Tomgram: Ira Chernus, What Ever Happened to Plain Old Apocalypse? | TomDispatch
Tomgram: Ira Chernus, What Ever Happened to Plain Old Apocalypse? | TomDispatch.
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For those of us of a certain age, it seems as if the world has always been ending. It’s easy now to forget just how deep fears and fantasies about a nuclear apocalypse went in the “golden” 1950s. And I’m not just thinking about kids like me “ducking and covering” at the advice of Bert the Turtle, while sirens screamed in the big city and the emergency warning system Conelrad blared from a radio on our teacher’s desk. Here, from Spencer Weart’s book Nuclear Fear, is a typical enough description of everyday life in that nuclearized America. “Operation Alert” was a set of exercises that started in 1954 and were meant to prepare the populace for imminent attack. As Russian nuclear-armed bombers “supposedly approached,” writes Weart, “citizens in scores of cities obeyed the howl of sirens and sought shelter, leaving the streets deserted. Afterward, photographs of the empty streets offered an eerie vision of a world without people. The press reported with ghoulish precision how many millions of Americans ‘died’ in each mock attack.”
No one was immune from such experiences and fears. In June 1953, for instance, President Dwight Eisenhower screened Operation IVY, a top-secret film about the first successful full-scale test of an H-bomb at Eniwetok Atoll in the Marshall Islands. That bomb was not just a city-killer, but also a potential civilization destroyer. The screening took place at the White House with the full cabinet and the Joint Chiefs in attendance. The president was evidently deeply disturbed by the image of an “entire atoll” vanishing “into a crater” and, adds Weart, by “the fireball with a dwarfed New York City skyline printed across it in black silhouette.” In 1956, Democratic presidential candidate Estes Kefauver announced that H-bombs could “right now blow the earth off its axis by 16 degrees.” Talk about waking nightmares.
In the same years, if you happened to be young and at the movies, nuclearized America was taking vivid shape. In the Arctic, the first radioactivated monster, Ray Bradbury’s Rhedosaurus, awakened in The Beast from 20,000 Fathoms to begin its long slouch toward New York City; in the Southwestern desert, near the Trinity testing grounds for the first atomic bomb, a giant mutated queen ant in Them! prepared for her long flight to the sewers of Los Angeles to spawn; in space, the planet Metaluna displayed “the consequences of a weak defense system” by being incinerated in This Island Earth. And don’t forget the return of the irrepressible, the A-bombings of Hiroshima and Nagasaki. In 1954, Godzilla, that reptilian nightmare “awakened” by atomic tests, stomped out of Japan’s Toho studios to barnstorm through American theaters.
No wonder that, of all my thousands of dreams from those years, no matter how vivid or fantastic, the only ones I remember are those in which I seemed to experience “the Bomb” going off, saw the mushroom cloud rising, or found myself crawling through the rubble of atomically obliterated cities. In this, I suspect, I’m not alone in my generation. In fact, I’ve always had the desire to conduct a little informal survey, collecting the atomic dreamscapes of my peers from that era. If I had another life, I undoubtedly would.
From the actual nuclear destruction of 1945 to the prospective nuclear destruction that, in the Cuban Missile Crisis of 1962, seemed briefly to reach the edge of a world-ending boil, to the possibility today of a global “nuclear winter” set off by a regional war between India and Pakistan, who knows just how the fear of a nuclear apocalypse has embedded itself in consciousness. All we can know is that it has, and that a climate-change version of the same, perhaps even harder to grasp and absorb, has been creeping into our imaginations and dreamscapes in recent years. Today, religious scholar, historian, and TomDispatch regular Ira Chernus takes the deep plunge into the modern version of the apocalyptic imagination, wondering whether the crater the first H-bomb left in Eniwetok Atoll is where hope lies buried. Tom
Is There Any Hope in an Era Filled with Gloom and Doom?
By Ira Chernus
Wherever we Americans look, the threat of apocalypse stares back at us.
Two clouds of genuine doom still darken our world: nuclear extermination and environmental extinction. If they got the urgent action they deserve, they would be at the top of our political priority list.
But they have a hard time holding our attention, crowded out as they are by a host of new perils also labeled “apocalyptic”: mounting federal debt, the government’s plan to take away our guns, corporate control of the Internet, the Comcast-Time Warner mergerocalypse, Beijing’s pollution airpocalypse, the American snowpocalypse, not to speak of earthquakes and plagues. The list of topics, thrown at us with abandon from the political right, left, and center, just keeps growing.
