Updated: Mon Oct. 27 2008 18:36:13

CTV.ca News Staff

The Toronto Stock Exchange started the week by plunging 756.75 points, or more than 8 per cent, on fears of a worldwide economic recession. If the trend continues, it could be the worst month for the TSX since 1940.

Investors began dumping energy stocks early Monday, and by closing time the S&P/TSX composite index was down 8.14 per cent to finish at 8,577.39 points.

Since the start of October, it's dropped 25 per cent.

On the oil market, crude prices continued to drop, despite OPEC's announcement it would slow production to stop the decline.

In New York, December crude prices were down 93 cents to US$63.22 a barrel.

Meanwhile, the drop in commodity prices pushed the Canadian dollar down to 77.59 cents US, continuing its largest one-month fluctuation since 1950.

The dollar's continued downward movement came as RBC Capital Markets released a report warning that the loonie could continue its slide if the worldwide financial crisis doesn't turn around.

American markets also took another hit Monday, with the Dow Jones plunging 203.18 points to 8,175.77. The Nasdaq Composite Index fell 46.13 points to 1,505.90 while the S&P 500 Index dipped 27.85 points to 848.92 after posting early losses.

Markets will continue to be volatile until it's clear to investors that measures designed to ease the global credit crunch are working, Paul Ferley of RBC World Markets told CTV Newsnet.

"There's some optimism that some of the earlier actions announced by the Fed will actually start playing out in money markets this week," Ferley said. "So I think a lot of eyes are going to be glued to that in terms of whether there's some evidence that things are starting to free up a bit."

The U.S. Federal Reserve begins a two-day meeting Tuesday, which may produce another interest-rate cut.

Experts speculate the Fed could lower its benchmark lending rate by one half a percentage point, to an even one per cent.

The European Central Bank is also expected to cut interest rates.

It will likely be another tough week for investors as overseas markets also opened down Monday, with Japan's Nikkei 225 Index closing at its lowest point in 26 years.

The Nikkei fell 486 points, or 6.4 per cent, to close at 7,162.90, depths it hasn't hit since October 1982.

While in Hong Kong, the Hang Seng Index fell 1,602 points, or 12.7 per cent, to close at 11,015.84. This is the Hang Seng's lowest close in more than four years and largest single-day decline since 1991.

European markets followed suit as all opened down in early trading, but rebounded by afternoon:

• London's FTSE 100 index was down 0.5 per cent after posting a 4.9 per cent drop at the opening bell.
• Germany's DAX was down 1.4 per cent after a 4.3 per cent loss in early trading.
• France's CAC-40 gave back 2.4 per cent after an early 5.8 per cent loss.

Japanese investors are skittish as the rising yen has cut into profits of some of the country's largest exporters, such as camera-maker Canon.

At the urging of G7 countries, the Japanese government has said it may intervene in currency markets to try and stop the yen's climb.

As well, stocks of Japan's two biggest banks, Mitsubishi UFJ and Mizuho Financial, plunged on reports that they may have to sell shares to raise money.

Some Japanese media reports said Monday the government is considering infusing cash-strapped banks with a US$108 billion aid package.

Meanwhile in Europe, British officials have admitted that the economy is contracting and the country is in a recession for the first time since 1992.

Prime Minister Gordon Brown announced that his government will increase spending to try pulling the nation out of its economic slump.

Comments are now closed for this story

Andrew
I don't normally agree with Michael Moore. I happen to agree however with his view that the current crisis in the market is most likely the largest theft of wealth in the history of the world. Committed by 5% of the population. Did we honestly think they were going to honour their debts when the baby boomers were begining to cash out their investments in order to retire.

Alex (Toronto)
"Capitalism" has failed many times, with the panics of the 19th century, the Great Depression, the corporate scandals of the 1990s, and the financial crisis of today. In each case, the problem was when people who controlled money were able to benefit from transactions by putting costs onto third parties (the public) who had no control over the transactions. It is the proper role of government to represent taxpayers and consumers in places where affected individuals would have no say or control. Any student of economics should know this. Each time unregulated markets fail (by imposing unexpected costs on others), governments are required to develop new programs and new regulations. Sarbanes-Oxley was the solution for the last round of problems.

