Canadian Personal Finance Blog

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Another interesting month in March for the CPI with the CPI running at 1.2% down from 1.4% in February. Lower inflation is a good thing for consumers for now, except the numbers are very deceiving, when Food is the major upward pressure (a day to day cost we all incur) and with Energy prices stabilizing, what will come in the next few months. With the amount of money “vomited” into the monetary system by governments, is Inflation that far off?

Food Glorious Food

The main culprits in the upward pressure is the cost of shelter and the cost of food. Specifically Stats Canada points out:

Food prices, the largest factor, rose 7.9% during the 12-month period to March, on the heels of a 7.4% rise in February. March’s increase was the largest since November 1986.

Yikes, that is expensive, seems our Food dollar is really not going that far these days.

Energy and Transport DOWN

The Energy and Transport sectors did their best to lower the CPI, if not put us into a deflationary spiral, by dropping significantly over the year as well. 

Mitigating the overall increase in the CPI was a 6.2% decline in transportation costs. Year-over-year price drops for gasoline and for purchasing and leasing passenger vehicles were the primary downward contributors. Increasing prices for passenger vehicle insurance mitigated the overall 12-month drop in transportation costs.

Excluding gasoline, the CPI rose 2.4% in the 12 months to March. Overall, energy prices fell 11.2% during the same period, a larger drop than February’s decline of 8.8%.

Now that is a price drop! No wonder they are laying folks off in the oil patches. 

CPI for March

The Big Picture

Random Thoughts will return next week, have a great weekend all.

Cramer vs. Stewart

I was watching CNN and saw that Jim Cramer was on and he seems to be starting up some kind of feud with Jon Stewart of the Daily Show, about how Jim is being taken out of context for his advice to buy Bear Stearns. I don’t see why Mr. Cramer is so upset, he does a daily show where he does advice, he was BOUND to have a few “clunkers” in his picks and doing it on a nationally televised (cable tv) show it is kind of hard to say, “I never said that”. Now Mr. Cramer is not saying that, he is saying he said later NOT to buy Bear Stearns, but like most pundits the rest of the media will pick him apart because they can show he did say BUY some time (8 weeks before Bear Stearns demise, as claimed by the Daily show). 

I rarely give out advice (I learned from This Big Financial Advice Mistake) on what and when to buy (and anyone taking that advice, needs to read my 5 Worst Investing Mistakes ), but I have said I buy banks and I am still buying banks (Canadian banks that is), but I am losing money on this advice and admit I am taking a beating, no big deal, but I am not making my living on my financial advice (if I did, I’d be living in a Refridgerator box on the Rideau Canal).  The most you can expect from someone like me is excellent examples of what NOT to do with your investing dollar.

My advice to Mr. Cramer is laugh it off, trying to vindicate yourself when being mocked by a Comedian who doesn’t necessarily have to make a point (although Mr. Stewart does) never looks good. You are in the business of giving advice, and entertaining people, but I suspect this “feud” isn’t going to be over very soon (since it helps both sides to keep it going).

I’d include the clips, but Comedy Central’s clips don’t play in Canada and the Comedy Network doesn’t like other folks using their clips (go figure). Interesting also that Mr. Cramer’s video clips seem to be lost on the CNBC site as well, but then again, “I KNOW NOTHING!” (that’s the Sgt. Schultz from Hogan’s Heroes quote, not the Cramer quote).

Addendum, but I do have this clip from CNN:

Proof in Point

Remember yesterday’s post where I said nothing good was going to happen this week? Well as usual, off by a mile, a sudden surge in stock prices makes me look like the stock prognosticator that I am (i.e. able to pick a loser in a 1 horse race). Although the Just Don’t Look advice still holds.

In recent memory the major get rich scheme that helped sculpt the Canadian frontier was the Klondike Gold Rush, and the National Film Board again comes through with an excellent movie outlining this event, called the City of Gold.

For my American readers this is similar to the California gold rush, however it is in the North of Canada in Dawson City, and this film outlines the problems endured to try to “Get Rich Quick!”.

