Bank of Canada Holds Firm Again
The Bank of Canada has held its overnight rate range at 0.75%-1.25%. I have highlighted the sections of the press release that have changed since the last release at the end of May:
The global economic expansion is proceeding broadly as projected in the Bank’s April Monetary Policy Report (MPR), with modest growth in major advanced economies and robust expansions in emerging economies. The U.S. economy has grown at a slower pace than expected and continues to be restrained by the consolidation of household balance sheets and slow growth in employment. While growth in core Europe has been stronger than expected, necessary fiscal austerity measures in a number of countries will restrain growth over the projection horizon. The Japanese economy has begun to recover from the disasters that struck in March, although the level of economic activity in that country will remain below previous expectations. In contrast, growth in emerging-market economies, particularly China, remains very strong. As a consequence, commodity prices are expected to remain at elevated levels, following recent declines. These high prices, combined with persistent excess demand in major emerging-market economies, are contributing to broader global inflationary pressures. Widespread concerns over sovereign debt have increased risk aversion and volatility in financial markets.
In Canada, the economic expansion is proceeding largely as projected, although the expected rotation of demand is somewhat slower than had been anticipated. Household spending remains solid and business investment robust. Net exports remain weak, reflecting modest U.S. demand and ongoing competitiveness challenges, particularly the persistent strength of the Canadian dollar. Despite increased global risk aversion, financial conditions in Canada remain very stimulative and private credit growth is strong.
Following an anticipated slowdown in growth during the second quarter due to temporary supply chain disruptions and the impact of higher energy prices on consumption, the Bank expects growth in Canada to re-accelerate in the second half of 2011. Over the projection horizon, business investment is expected to remain strong, household spending to grow more in line with disposable income, and net exports to become more supportive of growth. Relative to the April projection, growth in household spending is now projected to be slightly firmer, reflecting higher household income, and net exports to be slightly weaker, reflecting more subdued U.S. activity. Overall, the Bank projects the economy will expand by 2.8 per cent in 2011, 2.6 per cent in 2012, and 2.1 per cent in 2013, returning to capacity in the middle of 2012.
Total CPI inflation is expected to remain above 3 per cent in the near term, largely reflecting temporary factors such as significantly higher food and energy prices. Core inflation is slightly firmer than anticipated, owing to temporary factors and to more persistent strength in the prices of some services. Core inflation is now expected to remain around 2 per cent over the projection horizon. Total CPI inflation is expected to return to the 2 per cent target by the middle of 2012 as temporary factors unwind, excess supply in the economy is gradually absorbed, labour compensation growth stays modest, productivity recovers, and inflation expectations remain well-anchored.
The Bank’s projection assumes that authorities are able to contain the ongoing European sovereign debt crisis, although there are clear risks around this outcome.
Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be eventually withdrawn, consistent with achieving the 2 per cent inflation target. Such reduction would need to be carefully considered.
This was a significant re-write of the Bank’s periodic overnight lending rate press release, not surprising given recent developments in the US and Europe. It looks as if the Bank is setting the stage for an eventual raising of rates but their required optimism surrounding the European debt situation is, well, a bit optimistic in my view. Sorry, savers!
“Three friends are planning on moving away due to the disproportionate cost of living:income ratio. One is going to Calgary and the other two are going to UK and Australia.” | Vancouver Real Estate Anecdote Archive Says:
July 22nd, 2011 at 5:45 pm
[...] Vansanity at vancouvercondo.info 19 Jul 2011 3:40pm – “This week I’ve had the conversation with 3 friends that are planning on moving away due to the disproportionate ratio between the cost of living:income. One is going to Calgary and the other two are going to UK and Australia (Australia has its own housing bubble to deal with but it sounds like the incomes are higher in their field).” [...]
