The banks are struggling
Canadian banks have a problem. They’re having a difficult time boosting loans at a time when prospective customers don’t seem as keen to load up on new debt.
Royal Bank chief executive officer Gordon Nixon said the banks must now find ways to build their lending operations – a key driver of their profits – without being coaxed into making unattractive loans just to get more business in the door.
“What you hope you don’t see happen is banks starting to do stupid things again,” Mr. Nixon said in an interview, referring to the past several years where credit was easy to come by, and banks around the world were all too eager to lend.
“Right now we’re in an environment where demand for credit is very, very low … It’s not that credit isn’t available – there’s not a lot of demand.”
Full article in the Globe and Mail, hat tip to RP1 for the link!
September 8th, 2010 at 11:12 am
BC registered office of Canada Money TT Ltd, 5945 Kathleen Ave, Room 208. Shareholders are husband and wife, names correspond to persons convicted and jailed in China.
http://news.singtao.ca/vancouver/2010-09-08/headline1283935979d2716604.html
September 8th, 2010 at 10:20 am
@No More Gordocracies: Can't drive gold
September 8th, 2010 at 12:06 am
@Tony Danza: Buy a new washer and dryer?
September 7th, 2010 at 6:11 pm
@Nero: Let's get some perspective here: $1.03 Billion distributed amongst every man, woman and child residing in Vancouver is only $1,500! I mean what the hell would we all do with an extra $1,500?
September 7th, 2010 at 6:04 pm
correction* Money TT company locates in Vancouver. During 4-1/2 years, sums amount to 8500M Yen, daily transactions up to 4.6M Yen, involved 20+ chinese provinces, 4000+ local residents.
September 7th, 2010 at 5:48 pm
Latest murmur is Canada real estate will slow down. You won't read it in VanSun. A 43-yr-old Canadian PR/citizen is jailed 5-1/2 years in China and fined 3M Yen (abt C$500k). He registered a money TT company in Canada in 2003 to help people to transfer money from Canada to China and vice versa that is legal here but illegal in China. Amount came to 310M Yen (abt C$48M).
Chinese government found out his illegal underground money TT when they traced several corrupt officials siphoning C$3M, C$4.6M, to Canada.
It be interest if Sun and Province tell us more.
Clever man, he transferred money not through banks, but he and wife open 20 bank accounts in Canada and more bank accounts in China, and swap money around to customers who want receive money in either country. He charged less commission than banks 0.3%-0.5% making good profit still under radar FINTRAC.
September 7th, 2010 at 5:45 pm
@Supraboy: Son, I am a licensed opthalmologist and in my professional opinion you are suffering from a chronic case of RV (Rectal Vision). Fortunately the disease is easily treated by simply removing your head from your ass.
September 7th, 2010 at 5:03 pm
I don't understand how some of you would say you can afford to travel more as a renter than a homeowner. If you Had more money, you wouldn't be renting in the first place. Obviously the homeowner is taking your bitter money and piling up more cash while you have to take a percentage of your earnings each month to make the fat get fatter. I know quite a few homeowners getting rich renting their paidoff homes. Those who bought 20 yrs ago are laughing to the bank. Those who have parents with half a brainshould be enjoying multiple paidoff homes purchased more than 30 yrs ago.
September 7th, 2010 at 4:38 pm
@Nero: I don't know about this $5 million dollar condo, I hear that real estate is going down. But you say it comes with a FREE washer and dryer !? And CIBC will throw in 100k ?!
http://www.cibc.com/ca/mortgages/article-tools/up…
All yours for 420 easy payments of $30000!
