Pearl smartphones.

She filed a report with Vancouver’s fraud squad, Richmond police and Surrey RCMP but theft under $10,000 is small potatoes to these bustling crime-cracking detachments. As far as she knows, no one followed up on her complaint.

But the real surprise was having to repeatedly protest her innocence to lenders and the credit bureaus, which say it could be years before her credit reputation is totally clear.

“It’s a huge pain: I was the one who had to clear my name when they were the ones screwing up.”

According to the U.S. federal trade commission, a victim can spend up to 600 hours and shell out more than $1,000 in long distance calls, notary fees, mail-outs and lost wages to repair the rating damage.

She’s since bought a shredder and has stopped applying for any points cards, or entering draws or promotions that ask for personal details.

© The Vancouver Province 2008

Gerry Bellett
Sun

The Better Business Bureau has issued a warning about phoney e-mails and blog posts that target consumers and businesses, asking them to register for software using the BBB’s name.

BBB president and CEO Lynda Pasacreta said the messages and posts are part of a “large-scale ‘phishing‘ scam leveraging the trusted nature of the BBB name to entice recipients and bloggers to open messages and access attachments or links.” She said anyone receiving such e-mails or reading blogs requiring an update of contact information and the registration of software with the BBB shouldn’t click on any part of the link or respond to the message, as it would likely allow viruses or spyware to enter their computer.

“The attack has not affected BBB computer systems or networks nor has any data been compromised,” Pasacreta said in a news release.

She said anyone receiving such messages should not open them but forward them to [email protected]. They will be transmitted to the U.S. Secret Service electronic crimes task force, which is investigating the matter.

She said the public can go to the BBB security page at www.bbb.org/securityalerts for updates on the phishing attack. People can also call the BBB at 604-682-2711 for information if they are unsure about any purported BBB e-mails or e-mail [email protected]

© The Vancouver Sun 2008

 

White sand, impossibly blue skies and hot weather: it’s all a tourist could want

Janet Vlieg
Sun

LOS CABOS, Mexico – Who would have thought the highlight of a trip to Mexico would be a kiss from a dolphin?

Good holidays are laced with surprises and a friendly dolphin headed the list of memorable encounters during a recent week in Los Cabos on the Baja California peninsula.

Dolphins were not among my great expectations for this trip. Mexico’s hot sun and wide beaches have lured my family south on several winter vacations, so I booked this trip anticipating a poolside lounger, a good book and more than one frosty drink.

White sand, impossibly blue waters, sunshine, 30 C-plus temperatures — Canadians know what they want when they seek out a winter vacation hot spot. A non-stop flight, an all-inclusive package, and relief from bulky parkas and icy streets.

Los Cabos (Spanish for “the cape”) stretches from San Jose del Cabo in the east to Cabo San Lucas on the western tip of Baja California, where the Sea of Cortez meets the Pacific Ocean. Along a busy four-lane highway connecting the two towns is the Tourist Corridor, a 32-kilometre string of five-star resorts, luxury hotels, exclusive villas and upscale condo projects.

Cabo San Lucas after dark is the place to be for clubs, live music, dancing and bars, whose drink deals fuel the kind of fun that spills out into the streets. With names like Cabo Wabo, Margaritaville, the Giggling Marlin and El Squid Roe, bars around the marina pack in the partiers every night until the wee hours.

These high-energy pockets of night life near the Cabo San Lucas marina are well separated from the luxury enclaves that attract the more discriminating tourist.

If you prefer to wander through art galleries and artisans’ shops after a leisurely dinner, then San Jose del Cabo is your kind of town. It offers a quieter immersion in the culture of Mexico‘s Baja, with graceful avenues of old colonial architecture.

San Jose also boasts one of the Baja’s finest authentic Mexican restaurants, Casianos. Food and service is as expertly presented as any top Canadian restaurant, enhanced by the warmth of the wait staff. With infinite patience and passable English, they respond confidently to questions about the menu and the wine list.