Doctrinaire slogans supporting "capitalism" ignore this history. The truth is that Canadians are generally better educated than Americans are about this, which is why Harper is even less popular in Canada than McCain is in the US. The problem is the first-past-the-post system overstates the influence of temporary pluralities versus everyone else.

In fairness, we can't blame the Conservatives for what is happening in the rest of the world. However, we can hold the Conservatives accountable for the way Canada's economy shrank relative to the rest of the G7 in the last couple of years, and for the degree to which Canada's economy is being hit harder than other economies since the crisis began. Our stock market and our dollar have fallen further than most other major economies. Our economy has not been for the past couple of years and is not being managed well, and the opposition parties will have to work hard to stall the bad ideas of the Tories.

Jerry O'Connor
As the entire economic world sits and watches the slow rise and faster falls week in and week out in the markets (25% loss in less then 3 months) I am beginning to look eleswhere for more of the culprits of greed that are in part responsible for this whole mess other then just the greedy CEOs.

How about the world of credit and how it has been affecting all of our daily lives in this mess. Why isn't there anybody questioning the still terribly high interest rates while the rest of the world goes down the proberbial toilet?

People are losing their jobs, losing their homes, losing their pensions, losing their sense of decency and yet the interest rates on credit continue to be disproportionately way too high in the face of this economic meltdown.

WHY..............

Joe
Okay, all my money is out. I'm sick of the doomsday stuff. Bring it on. I have a job that is not effected and I am in no danger of losing my house. Bring on the second great depression.

macchiato
Steve from Ottawa,

"But no one explained the magnitude or the fact that it is just one component of a rotten system."

Try Nouriel Roubini, Mish Shedlock, Peter Schiff, to some degree Krugman ... Rosenberg from Meryll Lynch, but his own company laughed him out of the room.

Schiff really called this, go to youtube and watch people laughing at him 2 years ago, there's good one in the last year with Ben Stein telling Schiff 'financials are so cheap, they should be putting them in cereal boxes'. Schiff said they were toxic, he was laughed at. Unfortunately, no one wanted to admit the reality I guess.

Layton B in Moncton NB
First off, I am not gloating but I told everyone who would listen that the government cannot cut taxes and expect to keep up delivery of services. What does this have to do with this article? Well since corporate profit is lower and the tax rate for these corporations is lower, government tax revenue falls as well. Can you say deficit?

Or will the conservative government break the balanced budget law like they did their fixed election date law? Or will they gut heath care and privatize it? Neither one is an acceptable option. If you ask me we should have these CEOs and CFOs of the major lending banks brought up on charges. Fraud? The thought that these banks and investment houses were able to bring down our entire economy from the top, is down right scary. The days of old time capitalism have got to come to its end. I am not sure what the replacement will look like, but it will be so different from our current status quo, most of us cannot conceive of it. I believe the term is paradigm shift.

Prof. Pye Chartt
@ "James":
@ "Steve in Fredericton":
@ "New World":

You can call a horse with stripes just that. I prefer to call it a zebra.

The continual whining and complaining about capitalism demonstrates a complete misunderstanding for how it actually works in tandem with democratic government. Capitalism didn't cause the current economic turmoil. Read a paper, for heaven's sake (or, at least, one of my previous posts). If you think business people get paid too much, and shareholders have no voice, vote NDP and ensure that the leveling hand of socialism rewards everybody equally and looks after you like little children.

Have a lovely day. I'm going to get back to making money...because the government already takes most of it via progressive taxation (personal and corporate)...and you folks will need even more of my wealth to build your utopian nanny state after crippling the economy.

MB
What an awesome time to buy.

That is all.

Austin
This is a lesson on human stupidity. Three months ago, the world couldn't get enough oil at $150/barrel... and now you tell me that they cant give it away at $70. This is nothing but a manufactured problem that has caused everyone to press the panic button... well almost everyone, I am buying at these levels!!!

New World
Prof. Pye Chart

Your reply to Steve… BULL. It has everything to do with it - GREED. Even the Republicans who started the mess (starting with Reaganomics) are looking for CEO heads to roll, but that's a Republican or Conservative for ya… one minute the CEO is your best friend, but when things go sour it's the CEO that is put on trial.

