In a cooling housing market should you wait to buy and hurry up to sell?

By Erica Alini - Friday, February 3, 2012 at 9:18 PM - 0 Comments

Danny Johnston/AP Photo

Last week, Econowatch looked at the latest dire warnings about Canada’s real estate market. Everyone from the big banks, through Bank of Canada’s Mark Carney to Finance Minister Jim Flaherty is sounding alarm bells about inflated property, especially in hot markets like Toronto and Vancouver. With Canada’s economy slowing down and households overburdened by debt, many predict house prices will start heading south in 2012. On the other hand, the current record-low interest rates don’t have much place to go but up.  What does this mean for homebuyers and sellers? We asked realtors and mortgage brokers to weigh in.

John Pasalis is a Toronto realtor and the owner of Realosophy Realty Inc. in Toronto, a residential real estate brokerage that focuses on researching the city’s neighbourhoods. Larry Yatkowsky is a Vancouver realtor at Yatter Matters. Realtor Manny Riebeling focuses on Vancouver West and downtown areas and specializes in luxury properties and condos. David Larock is a Toronto-based, independent full-time mortgage planner. Kerri-Lynn McAllister is the editor at RateHub.ca, a website that compares mortgage rates in Canada.

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As the economy slows down, should austerity pick up speed?

By Erica Alini - Tuesday, January 31, 2012 at 2:01 PM - 0 Comments

Statistics Canada

Canada’s GDP numbers for November came out this morning, and it was a rude awakening. The economy slowed down unexpectedly in November, with output dipping 0.1 per cent, as opposed to the consensus forecast of 0.2 per cent growth. “While it initially appeared that the Canadian economy smoothly decelerated late last year, it now looks like Canada stumbled as it approached the 2011 finish line,” CIBC quipped in a note.

Dragging down overall output was a 2.5 per cent drop in oil and gas extraction activity, possibly due to low oil and gas prices and softening demand for exports. Notably, construction in both the residential and non-residential sector was down 0.3 per cent.

Statistics Canada

The November slowdown is expected to bring down quarterly growth from a projected two per cent annualized expansion. Recession–defined by economists as two consecutive quarters of negative growth–isn’t necessarily upon us. But with Europe teetering on the brink of fiscal disaster, global demand cooling, and the Canadian housing market possibly due for a downturn–which could shave as much as one per cent off of GDP, according to some estimates–is it really time for the Harper government to pull the breaks on public spending?

Another concern is that, with rates already at record lows, there’s little the Bank of Canada can do to soften the impact of deficit cuts with expansionary monetary policy. As Stephen Gordon noted yesterday, there are steep costs associated with introducing austerity at the wrong point of the business cycle.

Ghana’s advantage: An agriculture board?

By Paul Carlucci - Monday, January 30, 2012 at 2:41 PM - 0 Comments

A cocoa pod growing in Ghana’s Volta Region. The crop, which was brought to West Africa from South America by missionaries, represents one of Ghana’s most important economic drivers. (Photograph by Paul Carlucci)

It’s been over 30 years since Ghana was the world’s reigning king of cocoa, the throne long since usurped by West African neighbour Ivory Coast. But because of a series of policies by the Ghana Cocoa Board, production exploded in 2011, reaching a record one million metric tonnes. That number translated into US $1.7 billion in government revenues last year, up nearly 30 per cent from a record of US $1.2 billion in fiscal 2004.

Recent oil discoveries are fuelling an economic boom, but they haven’t stirred the government’s focus away from cocoa, one of the country’s traditional commodity exports, along with gold. According to official estimates, cocoa production grew by 14 per cent in 2011, compared to two per cent growth for the overall agricultural sector. President John Atta Mills’ administration chalks the boom up to the Cocoa Board policy package, which included subsidized fertilizers, farm rehabilitation, and timely payment of remuneration and bonuses for farmers.