Families with younger children considering a Los Cabos vacation for the first time may want to stay at an all-inclusive resort, avoiding restaurants away from their hotel. A package vacation provides families a week of pampering for the parents with enough activity to keep the kids happy. Keeping it simple — and safe.

That’s my thought as I check into the all-inclusive Dreams Los Cabos Suites Golf Resort and Spa. As advertised, it is located “on the ocean” midway between Cabo San Lucas and San Jose del Cabo. And it more than lives up to every superlative in the vacation brochure.

What’s the first thing a tourist does in a place like this? Throw on a bathing suit and head down to the ocean. Waves are crashing on shore, huge and magnificent, the only sound on an almost deserted white beach.

Entry into the ocean is prohibited. The currents off the Pacific Ocean and the Sea of Cortez are too dangerous for any level of swimmer. To reach the swimmable beaches along the Sea of Cortez, you need to take a cab or shuttle from your hotel.

A water taxi from the Cabo San Lucas marina will take you to the famous Lovers Beach near the iconic El Arco on Land’s End, a much-photographed arch-like rock formation in the Sea of Cortez.

Checking out several beaches, I discover the term “swimmable” is questionable even at the most popular beach, Playa Medano in Cabo San Lucas. The foaming waves are the kind that kick-start the adrenalin in buff teen boys and girls smart enough to wear shorts over their bikini bottoms.

In lieu of access to the ocean waves, resorts offer elaborate pool facilities, water slides, spas, whirlpools and expansive infinity pools whose ambience and design make you feel you’re adrift in a tropical sea — without the danger, of course. You get the idea: you’re so busy getting wet you forget all about wanting to stick your toes in the ocean.

With thousands of tourists, time-share owners and day-trippers pouring in from almost 500 cruise ships a year, Los Cabos is a playground for North American visitors, particularly Americans from California, Texas and southwestern states.

“The actual population of this area is really only a few thousand Mexicans who are from here,” explains Paulo, a tour guide. “The rest of the people are all visitors or temporary workers.”

Higher wages in Los Cabos, compared to other Mexican tourist centres attract the best students turned out by Mexico‘s universities, as well as some from countries such as the United States, Canada, Australia and New Zealand.

Locals speak proudly of the American celebrities who have spent time in their region, such as Madonna and Brad Pitt, about the tycoons who have bought property there, like Donald Trump, and about the movies that have been shot there in recent years, like Troy and The Heartbreak Kid.

None of that impresses a deflated Canadian who wants to experience the ocean. And that’s where the kissing dolphin comes to the rescue.

In a large, deep pool under a brilliant blue sky, dolphins and their trainers welcome small groups of visitors into the salt water at Cabo Adventures, located on the marina in Cabo San Lucas. Smiles break out all around as we learn hand signals to communicate with these lovable creatures. As friendly as the family dog, the dolphins engage the visitors in little games and allow us to hitch rides around the pool.

Moral of this story: when you can’t swim in the ocean, let a dolphin kiss your cheek.

IF YOU GO

– BEST BET FOR SIGHTSEEING: A four-hour desert safari explores the authentic Baja away from the tourist bubble on the beach; www.caboadventures.com

– BEST BET FOR COUPLES: A romantic stay at an ultra-private resort like One and Only Palmilla or Las Ventanas al Paraiso — both world class in luxury; adults-only pools and patios.

www.oneandonlyresorts.com or www.lasventanas.com

– BEST BET FOR FAMILIES: Dreams Los Cabos Suites, an all-inclusive resort on the Corridor, with spacious suites and organized activities.

– BEST BET FOR SINGLES: Pueblo Bonito Rose, right on lively Medano Beach and within walking distance of the Cabo San Lucas marina, the hub of nightlife action.

– BEST BET FOR REGIONAL CUISINE: Casianos restaurant in San Jose del Cabo (www.casianos.com).