D in Calgary
At what point does this stop being a headline. The way the media presents this topic, there is nothing I can do about it but worry. How is worrying going to change anything. If I pull out what's left of my money, it will make things worse, if I leave it in, I'll loose it all. My 2 cents, it's either a cycle that needs to be waited out, or it's the end of our economy and were all screwed. Tell me when you've know talk about something else until then.

Steve in Fredericton
@ James:

Well said. It appears we are in a "war of ideals" with the Prof.

I fully agree with you that the status quo doesn't work for the vast majority of us and a "New Deal" is required to make the necessary system adjustment to enable widespread growth vice the narrow, super-wealthy growth we see now.

If I read you correctly, a socialcapitalist approach would seem to be a good way to describe what is required.

Perhaps the Prof could get beyond all his "book-learning" to see how a narrow distribution of opportunity for wealth has robbed our society of its one true reward; prosperity.

cyberclark
PP says My only concolation is the hope that our lowering Canadian $ will be an incentive for export sales to offset the drop in oil prices...

Does not work like that PP; the currance on our tar sands oil was changed to Canadian dollars. 1 cent less per barrel x 1.5 million barrels is a fair bit of change that is not going to be there!

Steve in Fredericton
@ Prof Pye Chartt:

Yes I do understand captialism and the conservative ideology. In fact, I've fought to defend them. Are you able to say the same? While I agree with the underlying fundamental principles, I disagree with how it is being applied in todays interdependant global economy.

As for my "rich getting richer lament", I don't think I'm too far off the popular perception that too few of us own too much of the capital and have thus created a self-defeating economic system.

Raw capitalism and the free-market economy was designed over a hundred years ago during much simpler times. The basic rules simply don't work for us anymore. I believe we as consumers have a "dog in the fight" as well as shareholders. Unfortunately for most shareholders, it's too late for them to actually do anything to avert catastrophy once the coffers have been emptied and the CEO is cruising the French Riveria with what should have been partly their money. If shareholders were the solution, I don't think we'd have half the problem we have now or Enron or Nortel had a few years back.

I await your critique...

islander
I am 50 years old and should be concerned...but I'm not. It justifies my decision to return to university to retrain for a totally different career. It justifies my decision to never retire but to save while working, so when retaining time comes, I can do so without debt. I thought I'd be the odd-person out but maybe I'll be the new 'norm'.

Scott
People, stop blaming the government on this. Harper never lied, and the government is not responsible for the current economic situation in Canada. Canada is a tiny player on a very large playing field. We are along for the ride, and there is very little the Conservatives or liberals could do to change the direction of the ride we are on.

On the other hand, had the liberals actually been elected, confidence in Canadian markets would be MUCH lower than current levels and our downs would be much greater.

Milt
Hey PP

I believe the cut off point for profitability at the oil sands is approx $40 a barrel.

There is lots of room for profit/greed yet.

My suggestion to all of you is spend spend spend. You cant take it with you.
Afterall you have never seen a Brinks truck following a hearst.

James
To Prof Pye Chartt;

I have done my homework and I am curious of which European countries you refer to? If you are talking of the eastern European states then you should be honest and admit that East Germany, Poland, etc. did not have true socialism, rather totalitarianism in the guise of Communism.
As far as "sociocaptialism" is concerned, it may be a new term but you may also call it enhanced social capitalism, whereby governments have strong rules and regulations in place to ensure that capitalism is used as a tool to grow an entire economy for the benefits of all citizens and not just for a privledged few.
The "social welfare mechanisms" you talk about do not work in our system and only serve to keep poor people poor. If our government were more concerned with all of it's citizens, then more controls over banks and corporations would result in fairer treatments of citizens by banks and corporations; ie - bank fees in line with other countries and consumer protection.
Alas, our current government believes that banks and businesses know what is best for Canadians and this is why we continue to have unjustified bank fees and tainted food products. These are but some of the wonderful examples of captialism gone Pete Tong Prof!

kevin p
I am getting tired of this headline!
What recession fears? The U.S., Japan, several Asian countries and most of Europe have been in an unacknowledged recession for the last 6 months already! (Japan has been there most of the last 15 years)
Many countries are already there, Canada will almost certainly be in recession(hopefully mild) as a result for the last quarter of this year, and at least the 1st quarter of 2009. If people stop panicking, turn the channel to reruns, the markets will finish their correction before too long, and they will once again begin the rebirth cycle with slow steady "normal" growth of a couple percent a year.