September 7th, 2010 at 3:59 pm
@Devore: I agree with much of what you say. As an American, I honestly believe we are at the end of our empire, and that reset button is being pushed. Had the media monopolies become less powerful (through legislation and regulations they manipulated), and the sheeple less subject to divisive, inflammatory propaganda, and had the corporations had less a killer grip on both parties in Congress, and a better informed electorate put forth better candidates and held them accountable, and we'd better regulated campaign contributions, etc. etc., maybe things would not be going down the toilet. But I think the private sector deserves a hefty share of the blame for a helluva lot of the suffering for utter unscrupulous behavior at the expense of shareholders, creditors and the public. I am becoming much more interested in wave theory…perhaps there is a natural human cycle of optimism and pessimism that tends to explain the cycles of rising and falling governments, industries, etc. Yes, we are off the RE topic, and yet, this is one sector that has BC government at all levels, by the balls, abetted by govt. policies to assure cheap money and unreasonable risk-taking in mortgage lending and hedge fund investments by the banks.
September 7th, 2010 at 3:49 pm
@Simpatico:
"as fiefdoms of top executives in collusion with hand-picked boards rubber stamping short-term decisions"
Yes and these poor short term decisions are poor decisions for (most) share holders and the companies in the long term. Much of this has been fueled by bubbles created by poor short term government policy.
I will refer you to the government policy changes with respect to down payments, amortization terms and interest rates that have fueled the housing bubble in Canada. The banks didn't create it. In the long term this will be bad for banks and citizens. You can blame the executives if you want but the government made the policy changes that have allowed/caused this to happen.
September 7th, 2010 at 3:38 pm
@Simpatico: And why are those monopolies persisting? Could it be the protection of government regulations that are effectively restricting barriers to entry? We already know out representatives don't read the legislation they vote on, what makes you think they write it?
I'm not necessarily anti-government, it's an institution that pretty much needs to exist in one form or another for many many generations to come, even if we started the changes today. I just believe that whenever you have a government that exercises ultimate power over its citizens, there will always be groups who seek to co-opt its power to coerce everyone else to align with their beliefs and world view, and to extract advantages for themselves and their interests. And we don't get to opt out. Best we can do right now is retain the freedom to run and fund parallel equivalent systems (eg education, health care, transit, insurance, retirement, etc), while also paying for the establishment one, but one by one those are falling down, as government power gets unrelentingly pushed out further and further into our lives.
The root of the problem is whenever people get to vote, they quickly learn they can vote themselves free money. They believe as long as their cause is supported, they will be receiving more than the other person, which is all they care about, having that advantage. Just human nature. It's an inherent flaw in the system, but we believe it is the best system possible that maximizes social order and progress, so we defend it ardently. Eventually it grows too big and explodes.
No such thing as a benevolent or limited government. It always gets corrupted. All we can do is hit the reset button every couple hundred years.
Ah well, nothing useful real estate related ever gets said late night, so off-topic we go!
September 7th, 2010 at 3:34 pm
An interesting comment from the billion dollar boondoggle story:
"Obviously the city of Vancouver is going into bankruptcy.History tells us that when Burnaby went into bankruptcy during the Great Depression, they were forced to sell a big chunk of Burnaby to Vancouver. Renfrew was once in Burnaby.Now that the shoe is on the other foot, i suggest Vancouver sell back east Vancouver to Burnaby. Problem solved.As for these Olympic legacy units -they look like something out of East Germany 1968."
Read more: http://www.theprovince.com/business/Vancouver+tax…
I wonder if its true…
September 7th, 2010 at 3:32 pm
Utterly hilarious:
Vancouver taxpayers on hook for $1-billion as most Olympic Village units unsold
Read more: http://www.theprovince.com/business/Vancouver+tax…
http://www.theprovince.com/business/Vancouver+tax…
My favourite comment:
"Free washers and dryers? Why? Vancouver taxpayers have already been taken to the cleaners."
September 7th, 2010 at 3:32 pm
@Anonymous: The difference is that you want companies to constantly be destroyed, with (presumably) better ones taking their place in the corporate hierarchy. You absolutely do not want that in the governance realm. Look at Europe before the Treaty of Westphalia (and many sub-Saharan African states today): there were hundreds of groups competing for supremacy on any one territory. It was only after certain groups of elites had established an effective monopoly on the legitimate means of coercion (to use Weber's phrase) that Europe really began to flourish economically, culturally, etc.