A visit to Mexico offers a chance to try outstanding wines that are not exported to Canada.

Look for names like Monte Xanic or L.A Cetto, vineyards from the Valle de Guadalupe in the northern Baja.

– BEST BET FOR REGIONAL INDULGENCES: Plaza Mijares in the centre of San Jose del Cabo offers the best shopping for high-quality folk art and Mexican silver.

ENTER TO WIN FREE TRAVEL

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To win, find the Fly Free game board in the paper each Friday, from Sept. 12 to Oct. 17. Then, collect six game pieces from inside the paper every other day of the week. Stick those game pieces on the game board and submit your entries.

Go to www.vancouversun.com/flyfree for more information and for details on winning extra daily and weekly travel prizes.

© The Vancouver Sun 2008

 

Rosemary McCracken
Sun

In April 2008, Ed Doucet was biking down a mountain in Majorca, Spain, at 50 km/h when a tire became caught in a rut in the road. He flipped over the handlebars, landing on his pelvis. The damage: three pelvic fractures and four cracked ribs.

Doucet, 33, found out first-hand that when a medical emergency arises outside Canada, travel insurance is a traveller’s best friend

In fact, travel insurance is the most important item to pack on any foray outside Canada, even a day trip across the border. If you find yourself in a hospital in the U.S. or abroad without medical coverage, the bill could take a huge chunk out of your savings.

In Doucet’s case, five days in hospital in Majorca came to $6,300.62. His stay had to be extended until his condition stabilized, which meant purchasing a first-class airline ticket home. Add in the cost of ambulance transportation from the hospital to Majorca‘s airport, ambulance in London from Gatwick Airport to Heathrow Airport, and another ambulance ride from Toronto to Brantford, Ont., where Doucet lives and his return trip came to $11,264. His insurer, RBC Insurance, sent a Toronto nurse to Majorca to accompany him home — for another $5,162.88. The total bill rang in at $22,727.50.

“And I paid $63 for 11 days’ coverage,” says Doucet. “It was probably the best $63 I’ll ever spend.”

Many Canadians are not aware of the gap between what medical services cost abroad and what their provincial health plans allow towards these bills. The provinces partly cover hospital stays outside Canada, but some pay nothing toward specialists’ fees, prescription drugs, X-rays or anesthesia. The province of Ontario paid $974.20 towards Doucet’s medical bill, a faction of what his hospital stay cost.

“Our surveys show only about 60 per cent of Canadian travellers buy travel insurance,” says Moscou Cote, vice-chairman of the Association of Canadian Travel Agencies in Montreal. “We assume they are covered through their credit cards or their employee benefits. But we really don’t know.”

Travellers may assume they have more coverage through their credit cards and work benefits than they really do. Length of stay outside Canada is a common limitation; if you’re away longer than the limit, you won’t be covered.

They may also set family limits, adds Stan Seggie, president and CEO of RBC Insurance’s travel division in Toronto.

“If there’s a $3,000 family limit for trip cancellation or interruption coverage, it may not be enough for four or five airfares home,” he says.

Before you fly out, find out exactly what your credit card or your employer’s group plan covers. If necessary, top it up with travel insurance.

Travel insurance typically covers you in three areas:

– Trip cancellation or interruption

If your health, a death in the family or problems at home such as a fire or flood prevent you from going on a trip after you’ve paid for it, this coverage will help you recover this cost.

“It will also pay for your trip home if there is a natural disaster such as a hurricane at your travel destination,” says Robin Ingle, president of Ingle Insurance, a Toronto-based managing general agency, which acts as a bridge between insurance advisers and the company that underwrites the policy.

– Baggage

This protects you against the cost of lost, stolen or damaged luggage.

– Health

This will pick up the medical bills incurred outside Canada that are not covered under your provincial health plan. Make sure the policy covers air ambulance for your return to Canada as it may be weeks until you are able to travel on a commercial airliner.

