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Vroom Room

Good Morning,

Eagle over a lake in CanadaIts Friday, its the Vroom Room, make yourself comfortable we have cappuccino and biscotti, join the conversation.

Yes...2 weeks to Christmas, we hope that you started your shopping and are progressing along. Its that time of year when we all get a little busier for a bunch of reason.

This week we connected a few dots with an old school perspective. Back to the days of mechanical cars. Agreed...mechanical cars have a nostalgic feel about them. Lets not even mention the folks that clearly remember these cars. Are they nostalgic, mature, or just plain old? No difference in somw ways its good that these guys are still around.

“The bad news is when crude drops, so does the value of the currency and we lose part of our purchasing power,” said consumer advocate and former MP Dan McTeague.

Remember when the price of oil came down, and all the pedestrian comments that billions of dollars from cheaper gas would make their way in the CDN economy. At the time we mentioned that with a lower CDN dollar the savings at the pump would immdiately go for food/groceries.

You have to wonder for how long the deals on vehicles will last? The deals will endure, the quality of the deals might be a different story. You have to wonder if folks are buying/leasing a vehicle that has emotional appeal, or offers the best deal?

Our old race cars...Shelby Daytona Coupe at the Goodwood Revival, superb photo gallery.





Too Much Oil, Debt, Cars - Revisited

Its fascinating to revisit perspectives from some time ago, and conclude that it was either prescient, brilliant, smart or just plain dumb. As you know we always say that "We don't follow, we lead" while our thoughts are often a little too far ahead.

We also mention to connect dots and obvious be your own editor with the myriad of opinions that are generated on an ongoing basis.


Was it smart or not smart to ramp up the production of oil, to lower prices, to alter economies, to effect change.

Agreed there is already a good portion of a "cloud" (hard drives are so passe by now) somewhere full of opinions from pundits, analysts, experts on the impact of oil.

Oil has reshuffled the world order be it for the right or wrong reasons. As the current price of oil increases it will recalibrate the reshuffled order. With folks looking back and saying "we told you so" while others will look ahead and also say "we told you so".

The reshuffling has impacted Canada, created a new order, that will be recalibrated in the months and years to come.


Another portion of a cloud is full of various thoughts on the recent federal election in Canada. Which campaign resonated, which one missed the mark. Who had momentum, who was disconnected, and so on.

At Strada we connected a few dots...

For years CMS (Citizen Main Street) was encouraged to increase the level of debt they carried to support the Canadian economy, that was powered by oil and consumer debt. Oil got reshuffled, while consumer debt had reached its rational (or is it irrational) maximum.

In the meantime the government is balancing the books, offering more of the same. While the oil situation is not really sustainable, and the debt situation is at the end of its rope.

We all know the outcome "real change" carried the day. When it came time CMS made a brilliant decision "we collectively have our asses on the line, we need a government that will also puts its ass on the line".


Record year on top of a record year, its never been seen before in Canada. The 3rd largest auto market in Canada (Alberta) is struggling and its still a record year.

Yes...there is the surge in utility vehicles, and the continuing free flowing money from banks.

Lets not forget that "premium economy" is reshuffling segments of the market.

While CMS is inexorably migrating from an ownership to a mobility model.

From car (sedan) to utility, from ownership to mobility.





Have you noticed the "Dog Days of Summer" are more exciting than usual. Its not the quiet summer that most folks anticipated. 

How come?

Well...the Pan Am games have created their own level of excitement, and a ton of medals for Canada. Its a unique instance where Canadians truly feel like winners. Watching athletes bring in the gold.

The looming campaign for the federal election.

The burning question...

Are we in a recession, are we not in a recession, why use the "R" word in the first place.

Lets take a look...

The Canadian Dollar:

Its in the dumpster, CMS (Citizen Main Street) will spend more for the same "imported" stuff, and feel poorer while doing so. Keep in mind the feel poorer aspect...

The "Its great for manufacturing, jobs, exports..." we have heard that tired mantra for so long now that you truly have to wonder about its validity at this point. Did appliance making return to Canada? Did furniture making return to Canada?

Low Interest Rates:

At this stage its a big yawn, who cares anymore, they have been low for such a long time that its a given they will stay low. If the rates increase...think Walmart, Dollarama.

Price of Oil:

The oil industry in Canada, needs oil priced at $70 US a barrel to have a viable business model. We have known that for decades...nothing new here. $100 a barrel it was all $50 a barrel no so good. Its a new reality.

Auto Sales:

Through the roof, even with Alberta the 4th largest market in Canada behind this year. Go figure...easy CMS has no desire for ownership, its mobility for a monthly payment. Canadian banks have been empowering CMS to truly adopt the mobility model. Observe the increased share of leasing with the lower CDN dollar.

Real Estate:

Its over valued, its on fire, a crash is just around the corner, where is all this money coming from? Reflect on this for a moment...CMS feels in control with real estate, Canadian banks aided by the government have encouraged CMS to be in control.

Think about this too...its our collective money that is guaranteeing a "shit load" of mortgages.


The future direction of Canada is in a recession...reflect on this for a longer moment.