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A Toronto homebuyer takes his frustrations to the blogosphere

By Erica Alini - Monday, January 30, 2012 at 12:26 PM - 0 Comments

Last week, we wrote about whether Canada’s real estate market is on the cusp of a painful though not disastrous pop or an all-out meltdown like the ones that hit the U.S. and Ireland. Econowatch would like to kick off this week by drawing your attention to FML Listings, an anonymous blog launched by a self-described frustrated Toronto homebuyer. It’s based on a simple, brilliant idea: Pick a modest house or condo with an outrageous price tag, and rail against it in 50-100 words. Here’s today’s gem about a one-bedroom, one-bathroom going for $548,000: Continue…

Ottawa apparently sees the NEB as a friend of the oil industry

By Erica Alini - Thursday, January 26, 2012 at 5:11 PM - 0 Comments

Canada’s nominally independent energy regulator, the National Energy Board (which is currently evaluating Enbridge’s plan to build the Northern Gateway pipeline) is an ally of the federal government, according to an embarrassing official policy paper that was made public on Thursday. First Nations, on the other hand, are an adversary.

Greenpeace just published pages of documents obtained by the Climate Action Network through a freedom of information request. They show the NEB listed among entities Ottawa considers to be allies in its struggle to promote oil sands abroad. In an adjacent column on the same piece of paper, First Nations appear under “adversaries.”  The documents were drafted by Canada’s international trade ministry, and they lay out an advocacy strategy to combat criticism of Canada’s oil sands in the European Union. Continue…

What happens when Canada’s housing bubble pops?

By Erica Alini - Thursday, January 26, 2012 at 1:56 PM - 0 Comments

A few days ago, Bank of Canada governor Mark Carney released another alarming, albeit muted, warning shot about the state of the Canadian real estate market. Some properties in Canada are “probably overvalued,” the central banker said during an interview with CTV. Last week Finance Minister Jim Flaherty hinted he is also worried about housing: “We watch the housing market carefully and we are prepared to intervene if necessary,” he said.

So, are we literally living in a bubble? And when it bursts, will it get as ugly as it did south of the border? Here’s where the most recent speculation is pointing: Continue…

The most influential brand in Canada? Microsoft.

By Erica Alini - Tuesday, January 24, 2012 at 4:36 PM - 0 Comments

Polling firm Ipsos Reid recently picked Canadians’ brains on who they think are the most influential brands in the country. The pollster compiled a list of 100 brands, which included the brands that spend the most on advertising in Canada every year–plus a few well-known names that don’t spend much at all, like Twitter, but that Ipsos researchers thought were influential nonetheless. Brand names could be those of corporations, like Microsoft, products, like the BlackBerry, and sometimes both (like Google and Youtube). Then Ipsos asked every one of 1,000 adult responders to rank ten out of the 100 selected brands, so that, in the end, every brand had been rated 100 times, Ipsos president of market research Steve Levy told Maclean’s.

The results? Stunning.

The most influential brand in Canada turned out to be none other than Microsoft, which beat out traditionally cooler competitors Google (which came in second) and Apple (fourth). Could it be that Canadian consumers are already well aware that Microsoft is finally coming back–or, as Businessweek put it, Steve Ballmer is no longer Mr. Monkey Boy?

And the BlackBerry? Nowhere to be found in the top 10.

For more on the Ipsos Influence Index Study, click here.

Why did SOPA get so far? Geeks don’t lobby.

By Erica Alini - Friday, January 20, 2012 at 5:16 PM - 0 Comments

Congress received over $14 million from interest groups linked to the entertainment industry, which support the Stop Online Piracy Act in the House, and Protect IP Act in the Senate.

That was 7.2 times more than what Internet interest groups who (vehemently) oppose those bills put in the pockets of Capitol Hill lawmakers: a mere $2 million.

Still surprised two pieces of legislation as patently flawed as SOPA and PIPA made it this far in Congress?

For details on this dirty little open secret, check out this post by MapLight, a research company that tracks down campaign finance and breaks it down by hot-button bills, those who write them, and those who pay the big bucks.

As the Financial Times (where I read about MapLight in the first place–tip o’ the hat) rightly notes, it’s high time for Silicon Valley to recognize that what goes on in Washington doesn’t stay in Washington.