“It seems to me that people in Van don’t have a strong appreciation for the amount of wealth that is actually coming across the ocean. I could only dream of the wealth that I have seen and it honestly churns my stomach.” | Vancouver Real Est Says:
July 21st, 2011 at 5:59 pm
[...] people observer at vancouvercondo.info 19 Jul 2011 8:34pm – “It seems to me that people in Van don’t have a strong appreciation for the amount of wealth that is actually coming across the ocean currently and in past years. We can really only look at anecdotes here since it is not observed through income. I am heavily exposed to the current wave of asian immigrants – i could only dream of the wealth that I have seen and it honestly churns my stomach. Simple examples of new immigrants whom, on first glance I would never have known had that kind of wealth. The current wealth is much greater, and deeper than that from Hong Kong and Taiwan. 1. family of three, wealth generated offshore (which is why there are semi-annual trips and wire transfers): two condos paid cash, looking for another house now – 2. renter family I knew (new immigrants), thought they were lower – mid income, purchased house, cash for $900K, father is a a helicopter parent. family background in Asia – super rich. Wife has clearly said, she dresses down in Canada to not be noticed, in Asia everything is top tier Chanel, Gucci, etc. family drives a typical car here. 3. Couple in building, seemed like a blue collar worker. Turns out they were recent immigrants from China that go back for business reasons a couple times a year. Turns out they bought 3 units in the building for cash, renting out two living in one. 4. Girl I went to school with- realized she was wealthy, didn’t know how much – just bought a maserati (daddy’s money) – still owns a place in Van but generally travels the world This just scratches the surface. It makes me sick, but this is real wealth and it is here. Some try to hide it, others do not. when you look out on the street, and you see the Pradas, LVs, Chanels etc on girls in their mid teens and 20s, the maseratis, ferraris, mercedes slks driven by kids – remember that is real money, and those are purchased – not leased. It is play money for a lot of them, and it makes me sick and tired, but it is real.” [...]
July 20th, 2011 at 9:54 am
@Anonymous: I'll give you a "phatty" clue… Something growing in all these rented houses and remote forest ranges.
July 20th, 2011 at 6:14 am
@Van MD:
Re the Richmond House…
Further down Gilbert…almost to the dyke….was a rancher home that I beleive that Chinese guy they are trying to deport for the last 10 years
http://www.bclocalnews.com/richmond_southdelta/ri…
Thousands of kilos of methamphetamine was found in the spacious three-car garage at 13451 Gilbert Rd., directly across the street from the Lulu Island Wastewater Treatment Plant. That home had previously been owned by alleged smuggling tycoon Lai Cheong Sing, also known as Lai Changxing, though investigators insist the drug investigation was not linked to him.
July 20th, 2011 at 1:53 am
@keeperofthederp: Please put a not SFW warning next time!!
July 20th, 2011 at 1:33 am
@82 Anonymous: For those who want a little more than the typical press gloss, CIBC's report below.
http://research.cibcwm.com/economic_public/downlo…
A little scary to think that, even weighing housing as much as they do in the narrative, Vancouver's performance is mid-pack. Take that away and…
Check out the MLS Average Price chart on page 6 and have a nice day.
July 20th, 2011 at 1:11 am
About time. Most fraudulent citizens live outside Canada.
"Ottawa intends to revoke the citizenship of 1,800 people it believes obtained their status through fraudulent means, Immigration Minister Jason Kenney says.
The decision to revoke citizenship is rare, and a large-scale crackdown such as this one appears to be unprecedented. Fewer than 70 citizenships have ever been revoked since the Citizenship Act was passed in 1949."
http://www.cbc.ca/news/politics/story/2011/07/20/…
July 20th, 2011 at 1:00 am
@Frank:
"Trading" dirty money for clean money.
Some call it laundering.
July 20th, 2011 at 12:49 am
@Anonymous:
At least they have maple syrop. What do we export?
July 20th, 2011 at 12:38 am
Vancouver's economy now ranks 7th in Canada right behind that maple syrup export powerhouse, Quebec City.
http://www.vancouversun.com/business/technology/T…
July 19th, 2011 at 6:08 pm
@Van MD:
you do the talking
i'll post the shoops
photos of the DTES will do nicely, mmm?