Then there’s the world of arts and entertainment where selling the apocalypse turns out to be a rewarding enterprise. Check out the website “Romantically Apocalyptic,” Slash’s album “Apocalyptic Love,” or the history-lite documentary “Viking Apocalypse” for starters. These days, mathematicians even have an “apocalyptic number.”
Yes, the A-word is now everywhere, and most of the time it no longer means “the end of everything,” but “the end of anything.” Living a life so saturated with apocalypses undoubtedly takes a toll, though it’s a subject we seldom talk about.
So let’s lift the lid off the A-word, take a peek inside, and examine how it affects our everyday lives. Since it’s not exactly a pretty sight, it’s easy enough to forget that the idea of the apocalypse has been a container for hope as well as fear. Maybe even now we’ll find some hope inside if we look hard enough.
A Brief History of Apocalypse
Apocalyptic stories have been around at least since biblical times, if not earlier. They show up in many religions, always with the same basic plot: the end is at hand; the cosmic struggle between good and evil (or God and the Devil, as the New Testament has it) is about to culminate in catastrophic chaos, mass extermination, and the end of the world as we know it.
That, however, is only Act I, wherein we wipe out the past and leave a blank cosmic slate in preparation for Act II: a new, infinitely better, perhaps even perfect world that will arise from the ashes of our present one. It’s often forgotten that religious apocalypses, for all their scenes of destruction, are ultimately stories of hope; and indeed, they have brought it to millions who had to believe in a better world a-comin’, because they could see nothing hopeful in this world of pain and sorrow.
That traditional religious kind of apocalypse has also been part and parcel of American political life since, in Common Sense, Tom Paine urged the colonies to revolt by promising, “We have it in our power to begin the world over again.”
When World War II — itself now sometimes called an apocalypse — ushered in the nuclear age, it brought a radical transformation to the idea. Just as novelist Kurt Vonnegut lamented that the threat of nuclear war had robbed us of “plain old death” (each of us dying individually, mourned by those who survived us), the theologically educated lamented the fate of religion’s plain old apocalypse.
After this country’s “victory weapon” obliterated two Japanese cities in August 1945, most Americans sighed with relief that World War II was finally over. Few, however, believed that a permanently better world would arise from the radioactive ashes of that war. In the 1950s, even as the good times rolled economically, America’s nuclear fear created something historically new and ominous — a thoroughly secular image of the apocalypse. That’s the one you’ll get first if you type “define apocalypse” into Google’s search engine: “the complete final destruction of the world.” In other words, one big “whoosh” and then… nothing. Total annihilation. The End.
Apocalypse as utter extinction was a new idea. Surprisingly soon, though, most Americans were (to adapt the famous phrase of filmmaker Stanley Kubrick) learning how to stop worrying and get used to the threat of “the big whoosh.” With the end of the Cold War, concern over a world-ending global nuclear exchange essentially evaporated, even if the nuclear arsenals of that era were left ominously in place.
Meanwhile, another kind of apocalypse was gradually arising: environmental destruction so complete that it, too, would spell the end of all life.
This would prove to be brand new in a different way. It is, as Todd Gitlin has so aptly termed it, history’s first “slow-motion apocalypse.” Climate change, as it came to be called, had been creeping up on us “in fits and starts,” largely unnoticed, for two centuries. Since it was so different from what Gitlin calls “suddenly surging Genesis-style flood” or the familiar “attack out of the blue,” it presented a baffling challenge. After all, the word apocalypse had been around for a couple of thousand years or more without ever being associated in any meaningful way with the word gradual.
The eminent historian of religions Mircea Eliade once speculated that people could grasp nuclear apocalypse because it resembled Act I in humanity’s huge stock of apocalypse myths, where the end comes in a blinding instant — even if Act II wasn’t going to follow. This mythic heritage, he suggested, remains lodged in everyone’s unconscious, and so feels familiar.
But in a half-century of studying the world’s myths, past and present, he had never found a single one that depicted the end of the world coming slowly. This means we have no unconscious imaginings to pair it with, nor any cultural tropes or traditions that would help us in our struggle to grasp it.
