The results of a survey from the National Association for Business Economics shows forecasters are not united on what might be best way to revive the economy.

The $787 billion economic stimulus package signed into law by President Barack Obama will have only a “modest impact in shortening the recession,” a survey of economists showed.

Just over 60 percent of those polled in the semiannual National Association of Business Economists Economic Policy Survey said the plan will have a “modest” impact. About 29 percent said it would have little or no effect.

From what I can observe this is the beginning of a perfect storm in a tea cup.

Obama signed the legislation Feb. 17. It includes tax cuts for most U.S. families and allocates billions of dollars for public works projects and creating or saving 3.5 million jobs. The administration also has proposed spending on a new bank- rescue plan and an effort to limit home foreclosures.

The Commerce Department said the fastest rate of decline since 1982 has been the shrinking of the U.S. economy at a 6.2 percent annual pace in the fourth quarter of 2008.

A hefty 70 percent majority of survey respondents said the government should establish a “bad bank” to hold toxic assets of financial institutions. With the same ratio, respondents favor making banks’ acceptance of funds from the Troubled Asset Relief Program contingent on losses for current equity holders.

Business economists believe the government could successfully nationalize one bank without nationalizing the entire banking system, and could successfully privatize the system after nationalizing it. However, less than half thought such action would restore the flow of credit or speed an economic turnaround.

Most economists thought the dollar’s recent rise against the Euro had been due to short-term, safe-haven flows spurred by panic over the crisis and the uncertain outlook for the world economy.

I think if the plan gets wings it might just fly.

Research In Motion Ltd. (RIM) executives have been fined with a total of more than $75 million in restitution and dues by Ontario Securities Commission (OSC), for back dating stock options which makes it the largest individual settlement levied by the regulator.

James Balsillie, Mike Lazaridis and Dennis Kavelman, executives at RIM must pay a combined C$9 million ($7.3 million) in fines and legal costs. They also have to repay the company an additional C$68 million to settle charges they benefitted from improperly priced stock options. In total the figure adds to up be approximately $75 million.

In addition to the fines, executive Jim Balsillie will step down from the technology firm’s board for a minimum of one year. This move is also part of the settlement agreement with Canadian regulators over a stock-options controversy.

The OSC accused Balsillie, Lazaridis and other RIM executives of receiving backdated stock options over 10-years, ending in July 2006.

The maker of the BlackBerry smart phone showed a “fundamental failure of governance” by backdating stock options, Ontario Securities Commission Vice Chairman James Turner said at a hearing in Toronto today. “This was not fraud, rather it was negligence.”

“RIM is pleased that the parties have resolved matters with the OSC and looks forward to resolving matters with the SEC,” said John Richardson, RIM director. RIM has also made a settlement offer to U.S. Securities and Exchange Commission (SEC), which SEC staff has recommended the agency approve.

The question lurking in my mind is how will RIM set up repayment terms with the OSC. In times of economic downturn the sum is hefty but has to be paid.

For many of us terms such as “back dating” and “stock options” are not familiar territory. Stock options give share holders the option to buy shares in a company further down the road at a locked in price. They work on the principle of a raincheque at Safeway for your favourite cereal on sale, that could be bought at the discounted price later on.

Backdating creates an option on a certain day, but pricing the stock option at a price sometime in the past when shares were even cheaper, makes the potential profits higher.

The legal loophole here is that backdating technically “rips off” the company’s existing shareholders by offering an undisclosed, artificially created price to an exclusive group of shareholders usually the executives of the company, who have access to insider information.

RIM is not the only organization convicted for backdating. Leading technology company Apple’s Steve Jobs also captured the attention of the OSC, which began investigating RIM’s accounting practices for wrongdoing and lead to a settlement.

“RIM repeatedly made statements in many of its filings, including prospectuses, financial statements, annual reports, and management information circulars, that contained the misleading or untrue statement that options were priced at the fair market value of RIM’s common shares at the date of the grant and were granted in accordance with the terms of the plan,” the OSC said in its final statement of allegations publicly release.

Canada’s ambassador to the United States has openly warned American lawmakers their nation’s moral authority on global trade issues is being put at risk. Michael Wilson stepped up diplomatic pressure on U.S. senators yesterday to restrict “Buy American” policies, warning they could start the kind of worldwide trade retaliation that led to the Great Depression.

Wilson said the measure could create a “global economic calamity.”

“If Buy America becomes part of the stimulus legislation, the United States will lose the moral authority to pressure others not to introduce protectionist policies,” Wilson said in the letter to Senator Harry Reid, the Democratic majority leader, and Senator Mitch McConnell, the Republican leader.

