Canadian Banks & Interest Rates
Pani sent in two interesting links recently – the first is to a look at why Canadian banks seem to be faring so much better than their OECD counterparts in this downturn:
Canadian banks’ pre-crisis balance sheet structures were broadly similar to those of banks in other OECD countries with one notable exception – funding structure. Canadian banks were in the top quartile of the OECD sample in terms of their use of depository funding. The advantage of stable deposit funding may have insulated them from the freeze of wholesale funding markets, contributing to their resilience.
Why do Canadian banks have a firmer grip on depository funding? Environments and circumstances are important factors. On the supply side, large Canadian banks, benefiting from their nationwide footprints and a universal banking model, are able to offer one-stop service to households, which helps attract and retain household savings. On the demand side, in recent years, Canadian banks experienced slower asset growth than their neighbours in the US, leading to a narrower funding gap and hence a lower need for wholesale funding in addition to household savings
The second link is to a note about the Feds stated willingness to employ ‘shock’ interest rate jumps, and the difficulties in pursuing such a policy. The following is a quote from Carl Walsh quoted in the Wall Street Journal:
[O]nce the Fed does start raising the federal-funds rate out of its current record-low range near zero, “it should be increased quickly,” Mr. Walsh argued. “There is no support for raising rates at a gradual pace once the zero rate policy is ended.”
Based on recent anecdotes, quickly rising interest rates would have a dramatic impact on our local real estate market. It’s a good thing our banks are so healthy… or are they?
September 1st, 2009 at 10:46 am
beau:
#16 B, thx, still too much, considering that you are already supposedly paying property managers firm for the service.
September 1st, 2009 at 10:41 am
realpaul:
$239 per year, not month.
September 1st, 2009 at 1:02 am
bums up2:
The state of Washington has no restrictions on ownership of RE by non-citizens. To the best of my knowledge such restrictions can only be found in a few Midwestern states and apply only to rural land (rather like PEI's restrictions this side of the border).
http://answers.uslegal.com/questions.php?q=3364
It's a lot easier to live in the US and get a job if you're a citizen, though. Obviously.
September 1st, 2009 at 12:10 am
Yes, quickly rising interest rates, even just back to historical norm of 6 or 7 percent would wreak havoc on the re market here. The koolaid wears off and the hangovers a bitch.
August 31st, 2009 at 11:57 pm
Hmmm I have a friend with dual citizenship– should I tell her to buy in Seattle? So much easier when you're a citizen.
August 31st, 2009 at 11:50 pm
#2 Strataman:
That sounds bizarre …where did you here that?
If it is true, is he related to Bernie Madoff?
Sounds like a major con…probably ingratiated themselves to a bunch of non – resident investors . Most strata councils are VOLUNTEER based , are they not…no remuneration?
What happened to Robert's Rules of Order insofar as Council Executives and their powers/quorom ? Doesn't RROO apply "de facto" ?
Is the guys name Gordon Campbell…sounds like something he'd do.
Provincial Budget due soon folks….slash baby slash
August 31st, 2009 at 11:39 pm
Woodwards:
Craiglist has 11 units listed for sale
Few examples
http://vancouver.en.craigslist.ca/van/reo/1351716…
$669000 / 2br – Woowards w-43 1149sqft. 2bdrm/den (vancouver)
$669000 NO GST!!!!
Here’s your chance to own one of the largestsuites in the Woodwards building. If you missed the original release of the Woodwards condominiums, act now and purchase this rare home via assignment
========
$399999 / 1br – Woodwards W43 36th Floor **Amazing Views** (Vancouver(Gastown)) (map)
http://vancouver.en.craigslist.ca/van/reo/1320596…
================
Here is a link to the others:
http://vancouver.en.craigslist.ca/search/rea?quer…
August 31st, 2009 at 11:33 pm
Thanks guys, seems like we have a problem with the voting system, I had to disable it for now. Hopefully get it working again soon. On with the conversation!
August 31st, 2009 at 11:32 pm
Seattle condo prices S-L-A-S-H-E-D
http://www.seattlepi.com/local/409663_auction28.h…
QUOTE:
Gallery is located at 2911 Second Avenue. The minimum bids for Gallery are from $195,000 for one bedroom, one bath homes. The previous price for such units was $499,000. Two Bedroom/two bath condos would start at $325,000. Previously the price was more than $900,000.
Brix, on Capitol Hill, is at 536 Broadway East. Minimum bids for one-bedroom condos are $165,000 — down from $435,000. Two bedroom condos will start at $295,000. The original asking price was $640,000.
August 31st, 2009 at 11:31 pm
Welcome back Pope
Where's the voting bars…I want to mark you down for swearing like a F#&King longshoreman!!!
Also WTF happened…it was the sh*ts being down all day.
August 31st, 2009 at 11:25 pm
Welcome back, Pope! I was suffering withdrawal symptoms for a few hours earlier this evening.
Anyway, in a previous thread girlbear brought up the Woodward's tower. I drove past there on Sunday morning (at about 11:00) and saw a bunch of people (15-20) waiting outside. It looked like most of these were prospective landlords waiting for possible suckers (I mean tenants) to show up.