July 19th, 2011 at 5:30 pm
@bubba:
cranial enema? sounds like a good moneymaker if I can recruit some volunteers to help me on a study on that :）
@keeperofthederp:
hahaha your posts are so utterly,weirdly, out-of-place'ly, randomly awesome, I'm sure it's rendering those house-pumpers quite confused
Good job. Now I'm not sure on the avatars, will attempt to get myself one later this week.
@BPOM
so I started a thread there re: the house in richmond that listed at $8.5M and sold at $6.85M. It was soon pointed out by several users that it was initially purchased at 4.8M. Sold at 2M profit, albeit not at the 8.5M price tag which it was fishing for. So after taking some jabs from the pumpers (and actually quite a few supportive voices from the rational/bearish crowd), I delivered my counter-attack:
"haha, I'm just an outsider who got this piece of info from a source; I do not have the luxury of MLS access to fully check the price history. I did not exaggerate the title to state that the owner sold at a loss, but barely stated the fact that the asking price took a 20% haircut before being sold. However, this thread did prove to us that several of the house-pumpers here (who did not openly reveal their realtor status) are in fact realtors who have MLS access. Conflict of interest, anyone?
All the current anecdotes of price drops you hear in greater Vancouver area are but a herald of things to come. By late 2011-2012, the real show will be on : )
July 19th, 2011 at 4:15 pm
hold your applause
https://downandoutinvancouver.files.wordpress.com…
shenzen tiger is a serious pumper bull douchebag, and so is his little cohort, mahakala – they're all over the place. we'll see how long this account lasts. then the process will begin anew.
does anyone want a tutorial for more organized raiding? it can be tough to navigate because you can't google translate the button icons, but i figure if i screen cap the step by step process to setting up an account it would take anyone 1-3 minutes to slog through and start posting.
@vanMD – are avatars only for donators on this board? i can't seem to find the setup option – can you steer me in that direction?? i am flying blind, but not doing too bad, IMO.
July 19th, 2011 at 4:02 pm
Riba…..interesting lecture re usury.
http://www.youtube.com/watch?v=8x9VbDOBpGc&fe…
July 19th, 2011 at 3:49 pm
@Frank:
lol @ trader
July 19th, 2011 at 3:33 pm
@Frank:
You know, import-export /wink /wink
July 19th, 2011 at 2:50 pm
Oh geez…
Don'tcha get it?
Anecdote:
An Asian gal we know was royally po'd
3rd generation…spoke perfect English.
At her kids' school , Principal assumed that she was HAM.
She was insulted…via visual appearance.
Principal was "upset" because if her kids were HAM aka ESL…the Gov't would have provided the scholl with about $3000 in extra funding.
My Euro "trash" heritage, as DP's with F*ck all after WW 2, had to be sponsored to Canuck duh…and pay for "Engrish" lessons before allowed into Public School system.
HAM/ESL is a gravy train for Public Sector.
Boy..some of you VCI posters need Van MD services for a cranial enema…
July 19th, 2011 at 2:38 pm
@ frank
"WTF is ‘trading’ anyway?? Trading what?"
there isno is no problem with the trading, we dont care what he trades in Shanghai.
The issue is that according to our laws, this guy is the perfect case of the deemed resident for tax purposes and CRA must be after these guys to see if they declare their worldwide income for tax purposes in Canada as required by law.
For some reasons, CRA seems to be turning a blind eye on the vast abuse of our system.
The way I see it, is rather his wife , family , parents and grandparents are getting free health care here and child benefit payments as they dont work here and dont declare any income and there is no chance in hell that chinese making money in china will declare it to CRA and pay taxes. This makes me reflect on my civic duty to continue paying taxes in this country – the system must be fair to all to be sustainable for the future.