The cost of medical travel coverage varies widely, depending on the benefits, your medical condition and your age. But don’t choose a policy just because it’s cheap. You may save a few hundred dollars but end up spending thousands on extras not covered.

Some plans won’t cover certain medical conditions or people over the age of 80.

And don’t assume that youth is a protection against illness or injury.

“These are the people who are doing lots of sports, so they may be the most at risk,” says Cote.

Many plans require you to complete a medical questionnaire. You’ll need to disclose your medical condition fully and accurately. An incomplete or inaccurate application would give the insurer the right to turn down your claim.

And find out exactly what an insurer means by ‘stable medical condition,’ Ingle advises. “At one company, it may mean you haven’t been diagnosed treated, hospitalized or changed medication for certain conditions for the previous 90 to 180 days. At another, it may mean you haven’t been taking medication for these conditions for the previous 90 to 180 days.”

With your policy, you’ll be given the telephone numbers of emergency call centres in various parts of the world. Call the number as soon as illness or an accident occurs and you’ll be directed to a medical facility that specializes in the treatment you need.

“We also provide translation services,” Seggie says. “And we’ll guide you to the nearest Canadian embassy if your travel documents are lost or stolen.”

Doucet says he appreciated the arrangements the insurance company made as much as the expenses he was saved. “The ambulances, the wheelchairs — I didn’t have to worry about any of that,” he says.

And, if the unthinkable should happen, call the emergency number for assistance.

“Repatriation of remains” is a standard inclusion in most travel policies, but you’ll want to make sure it’s covered. If you or your travelling companion should die while travelling, the staff at the insurer’s emergency call centre will set everything in motion to assist the survivor. Without this coverage, he or she would have to find a local coroner to issue a death certificate, a local funeral home and a funeral home in Canada so that the two businesses can complete the necessary paperwork and arrange transportation.

© The Vancouver Sun 2008

Keith Woolhouse
Sun

For years, we’ve been led to believe that economies couldn’t crash and stock markets couldn’t plunge, because our political and financial leaders had plentiful fail-safe options they could use to circumnavigate the economy around and through depressions, recessions, contractions, inflation and what have you. Tweaking interest rates is the preferred choice to stimulate the economy or ward off inflation to keep everything ticking over.

Once again, we’ve been led up the garden path. While the powers that be have the instruments to deal with economic downturns, it’s usually not until the meltdown has taken hold that they act decisively. Then, it’s like trying to extinguish a forest fire — as fast as they put it out in one area, it flares up in another.

Forest fires, by the way, are contained by creating a firebreak, a gap in vegetation, and letting the fire consume everything up to that point. That’s similar to what’s occurring with the measures being put in place to contain the financial damage from this economic firestorm.

There’s another similarity between wildfires and the economy. Wildfires are an integral part of nature’s ecosystem, helping some plants evolve while promoting germination in others, so what we’re witnessing now is a man-made disaster imitating nature. Eventually the ravaged markets will flourish again.

The reality is that the financial meltdown that has raced through world stock markets is part of a natural economic cycle. Anyone who insists it caught them by surprise clearly hasn’t been paying attention to the headlines. The warnings have been obvious for months, sparked by the subprime mortgage mess and followed by a collapse in the housing market (not just in the U.S., but also in Europe), falling corporate profits, excessive price-earnings multiples, stock markets that continuously reached for new highs, rising unemployment, a decline in consumer spending and a commodity price bubble.

But that’s in the past. The burning question demanding an answer is: When will the economic wildfire be snuffed out?

Federal Reserve chairman Ben Bernanke predicts the global financial markets crisis is likely to restrain the economy well into next year, at least six months longer than most economists had forecast at the outset.

Last Wednesday’s extraordinary move by the central banks of Canada, the U.S., Britain, the EU, Sweden and Switzerland to cut their key lending rates by half a percentage point had been widely anticipated.