“A rush of protectionist actions could create a downward spiral like the world experienced in the 1930s.”

Wilson’s letter came in light of the U.S. Senate’s move today to debate on the massive economic stimulus package that President Barack Obama is aiming to complete before the end of February.

The Harper Conservative government is under pressure in the House of Commons to intensify their attempts to persuade the United States to exempt Canada from the measures.

“We will be having these discussions with our friends in the United States, and we expect the United States to respect its international obligations.” said the prime minister

Harper commented on the issue after he confirmed the U.S. president will visit Canada on Feb. 19. The prime minister is now bound to raise the Buy American provision during their first meeting.

Until now, Canadian officials in Washington have been talking off the record to officials in the U.S. administration about the matter. Mr. Wilson’s letter comes as Canada’s first formal complaint and jas now become a public record, unlike behind-the-scenes talks at lower levels.

International Trade Minister Stockwell Day said that the Harper government is in daily contact with American officials on the issue.

“We are warning them of the dangers of protectionist movements. They say that they are concerned about this,” Day said.

Canada and the U.S. form the world’s largest bilateral trading relationship with about CAD$1.5 billion in goods crossing the border every day between inter company transfers.

I can see it is this high level of integration in the economy that would make protectionist measures by either country difficult and would constitute the basis for seeking a Canadian exemption.

For the most part the controversial provision, part of the $819-billion US financial stimulus package before Congress requires all public works projects funded by the stimulus package to use only U.S.-made iron and steel. The Democratic-controlled U.S. House of Representatives approved the package in a vote last week and the Senate began debating it on Monday.

The Canadian government is very concerned the Buy American clause “takes it further than just steel and just iron products, but it could go across the board to many other products,” said Stockwell Day. He was addressing the House of Commons during question period.

Liberal Leader Michael Ignatieff accused the governing Conservatives of lingering on too long to intervene, and acted only after the legislation passed the House of Representatives which became a late move.

Day took a defensive stance and said ” Canada cannot get involved in drafting U.S. legislation.” The letter is a rebuttal to the Buy American policy provision.

The Federal budget survived its first round in the House of Commons as Bloc Quebecois sub-amendment was rejected, while Ignatieff wanted to sleep on it and deliver his verdict today. The media portrayed mixed reaction from groups, individuals, economists and businesses.

Tories struggled to remain in power by calling it an action plan for “extraordinary” times, while the budget overwhelmed Canadians with a massive debt load to finance a stimulus spending spree and tax breaks designed to cruise through the recession.

But where is the money promised coming from?

“The 2009 Canadian budget is chock-full of government spending and rather light on the side of tax cuts, but the truth is that domestic fiscal stimulus can only ease the pain of the global recession and credit crisis. This budget is palliative by necessity, but that is better than nothing.” said Sherry Cooper, Chief Economist at BMO Capital Markets.

I believe the silent question on every Canadians mind is how will the cash be delivered ? Most approved the direction in which the budget is leading Canada towards but wondered about ways it will be handled.

Flaherty announced there will be $12 billion for “shovel ready” projects across the country, but municipalities will have to contribute $9 billion to cash in on the funding, which will be made available through Public Works Canada.

Vancouver Mayor Gregor Robertson was “disappointed there wasn’t more money for new social housing units and transportation.” He praised Prime Minister Stephen Harper’s initiative for giving a boost to infrastructure projects.

“We look forward to seeing those infrastructure dollars flow to Vancouver this year,” Robertson said.

Robertson said the city currently has around $120 million available for bridge, water and sewer upgrades in the next year.

Tories are already being accused of not using $8 billion in unspent funding accumulated on the federal books.

In my opinion this is a clear indication the Conservatives make grand spending announcements but don’t follow through with the cash.

“It gets to the point of being tragic,” said Jack Layton, NDP leader “that the Prime Minister will make promises that he has no intention of keeping. Can the Prime Minister tell us which of the promises that he made in yesterday’s budget … he plans on breaking in the months to come?”

Harper’s credibility may be quizzed but I can see where Ignatieff is headed with his approach. He is treading a thin line. The Liberal Leader did not want to bring things to a head now. At this juncture, Canadians don’t want an election and they are not eager on a coalition option. Mr. Ignatieff needs time to establish himself as leader and to reorganize and refinance the party.

Ignatieff will deliver his verdict for the Federal budget on Jan 30.

This week media’s focus is Stephen Harper and Jim Flaherty as they fine tune the most anticipated Canadian budget to attempt saving the nation from ravages of a global recession, but also decide the fate of the Conservative government and political careers of both men.