That makes it so much harder for most of us even to imagine an environmentally caused end to life. The very category of “apocalypse” doesn’t seem to apply. Without those apocalyptic images and fears to motivate us, a sense of the urgent action needed to avert such a slowly emerging global catastrophe lessens.
All of that (plus of course the power of the interests arrayed against regulating the fossil fuel industry) might be reason enough to explain the widespread passivity that puts the environmental peril so far down on the American political agenda. But as Dr. Seuss would have said, that is not all! Oh no, that is not all.
When you do that Google search on apocalypse, you’ll also get the most fashionable current meaning of the word: “Any event involving destruction on an awesome scale; [for example] ‘a stock market apocalypse.'” Welcome to the age of apocalypses everywhere.
With so many constantly crying apocalyptic wolf or selling apocalyptic thrills, it’s much harder now to distinguish between genuine threats of extinction and the cheap imitations. The urgency, indeed the very meaning, of apocalypse continues to be watered down in such a way that the word stands in danger of becoming virtually meaningless. As a result, we find ourselves living in an era that constantly reflects premonitions of doom, yet teaches us to look away from the genuine threats of world-ending catastrophe.
Oh, America still worries about the Bomb — but only when it’s in the hands of some “bad” nation. Once that meant Iraq (even if that country, under Saddam Hussein, never had a bomb and in 2003, when the Bush administration invaded, didn’t even have a bomb program). Now, it means Iran — another country without a bomb or any known plan to build one, but with the apocalyptic stare focused on it as if it already had an arsenal of such weapons — and North Korea.
These days, in fact, it’s easy enough to pin the label “apocalyptic peril” on just about any country one loathes, even while ignoring friends, allies, and oneself. We’re used to new apocalyptic threats emerging at a moment’s notice, with little (or no) scrutiny of whether the A-word really applies.
What’s more, the Cold War era fixed a simple equation in American public discourse: bad nation + nuclear weapon = our total destruction. So it’s easy to buy the platitude that Iran must never get a nuclear weapon or it’s curtains. That leaves little pressure on top policymakers and pundits to explain exactly how a few nuclear weapons held by Iran could actually harm Americans.
Meanwhile, there’s little attention paid to the world’s largest nuclear arsenal, right here in the U.S. Indeed, America’s nukes are quite literally impossible to see, hidden as they are underground, under the seas, and under the wraps of “top secret” restrictions. Who’s going to worry about what can’t be seen when so many dangers termed “apocalyptic” seem to be in plain sight?
Environmental perils are among them: melting glaciers and open-water Arctic seas, smog-blinded Chinese cities, increasingly powerful storms, and prolonged droughts. Yet most of the time such perils seem far away and like someone else’s troubles. Even when dangers in nature come close, they generally don’t fit the images in our apocalyptic imagination. Not surprisingly, then, voices proclaiming the inconvenient truth of a slowly emerging apocalypse get lost in the cacophony of apocalypses everywhere. Just one more set of boys crying wolf and so remarkably easy to deny or stir up doubt about.
Death in Life
Why does American culture use the A-word so promiscuously? Perhaps we’ve been living so long under a cloud of doom that every danger now readily takes on the same lethal hue.
Psychiatrist Robert Lifton predicted such a state years ago when he suggested that the nuclear age had put us all in the grips of what he called “psychic numbing” or “death in life.” We can no longer assume that we’ll die Vonnegut’s plain old death and be remembered as part of an endless chain of life. Lifton’s research showed that the link between death and life had become, as he put it, a “broken connection.”
As a result, he speculated, our minds stop trying to find the vitalizing images necessary for any healthy life. Every effort to form new mental images only conjures up more fear that the chain of life itself is coming to a dead end. Ultimately, we are left with nothing but “apathy, withdrawal, depression, despair.”
If that’s the deepest psychic lens through which we see the world, however unconsciously, it’s easy to understand why anything and everything can look like more evidence that The End is at hand. No wonder we have a generation of American youth and young adults who take a world filled with apocalyptic images for granted.
Think of it as, in some grim way, a testament to human resiliency. They are learning how to live with the only reality they’ve ever known (and with all the irony we’re capable of, others are learning how to sell them cultural products based on that reality). Naturally, they assume it’s the only reality possible. It’s no surprise that “The Walking Dead,” a zombie apocalypse series, is theirfavorite TV show, since it reveals (and revels in?) what one TV critic called the “secret life of the post-apocalyptic American teenager.”