July 19th, 2011 at 2:28 pm
@white payer:
Well…..this has gotten out of hand…
I'm not sure about anonymous' bitch….call a spade a spade.
The powers than be have done a Roger Nielson…..waved the white flag ……and are saying in coded language or otherwise, that BC residents are peons to be tolerated…we'll use semiphor if need be to let Cathay Pacific flights in.
The view is better and more peripheral if one's head's out of ass.
Not racist…I don't care if its' Euro or Martian wealth.
If this satellite $$$ BS goes on much longer , this berg is TOAST.
Who the f*ck is gaining?,….answer = retarded politicians, bureaucrats and maybe 30 development companies. That's democracy eh….excluding 99.99999999% of the population. Talk about a gang bang
Oh F*ck……..
July 19th, 2011 at 2:20 pm
actually I do not blame the chinese at all, despite the unease the amount of wealth being transferred. the immigrants are looking out for their families and providing what they can. One issue is the speed at which the capital flows have entered the relatively small Vancouver market. Things are shifting quickly and i don't think that will abate.
Frank – It is Shanghai – so like New York, probably trading in equities.
July 19th, 2011 at 2:14 pm
I used to come to this site for intelligent banter with bulls and bears about the real estate bubble. Lately this place has turned into a place where trolls and racist roam. To me this is the sign that the bubble is truly over. I wish most of these people would grow up( most of you guys are 'adults') or at least act civil.
July 19th, 2011 at 2:10 pm
Yahoo article on the Chinese HAM buyers.A "trader' buys a $4.3 Million house, because 'I want my family to be comfortable' while he is in Shanghai – 'trading'
WTF is 'trading' anyway?? Trading what?
http://ca.finance.yahoo.com/news/Vancouver-real-e…
July 19th, 2011 at 1:53 pm
@people observer: Yea yeah, we get the picture.
So why has mortgage debt grown to well over 1.1 trillion if so many rich people are buying cash?
July 19th, 2011 at 1:50 pm
@bubba:
bubba: amen
that's why we must wage reverse psy-ops
http://www.youtube.com/watch?v=PrkHtqjXpB0&featur…
woops that's glenn gould
http://i54.tinypic.com/v5xz5f.jpg
July 19th, 2011 at 1:50 pm
@white payer:
And one more thing – for a few rich ones to exist, there's gotta be thousand-fold more of poor suckers around.
As the US is sinking deeper and deeper into a depression and peoples' misery riches new levels, few rich, fat fucks pay hundreds of thousands of dollars for some obscure classic cars at Las Vegas auction every weekend. There's no financial crisis there, no?
July 19th, 2011 at 1:45 pm
@people observer:
I look at the New Chinese Wealth differently – it's not how rich they are, it's how poor are we… these people are supposedly the new middle class.
Enough said.
Don't blame the Chinese as they are merely taking advantage of what is being served to them on a silver plater – blame your own government at all levels… your elected officials laughing at you all the way to the bank.
The same government that lets all the dirty Chinese wealth in has stripped us locals of all the possibilities to build our own wealth through hard work and financial prudence. All there is left is Real Estate.
Instant millionaires from China = instant millionaires from West End. It's a fucking miracle.
How can something so genius possibly go wrong??!!
July 19th, 2011 at 1:44 pm
@bubba:
No…it skews the reality….aka it's a bubble.
Our Gov'ts are addicted to the crack cocaine of this post 1997 ponzi scheme…yet it is faux bling…it is hollowing out the foundations of a stable society.
The "educated" professionals leaving for better climes is a canary in the mine…setting us up for 3rd world economy.
How many people on this blog are PO'd at the rug pull from underneath ?
Their parents/ancestors didn't come here to struggle and try to build a better life for their progeny so that assholes in office could use the bogus HAM economy as a false flag for prosperity.
This is gonna be a 4Q-ing disaster….
July 19th, 2011 at 1:30 pm
Well, all the money we sent there buying cheap trinkets has to come back eventually?