Canada has been at a pivot point since the presumed great recession of 2008/09 which never really occured in Canada. Besides solidifying the position of Walmart and Dollarama.

Canadian companies are very adept at making money with CMS. While CMS is adept at taking care of himself.

We could keep on going...

Canadian economic thinking is in a recession....must be the reason everyone wants to stay away from the discussion. The longer this "recessionary thinking" endures...the more interesting, and deplorable its going to get.

The "cloudier" Canada's future will be...

Must be our rant of the day.




Vroom Room

Good Morning,

HorsesIts Friday, its the Dog Days of Summer, its the Vroom Room. Enjoy the cappuccino and biscotti join the conversation, leave a comment.

You have to wonder if the Canadian economy is really "tanking" as the mainstream media would like us to believe. In the meantime our dollar persists on a downward spiral.

Did we forget all the media noise about China and the debt in Greece?

You know the saying...we always learn something new. It was informative last week to drive on the 401 with a conventional cruise control, and compare it to our drive with an adaptive cruise control. If you missed it just scroll down.

Don't you love it, reading that there is a pondering here, a mulling there, a possible somewhere else, and so on and on. have to be your own editor.

Canadian Sales:

A record breaking first half of the year...what else can you say...spectacular, impressive. Are we destined to drive around in a "square" utility vehicle of one make or another? What do you think?

Behind the scenes at the Goodwood Festival of Speed...impressive photo gallery.





Canada and the Auto Business

If you go by the numbers of auto ads on the various medias, either March will be a strong month, or its softer than expected and everyone is trying to get whatever they can out of the market.

Next week we will get a clearer picture.

The old saying "A vehicle is the second most expensive purchase next to a house". Must be a good thing that we are gravitating from ownership to mobility at a constant $500 per month.

For the past few years Canada has become a full fledged consumer economy empowered by free flowing money. We missed the bullet in the "great recession" of 2008/09 and morphed into a consumer economy.

Here is the deal...

Lean on CMS (Citizen Main Street) to consume more, empower CMS with inexpensive free flowing money to encourage him to consume even more.

The thought vector that Canadian companies were/are sitting on mountains of cash and should start investing in the Canadian economy got lost in a fog of changes. You have to wonder what happened to investing, creating jobs, to keep Canada going for the next generation.

Free flowing money has empowered record vehicle sales in Canada for the past couple of years. Yes...2014 was a record year, and this year started strong on top of a record year.

In the meantime...

The CDN dollar is in the dumpster, negatively impacting the confidence of CMS.

Price of oil is in the dumpster, with epic consequences across Canada.

Gas is not so cheap, a head of lettuce is not cheap, the same for coffee, and olive oil.

Pick up ads are touting 5 figure discounts/deals.

Vehicle sales in Alberta (3rd largest market in Canada) are steadily diminishing.

The mobility business model...

This model works well on a 24-36 month cycle, at 48-60 months most folks will have spent some money on consumables (tires,brakes,service) they are less tempted to change vehicles. If the confidence of CMS is shaken, lowered, with the current mobility model its easy to extend the trade cylce from 36 to 48 or 60 months.

As sales increase in the US with a rising tide of employment, consumer confidence, the opposite might just develop in Canada.

Month end March will be revealing.



Vroom Room

Good Morning,

Its Friday, its the Vroom Room, enjoy the cappuccino and biscotti, join the conversation, leave a comment.

Its a new month, we are back to fully engaged reality, with the expected increased turmoil in the world, and a ton of opinions on the Canadian economy, and the dollar.

Yes...we knew it was coming during the summer.

In case you missed our latest ebook "Behind Closed Doors"...Click. We are certain that you will find it interesting, captivating, and revealing.

As we move closer to "connected cars" and self driving cars. Old school mechanical cars are starting to look totally archaic, although easily restorable. You have to wonder about the challenges that these new cars will pose decades from now in the restoration process. By then the software to operate many of the features will be long gone.

Think about this for a moment.

Have you noticed how the mainstream media is increasingly in the eyeball business. Literally rehashing the same stories, photos, content, over and over in their quest to capture more eyeballs. 

In an atmosphere of diminished attention span, humans just "shut down" to ingesting the same s#&t over and over. 

Canadian Sales:

A record September, and a record 3rd quarter. Fascinating results when everyone fires on all cylinders, gets the game plan, and the money flows freely. Let's not forget new models too. It literally took years to arrive at this juncture in Canada. 

As expected trucks are increasing their popularity and market share.

Finally GM throttled up in September with a strong month...


We are increasingly reading opinions by pundits that Canada is falling behind. A couple of years ago we mentioned that Canadian companies were sitting on mountains of cash, while the conomy was relying on the Canadian consumer, and cheap money. 

We are seeing the results of a lack of "corporate leadership and innovation" in Canada. Cheap money from the banks has camouflaged a myriad of weaknesses, while increasing a wave of consumption. 

Canadian auto sales are one effect of cheap money.

The Corvette Z06 has a 0 to 60 of 2.95 seconds with an 8 speed automatic...impressive.

Old and new cars at The Maserati Centennial 2014.