Perhaps the only thing that should genuinely surprise us is how many of those young people still manage to break through psychic numbing in search of some way to make a difference in the world.
Yet even in the political process for change, apocalypses are everywhere. Regardless of the issue, the message is typically some version of “Stop this catastrophe now or we’re doomed!” (An example: Stop the Keystone XL pipeline or it’s “game over”!) A better future is often implied between the lines, but seldom gets much attention because it’s ever harder to imagine such a future, no less believe in it.
No matter how righteous the cause, however, such a single-minded focus on danger and doom subtly reinforces the message of our era of apocalypses everywhere: abandon all hope, ye who live here and now.
Doom and the Politics of Hope
Significant numbers of Americans still hold on to the hope that comes from the original religious version of the apocalypse. Millions of evangelical Christians seem ready to endure the terrors of the destruction of the planet, in a nuclear fashion or otherwise, because it’s the promised gateway to an infinitely better world. Unfortunately, such a “left behind” culture has produced an eerie eagerness to fight both the final (perhaps nuclear) war with evildoers abroad and the ultimate culture war against sinners at home.
This “last stand” mentality, deeply ingrained in (among others) some uncompromising tea partiers, seems irrational in the extreme to outsiders. It makes perfect sense, however, if you are convinced beyond a scriptural doubt that we’re heading for Armageddon.
A version of plain old apocalypse was once alive on the political left, too, when there was serious talk of a revolution that would tear down the walls and start rebuilding from the ground up. Given the world we face, it may at least be time to bring back the hope for a better future that lay at its heart.
With doom creeping up on us daily in our environmental slow-motion apocalypse, what we may well need now is a slow-motion revolution. Indeed, in the energy sphere it’s already happening. Scientists have shown that renewable sources like sun and wind could provide all the energy humanity needs. Alternative technologies are putting those theories into practice around the globe, just not (yet) on the scale needed to transform all human life.
Perhaps it’s time to make our words and thoughts reflect not just our fears, but the promise of the revolution that is beginning all around us, and that could change in a profound fashion the way we live on (and with) this planet. Suppose we start abiding by this rule: whenever we say the words “Keystone XL,” or talk about any environmental threat, we will follow up with as realistic a vision as we can conjure up of “Act II”: a new world powered solely by renewable sources of energy, free from all carbon-emitting fuels, and inhabited in ingeniously organized new ways.
In an age in which gloom, doom, and annihilation are everywhere, it’s vital to bring genuine hope — the reality, not just the word — back into political life.
Ira Chernus, a TomDispatch regular, is professor of religious studies at the University of Colorado Boulder and author of the online “MythicAmerica: Essays.” He blogs at MythicAmerica.us.
Follow TomDispatch on Twitter and join us on Facebook and Tumblr. Check out the newest Dispatch Book, Ann Jones’s They Were Soldiers: How the Wounded Return From America’s Wars — The Untold Story.
Copyright 2014 Ira Chernus
Taxing The Rich Not A Drag On Economic Growth: IMF Paper
Taxing The Rich Not A Drag On Economic Growth: IMF Paper.
CP | By Julian Beltrame, The Canadian PressPosted: 02/26/2014 10:33 am EST | Updated: 02/26/2014 3:59 pm EST
OTTAWA – A new paper by researchers at the International Monetary Fund appears to debunk a tenet of conservative economic ideology — that taxing the rich to give to the poor is bad for the economy.
The paper by IMF researchers Jonathan Ostry, Andrew Berg and Charalambos Tsangarides will be applauded by politicians and economists who regard high levels of income inequality as not only a moral stain on society but also economically unsound.
Labelled as the first study to incorporate recently compiled figures comparing pre- and post-tax data from a large number of countries, the authors say there is convincing evidence that lower net inequality is good economics, boosting growth and leading to longer-lasting periods of expansion.
In the most controversial finding, the study concludes that redistributing wealth, largely through taxation, does not significantly impact growth unless the intervention is extreme.
In fact, because redistributing wealth through taxation has the positive impact of reducing inequality, the overall affect on the economy is to boost growth, the researchers conclude.
“We find that higher inequality seems to lower growth. Redistribution, in contrast, has a tiny and statistically insignificant (slightly negative) effect,” the paper states.