Big Jim
These troubles are rooted by the greed of the US banks and the subprime as well as the speculators sucking money from our pockets through the gas pumps.

I say let the companies, banks etc fail. The other companies and banks that are left over can come in and mop up the mess and buy up the assets at 10 cents on the dollar and turn a profit. It has worked for many years and will continue to work.

The market crash of the 80's didn't kill us and we all survived it and we will survive this.

I think the media is part in parcel of the problem with the news casts that claim the sky is falling. Time for the media to stop making the news and to start reporting it.

H. Jones
H. Ontario

Don't these "stockholders" understand about the RISK factor before they paid their brokers?

Don't they understand that THEY ARE the ones who create the UPS and DOWNS of the market if they keep on selling!

They need to stay COOL and let the nature handle it. There are only 8 more days left for the United States to elect the NEW PRESIDENT!

JD
I have to agree about consumer confidence - it is the key to all of this in this country but Canadians are the last to have pride in their products; they wait for others to tell them first - if we continue to panic, we will continually line the pockets of that 2% who know we are going to panic.

Here in the Lower Mainland of BC, it appears, that regardless of the current price of oil, the price of gas at the pumps still sits at $1.11 (at least it did yesterday) and since things have been dropping consistently, I have no confidence that the gas stations are not going to collect accordingly any time sooner. Lucky you for getting gas at 96 cents; that is where it should be at this point.

Niagara George
I hope every Con supporter invested heavily in the stock market, on the day, during the campaign, when Harper said there were bargains to be had.

He didn't know what he was talking about then, and he doesn't know much more today.

The Japanese market is down 80% from it's high in 1989. We still have a long ways to drop, before anyone can be certain of returns on their $$.

Sharon in Ontario
I do believe the problems in the market have more to do with consumer confidence, however that is little consolation when I watch my retirement slip away. The media is playing its part also by making the TSX top stories. How about putting it somewhere in the middle and reporting "The TSX continues its up and downs, depending on the day"

Prof. Pye Chartt
@"Steve in Fredericton":

Thanks for the reply. While I never actually asserted that you HAVE voted NDP (my suggestion was to start and keep going), after reading your post and the whole "rich get richer" lament, I remain convinced that you don't understand capitalism or conservative ideology and, therefore, belong in different party. FYI: Shareholders get to vote; and therein lies the solution to your issue/problem!

@ "James":

Thanks for the reply. Contrary to your stubborn belief, Socialism HAS failed in those European countries that have warmly embraced it and fully implemented the underlying left-wing policies of wealth redistribution. You must do your homework, and not cling to wishful thinking. Lastly, there is no such thing as "Sociocapitalism." We already have social welfare mechanisms within our current capitalist system. It all works.

graham
If they want to stimulate consumer spending why not get credit cards like VISA or Mastercard to lower their outrageous interest rates

Beautiful Suffering
YAY!!! KEEP IT COMIN'!!! I LIVE TO SEE THE WHOLE THING CRASH BABY!!!

Roger T
STOP fearing and start admitting that we've been in a recession since 8 months ago. It's not going to get any better with bailouts and buyouts.

The American dream is officially dead and it's time to dream on.

Personal svaing comes before the economy!

Phipps
In light of the recession just think that with the August financial report the government (keep in mind this is before the economic turmoil) had a 46% reduction in Commercial tax revenue (mostly big business) and a 7% increase in income tax revenue. How is this step into recession going affect those revenues and the deficit that it will create. Now on top of the 33% reduction in the lending rate? I dont think that Canada is in good hands as we were all lead to beleive.

Makes me wonder if the state of the Canadian economy is as strong as once thought.

