Economy in Yo Yo mode for next year opined by a TEC Advisory Group

Richard Wong — Mon, 05 Oct 2009 05:48:39 +0000

TEC advisory group for CEOs meeting a day ago has the opinion that the economy in general that we are still in for more of the ups and downs of the stock market and economy in general. This advisory group includes professional service providers from mergers and acquisitions specialists, human resource consultants, group insurance providers, merchant banker, investment wealth advisor, business advisory coaches, CFO advisor, to CEO mentors.

The majority of the advisors in the room have over 20 years business experience and have gone through some of the downturns and definitely say that the major difference today in coming out of this last recession is that no one seems to believe that we’re on our way to a major recovery, that the recovery will have hiccups and the economy will go up and come down, maybe averaging zero percent growth for the next couple of years, but potentially income taxes might need to rise in order to continue to pay for continued government economic stimulus.

For a lot of business owners they have experienced a time period where there hasn’t been either constant of great growth and their sales teams haven’t had to work really hard and make several pitches to a prospect before they become a customer. For some regions of Canada, sales teams are being slowed down to several months before a prospect gives the okay to a purchase. For some inexperienced sales reps this is new territory and the adage of its cheaper to get a current customer to buy than to bring in a new customer is much more relevant in today’s world.

Statistics from various agencies have shown that the economies of the world have been propped up 100% entirely from the world’s governments economic stimulus plans. We question when the stimulus plans are done, whether or not consumer confidence will have increased to the point of taking over or whether more economic stimulus dollars will be needed.

The end result of stimulus plans will always be higher taxes, and this time around I am thinking that it will be individuals’ income taxes which will increase by a few percentage points rather than business. We need business in order for their to be employees to pay their taxes is always the rationale behind increasing taxes for individuals.

We can hope that consumer confidence will grow in the near future so government stimulus won’t be necessary.

Written by Richard Wong, CMA email: rwong@firstchoicecapital.ca

Renewable Energy Co.s Getting More Investment Cash than Oil Co.s

Richard Wong — Thu, 04 Jun 2009 19:27:16 +0000

Renewable energy companies including solar, wind, biofuel, and others for the first time in 2008 got more investment capital than conventional oil & gas companies. Green energy companies received more investment funding than fossil fuel companies as per a report from the United Nations.

Clean technologies including wind, solar, and others attracted over $140 billion in new investment dollars while gas & oil attracted $110 billion. Over 1/3 of the green investment dollars were for European companies. This continues Europe’s forward thinking amongst government, people, and investors on how to find ways of getting greener. They are being closely followed now, by now China, India, and other countries rather than Canada and the United States.

Some of the reasons I believe is that Europe has long been using cap and trade systems for carbon credits while in North America most of us are still trying to understand the concepts of carbon tax and cap and trade. China and India out of necessity of trying to find alternative cheaper energy and less issues of disposal and pollution have embarked on it to help continue to grow their economies in this economic downturn.

Achim Steiner, executive director of the United Nation’s Environment Program said that this recent milestone of more investment dollars attracted to renewable energy is a tipping point for for global energy versus fossil fuels. He is also encouraged by African countries like Kenya and Angola have entered into the field.

United Nations though still believes that $750 billion needs to be spent between 2009 & 2011, especially when in 2009 so far renewables energy investment has only totalled $13.3 billion.

Even with the new investment dollars the industry wasn’t immune to the stock market downturn as investment capital dropped by 51 per cent to $11.4 billion and stock prices dropped by over 60 per cent according to the Global Trends in Sustainable Energy report done by New Energy Finance (NEF) in London.

The United States though is one of the leaders in wind energy investment with over $51.8 billion and $33.5 billion for solar energy. Solar energy investment rose by over 50 percent year over year.

Biofuel was the next most popular investment at $16.9 billion but has come across environmental and political issues regarding ethanol creation at the expense of farming crops and rising food costs.

The trend in 2009 is alarming though to the United Nations as renewables energy investment as they have forecasted that current investment would lead to about $95 billion to $115 billion in new investment.

Green Investment as Per Cent of Global Economic Stimulus is shown below in the table below:

Written by Richard Wong, CMA rwong@firstchoicecapital.ca

First Choice Capital Advisors » Economic stimulus

Economy in Yo Yo mode for next year opined by a TEC Advisory Group

Renewable Energy Co.s Getting More Investment Cash than Oil Co.s