“This implies that, rather than a trade-off, the average result across the sample is a win-win situation, in which redistribution has an overall pro-growth effect.”
While the paper is heavy on the economics, there is no mistaking the political implications in the findings.
In Canada, the Liberal party led by Justin Trudeau is set to make supporting the middle class a key plank in the upcoming election and the NDP has also stressed the importance of tackling income inequality.
Stephen Harper’s Conservatives have boasted that tax cuts, particularly deep reductions in corporate taxation, are at least partly responsible for why the Canadian economy outperformed other G7 countries both during and after the 2008-09 recession.
In the Commons on Tuesday, Employment Minister Jason Kenney said the many tax cuts his government has introduced since 2006, including a two-percentage-point trim of the GST, has helped most Canadians.
Speaking on a Statistics Canada report showing net median family wealth had increased by 44.5 per cent since 2005, he added:
“It is no coincidence because, with the more than 160 tax cuts by this government, Canadian families, on average, have seen their after-tax disposable income increase by 10 per cent across all income categories. We are continuing to lead the world on economic growth and opportunity for working families.”
The authors concede that their conclusions tend to contradict some well-accepted orthodoxy, which holds that taxation is a job killer.
But they say that many previous studies failed to make a distinction between pre-tax inequality and post-tax inequality, hence often compared apples to oranges, among other shotcomings.
The data they looked at showed almost no negative impact from redistribution policies and that economies where incomes are more equally distributed tend to grow faster and have growth cycles that last longer.
Meanwhile, they say the data is not crystal clear that even large redistributions have a direct negative impact, although “from history and first principles … after some point redistribution will be destructive of growth.”
Still, they also stop short of saying their conclusions definitively settle the issue, acknowledging that it is a complex area of economic theory with many variables at play and a scarcity of hard data.
Instead, they urge more rigorous study and say their findings “highlight the urgency of this agenda.”
The Washington-based institution released the study Wednesday morning but, perhaps due to the controversial nature of the conclusions, calls it a “staff discussion note” that does “not necessarily” represent the IMF views or policy. It was authorized for distribution by Olivier Blanchard, the IMF’s chief economist.
Kerry Promises Ukraine $1 Billion Bailout (Detroit, Not So Much) | Zero Hedge
Kerry Promises Ukraine $1 Billion Bailout (Detroit, Not So Much) | Zero Hedge.
Having threatened Russia that “any military move would be a grave mistake” and sounding awefully like a “line” to be crossed, US Secretary of State John Kerry told reporters that the US is ready to bail out Ukraine…
- *KERRY: RUSSIA MILITARY MOVE ON UKRAINE WOULD BE GRAVE MISTAKE
- *KERRY SAYS U.S. PLANNING $1 BLN LOAN GUARANTEE FOR UKRAINE
- *KERRY SAYS U.S. WORKING WITH IMF, OTHERS ON AID TO UKRAINE
One has to wonder how many US jobs this will create (or save)? Or will Ukraine offer unlimited vodka to citizens of Detroit (or Puerto Rico for that matter)?
As Reuters headlines show:
- U.S. CONSIDERING UNSPECIFIED BUDGET SUPPORT FOR UKRAINE ON TOP OF POSSIBLE $1 BILLION LOAN GUARANTEE – KERRY
- KERRY SAYS POSSIBLE MILITARY INTERVENTION BY RUSSIA IN UKRAINE WOULD BE A COSTLY DECISION, GIVES NO DETAILS
Secretary of State John Kerry says the United States is planning to provide Ukraine with $1 billion in loan guarantees and will consider additional direct assistance to the former Soviet republic.
Speaking to reporters at the State Department on Wednesday, Kerry said it was “urgent to move forward” in assisting Ukraine following the ouster of its Russian-backed president. But he said it was also urgent for Ukraine’s interim authorities to enact reforms, curb corruption, and prepare free and fair elections.
The U.S. aid would be part of a planned massive international assistance package that was expected to include European contributions as well as loans from global financial institutions.
» Confirmed: Fukushima Radiation Reaches West Coast of Canada Alex Jones’ Infowars: There’s a war on for your mind!
» Confirmed: Fukushima Radiation Reaches West Coast of Canada Alex Jones’ Infowars: There’s a war on for your mind!.