Keystone XL wars: Much ado about nothing, basically

By Erica Alini - Friday, January 20, 2012 at 4:38 PM - 0 Comments

Michael Levi, a  senior fellow for energy and the environment at the Council on Foreign Relations, has written a must-read list of myths about the (temporarily) defunct Keystone XL. Levi takes aim at climate change scaremongering with the same delight with which he debunks job creation and energy independence fairytales. Here’s a synopsis:

1. The pipeline would have been catastrophic for global climate change. Verdict: false.

2. The pipeline would have reduced U.S. reliance on oil from the Middle East. Verdict: pipe dream.

3. The pipeline would have created hundreds of thousands of American jobs. Verdict: gross exaggeration.

4. The pipeline would have set back the green economy. Verdict: umm… not true.

5. If we don’t build the pipeline and buy their oil, Canada will sell it to China. Verdict: so what?*

*hem, this, of course, from an American point of view.

Read the rest here.

Econowatch: January 2012

By Colin Campbell - Friday, January 20, 2012 at 7:40 AM - 0 Comments

Nathan Denette/The Canadian Press

Canada’s big banks offered homebuyers a big fat incentive last week when, led by the Bank of Montreal, most dropped their five-year fixed mortgage rates to an unheard of 2.99 per cent. Like the failing Detroit auto industry of the early 2000s, with its zero per cent financing, no-money-down offers, Canada’s banks appear willing to sacrifice some profit to keep the mortgage market booming. They’re still making money—and certainly won’t go bankrupt like two of the Big Three automakers did—but there is a similar whiff of desperation here at a time when the housing market appears to be cooling. Even in once hot markets like Calgary, prices have flattened.

These ultra low rates are bad news for Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney, who’ve been warning Canadians for years to stop taking on record debt loads in this era of easy money. BMO’s rate does come with a few catches, like a maximum 25-year payment period. But that doesn’t mean buyers won’t find themselves in trouble five years from now if rates rise.

Maybe the bigger concern is what happens if the housing market really does head south, and what that means for the Canadian economy. Over the past decade, construction was the second-fastest growing industry, creating one million jobs. It now accounts for an incredible one-tenth of Canada’s GDP. Rising house prices have also made Canadians feel richer and insulated from economic troubles. As the U.S. showed, when housing is stripped from the equation, things can quickly go from bad to worse. Record-low mortgage rates might help keep the economy chugging along, but let’s just hope we’re not now running on fumes.

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Keystone XL: a timeline

By Gabriela Perdomo and Gustavo Vieira - Wednesday, January 18, 2012 at 5:52 PM - 0 Comments

(Paul Sakuma/AP Photo)

For better or worse, it’s been roadblock after roadblock for North America’s most infamous pipeline. Here’s a look at that tortuous timeline:

February 2005 – TransCanada Corp. announces plans to spend $1.7 billion to build a 3,000 km pipeline to move heavy oil from Alberta to Illinois. About 40 per cent of the route would be a conversion of existing pipelines that carry natural gas to handle 400,000 barrels of heavy crude. TransCanada was expected to be operating the pipeline as early as 2008.

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Expected Keystone rejection slams TransCanada stock

By Erica Alini - Wednesday, January 18, 2012 at 3:06 PM - 0 Comments

Google finance

News that the U.S. State Department is set to reject TransCanada’s proposed Keystone XL pipeline sent the company’s stock reeling this morning. TransCanada shares fell by over US$2 around midday, to a low of US$39.74 in New York, though they regained ground later in the day. The U.S. State Department is holding briefing on Keystone at 3 p.m. ET.

Apps for children: It’s a booming market

By Davide Berretta - Tuesday, January 17, 2012 at 2:52 PM - 0 Comments

demandaj/Flickr

Away from the hype that surrounds some of the hottest Internet companies in Silicon Valley, scores of developers are tackling the lucrative, accelerating sector of technology for children. “Backpacks will slowly shrink… Textbooks will pretty soon be delivered on tablets,” says Warren Buckleitner, editor of Children’s Technology Review, a publication that since 1993 has been tracking new releases and trends in this increasingly busy domain. “It’s not a matter of if, it’s a matter of when.”

