Leo (July 23 — Aug. 22)
An optimistic attitude will extricate you from a tightening predicament. Your hopes are thoroughly realistic. Liberation will come. The results will surpass your expectations.
Energy Reporter
If you look hard – really hard – you may be able to spot a faint silver lining amid the economic chaos that has caused stock markets to crash and lending practices to tighten up in the past few weeks.
Only three months ago, Ontario drivers were filling up their cars with gasoline at $1.37 a litre. Crude oil was trading at $147 (U.S.) a barrel. The wholesale price of natural gas was trading above $13.50 per thousand cubic feet.
Gasoline prices have since fallen 25 per cent, oil is down 40 per cent and wholesale natural gas prices have plunged nearly 50 per cent.
"It's not going to be pretty for the next little while, but let's not panic, there is some light out there," said Peter Dungan, a professor of business economics at the Rotman School of Management at the University of Toronto.
Dungan, taking part yesterday in a school panel to discuss the current financial crisis, said falling oil prices have put an enormous amount of purchasing power back into the hands of consumers over the past three months.
Small businesses are also enjoying a little relief from softening energy prices. "It's taking some of the edge off people's concerns, because ($147 oil) was changing the economics of moving products from place to place," said Ted Mallett, chief economist with the Canadian Federation of Independent Business. "Is that a silver lining? Right now, at least in the very short term, there are bigger concerns to worry about."
Avery Shenfeld, senior economist at CIBC World Markets, said it's both a sign of a weakening economy and part of the cure.
"One way that recessions end is that prices for goods come into line with what people are prepared to pay for them, including gasoline, houses and interest rates."
Housing, meanwhile, has turned into a buyer's market. Prices in the Greater Toronto Area fell for the first time in more than a decade – down 3 per cent compared with a year ago and much more depending on the neighbourhood.
A weaker dollar is also helping exporters, and falling commodity prices – while stinging economies in the west – will benefit Ontario's struggling manufacturers.
Andrew Sharpe, executive director of the Ottawa-based Centre for the Study of Living Standards, said certain individuals and industries are poised to do better than others in the current economic climate. Some much better.
"If you're young, employed, have little chance of losing your job and have no portfolio where you're losing money," you're doing well, said Sharpe, adding that now is a great time for many young professionals to begin accumulating assets and become first-time homebuyers.
Stocks are cheap. The housing market is cooling. Fuel prices are down. "Your purchasing power is going up," Sharpe said.
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