Researchers discover cesium near Vancouver
Paul Joseph Watson
February 26, 2014
Researchers have announced that radioactive isotopes from the Fukushima nuclear disaster have been discovered in seawater west of Vancouver off the coast of Canada, confirming predictions that the radiation would reach the west coast by early 2014.
The findings were announced at the annual American Geophysical Union’s Ocean Sciences meeting in Honolulu yesterday.
“John Smith, a research scientist at Canada’s Bedford Institute of Oceanography in Dartmouth, Nova Scotia, told the AGU meeting that since 2011 he and colleagues had measured a radioactive plume from nuclear complex at ocean monitoring stations west of Vancouver. Fukushima’s radiation reached Canada before the US on the powerful Kuroshio Current. It’s predicted to flow south and then circle back to Hawaii,” reports Planet Save.
Samples of cesium-134 and cesium-137, which has a half-life of more than 30 years, were found by the researchers. The good news is that the samples are well below safety limits, although these were massively increased by authorities in the aftermath of the Fukushima disaster. The full scale of the danger will not be known until 2016, which is when the cesium radiation is expected to peak.
Senior scientist Ken Buesseler said that the radiation has not yet reached Washington, California, or Hawaii, although researchers are still awaiting tests on samples collected earlier this month. Some have suggested April as the time when Fukushima radiation will begin to hit the Pacific coast.
Yesterday, the Tokyo Electric Power Co. (TEPCO) admitted that levels of radiation measured in seawater from around the destroyed nuclear reactor were “significantly undercounted,” just the latest in a long history of officials deceptively downplaying the threat.
Using ocean simulations, experts concluded last summer that the radioactive plume from the nuclear accident in March 2011 would reach U.S. coastal waters by early 2014.
While publicly scoffing at independent researchers concerned about Fukushima radiation, public health authorities have been making preparations which many see as being connected to the ongoing crisis at the Daiichi nuclear plant.
The Department of Health and Human Services recently ordered 14 million doses of potassium iodide, the compound that protects the body from radioactive poisoning in the aftermath of severe nuclear accidents, but a DHHS official denied that the purchase was connected to the Fukushima crisis.
High levels of radioactivity have already been detected on beaches in San Francisco, although officials were quick to assert that the findings had no connection to Fukushima.
In January it was announced that 19 academic and government institutions would begin monitoring kelp forests across the entire state of California for signs of contamination from the crippled nuclear power plant.
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This article was posted: Wednesday, February 26, 2014 at 9:54 am
- Fukushima’s Radioactive Ocean Water Arrives At West Coast
- Professor Denies West Coast Radiation Link to Fukushima
- Scientists to Monitor California Kelp Forests For Fukushima Radiation
- ‘Melting’ Starfish Along West Coast Prompt Fukushima Concerns
- Report: Third of US West Coast Children Hit With Thyroid Problems Following Fukushima
US Warns Russia Over “Provocative” Actions In Ukraine | Zero Hedge
US Warns Russia Over “Provocative” Actions In Ukraine | Zero Hedge.
As today’s actions by Russia have raised concerns and stirred flight-to-safety flows in the markets, The White House has decided to add its $0.02 worth:
- *OBAMA AIDE EARNEST URGES ‘OUTSIDE ACTORS’ TO RESPECT UKRAINE TERRITORY
- *EARNEST SAYS RUSSIA SHOULD AVOID `PROVOCATIVE’ ACTIONS
- *U.S. WARNS RUSSIA TO RESPECT UKRAINE SOVEREIGNTY
Or else…? On the bright side, he did not say anything about crossed lines of color.
The White House is urging “outside actors” to respect Ukraine’s sovereignty, as neighboring Russia prepares for massive military exercises.
White House spokesman Josh Earnest said the U.S. is aware of Russia’s plans to launch the military maneuvers. While Russian officials said the exercises were unrelated to the tensions in Ukraine, these exercise will take place near the shared border between the countries.
Without specifically mentioning Russia, Earnest also called on others in the region to end “provocative rhetoric and actions.”
Russia has questioned the legitimacy of Ukraine’s acting government, which took charge after pro-Russian President Viktor Yanukovych fled after signing an agreement aimed at ending his country’s three-month political crisis.
Canada Housing Crash Feared Among Analysts: Reuters Poll
Canada Housing Crash Feared Among Analysts: Reuters Poll.