You know, I'd rent a place there, if it was about 25% discounted from a comparable place in Coal Harbour or Yaletown. It's a relatively decent building, three blocks from work for me, and the amenities–like rooftop pool, gym, etc–are outstanding. Right now, however, landlords are being a little bit optimistic. It'll be interesting to see if they have to lower rents to attract tenants.
By the way, showing the place at 11:00 on a Sunday morning is pretty clever. They should show it at 11:00 on a Saturday night and see how much interest there is from prospective tenants.
August 31st, 2009 at 11:20 pm
Strataman: Sounds like when Cheney had to find a vice presidential candidate, or when Flaherty had to appoint someone to oversee the banks
August 31st, 2009 at 10:58 pm
Our goverment may not have the last say on intrest rates as they find the easy money has been drying up.
"China warns banks on OTC hedge defaults -report
Sat Aug 29, 2009 9:47am IST
BEIJING, Aug 29 (Reuters) – Chinese state-owned enterprises (SOEs) may unilaterally terminate derivative contracts with six foreign banks that provide over-the-counter commodity hedging services, a leading financial magazine said.
China's SOE regulator, the State-owned Assets Supervision and Administration Commission (SASAC), had told the financial institutions that SOEs reserved the right to default on contracts, Caijing magazine quoted an unnamed industry source as saying.
It did not name the banks or the firms in question, but said Keith Noyes, an official with the International Swaps and Derivatives Association, had confirmed he was aware of the letter to the banks. He declined to comment further to Caijing.
It also cited a SASAC official as saying that almost every SOE involved in foreign exchange or trade had some exposure to derivatives such as crude oil, non-ferrous metals, agricultural commodities, iron ore and coal, although only 31 SOEs were licensed to do so.
Nobody at SASAC was immediately available to comment on Saturday.
SASAC took over the job of overseeing SOEs' derivatives trading from the securities regulator in February after several Chinese firms reported huge losses from derivatives, and quickly tightened the rules, ordering firms to quit risky contracts and report their positions on a quarterly basis.
More…
UPDATE 1-Beijing's derivative default stance rattles banks
Mon Aug 31, 2009 7:42am EDT
By Eadie Chen and Chen Aizhu
BEIJING, Aug 31 (Reuters) – A report that Chinese state-owned companies will be allowed to walk away from loss-making commodity derivative trades provoked anger and dismay among investment bankers on Monday as they feared it may set a damaging precedent.
The State-owned Assets Supervision and Administration Commission, the regulator and nominal shareholder for state-owned enterprises (SOEs), told six foreign banks that SOEs reserved the right to default on contracts, Caijing magazine quoted an unnamed industry source as saying in an article published on Saturday.
While the details of the report could not be confirmed, it was Monday's hot topic in financial circles from Shanghai to Singapore as commodity marketers feared that companies holding underwater price hedges could simply renege on the deals, costing banks millions of dollars in profit.
The warning from SASAC follows a series of measures from Beijing this year to crack down on the sale of derivative products by foreign banks to Chinese enterprises, principally big consumers, who bought protection against higher prices last year only to watch the market collapse — leaving them with losses.
While many companies including top airlines have come clean on the losses, some analysts fear another wave may follow."
Also on the real estate front there is increasing immediacey in the commercial market which was forecast some time ago when it was forecast that the stimulaus packages by governments was nowhere near enough to cover the debt overhang. Defaults are being reported on both sides of the border. Calgary properties have also been hard hit. If that is the case then so is Vancouver because they are all owned by the same groups.
http://www.sfgate.com/cgi-bin/article.cgi?file=/c…
August 31st, 2009 at 10:50 pm
Strataman:
Thats an average of $239.00 p/m per unit just for a maintenance supervisor alone. What are the freaking strata fees in the bldg anyway. This is beyond ridiculous. Is the structure falling down? What happened to the responsibilities of the property manager and the scheduled maintenance plan that the unit holders pay him to perform. A 'building supervisor"? Is this guy going to fix the plumbing and the elevator, schedule moves etc like an actual 'super".
Doesn't this type of thing fall under the conditions of the strata agrrement for the unit holders to vote on such an issue. Craziest thing I've heard for awhile. Didn't PT Barnum say " Theres a sucker born every minute". Looks like this guy found the building they had moved into.
BTW CONGRATS POPE.
August 31st, 2009 at 10:30 pm
http://www.6717000.com/waterworks/ If you own there you not so bright!
August 31st, 2009 at 10:24 pm
I hear you! I posted this on Chipmans site cause I thought you had been bought and paid for!
"Interesting tidbit The Waterworks Strata President has appointed himself a paid $50000 annum job as the maintenance supervisor…no conflict of interest there …who wouldn’t like the deciding vote on their own salary? Hey what say we make the Mayor Chief of Police? Strata’s are totally f##cked systems of government."
If this is legal which I doubt then steer clear of strata ownership!
August 31st, 2009 at 10:20 pm
Are we back? Are we live? Can anybody out there hear me?
F*%#&(@%!!