If you haven't heard there is a bit of an economic crisis at hand. At its root, as far as I can understand, are home prices and bad mortgages. This chart by a Yale economist predicts a 43.5% correction in US home prices by 2011. Thanks to Ian for the link.

The joy of living on PEI in this time is that we historically don't fall as quickly or as hard as everyone else. On the flip side we don't rise as quickly. We should be thankful for this stability going into this financial Armageddon.

The average Canadian house price in August 2008 was $290,000. In PEI it was $142,000. To put it into perspective, the Canadian Average could fall 50% and still be more expensive than the average Island home today. If we join the rest of the country in the housing price free fall we won't have as much to lose. If Mr. Yale Economist is correct the average Canadian house will lose $126,000 in value and only 61,700 on PEI.

It's a good time to live on dorky little PEI.

If everything goes to heck and we're left to fend for ourselves Islanders are also at an advantage in that we are surrounded by agriculture. AKA we won't starve. As Alan used to say when he lived here. "It's the only capital city in Canada where you can smell manure in the spring". Who would have thought that may be a good thing?

Zap Your PRAM is a lot like good Scotch. It’s hard to find the right words to describe it. Instead of offering a feeble overview of an amazing four days with amazing people I’m simply going to offer a few sample Zap nuggets.

• Rob Paterson blew my mind with a notion that money, in many cases, is a replacement for relationship. Need someone to take care of your kids or help you move? If you have no friends or family you have to pay for those things to happen. I thought that this may be limited to personal situations but then realized that by the end of the weekend that relationship currency was actually being traded/offered in exchange for things like blogs, technology, and accommodations.
• Ian ruined many people with a fabulous Scotch tasting adventure. His breadth of knowledge and extreme likeability made tasting Scotch much more of a total immersion experience than I thought was possible. How did he ruin people? His exquisite selection of Scotches won over many new Scotch fans…. but once you’ve had the best you can’t go back. Silverorange might have to put in a new line item on the ol' income statement…
• Tessa fracking rocked touch football. Injuries and all.
• The conference refuses to end. From Dalvay it went to Casa Mia. From Casa Mia it went to Halifax. From there it apparently went to the Internet. The conference seems to be refusing to die on Twitter, Facebook, Google Groups, blogs, photo galleries and email. Long live Zap!
• These are freaking fantastic portraits. I can’t wait until mine is posted. I’m thinking of getting it blown up and framed in an ye-olde frame for my office. Need a kick-ass photographer in the Toronto area? You won’t get a nicer and more talented guy than Rannie Turingan.
• Dalvay By The Sea was magical. I believe Deane Barker summed it up by saying “there must be fairy dust sprinkled on this place”. The food, the ambiance, the setting… incredible. It will be hard to beat if we decide to do Zap again.
• John Connolly wooed us with world class talent on Saturday night. I bought his album today on Itunes and have been reliving the Zap night through his music.
• Oh the food…
• Jes Sherborne did a presentation on Decoration. It goes down as one of the most significant design presentations I have been privy to. It completely rocked. I make a light prediction that it may be a kernel that grows into an entire design movement.
• It was a mini-silverorange retreat. Each night as things wound down in the main building the silverorange cottages were just revving up. The shenanigans were legendary. We largely have Keith & Nick to thank. Seriously…. I laugh so much with the slice crew it hurts. Becky was forced to endure two nights in the cottage. On the last night we attempted to go to sleep before the cottage had cleared out. We spent the next hour laughing out loud in bed as the hilarity seeped through the thin wooden walls.

We learned from Rob's talk that banks create money out of thin air. We also learned that money is a replacement for relationships. If this is true we all cashed in at Zap. It turned out to not be about technology, the Internet, or anything tangible at all. The weekend was about the people and the relationships that were deepened or started.

The trick now will be to figure out how to leverage these relationships a thousand times, pool them into a general fund, sell that fund to someone else, sell insurance on the fund, then take out securities on the fund and the insurance.

A sincere thank you from all of us left back on PEI. We were honoured to be your hosts.

It's time. Zap Your PRAM kicks off today. People are making their way across the continent and in fact from around the world to come to our dorky little nonference.

Let the good times roll.

Apparently it has something to do with being a resource based economy. Whatever the cause, our dollar is loosing its value against the US dollar. Being a company that has a lot of US based clients this is a very good thing for us. We'll keep our fingers crossed that it will offset the downside. We're not quite sure what the downside of the economic crash is for us yet but we'll keep you posted.

1 USD = 1.16799 CAD

Handy Google Finance chart

I'm committing a bit of heresy. A fellow co-worker told me this morning that there was a piece in the Guardian this past weekend stating that many of those who have been reporting in the local news about the immigrant investment going ons have actually benefited (i.e. received money) from the program.

While the auditor general is investigating the program and the RCMP are investigating claims of fraud (limited to one or two individuals is my understanding) I'm still suspicious that the larger infractions will be swept under the rug.

Here on little ol' PEI almost everyone has been affected by this program. There have been thousands of investments in a province with only thousands of people in it. The people who have no doubt benefited the most from this program will be the business elite and the brokers themselves.

The press is targeting the wrong group. I personally do not care if MLA's businesses received funding through the program. If they were legit businesses that qualify for the program then they have a right to it. This is NOT where the majority of the abuse has taken place. The majority of the abuse is surely to be found within the brokers and within the business that do not qualify for the program. I would also suggest that some law firms/accounting firms may have gotten their hands dirty as well. I have heard unconfirmed reports of lawyers setting up shell corporations to receive investments and businesses specifically excluded from the program (i.e Real Estate & Professional Services) receiving investment.

This is not a political issue so please drop the "Liberal this" and "Conservative that" BS. This is a greed issue.

The real abuses of this program will more-than-likely never see the light of day as almost everyone, the press, the business elite, the fund-raisers, the politicians (in all parties), all have been involved. I suspect that only an all out RCMP investigation would be able to get to the bottom of this.

Start with the brokers and follow the trail from there.

During the high winds we had on Friday a blower contraption launched off the roof of an abandoned building down the street from us and crashed into the sidewalk. Thankfully no one was hurt. I've shown a sketch of its path down to earth and what could have been.

What are the rules when it comes to buildings like this? It's been for sale for a few years but has been falling apart. The roof has been ransacked by teens. The shingles have been blown off by storms. The entire building is gradually falling apart. Short of someone buying it and fixing it up can the city do anything?

The auditor general announced he's going to do a complete audit of the program. Hopefully he'll dig deep enough to find out if money was actually given to worthy companies, not just make sure all of the debits and credits line up.

I have a feeling that a lot of important and successful business people will not be too happy about this program being audited.