News from Canada:
Canada’s lost close to 71,000 jobs last month - the worst single month drop in a quarter century - in a clear indication the U.S. recession is beginning to wreck havoc on manufacturers and workers in central Canada.
Almost all the job losses were in Canada’s manufacturing heartland. Ontario shed 66,000 workers - 42,000 of those factory jobs - pushing the province’s unemployment rate up six-tenths of a point to 7.1 per cent.
Overall, the Canadian jobless rate edged up to 6.3 per cent from 6.2 per cent in October, but would have been worst if not for the fact that 48,000 fewer Canadians were looking for work in November.
News from the USA:
The news from south of the border was no better, with the U.S. reporting a 533,000 jobs contraction last month after losing 320,000 in October and 403,000 in September. The U.S. is down 1.9 million jobs since last December.
After years of impressive expansion, the Canadian economy has ground to a halt, with little growth in the first three quarters of this year and economic decline in the current quarter. Falling commodity prices, a comparatively high dollar and the impact of the slumping U.S. housing and auto sectors have dealt a blow to the forestry, mining and manufacturing sectors across Canada.
In the United States, the recession appears to be getting worse.
“The economy has been slowing since December 2007. The real question is whether the economy is in a recession or depression?,” said Peter Morici, an economics professor with the University of Maryland school of business.
How do these stats stack up historically?
It was the worst one-month performance in the U.S. since 1974. For Canada, it was the most jobs lost in one month since June 1982, although as a proportion of the market it was the ninth worst since the recession of the early 1980s.
That recession was the worst for Canada and the United States since the Great Depression of the 1930s. Job losses in steel, auto and other primary industries, combined with soaring interest rates, sent the unemployment rate soaring to 13 per cent, more than twice the current rate.
On the bright side, sales of alcohol will set records this holiday season!
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WatchMojo NewsletterSometimes, you want to get in the fetal position and cry…
I just got a call from a telco offering:
- one year free
- a free smart phone
- if you agree to a 3 year deal, and even then, they will give you the first month free!
Consumer spending must be even more abysmal than anyone could have predicted. I wonder if I still have that tent… everywhere you look, the news is bad or dire.
Car sales are down, “beyond imagination”, in fact:
Speaking at a press conference Friday afternoon, an emotionally-wrought Honda President Takeo Fukui described the slowdown in global auto sales as “beyond imagination”, and said mounting business difficulties in November prompted his decision to exit global racing.
Naturally, who’s going to pay $6 for a coffee crappucino:
[A] poignant moment was when CEO/Founder said one day a few weeks ago the numbers from Florida were so bad he couldn’t believe them. So he got on an airplane and went there. These “neighborhoods” are studded with empty houses, foreclosed signs, half finished developments. The only people in the area are the baristas working in the little Starbucks! He said it looks like a movie lot.
30% of Starbucks’ revenue and profits come from Florida and California.
Nuff said. People are hitting Starbucks next, what better barometer for the decline of the American Empire?
Paul Graham talks about the demise of VCs. I could copy and paste tidbits, but then I’d end up pasting the whole thing. There is nothing earth shattering about this article, but it does explain how slowly but surely, on an almost deal-by-deal basis (without naming any, though), VCs are rendering themselves obsolete.
As someone who unsuccessfully pitched 10 or so VCs (and maybe another 5-10 angels, to boot) from January 2006 to May 2008, I’d say:
1- Not All VC Investments Are Alike
First and foremost, we have to be careful about taking lessons and realities of consumer media startups (that indeed probably don’t need VC) and apply it to all segments of the industry.
2- Self-Serving? Yes. False? No.
It should be stated, that indeed, Graham isn’t a VC, but is an investor. As such, sure, he stands to gain from the VC-is-dead rhetoric… but I suppose he launched Ycombinator as a result of seeing VCs starting to look like dinosaurs.
3- Draconian Terms
VCs do themselves no favor with their draconian term sheet rules, which sort of explain why I was unsuccessful with at least half of those VCs I spoke to.
4- The Information Gap
VCs also got Google-envy, but Google is the result of a once-in-a-generation perfect storm that remains the only ad-supported technology startup that became a hit… a huge hit. But VCs typically hail from engineering, computer programming roles and companies, meaning that they just don’t get advertising. They really don’t. Hence why they wrongly backed a gazillion UGC/social media startups that will never see VC-worthy revenue figures, let alone a liquidity transaction.
This is what I call the information gap, ironic, seeing how VCs helped fuel the information age. I covered this in Understanding the Roots of VC Woes vs. Scapegoats. In other words,
- the credit crunch only exposed VCs bad investment strategies, it is not the cause of its downfall.
- the lack of IPOs have nothing to do with Sarbanes-Oxley, but rather, bad investments in idiosyncratic projects that no one really cares for (in the consumer media space, I stress, once again).
This probably explains why the other half of VCs I spoke to didn’t invest… because these geniuses (in a good way, of course), actually questioned the wisdom of creating professional video content (that marketers actually want) when you could have free user-generated content en masse (that no marketer wants to come close to).
Not that I’m bitter of course, or gloating, now.
By the way, how’s that investment in Crapstr.com coming along, pal?
5 - You’re Not Jack Welch
Lastly, the mantra of being #1 or #2 does not apply and is not relevant online. This is rubbish mentality that focuses good entrepreneurs to make bad decisions, only to see VCs pull the plug when they fall in love with the latest “it” fad. Sometimes it’s good not to follow the crowd… and if the crowd ran towards the VCs (and jumped off a cliff) doesn’t mean you should too.
6 - Dirty Little Secret
VCs not only literally take in more than they give back…
But most entrepreneurs will tell you that most (not all) VCs don’t add all that much value, and figuratively contribute less than they take, as well.
The leaders in the VC community need to gather all of their constituents in a room and try to gain the credibility they’ve lost in entrepreneurs’ eyes. Frankly, I don’t think they can pull it off.
Prove us wrong.
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