Hong Kong dropped 100 basis points. China‘s central bank trimmed its key rate by 27 basis points. Last Tuesday, Australia had cut its rate by 100 basis points, double the expected amount. Only Japan among the world’s leading economic nations failed to act. But with an interest rate at 0.5 per cent, it has little wriggle room.

Financial market leaders and economists had been urging for days for action on the interest-rate front as essential to get the world economy back on track.

While lowering interest rates too far, too fast can fuel inflation, given the ongoing brutal economic free fall, it appears to be the prime mode of attack.

With markets trading at levels not seen since 2003, and the S&P/TSX and the Dow Jones average below 10,000 points and the S&P 500 below 1,000 points, there is no telling where the end lies. The most positive prediction: around mid-2009, followed by an agonizingly slow recovery.

At times like this, most analysts agree: Don’t panic; stay the course; you don’t lose until you’ve sold; consider dollar-cost averaging; timing this market is hopeless. It needs cash and courage to step into the markets now.

© The Vancouver Sun 2008

 

Whitecaps win sets off sellout crowd

Ian Austin
Province

We are the champions of the (USL soccer) world.

The Vancouver Whitecaps sent a sellout Swangard Stadium crowd home deliriously happy last night, delivering the hard-fought championship of the United Soccer League First Division.

Charles Gbeke (pronounced Bee-kay) was the hero of the night, scoring the only two goals the team needed to down the Puerto Rico Islanders 2-1.

“It’s pretty awesome,” said fan Warren Calderone, whose entire family came decked out in blue Whitecaps-coloured wigs. “It was close, but we took over in the last 15 minutes. There were a few tears there at the end.”

The crowd witnessed a see-saw battle as the home team went ahead 1-0, then watched the Islanders tie the game.

But Gbeke sent the crowd into a frenzy with a brilliant header in the 78th minute to seal the deal, with an assist to the exquisitely named Justin Moose.

The final whistle saw the entire crowd on its feet, waving flags, chanting and racing on to the field.

Gbeke and the other players ran joyfully to the south end of the stadium, where they danced alongside fans setting off fireworks, throwing confetti and singing at the top of their lungs.

The scene was a riot of blue as the pandemonium unfolded under a full moon on a cool, crisp night that had the Puerto Rican substitutes jogging all game on the sidelines to keep warm.

“This is fantastic, “ said Ferenc Haranghy, a Port Coquitlam contractor, joining the jubilant mob at midfield.

“This represents the future of the franchise. From this, I think we’re going to start the momentum for a Major League Soccer franchise.”

The game was a non-stop cacophony of sound as the Puerto Rican fans with their drums and cowbells competed with the Whitecap fans chanting “Go, Caps, Go” and “White-Caps,” led by the Whitecaps’ mascot, Winger.

“I’ve been waiting for this for years,” said Pedram Shakibafal of North Vancouver, waving a team flag. “This shows the Whitecaps are the best.”

Hundreds of fans lingered at the stadium long after the win, soaking up the atmosphere, chanting and singing the many Whitecap-fan songs in unison.

And game-MVP Gbeke, 30, was in the middle, hugging and dancing with them.

“The fans are great,” said Gbeke, who was traded from his hometown Montreal Impact this season.

“It was a great moment. We’re a family. We help each other out.”

But Gbeke didn’t want to be singled out for his two-goal effort.

“I just want to dedicate the MVP award to my team,” said the striker. “We did it together.”

The Whitecaps will move to B.C. Place in 2011 and want to join Major League Soccer.

© The Vancouver Province 2008

 

As traditional sources begin to dry up, borrowers look elsewhere for help

Jane Bryant Quinn
Sun

Social lending, person-to-person, is getting more attention as other sources of small loans dry up. Borrowers are looking for angels willing to make small business and personal loans. Angels gamble that they can find dependable people, make some money and have some fun.