The boom in technology designed around children’s needs was catalyzed by the launch of Apple’s iPad in 2010, says Buckleitner, a former teacher with a Ph.D. in educational psychology. The tablet, he says, was the first reasonably priced device to bring together the must-have features of a blockbuster piece of hardware for kids: wireless Internet connection, powerful batteries, an App Store that has galvanized independent developers as well as those working within companies, and a large multi-touch screen.

“We knew that magic happens when you put touchscreens in the hands of children,” says Emil Ovemar, producer and co-founder of Toca Boca (which means ‘touch mouth’ in Spanish), a maker of games for Apple devices within Bonnier, a large Swedish media conglomerate with yearly revenues of almost US$4 billion. The work-and-play philosophy behind Apple devices seems to fit particularly well with the way children operate. “The most natural way to learn something is through play,” notes Ovemar.

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Does Islamic finance have a place in Canada?

By Erica Alini - Monday, January 16, 2012 at 5:32 PM - 0 Comments

(Hasan Jamali/AP Photo)

Around $900 billion in assets across the globe are managed by Islamic banks that operate according to sharia, an interpretation of Islamic law. In recent years, so-called Islamic finance has been growing at a rate of 15-20 per cent a year, and proved remarkably resilient to the financial crisis. Proponents of the relatively new sector point to its back-to-basics financial structures, which have made it popular with a number of non-Mulsim clients who have little appetite for risk. Critics, though, say the restrictions it comes with–prohibitions, for example, on paying interest and investing in anything that involves porn, pork or booze–are archaic and unworkable.

Canada, with its 1.3 million Muslims, has lagged behind countries like the U.K. and the U.S. in embracing sharia-compliant financial products. None of the country’s big banks currently offer sharia-compliant services, though some smaller players do. Toronto-based UM Financial Inc., which issued home mortgages conforming to Islamic law, filed for bankruptcy last year, leaving 170 Muslim borrowers in limbo, and opening a legal can of worms. Is the firm’s failure evidence that Canada should steer clear of Islamic finance; or proof that the country needs more of it–i.e. that the banks and policymakers need to bring the practice into the mainstream, with tighter rules and better oversight? We asked the experts to chime in. 

Tarek Fatah is the founder of the Muslim Canadian Congress, a liberal-minded grassroots organization. He is also the author of Chasing a Mirage: The Tragic lllusion of an Islamic State, among other works. Walid Hejazi is associate professor of international business at the University of Toronto’s Rotman School of Management, where he is currently teaching an MBA course on Islamic finance.

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Ghana’s cursed growth

By Paul Carlucci - Tuesday, January 10, 2012 at 2:29 PM - 0 Comments

Photograph by Paul Carlucci

The West may be paddling an ocean of debt and disorder–naught but austerity and tatty lifestyle reductions–but Africa is booming, especially Ghana, one of the world’s fastest growing economies in 2011.

In this West African nation, it’s the era of oil. Tapped just over a year ago in the Gulf of Guinea, the Jubilee Oil Field contributed seven per cent of the country’s 14.6 per cent growth last year. A reported 23 million barrels were lifted out of the field in 2011 by Ireland’s Tullow Oil and other stakeholders. The Ghana National Petroleum Corporation, a 13 per cent shareholder, lifted $344 million-worth.

But discoveries of vast natural reserves are notoriously a tricky thing to manage. There’s the text-book case of the Netherlands–which economists dubbed the Dutch Disease–, where natural gas reserves found in the 1960s lead to an appreciation of the local currency that eventually chocked a number of domestic exporters. And then, of course, there’s Nigeria, where billions in oil wealth did little to relieve the wretched poverty of the Niger Delta region.

Ghana is having its own share of troubles. Critics say millions have already been lost in unpaid corporate taxes and a skewed royalty system. Meanwhile, the oil-propelled growth has failed to create jobs or spur development in a country that, despite its recent elevation to lower-middle income status, still struggles with grinding poverty in its urban, rural, southern and northern regions.