Global Economic Intelligence

Interesting to look at the big picture and get a feel for what sort of economic world we will be navigating in 2014, take a look. An easy read the graphics are intuitive.






Current Reality

Lets start the last month of the year reflecting on  the big picture for a moment. 

Here is the deal:

  • CMS (Citizen Main Street) has been carrying the Canadian economy for a few years now. Its part of the New Reality from a few years ago.
  • We all know that CMS has been empowered by "cheap credit". Agreed it facilitated Canada dodging the bullet of the "global recession", although a ton of pundits constantly made reference to the "recession" which never really existed in Canada.
  • We all know that most companies are sitting on a ton of cash, withholding investments, and waiting for "something" (gotta wonder about that something).

 The present:

  • Auto sales powered by new product, but primarily cheap credit, and long term loans are literally through the roof in 2013. 
  • Real estate (construction, resale) powered by the same cheap credit is through the roof, and evolving into the main industry in Canada.
  • CMS appetite for credit is over the top, and through the roof.
  • Until Carney was cautionary the rest of the world was patient. Now that Poloz is saying that its normal, the rest of the world and some Canadian banks are pushing the "caution button".
  • Obvious that CMS is close to the end of the road dealing cheap credit.
  • Pundits have shared their thoughts from all directions since the beginning of the year, usually on the premise that its all normal, and part of a new reality.
  • The Canadian dollar recently embarked on an inexorable downward slide, which will help most Canadian companies exporting (the ones that have not closed or moved).

 The immediate horizon:

  • For how long can vehicles be sold with long finance terms, to facilitate rolling over deficiencies? 
  • What happens when CMS reigns in the appetite for cheap credit? We are getting a glimpse.
  • What happens as the "Bitumen Bubble" endures, and inexorably turns the Oil Sands into expensive oil?
  • What happens as Gen Y wages/income continue to stagnate?
  • What happens as the world continues to see Canada as a bubble on the cusp of bursting?

The immediate auto business:

  • Manufacturers after a through the roof 2013 will soften the level of incentives going into 2014.
  • Can CMS continue to budget $500/month for a vehicle, to do a deal?
  • Will dealers finally understand the relation between "brick and mortar" and "digital" that we described in iDealer.
  • It will be Plan A, Plan B, and even Plan C to navigate 2014.





Citizen Main Street

We have been saying for a few years that CMS (Citizen Main Street) has been powering the Canadian economy, with many companies sitting on piles of money.

If the 2 largest purchases of a family are houses, and vehicles, house sales are booming in Canada, and vehicle sales are almost off the both instances its powered by OPM (Other People's Money) at extremely low rates.

At one point it was "Lets temporarily power up CMS with cheap OPM" now the rest is history...

The impact on contruction to build houses acquired with OPM

Chart-Ben Rabidoux


As housing takes off others sit on the sidelines "waiting"...waiting for what?


Chart-Ben Rabidoux


To bring it closer to home in the auto business...


Chart-JD Power

 Its a new reality in discovering the effects and impact of inexpensive OPM (Other People's Money) on CMS (Citizen Main Street) to temporarily power up the Canadian economy.

We urge you to connect your own dots for the last quarter of 2013 and 2014.





Vroom Room

Good Morning!

Its Friday, its the Vroom Room come in make yourself comfortable, we have cappuccino and biscotti, join the conversation.

Last Saturday we went for a drive to Owen Sound to attend the Cobble Beach Concours d'Elegance. We had not gone for a lenghty drive (over 2 hours) on surface roads in some time. Yes...Walter (E500) remains a fun car to drive on such roads, as well there is a country side peacefulness that is a contrast from the habitual crowded GTA roads.

On our return for a few kilometers there was a 1959 Cadillac following us. Revealing to see from the rear view mirror the side over hang, the narrow tires, and such a huge car. There a myriad reasons cars are safer today, less over hang, better tires are certainly a couple of components.

You must have noticed that numerous pundits are talking about the 5th anniversary of the "financial crisis" think about was 5 years ago. At the time we shared our thoughts with New Reality, which still resonates today.

Fascinating this past Wednesday to see how the markets were behaving prior to, and past Ben Bernanke's (The Feds) announcement on wether they were going to "taper" or not. Even more interesting when everyone seemed to have the answer, and it was not the correct answer.

Its still CMS (Citizen Main Street) that is powering the Canadian economy...think about this for a moment.

Its still the Canadian taxpayer that is back stopping mortgages in Canada...think about this too.

Perhaps the lingering lesson from 5 years ago: "When folks get too creative with money in one fashion or another, it always takes a perilous / uncharted direction". Lets leave it at that for the moment...

In case you missed it, we also started "The Backstory" which we will continue, our first backstory was to get "Where is the Money" out of the vault, since it increasingly resonates, with most folks wondering where all the money has gone.

Keep an eye, it will be interesting, and fascinating to see how Sergio Marchionne deals with the Chrysler IPO, and VEBA, obvious the end result is to own Chrysler...lets see how Sergio plays this one out.

Our usual old race cars from the Goodwood Revival Tourist Trophy.