According to what I have been following in the news the transformation of Harper and Flaherty from anti-spending hawks to purveyors of a massive deficit has been a harsh one.

The Harper government claims to have conducted the most comprehensive and inclusive budget consultations in Canadian history with 46 Muncipalities consulted and 5400 letters, email and submissions from groups and individuals. The list goes on but whether these measures will oil the rusty economy’s wheels is uncertain.

Private-sector markets have broken down “and the only player who can fill that gap is the government,” Flaherty said.

It seems that the Prime Minister is trying to prepare Canadian citizens for bad news. Harper’s office broke the budget secrecy in a pre-budget to reveal the planned deficit would reach $64 billion over two years.

Before Finance Minister Jim Flaherty gets to read the full budget, Conservative John Baird and his cabinet colleagues will have already unveiled billions of dollars in new spending programs, all part of an economic stimulus package to help Canada survive the global financial crisis.

The estimates of the costs and implications of the fight against the recession came amid a continuing flow of evidence for the need of economic stimulus — the latest a steep 1.6-per-cent broadly based drop in Canadian wholesale sales in November and an increase in unsold inventories to a seven-year high.

Harper, Flaherty, and other government officials have avoided referring to tax cuts and have only referred to tax “measures” that will be in the budget. I think the term is ambiguous as it could be a combination of tax credits, grants or other adjustments that may not exactly be a permanent tax cut.

The deficit for 2009-10 will be $34 billion and comes just two years after Ottawa was routinely posting surpluses of $10 billion or more. Canada hasn’t dropped so deeply into the red in one year since the 1994-95 budget. It gets slightly better for 2010-11, when the deficit forecast is for $30 billion.

The Bank of Canada, however, warned this week in a downwardly revised forecast that the economy would contract by 1.2 per cent this year. The warning came as the central bank cut its interest rate further to a 50-year low of one per cent.

Bank of Canada governor Mark Carney said, “the recovery projected by the bank is milder than from an average recession due to muted recoveries expected in other economies around the world.”

“We are comfortable with our forecast,” he told reporters at a news conference in Ottawa.

The latest outlook offered by the central bank marked a significant downgrade from the forecast it presented in October, when the bank projected growth of 0.6 per cent in 2009, and 3.4 per cent in 2010.

All these measures are to pull out the economy from a downward spiral.

But I poise this question: what if the Bank of Canada is wrong? Will it cost Harper and Flaherty their jobs or be their saving grace?

Today the world awaits Obama’s formal swearing in as the President of the United States. There has been extensive media coverage regarding predictions about Obama’s inauguration and its effects on bailing out the U.S. economy from the global financial collapse, but the outlook seems to be rather bleak than hopeful.

I am following the media through an event so monumental in history that every outlet seems to have a point of view on it. A wide range of opinions from pessimism to outright optimism prevail. The media voiced concerns about whether Obama can captivate financial markets with his wit and allure the way he had mesmerized citizens of the world.

Security measures were airtight in Washington DC but at the back of people’s minds their financial health was a priority.

“Protecting the president may be easier today than making sure that millions of ordinary Americans are safe from the financial whiplash,” reported the Globe and Mail.

In different parts of the world, experts’ predicted that the global financial crisis has a lot further to go. Global equities spiraled and the dollar plunged downwards with the inaugural ceremony a few hours away.

Royal Bank of Scotland on Monday warned its losses last year could come to as much as 40 billion dollars, the biggest loss in British corporate history.

In the U.S, Chrysler is one of the three big US automakers that have been shaken by the world economic slowdown. It forced them to seek government help to rescue them from a meltdown that could threaten million of jobs.

World leaders had new worries as the Presidential inauguration neared. French Prime Minister Francois Fillon said struggling French carmakers would get up to 7.8 billion dollars (six billion euros) of state aid in a new “auto pact” to help the key industry survive amid collapsing demand and job cuts.

Japan’s fourth biggest carmaker Mitsubishi Motors Corporation said Tuesday it would suspend some operations at plants in Japan next month and try to cut wages, and Toyota reported a four percent fall in global sales in 2008.

High hopes are associated to Obama’s new stimulus package of approximately 825 billion dollars for kickstarting the US economy which will subsequently filter out to the global economy.

With Obama’s inauguration, thousands upon thousands of out-of-towners had descended on Washington, D.C., to attend the ceremony and parade Tuesday, and take part in the revelry over the weekend. Obama swag and souvenirs are hot ticket items in the capital city.