“The growth associated with oil development is false-growth because the investment does not have direct bearing on the economy,” says Mohammed Amin Adam, an energy economist and the national oil coordinator of Publish What You Pay Ghana, an advocacy group. “Development hasn’t kept pace with growth,” he adds. Despite the GDP numbers, “more and more people are coming under the poverty line.”

There are three issues the government needs to address if it wants to turn Ghana’s oil sector into a ground-level growth machine, says Adam. The first revolves around supply side economics. Ghana is largely an import-based economy. It ships away its raw materials–gold, timber, cocoa–for production elsewhere, then buys back finished products. The influx of oil revenue, says Adam, is playing up this dynamic, swelling up demand that can’t be met domestically. If the supply side can’t match the rise in demand from the inflow of oil revenue, the result will be inflation, he says.

And the oil money is feeding another beast: corruption. Unquestionably, Ghana is not new to the problem. An anti-corruption NGO recently estimated that the country loses $4 billion a year to pernicious seepage, and Transparency International ranked it 69th out of 183 countries in its 2011 Global Corruption Perception Index. But civil society watchdogs worry that the oil bonanza will ratchet up greed in 2012, an election year, and beyond.

Bribes and graft, in turn, will “increase the cost of investment,” predicts Adam. He’s talking about general investment, including in non-oil sectors, where the potential lies for Ghana to create the jobs it needs. The oil boom, in fact, has been largely jobless. Unemployment was at 11 per cent in 2000, according to the latest census, but the government plainly admits it doesn’t know how many people are out of a job these days. One thing is for sure, though, pouring more of the oil money into the agricultural sector would help put people to work, says Adam. Agriculture made up about 16 per cent of  Ghana’s GDP in 2011, and that’s where a big portion of the country’s permanent jobs are. “Depending on how we spend the money in the non-oil sector that have higher growth potential, higher employment potential, like agriculture, then that could help the country,” muses Adam. A planned Heritage Fund is meant to address these sort of ideas about how to use the oil money. Alas, it only accounts for only nine per cent of that revenue.

Norway’s butter bailout

By Alex Ballingall - Tuesday, January 3, 2012 at 4:47 PM - 0 Comments

Heiko Junge/AP Photo

It was Saturday night, the week before Christmas, and two Swedish men were driving over the border to Norway. With them, in their small van, they carried more than 500 packets of butter—for a total of 250 kg—which they hoped to sell for more than 62,500 Swedish krona (CAD$9,187), according to Norwegian police.

Like countless profiteers before them, the two Swedes were trying to take advantage of the scarcity of something in high demand. In this case, it happened to be butter.

Norway, it turns out, is in the midst of a severe shortage of the fatty dairy product. Over the holidays, butter prices in the Scandinavian country spiked. Shoppers frustrated with store shelves devoid of butter took to the internet, where a one-lb. stick would sell for as much as $465.

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Can a bond offering help cure poverty on Native reserves?

By Erica Alini - Thursday, December 22, 2011 at 12:05 PM - 0 Comments

www.fnfa.ca

Money, goes conventional wisdom, comes with strings attached. Especially other people’s money. Especially when it comes as lump-sum transfer. And, as the ongoing Attawapiskat saga shows, the strings tie both ends of the money chain, with receivers accusing Ottawa of stinginess and neglect, and lenders always keen to point to suspicious accounting practices–or at least maladministration.

Yet, there’s a smart way around all this: borrowing from the markets. Though few seem to have noticed, First Nations are working on it. They plan to issue their first bonds in the fall of next year, in a collective offering worth at least $100 million. The money raised will serve for things like housing and to build badly needed infrastructure, which will create jobs and the conditions for banks and private business to set up shop on Native reserves, says Steve Berna, chief operating officer of the First Nations Financial Authority, the voluntary not-for-profit organization tasked with issuing the bonds.

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Econowatch: December 2011

By Colin Campbell - Wednesday, December 7, 2011 at 12:10 PM - 0 Comments

David Paul Morris/Getty Images

Feeling down about the state of the economy? You’re not alone. According to a recent global survey, nearly a quarter of the workforce, weighed down by economic uncertainty, is depressed. In Canada, a poll found that 89 per cent of workers feel overworked, up from 64 per cent two years ago. There is not a lot of positive energy going around.