Posted: 02/26/2014 1:06 pm EST
Canada’s real estate market may be resting on a house of cards, say experts in aReuters poll.
The news agency surveyed 16 housing experts and almost all of them are worried that prices could fall sharply after a decade of rapid growth.
Three said they were “very concerned,” two said they were “concerned” and eight said they were “slightly concerned.” Three said they were not concerned at all.
However, the analysts also didn’t believe that a housing crash would happen any time soon. In fact, prices are expected to rise 2.2 per cent this year, one per cent in 2015 and 0.8 per cent in 2016, Reuters reported.
“Outside of Toronto and Calgary, the housing market is largely cooling, though far from crashing,” Sal Guatieri, senior economist at BMO Capital Markets, told the agency.
Concerns about a housing crash arise amid positive signs for the country’s real estate market. The average price of a Canadian home rose between 1.2 per cent and 3.8 per cent in the fourth quarter of 2013, said a Royal LePage survey.
But the market also remains vulnerable, as prices could fall by as much as 25 per centdue to spiking interest rates or an “economic shock,” a TD Bank report said earlier this month.
However, the report also said that much of the imbalance in the market reflects “frothier conditions in the larger urban centres of Toronto and Vancouver.”
Bank of Canada Governor Stephen Poloz warned in early January that long-term interest rates could rise in response to tapering by the U.S. Federal Reserve, though he also did not appear in any hurry to hike them.
Canadian Consumer Debt To Hit All-Time High By 2014’s End, TransUnion Predicts
Canadian Consumer Debt To Hit All-Time High By 2014’s End, TransUnion Predicts.
CP | By LuAnn LaSalle, The Canadian PressPosted: 02/26/2014 8:29 am EST | Updated: 02/26/2014 10:59 am EST
MONTREAL – Canadians are still on target for a record year of personal debt despite ending 2013 by making a small dent in the money they owe, says credit monitoring agency TransUnion.
At the end of last year, Canadians owed a total of $27,368 on such things as lines of credit, credit cards and car loans, TransUnion said in a study released Wednesday.
That’s down $117, or 0.42 per cent, from $27,485 in the fourth quarter of 2012 — the highest level of non-mortgage debt on record.
“We’ve been told over and over and over again from so many places that we’ve got to get this debt down and we can’t make it happen,” said Thomas Higgins, TransUnion’s vice-president of analytics and decision services.
TransUnion is sticking by its prediction that average consumer’s total non-mortgage debt will hit an all-time high of $28,853 by the end of 2014.
“There’s nothing to give us any indication that the debt levels are going to start to come down in any noticeable chunk,” Higgins said from Toronto. “Right now, we’re still trending in that direction (to higher debt), for sure.”
Higgins said Canadians started to pile on debt in the years before the 2008 recession. He said he’d have to see Canadians’ personal debt being reduced consistently by $500 to $1,000 over four to six quarters before he would say “we’re sorting of heading somewhere.”
In the last quarter of 2013, consumers’ credit card debt and debt on lines of credit were down a bit, Higgins said.
But consumers spent a little less on holiday shopping only because they got “better deals” rather than consciously cutting spending, he said.
The study also found that loan delinquencies in the quarter ended Dec. 31 were down, meaning that consumers were making minimum payments on their debts.
“We may not be paying all of it, but we’re paying enough down so that you’re still in good standing.”
But Higgins cautioned that if anything impacts the economy, the markets or interest rates, delinquency rates are usually impacted first.
Meanwhile, the study also found that Vancouver residents experienced the biggest increase in consumer debt, hitting $41,077 at the end of last year, up seven per cent from $38,357 in 2012.
On the other hand, those in Montreal managed to reduce their debt by 5.5 per cent from $19,651 to an average of $18,563, the lowest among residents of all major Canadian cities.
Higgins said Vancouver generally has higher incomes allowing consumers to take on more debt, while consumers in Montreal usually save to buy bigger items or pay with debit cards.
In a report on Tuesday, Statistics Canada said Canadian families have become wealthier over the past several years, with net worth rising despite the well-documented growth in household debt and a setback from the recession.
However, there were big differences across age groups, regions and family types and economists noted that the biggest single reason overall for the improvement was rising house prices, which are widely expected to moderate or even fall in the next few years.