Makes me a little worried, I am just glad that I am young and I can leave my investments in hoping they will recover over the next 10 - 15 years but I will definitely have to put off buying a house as I had planned on doing so within the next 2 years.

Boo earns.

Tory times are hard times.
But you had to vote for the dumbed-down Clownservatives.

Boyd
God bless Canada which relies on oil. ...

Steve in Fredericton
@ Prof Pye Chartt:
... I understand there is no direct causal-link between the global economic crisis and the salaries of CEOs, however, there is a link in terms of patterns and manifestation of the immense greed pervasive throughout our largely unregulated and under-controlled capitalist free-market economy.

BTW, very bad form to assume I'm NDP. In fact, I support and vote Conservative. To that end, my approach is slightly reigned-in from the "eat or be eaten" approach you seem to espouse. I simply believe that we can have a democratic market economy where unbridled greed is restrained through gov't regulation which in the end will benefit the economy as a whole and feed growth across the spectrum of the workforce vice the rich getting richer on the backs of the rest of us.

If you believe a Bank president or CEO NEEDS $12M per year to survive and live comfortably then I believe you are truely dillusioned. Greed needs to be controlled and monitored. No reason we all can't be better-off in the end. He who has the most when he dies is still dead.

Lowell
I am wondering why certain american economists cannot keep their opinions south of the border. Their constant fear mongering in canada is of no benefit to us. I think even though we are USA's biggest trading partner we can seek markets elsewhere to help weather the adverse affects from the American recession. That is if our new Conservative government is on the ball.

James
To Prof. Pye Chart. Apology accepted.

Socialism has not been proven a "globally-proven failure." Communism, itself, has not been proven as a failure. Most communist states are either dictatorships or totalitarian states, not true communism. Even capitalism as we know it is not true to it's meaning; dependent on "private" capital and profit making. Governments have always been involved in Capitalism, using public funds and regulations to prop up "capitalists" and excessive wealth for a select few.
No system is perfect, communism, capitalism or socialism, however, the time has come for commerce to be based on ensuring the vast majority of human beings on this planet can make a decent living without being poisoned, cheated or murdered by the "chosen" few, the super wealthy. Show me a super wealthy and I will show you somebody who has profited while others have suffered, even Bill Gates, Warren Buffett, et al. A person does not make those kinds of profits without lives being lost or the environment being destroyed.
Greed, on all levels, did us in. Socialcapitalism has not been tried on a large scale basis since the Depression and it's time has come again. It's time for another "New Deal."

Nick in Gatineau
I doubt that thrusting a metaphysical enveloppe to this will resolve anything. No system is better than another. It boils down to which one is not as bad as the others (France saw something similar in the 1880's - Monarchy vs. Democracy).

The unfortunate part is that we will have no choice but to associate with polictical affiliation. Just as parts of the world associate it with religious association. The realities of this world is that many have been pursuing hidden agendas which requires long and arduous research to find while others are quite open about their intentions.

Those who are silent are the scary ones because, plainly put, they enforce transparency laws on the backs of companies and citizens but do not apply it for themselves. Sometimes called accountability, this transparency has to take place. Anything hidden has to be hidden in the name of National security and not because a party leader doesn't want his opponents to know what he's doing.

If the government doesn't trust its citizens, how can the citizens trust the government and everything associated with it ?

John W.
Glad to see that Dwight Duncan was on the ball in Ontario his stradegy of blaming Flaherty if fanaly working...

Looks like the Bob Ray era all over again...

Prof. Pye Chartt
@"James":

Thanks for the reply. However, having read your post (and all those that have preceded it which condemn capitalism and offer no alternative specifics other than pure Socialism), I simply noted the idea to "kiss the old way of capitalism goodbye" and usher in "new world commerce" (whatever that is). ...My apology.

Now, apparently, you're clearly advocating Socialism (a punitive and parasitic system of wealth redistribution that REQUIRES capitalism to function), which has been a globally-proven failure, BUT, with "responsible controls on financial markets."

James, we've always lived in a capitalist society that imposes regulations on commerce. Always. The "crisis" we're presently immersed in resulted from the foolish manipulation of restrictions/regulations (and partial removal thereof) by politicians and the natural advantage-taking by greedy business people.

