July 2011 Canadian Economic Fundamentals
- Thread starter Ally
- Start date
- Joined
- Mar 24, 2009
- Messages
- 16,743
Investing is boring: If you want excitment, go to Vegas
Successful investing should be boring, which may explain why so many excitement-seeking investors suffer disappointing returns.
If you want excitement, go to Vegas.
If you want to be a rich crashing bore, read a little book self-published by Edmonton-based wealth counsellor Marshall McAlister. It`s titled The Brilliance of Boring Investing: An Academic Approach to Portfolio Design. (See, even the subtitle is boring!)
It begins with a quote from Nobel laureate Paul Samuelson: `Investing should be dull. It shouldn`t be exciting.` But there`s a paradox, writes McAlister: the portfolio process that requires less work from investors can actually deliver the best long-term investment returns.
Read the full article here.
Successful investing should be boring, which may explain why so many excitement-seeking investors suffer disappointing returns.
If you want excitement, go to Vegas.
If you want to be a rich crashing bore, read a little book self-published by Edmonton-based wealth counsellor Marshall McAlister. It`s titled The Brilliance of Boring Investing: An Academic Approach to Portfolio Design. (See, even the subtitle is boring!)
It begins with a quote from Nobel laureate Paul Samuelson: `Investing should be dull. It shouldn`t be exciting.` But there`s a paradox, writes McAlister: the portfolio process that requires less work from investors can actually deliver the best long-term investment returns.
Read the full article here.
- Joined
- Mar 24, 2009
- Messages
- 16,743
Canada's housing bubble close to bursting: Capital Economics
CALGARY ` Canada`s housing bubble is now close to bursting as housing valuations have `lost touch with fundamentals` and household debt is at a record high, says a report by Capital Economics.
The report says it fears that house prices could fall by as much as 25 per cent over the next three years.
`House prices have been growing rapidly for nearly a decade now and it has reached the point where housing is so overvalued relative to incomes that a downward correction seems unavoidable,` says Capital Economics.
`Relative to disposable income per capita, our calculations suggest that housing is around 25 per cent overvalued, which is approaching the level of excess that the U.S. market reached at its peak in 2006.`
Read the full article here.
CALGARY ` Canada`s housing bubble is now close to bursting as housing valuations have `lost touch with fundamentals` and household debt is at a record high, says a report by Capital Economics.
The report says it fears that house prices could fall by as much as 25 per cent over the next three years.
`House prices have been growing rapidly for nearly a decade now and it has reached the point where housing is so overvalued relative to incomes that a downward correction seems unavoidable,` says Capital Economics.
`Relative to disposable income per capita, our calculations suggest that housing is around 25 per cent overvalued, which is approaching the level of excess that the U.S. market reached at its peak in 2006.`
Read the full article here.
- Joined
- Mar 24, 2009
- Messages
- 16,743
Economy stalls in April
Canada's economy didn't expand or contract at all in April, a slight pullback after a 0.3 per cent gain the previous month.
Gains in mining, retail, the public sector and utilities offset a decline in manufacturing, finance and other sectors, Statistics Canada said Thursday.
Economists had been expecting a drop of 0.1 per cent. Over the past 12 months, Canada's economy has expanded by 2.8 per cent.
Scotiabank economists Derek Holt and Karen Cordes Woods said that even beyond the flat overall growth, the details of the report showed weakness in the economy.
Read the full article here.
Canada's economy didn't expand or contract at all in April, a slight pullback after a 0.3 per cent gain the previous month.
Gains in mining, retail, the public sector and utilities offset a decline in manufacturing, finance and other sectors, Statistics Canada said Thursday.
Economists had been expecting a drop of 0.1 per cent. Over the past 12 months, Canada's economy has expanded by 2.8 per cent.
Scotiabank economists Derek Holt and Karen Cordes Woods said that even beyond the flat overall growth, the details of the report showed weakness in the economy.
Read the full article here.
- Joined
- Mar 24, 2009
- Messages
- 16,743
Dealers push back rate hike forecasts
TORONTO (Reuters) - Most of Canada's primary dealers have pushed back their forecasts for the next Bank of Canada rate hike over the past month, with two seeing no increase this year, a Reuters poll showed on Wednesday.
