Khushwant Toor writs from Toronto

CANADIAN housing market is slowing down and seems to be following the U.S. path. Not many economists are openly predicting a U.S. type Canadian housing market downturn yet. However, the people involved in day to day sale and purchase of real estate and the professionals such as, real estate sales representatives, mortgage brokers, home inspectors, the real estate lawyers, are all worried about the decrease in the work load and the housing market activities.

November seems to be the slowest month of work load in all the offices connected with real estate purchase and sale. More houses are on sale than number of people looking to purchase them. For the potential purchasers the mortgage lending criteria has been tightened by the banks so much so that it is quite hard these days to get a mortgage approved at a good rate, which further defies the purchasers’ confidence.

People are scared to spend money to buy new houses now. Especially, sale of bigger houses has dropped considerably. Investors who booked houses with the builders a year or two ago, in anticipation that they will make money when the building is completed, are completely taken by surprise by the downturn in Canadian housing market. Personal bankruptcy filing cases are on the rise in Canada.

Housing related trades and companies have reached their buffer limits, and the big companies like Wirlpool Corporation, one of the biggest housing appliance manufacturer feeling the pinch due to dropped sales, last week decided to lay off more than 5000 workers by year 2009.

A senior economist at Merrill Lynch blames the construction activity in Canada to be the driver for economic slow down in housing market now. Construction activity in Canada has been greater than the U.S. during the last two years. Merrill Lynch economist explains that the U.S. prices started to increase in 2005, peaked in 2006 and have been falling ever since; majority of the fall down attributed to over construction.

Comparing the Canadian housing market the Merrill Lynch economist points out that as of August, there were 34,635 multiple units (generally consisting of high rise condos) under construction in Toronto and 19,973 in Vancouver. These figures mean that both cities have built more condos than all Canadian cities combined a decade ago. The number of housing units now under construction in Canada is just short of the May peak, which was the highest figure ever in the 36 years of data available. The Merrill Lynch economist says the market here resembles the U.S. market, with completed units piling up and not selling, a sign of overbuilding.

When the U.S. market peaked in April, 2006, inventories of unsold single family homes rose 26.5% from a year earlier. As of last month, available data with Merrill Lynch shows that inventories of unsold new single-family homes in Canada were up 56.1% compared to last year. Canada's housing market seems to be tracking the U.S.

But why the two-year lag? No one is very sure, however the economists at Merrill Lynch attribute a number of factors responsible for the two year grace period of less down turn Canadian have enjoyed. “It may be because the Canadian market had more room to run, having remained weaker for longer than the U.S. market through the 1990s. It may be because the commodity price boom had kept national income and thus consumer fundamentals stronger in Canada over the past couple of years. It may be because Canadian lending standards were slower to loosen."

Not only the Canadian housing market, the overall Canadian economy is predicted to slow down in the coming winter months. Last week in an interview with CTV Canada, U.S. economist and trader Dennis Gartman said that "Canada can't avoid recession," He added that the U.S. and Canadian economies are so tightly connected that whatever happens in the U.S. also happens to its northern neighbour. "We are your biggest client, you are our biggest client and for the next six months or so we are going to drag Canada down with us," he told CTV's Question Period.

It may not be as bad as the U.S. economic meltdown but still Canadian market is heading towards a slowdown in the coming winter months.

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Diwali celebrated across North America

Khushwant Toor writes from Toronto

THE festival of lights – Dewali was celebrated all over North America with great enthusiasm.

A massive display of fireworks was organized at Sikh Gurudwaras and the Hindu Temples across major cities in North America.

Co-workers and colleagues joined their Indian counterparts in celebrating the festival with sweets at work places during the office hours.

Families gathered together at Gurudwaras and the Hindu Temples in the evening to celebrate the festival.

Extensive display of fireworks was displayed at night while celebrating Diwali.

Almost all the Gurudwaras and the Hindu Temples in Toronto were lit up by strings of colorful lights and were visible miles away.

People participated in the fire work display till late at night.

The whole last week Indian sweet shops were full with customers buying sweets to give to near and dear ones.

Dewali has gained so much popularity among the North American people that its celebrations were shown on all the major news channels.