Capitalism didn't fail us! American political leaders and some Wall Street grinders did. Advocating Socialism as a fix-all ignores the facts and circumstances surrounding our present state of economic affairs.

ted
Media panic-hype is also driving a portion of this slide. ...How about reporting the market gain/loss at the end of trading instead of this continued "The sky is falling!" routine. Put a TSX ticker in the body of this report and let readers see the actual picture of the market at this moment.

James
To Prof Pye Chart - Obviously, you did not read my posting. If you had you would have seen; "FORGIVE BAD DEBT." Nobody has the money to pay off all the bad debt that is out there. The only simple solution is to forgive the debt and reboot the system. I said it was simply, not easy. This has been done before with the IMF and G-8 countires forgivig the debts of poor countires. Only now, it is the entire world that is in a financial quicksand and sinking fast and there are no vines to grab onto.
This happens all the time in a captialism system; it's called bankruptcy.
Also, I am not calling for communism, just socialism with responsible controls on financial markets. An end to excessive capitalism would be fine by me.
The muckity mucks brought it upon themselves and ourselves Professor!!

Tom Hawley
Steve in ottawa:
During the election and prior to ,the Liberals told us things are going to get worse.Harper told us that we need to stay the course.
Now I am not blaming Harper for the global situation .I will say for an economist as well as our PM he lied to us.He lied to us that things are fundamently good in Canada.He told us banks will NOT get taxpayers money. Harper also told us there will be NO deficit.Wait and see.He lied to us that the Liberals were misleading us.It not hard to tell who did the misleading.

If Harper as he claims knew there was going to be a downturn in the global markets why did he not inform us ?Why did he spend the contingency fund?Hence the election!He was suppose to know this as early as a year prior to.People may not have lost as much.
The two percent cut in the GST is now more laughable than it was practical.The hook was baited and some fish bit it.Now we have a jar but no worms.We as average income earners received very little but will pay dearly when the immediate deficit needs to be repaid.This will amount to more than the bits we received from the "cut".
So Steve we were warned but some chose to believe lies rather than the truth.The truth at times does hurt but it is neccessary.

Prof. Pye Chartt
Another Monday morning...another trading day...and more people losing their head.

@ "Steve in Fredericton":
Executive salaries and bonuses have nothing to do with this situation. Keep voting NDP, then, in the faint hope that one day Socialism will put us all on an "equal" footing, destroy the economy for good, but, remove the greed and jealousy from misguided people.

@ "James":
We're still waiting for you to educate us as to how the elimination of capitalism as we know it and the full institutionalization of Socialism (or Communism) is going to solve our economic problems and make our lives better. Another morning. Another anti-capitalism post. Again, no explanation.

@ All The Screaming, Nervous Nellies:
Take a breath, take a pill, and relax. Markets are all about confidence. Right now it's weak. Give it some time. Emotion drives markets more than knowledge and facts do. Keep your seatbelt on, and exercise some patience.

Have a great day, everyone. Remember: If you have your health, you have EVERYTHING. Keep it all in perspective!

Kevin
Ï just hope our government doesn't go deep into the trend all the other nation's gov'ts are - bailing out and pouring in billions of dollars to keep the "economy" from failing. Let capitolism work. If a company is good it will survive, if it can't then find something else to do. 400,000,000 people in North America still have to eat and live and eventually it will come around. Tighten the belt, which is what we've been doing as a family of 7 for the last year. BUT DO NOT THROW AWAY our taxes after corporate investments that are only going to prop up executive salaries and yet still see companies fall. That is just dumb.

George
Anyone else getting a little bored with this topic? Markets go way up and then the next day they go way down. Not much news there; it has become the norm like the sun rising everyday.

James like you comments now any ideas on what the "New World Order" will look like?

Lots and lots of moaning and croaning but very few if any solutions. Easy to moan and craon folks now start thinking.