The two sides are meeting on websites such as Prosper.com and Lendingclub.com. What tempts the angels is that you don’t have to lend very much — maybe $50 or $100 at a time. Fifty dollars to 100 people is a $5,000 diversified bet. Prosper.com says that, after fees and defaults, a low-risk portfolio might earn 5.9 per cent, and a high-risk portfolio, 11.3 per cent.

Zopa.com takes a different approach. Your investment lowers a chosen borrower’s monthly payment. There’s an eBay sort of fascination to scrolling through the pleas at these sites. People post their pictures and stories, and extend their begging bowls. Zopa.com adds videos and blogs. You can lend to Rocketman, who financed an Atlas-E missile silo for his private rocket company and is looking for help with the monthly payments (not many takers). Or to Mistman23, who needs $1,000 to take his family to the amusement park, Six Flags Over Texas (he got his money).

And how about the cute couple that wants $12,000 for their wedding? “You get a lot of cash gifts for the wedding,” they write. They say they’ve got 386 people on their guest list and figure that will bring in enough to repay the loan. Most of the requests are for debt consolidation, from borrowers suffering under the lash of high interest rates on credit cards. They’re not all deadbeats, as you might think. Many have above-average credit scores. Still, they don’t have the money to retire their loans and you can’t count on their smiles to tell you whether they will repay.

Angels typically offer lower rates than the credit-card issuers charge. That’s a win for the borrowers and for the angels, too, if enough of their loans succeed. There aren’t a lot of places where you can earn that much money on a modest investment. When Prosper.com opened its doors 21/2 years ago, most of the borrowers who flocked to the site had no other options. “A pole dancer needing money to buy a pole,” one bemused lender told me. Defaults were higher than predicted.

Last year, more mainstream borrowers started showing up. “Creditworthy people are being cut off from traditional sources such as home-equity loans,” says Chris Larsen, Prosper.com’s co- founder and chief executive officer. That’s an opening for direct loans, although the weakening economy raises the default risk for mainstream borrowers, too.

The sites approach matchmaking in different ways.

At Prosper.com, borrowers post the loan they want, the maximum interest rate they are willing to pay and, in most cases, their monthly income and expenses. Lenders bid on the loan, offering lower rates. The winning bids — often, more than 100 of them, in $50 and $100 pieces — are bundled into a three-year loan at a single average rate. Prosper.com checks identity and provides a credit rating based on credit histories and credit scores. Lenders generally have to gamble that borrowers told the truth about their incomes and expenses. You can also ask Prosper.com to bid for you, automatically, on loans of a type you specify.

Prosper.com publishes its loan-performance data. If a friend of the borrower contributes, the chance of a default drops by 35 percent, Larsen says.

Lendingclub.com specializes in loans within affinity groups such as alumni associations and Facebook friends. You can bet on individuals or buy into a portfolio of loans. Lendingclub.com sets the interest rates, based on its assessment of the borrower’s credit quality. Both companies put delinquent loans out for collection. You can’t dun the borrowers yourself. Lending-club.com has a third-party servicer that would administer the loans if it went out of business.

Zopa.com has a hippie feel, with colorful headlines and happy comments such as “Zopa rocks!” Borrowers get loans from participating credit unions and ask for help in reducing their monthly payments. Investors buy credit-union certificates of deposit at rates slightly higher than the average they would get at banks. They divert some of the interest they earn to borrowers whose stories they like. Your money is safe at Zopa.com, but you’re not earning much or helping borrowers much, either.

You can give away as little as a penny a month.Two new sites for students needing help with college costs look iffier, from a third-party lending point of view.

Fynanz.com bestows ratings on its student borrowers, with the best rates going to seniors and full-time students.

You don’t get credit reports, but there may be co-signers, which helps. At Greennote.com, the students don’t even have co-signers.