Expectations are high and the world’s eyes are on Obama. Whether he will be up for the daunting task that lies ahead remains to be seen.

The North American financial crisis took another plunge with Nortel Networks announcing bankruptcy but the name will still be prominent as a sponsor of the 2010 Winter Olympics in Vancouver.

The company filed for bankruptcy protection from creditors, deciding to stay in operation as a smaller entity. The Canadian Government immediately promised C$30 million in short-term financing for Nortel, which employs 32,000 people, mainly in Ottawa.

The company being a third-tier sponsor is not providing any cash to the Games. It has a comparatively small role as a provider of gear to carry all the voice, video and data traffic for the Games that are estimated at $15-million.

Nortel retains full rights to use the Olympic brand to promote its name and will have preferential access to tickets for major events and hotel rooms.

Nortel became the official sponsor for the Vancouver event in 2007 and a year later committed itself to the 2012 Summer Games in London. A “tier-one” sponsorship promise is estimated at $71-million in network equipment and cash for the London Games.

The company’s involvement is mainly due to Bell Canada’s lead sponsorship of Vancouver’s Winter Games. The $200-million deal with Bell includes Nortel as the main equipment supplier which is designing and running the network for the Vancouver event.

Ward Chapin, chief information officer for VANOC said Nortel reaffirmed its commitment to the 2010 sponsorship on Jan 14.

“Much of Nortel’s commitments to the Games have been delivered and will be in place by May,” he said.

The 2010 Olympic sponsorship has been shaky in times of current financial turmoil. Like Nortel automobile company GM has received a $3 billion bailout from the federal government but declared its firm commitment to sponsor, which includes providing vehicles to VANOC.

Mining company Teck Cominco, the provider of metal for the Olympic medals announced sold off assets and announced layoffs recently but did not back out of the sponsorship.

VANOC says none of the 2010 sponsors have indicated they will unable to fulfill their deals for the Games. Organizers are looking at their budget regardless with a revised budget expected next week.

Living in Vancouver this may seem unrealistic. Is it possible a house costs the same as a swanky fashion label handbag? Reports say, “Yes, it is.” In view of the current financial crisis real estate prices have been reported to be as low as $1000 for a house in Detroit and Cleveland.

Are the media making a mountain out of a mole hill? Curiosity got the better of me and I decided to dig in deeper on the looming financial crisis in North American real estate. Media offerings from major online news websites in both Canada and the US provided an interesting contrast. Despite a sub prime mortgage crisis Forbes magazine reported what $1 million buys in homes worldwide, while the Canadian Real Estate Association (CREA) reported a 12.3 per cent drop in sales of houses.

Experts are still divided over what the future hold. Ted Tsiakopoulos of the Canada Mortgage Housing Corporation (CMHC) could not foresee a “…U.S. style housing market meltdown in Canada.” But Ontario MP Garth Turner has a different view. The author of a new book, “The Greater Fool: The Troubled Future of Real Estate,” Turner thinks the pieces are in place for a real estate collapse in this country.

“I ain’t got a motorboat but I can float ya boat”

As we shovelled our snow ridden walkways, promises of a sun-soaked house in Florida with a swimming pool in the courtyard seemed like a dream come true.

Last year alone, Canadians bought 56,000 Sunbelt properties, says Brian Ellis, vice-president of Brampton-based Florida Home Finders of Canada Inc.

“The absolute biggest bargains are in luxury product,” Ellis adds. “You can get a house on the water with its own private dock that sold for $3-million a year ago for not much more than $1-million today.”

Every time I went online my heart sank as I read about the distressing real estate failure in the market. I wondered on ways the media have jumped on the story of our economy, making it constant front page news.

The online news websites constantly updated the financial crisis timeline and sidebars to make sure finances are on our mind at all times.

Then there is the threat of job losses which makes the real life get even more “in your face”. With the Canadian budget around the corner ready to be announced at the end of January and Finance Minister Jim Flaherty said, “We regrettably are going to have to expect continuing job losses in Canada,” he said, hours after new Statistics Canada data showed that the country lost 34,400 jobs last month, more than expected.

The unemployment rate was 6.6 per cent. However, Mr. Flaherty stressed the Canadian job losses are not as staggering as those in the U.S.

I ponder now whether I’m not considering the severity of our financial situation, as implied by talks of further bailouts and threats of recession.

In the midst of all the ruckus and rumblings of economic carnage, I feel I am conducting myself in the same way I’ve always been. Except now, I’m seriously considering whether I should be more worried. The media are predicting long term financial crunch and here I am still buying a Louis Vuitton bag, at the price of a house in the U.S.