In today’s Get Rich Quick schemes, at least you don’t have to trek through snow and fight Grizzly bears, but are they as likely to make us money?

Mardi Gras is on Tuesday, so that means that Lent begins Wednesday this week and this is a perfect opportunity for folks to start something new with their Personal Finances (and their spiritual life, if they wish as well). Easter is the time for new beginnings or restarting something you need to start doing again, and most people view Lent as a time to “find something to give up”.

That is one way of viewing your Lenten journey, but another way is to look for something to Enrich your life for the 40 days of Lent (leading up to Good Friday and Easter). 

Financial Lenten Journey

What areas of your personal finances could use either Enrichment or Better still a sacrifice that might help your financial well being? There are some very simple ones that I think about every year (and have done a few of them):

• The Latte withdrawal penance. Cut out buying coffee for the 40 days of Lent and put that money aside, to either save, give to charity or pay down your debt. Keep track of this and see how much money you might be saving here, it’s worthwhile finding out where this discretionary money is going.
• Read 4 Personal Finance books over the 40 days to enrich your understanding of your personal finances or your investing adventures. Building up your expertise over Lent is a good thing.
• Brown bag it for 40 days, give up buying lunch at work, and bring your lunch instead. Another way to find out where your discretionary spending is going.
• Take the bus to work for Lent. Leave the car at home, buy a bus pass and take the Bus to work. Yes gas is cheaper right now, but not driving might have other benefits for you (less stress, more exercise, etc.,). 
• Live on cash for 40 days and get rid of your credit cards. Freeze them in your freezer, lock them in your safety deposit box, or cut them up, but live on CASH only (no debit either) and see if you can do it, does it change your spending habits?

Think about these or suggest others, I am open to suggestions myself. Shrove Tuesday is tomorrow and then Ash Wednesday means Lent begins and your journey begins that day.

That is what Minister Flaherty has created, a budget for every single person in Canada (or at least everyone in Canada will be touched in some fashion or another). This is an all encompassing and wide sweeping budget to kick start the economy (hopefully) and drive the government back into the glory days of the 70’s for racking up massive deficits ($33.7 B this year alone) (my opinion).

Budget Things that are Good For Me

Since I personalize things usually here is a list of things in the budget that are a good thing for me:

• EI payments will be extended by 5 weeks, which is great, except I haven’t started collecting E.I. yet, but it is good to know that if I need it, I will be getting it for a longer period of time.
• $8.3 billion for the Canada Skills and Transition Strategy, this is a good thing, since it helps unemployed folks like me get retrained and learn new certifications and skills (I am currently working on I.T.I.L. base certification and will move on to more technical training soon, as part of a provincial training program).
• Basic personal tax exemption for this tax year goes from $9,600 to $10,320, not a bad thing making $720 more not taxed!
• Tax brackets move up with (quoted from CBC) “…The upper limit for the 15 per cent bracket would go to $40,726, while the upper income limit for the 22 per cent bracket would rise to $81,452….”.
• Some very vague statements about “Mortgage Insurance” that we couldn’t really decypher (whether it pertained to CMHC insurance or the insurance banks offer on their mortgages).
• Tax relief for home improvement projects up to $1350 (if you spend $10000 or more) but only for this year and only for work done starting today.
• Adding CDIC support for TFSA accounts. This one surprised me, since I thought that was already in place, but I am very happy to know my TFSA is insured like a bank account is.
• “…Extending the Wage Earner Protection Program to cover severance and termination pay owed to eligible workers impacted by employers’ bankruptcy….”  which should help Nortel employees in specific, but not by much.
• EI Rates are now frozen for a while, which is cool.

And a lot of other rhetoric and vagaries that confuses me.

I actually got to read the Budget document when Larry MacDonald showed it to me, which was kind of cool, but he kept it. 

Is this budget going to help? I don’t know. Are the Liberals going to vote it down? I don’t know, but don’t worry all that will give me much more to write about in the next few days, so stay tuned.