The central bank is expected to keep interest rates unchanged until at least September as "substantial headwinds" cited by its top official could hinder the economy,
Seven of Canada's primary dealers -- the institutions that deal directly with the central bank as it carries out monetary policy -- have moved their target for the next Canadian rate hike further into the future since the last poll on May 31.
Read the full article here.
TORONTO (Reuters) - Most of Canada's primary dealers have pushed back their forecasts for the next Bank of Canada rate hike over the past month, with two seeing no increase this year, a Reuters poll showed on Wednesday.
The central bank is expected to keep interest rates unchanged until at least September as "substantial headwinds" cited by its top official could hinder the economy,
Seven of Canada's primary dealers -- the institutions that deal directly with the central bank as it carries out monetary policy -- have moved their target for the next Canadian rate hike further into the future since the last poll on May 31.
Read the full article here.
- Joined
- Mar 24, 2009
- Messages
- 16,743
Home-resale price index jumps in April
TORONTO (Reuters) - Canadian home resale prices rose in April from March, marking the biggest of five straight month-on-month increases and gaining right across the country, a report on Wednesday said.
The Teranet-National Bank Composite House Price Index, which measures price changes for repeat sales of single-family homes in six metropolitan areas, showed overall prices were up 1.1 percent in April from March.
It was the first time in 10 months that prices rose in all cities surveyed. Housing has been a resilient sector of the Canadian economy, rebounding quickly and steadily after a brief slump early in the financial crisis.
Analysts said the higher prices shown in the last few surveys were fueled by a rush to buy before stricter mortgage rules came into effect in the spring.
Read the full article here.
TORONTO (Reuters) - Canadian home resale prices rose in April from March, marking the biggest of five straight month-on-month increases and gaining right across the country, a report on Wednesday said.
The Teranet-National Bank Composite House Price Index, which measures price changes for repeat sales of single-family homes in six metropolitan areas, showed overall prices were up 1.1 percent in April from March.
It was the first time in 10 months that prices rose in all cities surveyed. Housing has been a resilient sector of the Canadian economy, rebounding quickly and steadily after a brief slump early in the financial crisis.
Analysts said the higher prices shown in the last few surveys were fueled by a rush to buy before stricter mortgage rules came into effect in the spring.
Read the full article here.
- Joined
- Mar 24, 2009
- Messages
- 16,743
CIBC sees slower global, Canadian economic growth
CIBC estimates Canadian economic growth slowed to 1 per cent in the second quarter, but it expects the pace to pick up in the second half of 2011.
The bank is forecasting Canada's annual growth rate for 2011 will be 2.7 per cent, slipping to 2.6 per cent next year. That's down from 3.2 per cent annual growth in 2010.
Read the full article here.
CIBC estimates Canadian economic growth slowed to 1 per cent in the second quarter, but it expects the pace to pick up in the second half of 2011.
The bank is forecasting Canada's annual growth rate for 2011 will be 2.7 per cent, slipping to 2.6 per cent next year. That's down from 3.2 per cent annual growth in 2010.
Read the full article here.
- Joined
- Mar 24, 2009
- Messages
- 16,743
Canadian home prices at an all-time high
Canadian home prices in April were up 1.1 per cent from the previous month, according to Teranet's June 2011 report on the national housing market.
This increase was the largest in the last five months and was the first time in ten months that prices rose in all six of the metropolitan markets surveyed.
The Teranet-National Bank National Composite House Price Index (quite a mouthful isn't it?) now stands at a record 140.47. To give you some context, it stood at 100 in June 2005.
Vancouver led the six markets that were surveyed, posting a 1.8 per cent increase in housing prices. As you probably know, the housing market in Vancouver is red hot and April was the seventh consecutive month that prices rose.
here.
Canadian home prices in April were up 1.1 per cent from the previous month, according to Teranet's June 2011 report on the national housing market.
This increase was the largest in the last five months and was the first time in ten months that prices rose in all six of the metropolitan markets surveyed.
The Teranet-National Bank National Composite House Price Index (quite a mouthful isn't it?) now stands at a record 140.47. To give you some context, it stood at 100 in June 2005.
