I’m referring to the economy.

Unless you were clinically dead today, you heard of the marked nose-dive the markets took today. The TSX dropped a hefty 600 points today. Recent days have seen some serious drops as well although today’s drop was much larger. And just in case you weren’t aware, the TSX has shed over 2,500 points over the last 3 months.

Of course these are only the TSX numbers. The world markets were hit huge and the American markets are expected to bleed heavily tomorrow, as the markets there were closed today due to the holiday.

If you’re like me (just another average Joe with little knowledge), you’re asking, “So how does this affect me?”

Well, that’s a good question.

I think, firstly, anyone with RRSPs are going to lose some value this quarter, if not most of this year. The majority of RRSPs are laden with mutual funds. Those mutual funds took a hit today. Again, think ‘long term’ with RRSPs… at least that’s what they say. Let’s hope to hell they’re correct.

What about the Canadian economy?
The US is in a world of hurt. The huge rise of debt from sub-par mortgage practices are catching up with them. The country is spiraling into a recession. Many ‘experts’ think Canada will weather the storm alot better than the US, but who really knows for sure. Canada’s biggest importer of goods and resources is the US. If the US economy is hurting, then Canada is going to hurt… but how badly?

And lastly, I’m really wondering how to read all of this:

• Scenario #1: The US recession takes hold. The US economy grinds to a halt, job cuts are massive, yet more people lose their house… it’s all bad. Canada takes a huge hit as well, being so closely tied to the US. Jobs are lost, the economy slows and times get tough. The only upside I see in this scenario is that housing prices drop a bit. The big downside I see is the resource industries greatly curtail exploration and the like, thus affecting people like me, who’s job relies heavily on those industries.
• Scenario #2: The US recession hurts the US but Canada is spared for the most part. Sure Canada doesn’t get away unscathed, but the bloodbath remains south of the border. The upside is the Canadian economy remains strong, jobs are plenty and time, although they’ve been better, are still quite good. The downside is the housing boom we’ve been living in for the last several years means house prices are still out of reach for alot of people…. self included.

So, what are your thoughts about 2008?