Jane Bryant Quinn, a personal finance writer and author of Smart and Simple Financial Strategies for Busy People. She is a Bloomberg News columnist.

© The Vancouver Sun 2008

Sun

The British government is considering a $24-billion plan to monitor the e-mail, telephone and Internet browsing records of every person in the country. It would involve the creation of a mammoth database to store hundreds of billions of pieces of communications traffic and its supporters say it would become one of the security services’ most comprehensive tools in the fight against terrorism. Britain‘s internal security service MI5 has to apply for warrants to intercept specific e-mail and website traffic, but under the new plan, networks could be monitored live by the government listening post. Security officials claimed that live monitoring was necessary to pick up terrorist plots.

© The Vancouver Sun 2008

 

David Friend
Other

TORONTO – Economists from Canada‘s Big Five banks expect little or no growth in the near future, warning Monday that the domestic economy’s current gloom will deepen into something worse than a recession.

The word “recession” wouldn’t describe the deep structural problems affecting everything from the U.S. housing sector to the Canadian oil industry, said Bank of Nova Scotia chief economist Warren Jestin.

“You have to invent a new word to describe what we’re in now,” he said after the banks presented their perspectives at the Economic Club.

“It’s being driven through the financial markets into the real economy. All of those things suggest that it’s entirely different than what you might expect from a typical recession.”

In their most recent economics forecast, Scotiabank economists predict recessions for both the U.S. and Canada, economic slides that will require central bankers in both countries to cut interest rates by at least a full percentage point.

All agree that a slide in commodity prices bodes ill for the Canadian economy, which is heavily dependent on the production and export of oil and gas, metals and minerals.

Drops in oil and metals prices have hit the already teetering Toronto Stock Exchange hard. On Monday it took an agonizing 1,200-point fall before recovering somewhat to sit around 700 points in the red as oil dropped to trade around the US$90 mark.

And Bank of Montreal economist Doug Porter said prices will continue to take a beating over the next year, dragging Western Canada‘s formerly booming economy in particular down with them.

“You’re going to be seeing Western Canada come back down to the rest of us with a thud, especially if commodity prices keep doing what they’ve done in the last three months,” he said.

“It’s almost as if the markets are pricing in a much harder landing for commodity prices. I think that’s reasonable if you don’t get some thawing in the credit markets relatively soon.”

Porter said the direction of Canada‘s economy depends on whether the financial-sector troubles in the United States start to settle down.

“At this point, if this kind of volatility keeps up, I think we’re looking at a much more serious downturn than the mild recession that most of us are talking about,” he said.

“Over the next month, that’s what bears watching.”

The cautious outlook was echoed by Don Drummond of TD Bank, who said the Canadian economy won’t see any growth until late 2009.

Drummond told the Economic Club audience that even at that point there will be only a gradual recovery.

“I think the credit system is going to be mucked up for quite some time, even if it improves somewhat,” he said.

Jestin remained on the more optimistic side of the loonie’s direction, predicting that it will hold above the 90-cent threshold as it weathers the financial downturn.

“I still think the fundamentals on the Canadian currency – those that initially drove it through parity and kept it quite strong by recent history-are largely intact,” he said, pointing out that Canada’s trade numbers still look favourable compared to many other developed countries.

Craig Wright, chief economist at RBC Financial Group, held a more pessimistic view on the dollar, predicting it would slide “just under” 90 cents by the end of next year. The loonie was down 1.78 cents to 90.68 cents US Monday morning.

“For Canada, exports are going to be a continued challenge by weakness in the U.S., but we’re still relatively bullish on the Canadian economy,” he said.

Porter told the audience that it’s tough to provide an accurate outlook on the economy given the unpredictability of capital markets.

“Trying to do a economic forecast in this kind of turmoil is a bit like trying to put a value on your house while the kitchen is on fire,” he said.

“You just don’t know how long the fire is going to go on for, or how much damage it’s going to do.”

Other

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