Wednesday, January 21, 2009

"What, A Strange Recession?"

"What, a Recession?" By Richard Crenian
Jan 20-09

I traveled from Toronto to Calgary last night and couldn't believe how busy the Toronto (YYZ) airport was.....and the flight to Calgary (YYC) was absolutely jammed pack.
The irony was the flight cost was substantially more at $40 Oil today than it was at $120.....what gives? How can that be?
As I pretend I'm a fly on the wall I hear the talk of all these business deals starting to happen, and I spoke to my friend Donnie who lives in Florida. He tells me sales of homes are down and prices are depressed.
Don said that you would never know it when you go out and see all the restaurants full all the people about town, shopping up a storm in the popular shopping centers.
A room at two major hotels downtown Calgary if you can in on short notice, is $300-$400 a night!!
A car rental for a full size car with taxes during the week is $90 a day.
What the heck, if this is a recession, where is the doom and gloom, why is business being conducted and why are rooms, cars and flights so expensive?
Supply and demand?
If there is high demand and low supply that's a recession? I know I slept through a lot of my Economics classes in school, but logically it still doesn't make sense.
I'm told there is a major recession but look around.......restaurants, traffic, airports and shopping centers......are busy.
In Toronto those 70 per cent off signs have come off.
The 50 percent signs are for existing product.
In Calgary, with $40 oil, the same story with restaurants and shopping centers appearing full.
Ok so who is suffering?
Realtors, Home Stores, Car Dealers, non-basic retailers.
Note to self, when buying cash flow commercial products, avoid furniture and home stores, car dealers, leasing companies and realty companies.
Stick with bread and butter businesses. You read it here first.
Richard Crenian

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