You want only one sovereign government on any territory. Why do you think the US is such an economic/political/cultural/military power? Because it has had (except for a brief interlude in the early 1860s, the destruction that resulted as a result only serving to underline my point) only one sovereign for over 200 years.
September 7th, 2010 at 3:31 pm
@VHB: Thanks. I had checked out the forum posts previously (I've been lurking in the background ever since we decided the time might be ripe to sell our primary residence, about 3 months ago).
Your posts in the past have been well reasoned and analytical. However, in this case I suspect the 95% confidence interval on the average calculations (based on 3 or at best 4 data points), might be a bit wide. It seems the readers here are hungry for any tea leaves (and you appear to be the resident fortune teller), but its probably premature to extrapolate the first few days of september into a full month estimate.
By the way, you're not by chance related to vancouver housing blogspot, are you? It was a housing blog I used to read a few years ago, sporadically. Nice analyses, but I'm not really sure what happened to it. If I recall, that blog was also relatively bearish on vancouver RE, largely on the basis of analysis of fundamentals.
September 7th, 2010 at 3:28 pm
@Anonymous: I don't want you to misunderstand me. I don't want to romanticize government either. There's a huge yawning gap between responsible government and what we typically get. Just as there is a big gap between how the largest corporations actually operate (as fiefdoms of top executives in collusion with hand-picked boards rubber stamping short-term decisions), versus the ideal visions of pure capitalism, without abusive monopolies, governed by a rational market, restrained by the rights of shareholders, guided by good business practices. I personally think small businesses are much more respectable, honest, productive.
September 7th, 2010 at 3:27 pm
Vancouver's Billion Dollar Boondoggle
“It’s weird,” said Heather Eddy, who recently moved into a rental unit at West 1st and Columbia. “It’s almost living in a futuristic police state. All you see is police cars driving around and people on bicycles.”
Eddy, a 24-year-old pastry chef, said she believes the village was opened too early.
“It’s very much like a ghost town,” she added. “I’m scared to walk down the streets at night.”
Near the renovated Salt Building, Mitch Williams described himself as a “lookie loo” checking out the views.
“This place is spooky,” said Williams, a 41-year-old telecom worker from Port Moody. “It’s like a sci-fi movie. I don’t see any patio furniture and there’s nothing on the balconies.”
Read more: http://www.theprovince.com/business/Vancouver+tax…
September 7th, 2010 at 3:25 pm
@Devore:
I agree. However, the effect that a single individual has on the vote in either case is infinitesimally small.
http://en.wikipedia.org/wiki/Paradox_of_voting
September 7th, 2010 at 3:24 pm
@Simpatico:
"How many will simply stop making their mortgage payments because they don’t like the bank’s manipulation of elected officials?"
Nobody forces you to take a mortgage out nor do they force you to deal with a bank or any institution you do not like. CMHC is the problem and they are a government organization.
"Don’t like Translink, so that means you somehow stop paying to take the bus if you don’t have a car?"
Translink is a government organization. And yes you have an option not to take a bus. I have not taken a bus in 10 years or more.
"Dislike the oil companies, so just stop paying for gas?"
Yes you have a choice to not buy gas. BTW most oil companies in the world are state (government) owned. The vast majority of oil is controlled by governments not private cooperations.
"I think you need to stop romanticizing corporations, especially the monopolies."
None of the examples you have given are monopolies and are actually government controlled.
September 7th, 2010 at 3:18 pm
@Devore: @Simpatico: Very interesting points by both of you. I've been thinking a lot about this and once I'm finished the projects that I'm currently working on–two of them–I plan on taking this up.
There are some similarities and many differences between corporations and governments. The most important similarity shared by the two institutional forms is the divergence in interests between those that rule/lead–executives and politicians–and those that "own" the enterprise–shareholders and the citizenry.