Steve in Ottawa
It is not a bit of wonder that investors are getting nervous. Not one acedemic, corporate leader or other person of note has effectively and coherently warned about this crisis, even as late as a couple of weeks before it started happening. Many people knew there was a sub-prime mortgage problem. But no one explained the magnitude or the fact that it is just one component of a rotten system. Further, I do not recall a single "think tank" or University of note being able to state coherently what is happening in the interrelated commodity, finance and debt markets. If the thinkers and economists do not know what is happening, where are we going to be in 6 months? I personally believe that most government executives and financial leaders do not really understand how the world financial system is really structured. It truly is a complex machine. But, having leaders in government, industry and academia who really do not know what they are doing is scary. I think this problem is much bigger than they all realize.

Mark - Vegreville, AB
So now governments will have to bail out the stock market AND the banks? When the heck will this end?

And more importantly, how the heck can governments afford to do this? And where is this borrowed money coming from if there is no money available for people to borrow, which is what is supposed to be causing the problem in the first place?

This entire situation is getting more confusing every day.

my 2 cents
...Governments should be working to prop up economies, not companies. Individual companies should be allowed to fail if they can't compete. Capitalism is built on allowing companies and individuals to thrive on their own success and fail when they no longer meet the needs of the market. The void will be filled by new companies who will be able to compete.

For an example consider a few years ago, Canadian airlines were failing left and right. Westjet started up in the midst of all of those failures and is thriving despite the fact that much of their service is to out of the way cities where Air Canada can barely afford to fly.

The government propped up Air Canada for years (and is still doing so). They should have been allowed to fail. If there was sufficient demand for air travel, then a new company would provide the service at a profit. If there isn't sufficient demand then our tax dollars should not be going to pay for it.

Don H. in K.L.
It's gonna be more than a tough week, it's gonna be a tough year mkaybe longer.We've only scratched the surface as far as the economic outlook.I've said it before and i'll say it again , too many people abused for too long and now it's time to pay. Had I been sure this was gonna happen i would waited til after the crisis to start saving for retirement.

James
Flushed!! Whoops, there goes another country to the IMF! Whoops, there goes another bank to government for a bailout. Whoops, there goes the price of a barrel of oil! Shall I go on?
It has become a 24 hour cycle of downward movement on the worldwide markets. First Aisa, then Europe and finally North America. Then back to Asia again.
It is going to continue as long as governments continue to prop up a bankrupt world economy. This is only a temporary measure, though, as the weight of overall debt is too big to carry for too long. The bottom will only be reached when people get their heads together and forgive bad debt. This hasn't happened yet because too many muckity mucks have refused to agree to becoming mere mortals. The time will come, maybe Nov. 14, when the nations of the world will shed a tear as they kiss the old way of captialism goodbye and try to develop the new world of commerce.
It won't be easy, but there is no other choice. The ant can't move this rubber tree plant! Whoops, there goes another .........

Nick in Gatineau
George Bush is hedging his bets that if he guarantees new US debt that it'll give the US leverage against China in a possible trade war. Since China owns the majority of US old debt, and the US have been complaining that China 's trade strategies are illegal, it is not a surprise to see this tactic.

The problem is that it doesn't seem to be working on the most important levels: Trust and confidence. The banks don't trust themselves with this. They don't trust each other.

What exactly were the old guarantees that brought on trust between the banks ? What was the foundation ? Maybe start there instead of simply giving banks free cash.

Steve in Fredericton
Has anyone thought to look at the salaries, bonuses, etc that are still being paid to the top execs and captains of industry?

My guess is that everyone is feeling the pinch of lowered markets except the CEOs and CFOs.

Should not their salaries and remunerations fall along with the market, or are they stuffing their pockets before the bottom completely falls out.

Accountability folks, that's all I'm saying.

pp
OK
Now I am getting a bit nervous...

I was ok with the economy when the price of oil was up but now in combinatin with everything else and the huge asian market going bottoms up I am worried...

Canada has been riding along on oil revenues but now those are going to be hit. If oil is down under the $80 mark then there is very small profit margins for Canada - it's hard to get oil out of Canadian soil and costly.

My only concolation is the hope that our lowering Canadian $ will be an incentive for export sales to offset the drop in oil prices...

On the up side I did pay 96.8/L to fill up this weekend :)

Always look on the bright side people :)