A new beginning after the naughts?

It's the start of a new year and a new decade. The naughts, or nots, are mercifully over and the new year brings a sense of optimism that things will get better. They have to, don't they?

Well, there will be a number of changes and a few firsts, starting this month.

President Barack Obama will give his first state of the union address toward the end of this month. Hint: it's not good. Employment is just one example. According to the Washington Post , the period from December 1999 to December 2009 was the "worst for the U.S. economy in modern times." Over that 10-year period there was no net job creation. Zero.

New York Times columnist and Nobel prize winning economist Paul Krugman suggests the U.S. needs to add more than 100,000 jobs a month just to keep up with its growing population. The U.S. has lost eight million jobs since the recession began two years ago. By Krugman's estimate, the country needs to create about 18 million jobs over the next five years before it returns to "anything that feels like full employment."

And it's not just jobs that have vanished. Nearly one quarter of American homeowners owe more on their mortgages than their homes are worth. These people aren't booking ski vacations any time soon.

While Obama will try to explain the severity of the times to the American people and at the same time inspire them, Canadians will hear very little of substance from their political leaders this month. Or next, although many of them they will no doubt show up on TV screens at the Olympics.

Prime Minister Stephen Harper has decided that his government can afford to take a breather from the daily rituals of Parliament while it contemplates how to manage the economy, develops a long-term strategy for balancing the budget and decides how to reform the senate.

In unprecedented times the Conservatives take an unprecedented luxury: time off - to debate the proper level of economic stimulus while watching athletes slide headfirst down a $100 million tube of ice; to weigh spending cuts against tax increases as pairs of figure skaters spin and toss one another about; perhaps to recruit more hockey players and ski racers to fill vacant senate seats.

When the going gets tough, the rogues go pro.

At the end of this month the World Economic Forum - remember it? - will bring together business, political, cultural and NGO leaders in Davos, of course. The modest theme for the 40 th annual meeting is "Improve the State of the World: Rethink, Redesign, Rebuild."

Refinancing is apparently not on their agenda.

But it is on the agenda of Whistler Blackcomb's parent companies, Intrawest and Fortress Investment Group. How negotiations are going on the $524 million debt payment that Intrawest apparently missed on Dec. 23 is anyone's guess and some people are guessing. An unnamed source "familiar with the matter" suggested to the New York Post that Fortress has made an offer to its lenders, led by hedge fund Davidson Kempner, but it was rejected. The anonymous source suggested both sides may be waiting for the Canadian government to step in and prevent Intrawest from going into receivership prior to the Olympics.

The implied danger is that if Intrawest went into receivership Whistler Blackcomb would be padlocked and Olympic ski racers would be left standing around at the base of the mountain waiting for someone to open the lifts. It's an imaginative scenario inferred by someone hoping for a government handout.

Closing the operation and shutting off cash flow, not to mention reneging on an Olympic contract, would help neither the lenders nor the creditor. And why the Canadian government would get involved in rescuing Intrawest, a company that owns and operates more American resorts than Canadian resorts, is something only desperate Wall Street financiers could explain.

What does appear to be a possibility, however, is that Fortress could lose control of Intrawest to its creditors. What that would mean for Whistler Blackcomb, in the long run, is even more uncertain. But in a financial world where fortunes were made packaging and commoditizing mortgages to the Nth degree until the whole house of cards collapsed and that has now moved on to packaging and commoditizing life insurance policies, don't expect a lot of empathy for "the visitor experience" or "living the dream."

Welcome to 2010.



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