Yesterday U.S. Democratic presidential candidate Barack Obama in a special message wished "Hindus, Sikhs, Jains and their friends" around the world "a joyous Diwali" with a promise that if elected he would "work to renew America's moral leadership" in the world.

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Welcome to Mouseland

Gurpreet Singh writes from Vancouver

LAST year, I got an opportunity to translate the late Tommy Douglas's Mouseland into Punjabi. The tale is taken from a famous speech by the former New Democratic Party leader who, as Premier of Saskatchewan, introduced Medicare for the first time in North America.

Mouseland is a story of mice ruled by cats. The cats make laws to suit themselves and hunt and kill mice at will while the mice have no choice but to elect cats – be they white, black or even half-black and half-white.

In the end, a small mouse advises his rodent brothers to elect one of their own and is soon jailed for his radical views.

Tommy Douglas, whose birth anniversary fell on Monday, Oct. 20, delivered this speech in 1944, much before his Co-operative Commonwealth Federation (CCF) party was renamed the NDP in 1961.

He suggested that social democrats are the best choice for the working people, while all other parties – including Liberals and Conservatives - do not best represent their interests.

My translation is posted on the NDP website, but this cannot stop me from criticizing the party that claims to be the true representative of the working people.

The NDP, or any social democrat, should read Mouseland in the context of the present and perform some heartfelt introspection.

The NDP has become part of the establishment. They are only as good as the cats of Mouseland when they come to power, and do not truly represent the mice, or the ordinary people.

When the NDP was in power in B.C., social justice activists claim that they did very little for the homeless people. Even the labour union leaders blamed them for protecting corporate interests.

Recently, the B.C. NDP caucus accepted the fat-cat pay raise when the ruling Liberal government decided to raise the salaries of MLAs.

The NDP backed off and apologized, but only after the people criticized both parties for joining hands to serve their own vested interests.

This month's federal election gave an opportunity for Green Party leader, Elizabeth May, to participate in the leadership debates as a voice for the Canadian underdog. Surprisingly – or perhaps not - Federal NDP leader Jack Layton, who claims to be the voice for that same underdog, objected to May's participation in the debates.

The lines between parties have become blurred, interests overlap, strange bedfellows are dancing together in the poltical wings. Political slogans today ring hollow.

Parties like the NDP, once the representatives of working Canadians, newcomers, average folk, the marginalized and the unheard can no longer be relied upon to bring about social change. Or even represent the interests of regular Canadians.

The cats have joined forces. It is now up to the mice to fight for the common good.

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Bush favours the wealthy

A latest analysis by the Center for American Progress Action Fund shows that President Bush's economic policies have "redistributed wealth to the richest Americans and left the majority with stagnating wages and declining household incomes."

Looking at the effects of the first three Bush tax cuts, the Congressional Budget Office concluded that "the percentage by which the effective tax rate was cut for high-income families was nearly twice the rate cut for those in the middle of the income spectrum." Meanwhile, the administration's failure to raise the minimum wage coupled with its poor enforcement of federal wage and hour laws, trade agreements, and union rights further undermined the economic security of middle and lower-income Americans.

Data prepared by the IRS from tax returns filed during the post-9/11 recovery (2002 to 2006) reveals that household income grew by $863 billion during the period. "The 15,000 families at the top of the income scale saw their annual incomes go from about $15 million a year to nearly $30 million," accounting for more than 25 percent of all of the growth in income for the entire country. The remaining 1.7 million families in the top 1 percent of households accounted for nearly another 50 percent. But while the "top 10 percent of families accounted for 95.3 percent of the nation's income growth between 2002 and 2006," the average real income for families in the bottom 90 percent of households increased by about $300 to a little less than $30,700."

US presidential candidate McCain claims that "in this country, we believe in spreading opportunity." But his Bush-like economic policies would only further America’s income inequality. In fact, by extending Bush's tax cuts to the wealthy and proposing $175 billion in tax breaks to America's largest corporations, McCain's regressive economic agenda would redistribute wealth to the richest Americans during a period of stagnating wages and growing economic anxiety.