July 19th, 2011 at 1:25 pm
here's the thing. Regardless of what you think about that bling – it is real and sustaining wealth for the most part (even if the Chinese economy slows significantly). Debt is not part of culture – see minimum down payments in China. We are only seeing a sliver of the amount of wealth by those that can afford it.
The previous Asian immigrants are essentially irrelevant. Even if the ultra wealthy are a tiny sliver of the population, the absolute number is enough to move these markets.
July 19th, 2011 at 1:12 pm
@people observer:
Don't beat up on yourself..
Ask the question….how many people are UNDER these rich HAMsters in some economic pyramid/ponzi scheme?
F*ck…..I drive around and see all the conspicuous HAM bling…..it's all BULLSHIT. Pimple faced teens driving $50K cars…..gimme a break
The Asians that have been here in Canada for 3+ generation could never achieve this BS bling….they'd have their short hairs taxed.
It is all an OZ-ian delusion….Faux wealth and Faux prosperity….the average Canadain was better off 30 years ago…..pathetic mind candy since then.
July 19th, 2011 at 1:04 pm
Dumb round eyes.
You have no idea how much YUAN there is in specials …your choice of combo(3) items………and throw in egg rolls.
July 19th, 2011 at 12:51 pm
@people observer:
>>>It is play money for alot of them, and it makes me sick and tired, but it is real<<<
Yes, it's real.
Real dirty.
July 19th, 2011 at 12:46 pm
Lick me bulls
July 19th, 2011 at 12:34 pm
It seems to me that people in Van don't have a strong appreciation for the amount of wealth that is actually coming across the ocean currently and in past years. We can really only look at anecdotes here since it is not observed through income.
I am heavily exposed to the current wave of asian immigrants – i could only dream of the wealth that I have seen and it honestly churns my stomach. Simple examples of new immigrants whom, on first glance I would never have known had that kind of wealth. The current wealth is much greater, and deeper than that from Hong Kong and Taiwan.
1. family of three, wealth generated offshore (which is why there are semi-annual trips and wire transfers): two condos paid cash, looking for another house now –
2. renter family I knew (new immigrants), thought they were lower – mid income, purchased house, cash for $900K, father is a a helicopter parent. family background in Asia – super rich. Wife has clearly said, she dresses down in Canada to not be noticed, in Asia everything is top tier Chanel, Gucci, etc. family drives a typical car here.
3. Couple in building, seemed like a blue collar worker. Turns out they were recent immigrants from China that go back for business reasons a couple times a year. Turns out they bought 3 units in the building for cash, renting out two living in one.
4. Girl I went to school with- realized she was wealthy, didn't know how much – just bought a maserati (daddy's money) – still owns a place in Van but generally travels the world
this just scratches the surface. It makes me sick, but this is real wealth and it is here. Some try to hide it, others do not. when you look out on the street, and you see the Pradas, LVs, Chanels etc on girls in their mid teens and 20s, the maseratis, ferraris, mercedes slks driven by kids – remember that is real money, and those are purchased – not leased. It is play money for alot of them, and it makes me sick and tired, but it is real
July 19th, 2011 at 12:33 pm
@900kCrackHouse H A M = Hot Asian Money
May be somebody could tell me the meaning of lawn Asian…
July 19th, 2011 at 12:31 pm
@phil
Because she hardly spoke English and kept saying "no no no phone number. Name? Name?"
July 19th, 2011 at 12:30 pm
Can someone fill me in on the term HAM?
July 19th, 2011 at 11:46 am
Where is Lavishing Lick?
Is he banging Rupert Murdoch's wife ?
Naaahhhhhh
July 19th, 2011 at 11:42 am
@keeperofthederp:
Oops, wrong file.
http://downandoutinvancouver.files.wordpress.com/…
July 19th, 2011 at 11:42 am
@keeperofthederp:
That's a hilarious screenshot you got of Choi.
http://kecute.files.wordpress.com/2007/11/dog-smi…