Vancouver led the six markets that were surveyed, posting a 1.8 per cent increase in housing prices. As you probably know, the housing market in Vancouver is red hot and April was the seventh consecutive month that prices rose.
here.
- Joined
- Mar 24, 2009
- Messages
- 16,743
Canada's choice: Diversify or suffer
It boils down to Economics 101: relying on a single customer to buy your products is a recipe for corporate disaster.
Imagine if Ontario's tech sector, B.C.'s forest products firms or Saskatchewan's potash producers conducted business as if globalization never happened.
The heat they'd get from policymakers, investors, academics, economists and editorial writers would be painful indeed.
Yet that's precisely the position that Canada's largest and most profitable industry -the energy sector -is in today, more than a decade into the 21st century
Read the full article here.
It boils down to Economics 101: relying on a single customer to buy your products is a recipe for corporate disaster.
Imagine if Ontario's tech sector, B.C.'s forest products firms or Saskatchewan's potash producers conducted business as if globalization never happened.
The heat they'd get from policymakers, investors, academics, economists and editorial writers would be painful indeed.
Yet that's precisely the position that Canada's largest and most profitable industry -the energy sector -is in today, more than a decade into the 21st century
Read the full article here.
- Joined
- Mar 24, 2009
- Messages
- 16,743
House prices rise at fastest pace in 10 months
OTTAWA ` Canadian home prices rose across the country in April, advancing at their fastest pace in 10 months, the Teranet-National Bank composite house price index shows.
Overall, prices gained 1.1 per cent over the month before, the largest of five consecutive monthly increases.
"The large rise of the composite index in April may have been due to front-loading of sales to beat the announced shortening of the maximum amortization period for insured mortgages," said National Bank senior economist Marc Pinsonneault.
It was the first time in 10 months that gains were recorded in all of the six major city areas covered by the index, which measures price changes for repeat sales of single-family homes in six metropolitan areas.
But analysts do not expect the gains to last.
Read the full article here.
OTTAWA ` Canadian home prices rose across the country in April, advancing at their fastest pace in 10 months, the Teranet-National Bank composite house price index shows.
Overall, prices gained 1.1 per cent over the month before, the largest of five consecutive monthly increases.
"The large rise of the composite index in April may have been due to front-loading of sales to beat the announced shortening of the maximum amortization period for insured mortgages," said National Bank senior economist Marc Pinsonneault.
It was the first time in 10 months that gains were recorded in all of the six major city areas covered by the index, which measures price changes for repeat sales of single-family homes in six metropolitan areas.
But analysts do not expect the gains to last.
Read the full article here.
- Joined
- Mar 24, 2009
- Messages
- 16,743
Recession Recovery: We've Only Just Begun
Three years after the onset of the recession, the world economy remains deeply unsettled. This state of affairs should surprise no one.
Arguably, the most instructive book since the recession ` This Time Is Different ` has analyzed the history of financial meltdowns going back to the 14th century. What U.S. economists Carmen Reinhart and Kenneth Rogoff discovered explains much of what the world faces today.
Read the full article here.
Three years after the onset of the recession, the world economy remains deeply unsettled. This state of affairs should surprise no one.
Arguably, the most instructive book since the recession ` This Time Is Different ` has analyzed the history of financial meltdowns going back to the 14th century. What U.S. economists Carmen Reinhart and Kenneth Rogoff discovered explains much of what the world faces today.
Read the full article here.
- Joined
- Mar 24, 2009
- Messages
- 16,743
Canadian housing bubble burst prediction refuted
A new report from Capital Economics says Canada's housing bubble is now close to bursting and prices could fall by as much as 25 per cent over the next three years.
The President of the Real Estate Investment Network disagrees and says million dollar transactions in Vancouver and Toronto are skewing the national picture.
Don Campbell tells 660News while activity will likely cool in Canada's two largest real estate markets, transactions in other regions, like Calgary and Edmonton, are poised to take off over the next five years.
Read the full article here.
A new report from Capital Economics says Canada's housing bubble is now close to bursting and prices could fall by as much as 25 per cent over the next three years.