The bottom 60 percent of taxpayers would see only 12 percent of the benefit from McCain's plan to extend Bush's tax cuts, while over 100 million middle class households would receive nothing from McCain's proposal. Moreover, even though corporate profits increased by an estimated 66 percent between 2000 and 2006, McCain's plan to slash the corporate tax rate to 25 percent from 35 percent would give even more benefits to America's richest corporations. According to a Center for American Progress Action Fund analysis of McCain's plan, the 200 largest companies stand to gain $45 billion a year from McCain's proposal. Highly profitable industries like energy companies and merchandising and retailing companies would receive billions from additional tax breaks.

America’s income concentration is at its highest level since 1928. According to the OECD report, "the richest 10 percent earn an average of US$93,000 -- the highest level in the OECD. The poorest 10 percent earn an average of US$5,800 -- about 20 percent lower than the OECD average." But income inequality is cause for even more concern than the simple numbers suggest, since it also has an effect on mobility. In fact, just "7 percent of children born to parents in the bottom wealth quintile make it to the top quintile in adulthood," and "36 percent of children born to parents in the bottom wealth quintile remain in the bottom as adults." As OECD Secretary General Angel Gurria has pointed out, "greater income inequality stifles upward mobility between generations, making it harder for talented and hard-working people to get the rewards they deserve."

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US Presidential poll: Obama picks up momentum

Harjap Singh Aujla writes from New Jersey

THE feds have dropped the interest rate to one percent, the lowest in years. That leaves little scope for maneuvering another rate cut in near future. This is an indicator of the extreme desperation of America’s Federal Government. They want to do something to boost the economy even temporarily. Stock market has recovered a little bit, but whenever a financial turnaround seems round the corner some depressing news pops up which drags the indicators down. The markets, not only in America but the rest of the World too somehow are not responding adequately to the remedial steps that the American government is taking. The perception among the common folks is that the bottom has not yet reached and they are searching it. This has a bad impression on the common investor. During this election year at lease the economy seems to be playing a decisive roll.

Such an unprecedented public sentiment does not auger well for the chances of the ruling Republican party. Somehow the lack of trust in the government has assumed alarmingly gigantic proportions. During the past seventy nine years such an economic downturn was never seen in America. This hurts the chances of John McCain the nominee of the ruling party and inadvertently helps the chances of a maverick candidate Barack Obama. So far Mr. Obama has conducted a cool, composed and balanced campaign and his unruffled style of campaigning is attracting those voters to his camp, who in a normal election year would have voted overwhelmingly for his opponent. The trend of early voting in some of the states is also helping Barack Obama. The younger and well educated white voters are leaning in ever larger numbers towards Obama.

Obama’s policy is sparklingly clear. He does not want to put any additional burden of taxes on the middle class and the poor. But he does want to raise the taxes to give a boost to American economy. According to his vociferous announcements he wants to put the additional burden of taxes on those earning upwards of 250 thousand dollar in income. His opponent John McCain is silent on this. This silence is sending the signal that he does not want to tax the wealthy. John McCain blames Obama to be a socialist, who wants to redistribute the wealth in America. This argument is resonating very well with the rich and the powerful, but it has virtually no impact on the younger voters. On social security deductions, Obama says that so far the people earning more than one hundred thousand dollars a year have not been paying any social security tax on their incomes above one hundred thousand dollar limit, now he wants them to pay too. This measure is also likely to hurt high income groups a little more. But the younger generation knows that in order to save social security funds from going bankrupt such a drastic action is needed and they are prepared to make the necessary sacrifices, because when they retire their social security is likely to be affected. The lesser educated and conservatives are not buying this argument.

The Bradley Effect is of course a reality and its magnitude will be known on the day of polling. On the other hand the economy is not improving. A lot of people now appear unlikely to vote in response to their economic conditions and not on racial lines. As of this moment there are clear chances of an African American male breaking the glass ceiling and becoming the most powerful political and administrative head in the World.

Obama’s path won’t be easy after election. The economy has to be put on even keel. The solution to America’s involvement in Iraq will not be easy. Afghanistan is becoming a bigger problem and its solution is not easy at all. Iran’s nuclear program is going to be a real threat. It will take a lot of bi-partisan effort to solve these problems to the satisfaction of common Americans.

Let us wait and watch what 4th of November has in store for us. I shall talk to you after 4th of November.

harjapaujla@gmail.com

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