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?

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realpaul
realpaul
11 years ago

beau:

#16 B, thx, still too much, considering that you are already supposedly paying property managers firm for the service.

beau
beau
11 years ago

realpaul:

$239 per year, not month.

patriotzed
patriotzed
11 years ago

bums up2:

Hmmm I have a friend with dual citizenship– should I tell her to buy in Seattle? So much easier when you’re a citizen.

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.

Wreckonomics
Wreckonomics
11 years ago

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.

bums up2
bums up2
11 years ago

Hmmm I have a friend with dual citizenship– should I tell her to buy in Seattle? So much easier when you're a citizen.

no-lympics
no-lympics
11 years ago

#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

no-lympics
no-lympics
11 years ago

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

no-lympics
no-lympics
11 years ago

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.

no-lympics
no-lympics
11 years ago

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.

oneangryslav2
oneangryslav2
11 years ago

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… Read more »

Mark Downs
Mark Downs
11 years ago

Strataman: Sounds like when Cheney had to find a vice presidential candidate, or when Flaherty had to appoint someone to oversee the banks

realpaul
realpaul
11 years ago

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.… Read more »

realpaul
realpaul
11 years ago

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.

Strataman
Strataman
11 years ago

http://www.6717000.com/waterworks/ If you own there you not so bright!

Strataman
Strataman
11 years ago

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!