The President of the Real Estate Investment Network disagrees and says million dollar transactions in Vancouver and Toronto are skewing the national picture.
Don Campbell tells 660News while activity will likely cool in Canada's two largest real estate markets, transactions in other regions, like Calgary and Edmonton, are poised to take off over the next five years.
Read the full article here.
- Joined
- Mar 24, 2009
- Messages
- 16,743
How vulnerable are Canadian housing prices?
So is it a bubble? Glancing at popular metrics such as the price-to-income ratio or the price-to-rent ratio, it is tempting to conclude that the housing market is already in clear bubble territory and a huge crash is inevitable. Tempting, but probably wrong. When it comes to the Canadian real estate market at this stage of the cycle, any statement based on average numbers can be hugely misleading. The truth is buried in the details`and there the picture is still not pretty, but much less alarming.
Read the full report by Benjamin Tal here.
So is it a bubble? Glancing at popular metrics such as the price-to-income ratio or the price-to-rent ratio, it is tempting to conclude that the housing market is already in clear bubble territory and a huge crash is inevitable. Tempting, but probably wrong. When it comes to the Canadian real estate market at this stage of the cycle, any statement based on average numbers can be hugely misleading. The truth is buried in the details`and there the picture is still not pretty, but much less alarming.
Read the full report by Benjamin Tal here.
- Joined
- Mar 24, 2009
- Messages
- 16,743
Government expected to add 15,000 jobs in June
SLOWING ECONOMY: The forecasts suggest June employment growth will continue to fade after blockbuster gains in April, while the unemployment rate stabilizes.
The job market slowdown has largely been attributed to overall economic weakness in the second quarter. Supply chain disruptions in the heavyweight manufacturing sector due to the Japanese earthquake are seen temporarily affecting hiring, while higher energy prices drag on consumer spending.
JOB QUALITY: Markets will be watching for further signs of strength in terms of more highly paid full-time jobs in private business, which are needed to boost growth.
Full-time employment in May grew by 32,900, while part-time fell by 10,600. Private-sector employees rose by 37,100 and public-sector jobs fell by 44,300.
Read the full article here.
SLOWING ECONOMY: The forecasts suggest June employment growth will continue to fade after blockbuster gains in April, while the unemployment rate stabilizes.
The job market slowdown has largely been attributed to overall economic weakness in the second quarter. Supply chain disruptions in the heavyweight manufacturing sector due to the Japanese earthquake are seen temporarily affecting hiring, while higher energy prices drag on consumer spending.
JOB QUALITY: Markets will be watching for further signs of strength in terms of more highly paid full-time jobs in private business, which are needed to boost growth.
Full-time employment in May grew by 32,900, while part-time fell by 10,600. Private-sector employees rose by 37,100 and public-sector jobs fell by 44,300.
Read the full article here.
- Joined
- Mar 24, 2009
- Messages
- 16,743
How mortgage refinancing affects your networth
A mortgage is more than a monthly payment - it is a debt instrument used to finance an asset.
On a household's balance sheet, a mortgage is a liability and, as such, it is subtracted from a household's assets to determine that household's net worth. Too many consumers fall into the trap of refinancing a mortgage in order to lower their monthly payments without considering how that refinancing affects their total net worth. Does refinancing your home ever pay off, or is it just a short-term fix to a bigger problem? Read on to find out. (For background reading, see Mortgages: The ABCs Of Refinancing.)
Read the full article here.
A mortgage is more than a monthly payment - it is a debt instrument used to finance an asset.
On a household's balance sheet, a mortgage is a liability and, as such, it is subtracted from a household's assets to determine that household's net worth. Too many consumers fall into the trap of refinancing a mortgage in order to lower their monthly payments without considering how that refinancing affects their total net worth. Does refinancing your home ever pay off, or is it just a short-term fix to a bigger problem? Read on to find out. (For background reading, see Mortgages: The ABCs Of Refinancing.)
Read the full article here.
- Joined
- Mar 24, 2009
- Messages
- 16,743
Did S&P blow up Europe's plan to keep Greece afloat?
Standard & Poor's threw a wrench into Greece's rescue efforts today, though the move shouldn't surprise anyone. S&P warned that a plan by French banks to roll over some Greek debt would probably be treated as a default under the ratings agency's criteria. In this case, it would be a "selective default."