What is good for the elite is rarely good for the rest of the populace. There is no capitalism anymore. Why? Because there are no capitalists. Those who make the decisions–the executives–don't own the enterprise. Shareholders do. And over the last few decades the nature of corporate (crony) capitalism is such that shareholders have become virtually powerless. Moreover, the exorbitant pay that executive boards have gifted to each other in an orgy of circle-jerk gluttony means that every executive has the same incentive–goose short-term performance in order to raise the stock price significantly, load up on options, cash out, take one's golden parachute and do it all over again. The fact that the company's long-term financial health is undermined as a result is incidental. No true owner of a company would operate it in this manner.
Analogously, politicians operate using the same short-term rationale. (Incidentally, this is one of the reasons why I oppose term limits.) They become rich and the shareholders (citizens) have to pick up the mess–financially, socially, in terms of blood and guts on foreign battlefields. (Democracies are just as bellicose as non-democracies, the only difference being that democracies generally don't fight each other.)
September 7th, 2010 at 3:17 pm
@oneangryslav2: Thanks – I suppose I'll have to treat this website like the zoo – feeding the animals makes them unfit to survive in their native environment – we wouldn't want that to happen…
September 7th, 2010 at 3:00 pm
@Devore: Easy to say, but monopolies leave people few choices. How many will simply stop making their mortgage payments because they don't like the bank's manipulation of elected officials? Don't like Translink, so that means you somehow stop paying to take the bus if you don't have a car? Dislike the oil companies, so just stop paying for gas? I think you need to stop romanticizing corporations, especially the monopolies.
September 7th, 2010 at 2:56 pm
@Simpatico:
What a load of crap. Most of the biggest companies from two decades ago no longer exist today. Private companies are punished quickly and severely by the markets in ways governments can only imagine.
And if you don't like a company don't buy it's products or avoid it's stock and bonds.
Try not paying your HST or carbon tax today.
September 7th, 2010 at 2:54 pm
@Simpatico: It's easy to challenge a corporation: stop giving it money. Try that with government. And as a shareholder, you can vote too, to exact same effect as in the polling booth.
September 7th, 2010 at 2:45 pm
@giggling: I have to say, far too many people on this blog confuse big corporations with government. I've worked for big corporations. They are not transparent, self-serving, often wasteful, dedicated strictly to making profit for their shareholders and delivering big compensation to their executives. However, unlike government, corporations need NOT care about free speech, right to free association or assembly, nor are the leaders subject to a vote of the people. We may argue about whether government is becoming a captive of corporations and veering off the path of democracy, or even devolving into a form of fascism, but we should recognize that in the case of government there are many more remedies available to the common person in challenging decisions, compared with challenging corporations. I'd argue that good government depends on us getting off our rear ends and paying attention, speaking out, enforcing rights. It's the only thing that stands between us and the incredibly voracious excesses of an unbridled private sector.
September 7th, 2010 at 2:38 pm
@hesitant: Welcome to the site, hesitant. One of our posters has graciously explained to us how we can make foreclosed comments disappear. It's wonderful logging on to the site and not being able to view the asinine drivel of SSB and his ilk (or alter egos).
http://vancouvercondo.info/forum/topic/how-to-hid…
September 7th, 2010 at 2:29 pm
@hesitant: I record them every day from either Paulb or Yatter matters. The archive of these dailies is in the forum under 'september numbers' for September, and analogously for other months.
They are not official numbers, but they typically end up pretty close.
September 7th, 2010 at 2:24 pm
@hesitant: don't waste your time. That guy is a troll. If you are new to the internet, here is a link that explains what a troll is. Please don't egg him on.
http://en.wikipedia.org/wiki/Troll_%28Internet%29
September 7th, 2010 at 2:03 pm
@VHB: I'm curious as to the source of the sales statistics. I see the sales updated, generally most evenings (although not this past friday, for example) on the yattermatters website. That blogger cites the real estate board of greater vancouver, I believe, as the source. But the REBGV does not have any publicly available daily statistics, at least none that I could easily find. Do you know of any other public sources for the data?