Unfortunately, this could become a chronic condition, because there’s little to suggest that the economy will spring to life any time soon. Nowadays, just as things start to look up, they drop back down. U.S. third-quarter growth was recently revised downward, from 2.5 per cent to two per cent. Markets are swinging almost daily by amounts they once moved only over a period of months.

Many observers are coming to the conclusion that this go-nowhere drift is the new normal. We could be headed for a long era of disappointment, like the one the U.S. economy fell into in the ’70s, when markets were all but dead and growth stalled. Even politicians are throwing up their arms. “Our world has entered into a time of slower growth,” warned the Ontario Liberals in their recent Throne Speech, “and we expect that slower pace of growth to continue throughout the four-year mandate given to this parliament.” A stirring message: four more years of hard times.

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Economists: diversity drives down charitable donations in Canada

By Erica Alini - Tuesday, December 6, 2011 at 3:24 PM - 0 Comments

Kathryn Harper/Flickr

With Santa soon to climb down (the believers’) chimneys, a new study found rather un-Christmassy evidence that ethnic and religious diversity tends to drive down charitable giving in Canada.

McMaster University’s Abigail Payne and David Karp, Wilfrid Laurier University’s Justin D. Smith, along with James Andreoni from the University of California, San Diego, found that a 10 percentage point increase in a neighbourhood’s ethnic diversity leads the average household to give $27 less per year to charity, out of an average donation of about $200. That’s a 14 per cent drop. Increases in a neighborhood’s religious diversity also tend to make households stingier—albeit to a lesser degree. A 10 percentage point increase reduces donations by $20, or 10 per cent. Continue…

Are you smarter than a central banker?

By Erica Alini - Tuesday, November 29, 2011 at 4:46 PM - 0 Comments

At first glance Economia, a video game created by the European Central Bank, looks like an ingenious device to help laymen grasp the basics of monetary policy. The iPhone app (which you can also play on your computer) is sleek, and the game–which NPR dubbed “angry bonds”–is actually fun.

The goal is to keep inflation just below two per cent, and the only way to do so is raising or lowering the exchange rate. As a learning tool, it’s very effective: After a couple of tries, you’ll never forget that hiking up rates brings down inflation, and cutting them does the opposite–a concept that goes a long way to helping people understand headlines featuring the likes of ECB Chief Mario Draghi, Bank of Canada Governor Mark Carney or Fed Chairman Ben Bernanke. After a while it gets so easy it’s boring, but then the game starts throwing all kinds of unpredictables at you–like a housing crisis, a stock market meltdown, rising oil prices… It doesn’t get quite as real as the current sovereign debt crisis–and you don’t get to behave as a lender of last resort–but you’ll have your hands full. If there’s even a little bit of nerd in you, you’ll like it.

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That cheap manufacturing labour: a portrait gallery

By Brendan Brady - Wednesday, November 23, 2011 at 11:48 AM - 0 Comments

Cambodia: enjoying China’s long shadow

By Brendan Brady - Tuesday, November 22, 2011 at 1:07 PM - 0 Comments

Photograph by Brendan Brady

With per capita GDP well under a thousand dollars and a government dependent on foreign aid, Cambodia is among the poorest of the poor in Southeast Asia. But with workers in China, Thailand and Vietnam, demanding and obtaining heftier paychecks, Cambodians are getting a residual lift. Rising wages, labour unrest, as well as currency instability and political turmoil in some cases, elsewhere in the region’s traditional manufacturing centers are improving the prospects of Cambodia, an industrial minnow.

The country’s garment exports have soared in the past year, increasing by nearly 40 per cent, according to the government. Independent observers might put the figure lower, but they would agree with Ken Loo, the secretary general of the Garment Manufacturers Association of Cambodia, when he points to rising wages and work stoppages in China as one of the main causes of Cambodia’s increased share of the market. It’s an important boost in a sector that has been Cambodia’s main engine of growth since the late 1990s, when the country stabilized after years of debilitating civil strife. The garment and footwear industry employs some 400,000 people in this country of just over 14 million (the Gap, H&M and Nike are among the major brands that have suppliers in Cambodia) and account for more than two-thirds of Cambodia’s exports.