Observers have questioned how the agencies would treat such a rollover, which Germany says its banks will follow.
After what had been an optimistic few days, with Greece taking the right steps to get more bailout money from the EU, European Central Bank and International Monetary Fund, the S&P warning has disappointed some. Greece will now get more money from its initial bailout package, but today's warning from S&P suddently puts a question mark over talks on a second rescue plan.
Read the full article here.
Standard & Poor's threw a wrench into Greece's rescue efforts today, though the move shouldn't surprise anyone. S&P warned that a plan by French banks to roll over some Greek debt would probably be treated as a default under the ratings agency's criteria. In this case, it would be a "selective default."
Observers have questioned how the agencies would treat such a rollover, which Germany says its banks will follow.
After what had been an optimistic few days, with Greece taking the right steps to get more bailout money from the EU, European Central Bank and International Monetary Fund, the S&P warning has disappointed some. Greece will now get more money from its initial bailout package, but today's warning from S&P suddently puts a question mark over talks on a second rescue plan.
Read the full article here.
- Joined
- Mar 24, 2009
- Messages
- 16,743
Seven tips for renters
My husband and I were fortunate enough to buy our downtown Toronto home before prices shot through the roof.
That doesn`t mean we don`t struggle to balance mortgage payments with the many other costs facing a young urban family, but it does mean that we don`t need to go through the hassle of upgrading to a larger house. We love our neighbourhood and thankfully, we have enough room here to accommodate our growing toddlers.
Read the full article here.
My husband and I were fortunate enough to buy our downtown Toronto home before prices shot through the roof.
That doesn`t mean we don`t struggle to balance mortgage payments with the many other costs facing a young urban family, but it does mean that we don`t need to go through the hassle of upgrading to a larger house. We love our neighbourhood and thankfully, we have enough room here to accommodate our growing toddlers.
Read the full article here.
- Joined
- Mar 24, 2009
- Messages
- 16,743
- Joined
- Mar 24, 2009
- Messages
- 16,743
Reno Rationalization: Investment of Self-Gratification?
Listen, I'd be the first person to tell you that I'm not normal, but when all the rest of the world is diving into bathroom redos or kitchen makeovers with gusto, I stand alone: I really dislike renovations.
It`s not because they don't make a house prettier or more functional. It's great to see the before-and-after shots of a reno, just as I get a kick out of seeing bodies transformed when people start a new diet or exercise plan. The problem is that one of these things is a true investment, while the other is nothing more than conspicuous consumption ` justified as an investment.
Read the full article here.
Listen, I'd be the first person to tell you that I'm not normal, but when all the rest of the world is diving into bathroom redos or kitchen makeovers with gusto, I stand alone: I really dislike renovations.
It`s not because they don't make a house prettier or more functional. It's great to see the before-and-after shots of a reno, just as I get a kick out of seeing bodies transformed when people start a new diet or exercise plan. The problem is that one of these things is a true investment, while the other is nothing more than conspicuous consumption ` justified as an investment.
Read the full article here.
- Joined
- Mar 24, 2009
- Messages
- 16,743
Speculators unburned
IT has been almost two weeks since the International Energy Agency (IEA) announcedit would release 60m barrels of oil from its member governments` reserves, apparently in response to `ongoing disruption of oil supplies from Libya`. How is that working out?
If the intention was to reduce prices in the medium- or long-term, it has failed. The price of Brent crude fell $5 on the announcement but has rallied since. The price of West Texas Intermediate (mainly produced in America) is trading higher than before the IEA announcement (see chart).
Read the full article here.
Read the full article here.
IT has been almost two weeks since the International Energy Agency (IEA) announcedit would release 60m barrels of oil from its member governments` reserves, apparently in response to `ongoing disruption of oil supplies from Libya`. How is that working out?
If the intention was to reduce prices in the medium- or long-term, it has failed. The price of Brent crude fell $5 on the announcement but has rallied since. The price of West Texas Intermediate (mainly produced in America) is trading higher than before the IEA announcement (see chart).
Read the full article here.
Read the full article here.