"History, real solemn history, I cannot be interested in.... I read it a little as a duty; but it tells me nothing that does not either vex or weary me. The quarrels of popes and kings, with wars and pestilences in every page; the men all so good for nothing, and hardly any women at all - it is very tiresome." Jane Austen spoken by Catherine Morland in 'Northanger Abbey'
We wait for the November real estate data to come in without much expectation that there will be major changes in seasonal price or volume levels until the market in real estate has had another month or so of looking at global sell-offs in housing related commodities.
Global price dumps are breaking down more supports and next up into the spotlight could be the high yield market in energy bonds. The chart on the left is from Barclays via alliancebernstein.com.
Notice on the chart mashup at the top of this post that steel looks to be a better bet than wood for building that next hovel. As the video below claims, a 20% construction saving can be had using steel prefab components on site.
22 Shipping Container Buildings
Check out this photo gallery of steel container buildings.
The 2009 Pit of Gloom looks like the beginning of a global shipping bear and with the plunge, steel container prices are falling as well.
Businesses are running out of (good) jobs to outsource, but we can still outsource the crappy ones eh!
By 2016 almost 1.1 million IT jobs will have been sent offshore by 4,700 companies with annual revenue over $1 billion headquartered in the U.S. and Europe. In the U.S. advanced industry labour areas have plunged 61% in 33 years from 1980 to 2013 (top of chart mashup).
Canada's labour cost (2nd chart in the mashup) is running +/- 20% higher than Mexico's and the top source countries for importing labour into Canada are the Philippines, followed by Mexico, the United States, India and Jamaica. Notice the plunge in Canadian labour costs in 2012 as foreign workers become more appealing as hires.
Let's look at some bullet points and their sources:
The U.S. advanced industry platform has thinned out substantially and inordinately, so that less than half as many large metro areas have the density of advanced industry activity that they had in 1980. That means that on balance many fewer U.S. metropolitan areas now have the dense supplier bases and deep pools of technically relevant workers necessary to support new advanced industry growth.
By 2016, corporations in the U.S. and Europe are expected to move an additional 750,000 business services jobs to low-cost geographies. This would bring the total of offshored jobs in finance, procurement, HR, and IT to 2.3 million – or one third of all jobs in these areas.
The snapshot view (bottom panel on the chart mashup above) on December 1st 2012 shows that there were 338,221 Temporary Foreign Workers in Canada, up 235% from 101,078 on December 1st, 2002. But the calendar view shows that the number of temporary foreign workers grew from 181,794 in 2002 to 491,547 in 2012 (170% increase); although a double count could occur if a short-term worker returns home and then comes back for another temporary position, but it does reflect the growing number of temporary workers who are in Canada for more than a year.
"The best tar-sands companies need to get $50 per barrel for their oil to break even. The rest need between $50 and $90 per barrel. Today, a barrel of bitumen sells for just $56."
November 10, 2014 Quote from Matt Badiali, editor of S&A Resource Report
"Investors in Canadian oil sands are at a heightened risk of companies wasting $271 billion of capital on projects in the next decade that need high oil prices of more than $95 a barrel to give a decent return.", the Carbon Tracker Initiative (CTI) revealed today."
November 4, 2014 Quote from Carbon Tracker Initiative
THE TRUE COST OF OIL
Garth Lenz, November 2011 TEDx Victoria BC
Lest we forget—lest we forget!
Rudyard Kipling 1897
I like to update this page occasionally with data that informs the inflation deflation debate. I noticed on my Twitter feed this morning a chart on the Eurozone members' inflation rates and lack thereof. Almost half the members have zero or negative Y/Y inflation rates as of September 2014.
Included in my chart mashup are the U.S. and Canadian inflation rates and a long term chart of the CRB CCI Commodities Index which has been dropping since 2011 and down well over 20%. If it retests the March 2009 Pit of Gloom, it will drop another 20-25%.
Dropping commodity prices are an indication of weak aggregate demand for stuff which is what most countries try to export if they don't have the know how to export value added services.
In this global environment of surplus labour, software is going to outperform hardware; ie: brains over brawn. ps... Real Estate is not immune to a price correction when investor's thoughts turn to yield analysis.
History, Charts & Curated Readings
"Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement; and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it." George Santayana Vol. I, Reason in Common Sense