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Explaining Canada’s hurry to build pipelines in the U.S.

By Andrew Leach - Monday, November 21, 2011 at 4:20 PM - 0 Comments

Washington’s decision to temporarily shelve the Keystone XL project has Canadian companies rushing to redraw the pipeline map. Enbridge announced plans to reverse the direction in which crude oil flows in the Seaway pipeline connecting Oklahoma to Texas in order to send more oil from Midwestern refineries to those on the U.S. Gulf Coast. Keystone godfather TransCanada, on the other hand, wants to start building the southern leg of the pipeline, also linking Oklahoma to Texas. Both projects aim to reduce the pressure on a bottleneck of crude in the U.S. Midwest that’s been building up for a year. Why are Canada’s majors so eager to build pipelines to the Gulf? Andrew Leach, a professor of natural resources, energy, and environment at the University of Alberta’s Alberta School of Business, explains.  

Why is there a buildup of crude oil, including Canadian crude, at refineries in the U.S. Midwest?

It’s a simple case of supply and demand in a local market. We’re often told the market for oil is global, but in truth it’s more of an integrated web of regional markets and the U.S. Midwest is one of those regions (in the graphs, you’ll see it referred to as PADD 2). This regional market has pipelines running both in and out of it, and oil is used by refineries within the region to produce gasoline, diesel fuel and other products. There are essentially two ways in which crude oil gets out of the Midwest–either it’s refined or it’s transported to another region by pipeline, rail, barge, or truck. On the demand side, use of crude oil by Midwest refineries has been decreasing since the year 2000, as shown in the figure below: Continue…

Netflix for toys: Parents reclaim the living room

By Davide Berretta - Thursday, November 17, 2011 at 10:13 AM - 0 Comments

zsoltika/Flickr

Nikki Pope says she came up with the idea after spending time with her 11 brothers and sisters’ families. She couldn’t help but notice “the huge buildup in everyone’s houses of toys that the kids were no longer playing with, because they were growing so quickly,” she said.

The idea was to start Toygaroo, a toy rental subscription company that works pretty much like Netflix. Instead of creating a movie queue, parents select a number of toys online, along with a subscription plan, and Toygaroo delivers a box containing, for example, four sanitized toys once a month for about US$35.

If that sounds a bit pricey, there’s also Colorado-based BabyPlays, which offers slightly cheaper subscription rates.

In the States, similar companies renting baby clothes and children’s books are also taking off, as online services penetrate deeper and deeper into the lucrative children market. But the Netflix-for-toddlers model may soon be coming north of the border as well.

Pope said she is seeing a large number of inquiries from Canadian parents, enough to warrant an expansion to Canada, perhaps as early as 2012. And Canadian investors are already pouring money into it. When Toygaroo was featured in a startup reality show last March, it raised US$200,000 in investment, including from Canadian mogul Kevin O’Leary.

In the meantime, two Canadian moms who have been renting toys online for over a year, are also getting ready to offer the subscription option. Operating the self-funded Toys Trunk out of Milton, Ontario, Carolina Rey and Katia Parada rent individual toys, such as the “bilingual learning table” and  “jump smart trampoline” for prices mostly hovering around $7 for two weeks and $10 for four weeks.

Rey, a former industrial engineer with two children, says Toys Trunk wants to go the way of Toygaroo and Babyplays soon, but data on their 300 customers tells them most parents want a quicker turnaround than those offered down south. “The funny thing is that we noticed that our moms like to change the toys every two weeks,” says Rey. Especially in the case of city dwellers, she says, certain toys are so large that, “people.. want to try them and take them home but they take up so much room so they just want them for a couple of weeks.”

For now, Toys Trunk is serving Milton, Oakville, Georgetown, Mississauga, Campbellville and Burlington. “The dream,” says Rey, “is to have it national.”

You can follow Davide Berretta on twitter at http://twitter.com/#!/daveeday