IMF pessimistic on Canadian outlook

The IMF has put on their grumpy pants and come out against the Canadian Economy again, so says the Globe and Mail.

Markets worldwide reacted with some shock to the news, posting modest declines. But the Toronto Stock Exchange took a bigger hit than most others, falling 1.2 per cent.

The Canadian stock market has been sluggish, relative to other leading global markets, as economic doubts have risen this year. The TSX has grown just 2.7 per cent to date in 2012, compared with a 14.6 per cent jump in the S&P 500 and even 6.7 per cent growth in the Euro Stoxx index.

“We’ve been saying for a while that the Canadian stock market would underperform,” said Pierre Lapointe, the head of global strategy and research for Pavilion Global Markets Ltd. “It has. And we continue to think that it will underperform.”

The IMF report focused heavily on Canada’s deeply entrenched trade relationship with the United States. While Canada’s recovery has been faster, “growth has been constrained by sluggish expansion in the United States,” the report said.

Read the full article here.

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patriotz
Member

Further to the article, Canada is currently running a record trade deficit despite near-record high oil and commodity prices – something never before seen in Canadian history.

Your homework assignment is to determine why this is the case and the future implications.

http://www.cbc.ca/news/canada/story/2012/09/11/trade-deficit.html

patriotz
Member

Yahoo proves its moniker. Good headline, stupid content.

“A very common question I’m asked is, ‘Is now a good time to buy?'” Gibbard says. “My answer is always that if you’re buying for your own home — for shelter–then yes, buy. The interest rates are at near historical lows and if you’re buying for your own shelter, with a long-term strategy in mind, I personally believe it’s a good strategy.

“Why wait a year to buy in hopes that the values have dropped when in the meantime, you’ve wasted 12 months’ rent, and if interest rates have increased, you’ve negated your potential savings by waiting to buy and paying a higher interest rate for the next five to 10 years?”

Door prize for those able to guess Ms. Gibbard’s occupation without clicking the link.

http://ca.finance.yahoo.com/blogs/insight/depressing-canada-housing-outlook-forces-critical-homeowner-decisions-140353331.html

Bailing in BC
Guest
Bailing in BC

Oooh oooh! Is she a welder?!

Bailing in BC
Guest
Bailing in BC

Damn, I just read the link. No door prize for me. Gotta love it, get on the property ladder and then “reach for the stars” that is of course if “you have the means (and the guts)”

N
Guest
N

@patriotz:

Door prizes are, by definition, given based on a lottery which everyone who comes through the door enters. They are not given as prizes for contests such as correctly answering a question. That would be a simple “prize.”. 🙂

patriotz
Member

Canadians’ personal debt creeps higher, poll says

Fifty-one per cent of those polled rated paying down debt as more important than saving and investing. Last year, it was 49 per cent.

Um, paying down debt is saving. Nice poll question, RBC.

fatso
Guest
fatso

it would be interesting to do VCI poll regarding the amount of non mortgage debt.

Bailing in BC
Guest
Bailing in BC

@N:
Does that mean I’m still in the running?! What’s the prize? Is it a pony? Is it a flying pony?!!!!

PCinWA
Member
PCinWA

I certainly don’t disagree with the IMF. But at the risk of stating the obvious, what economic credentials do Tom Cruise, Paula Patton and Jeremy Renner have? Why do we even care what they say about the Canadian economy? They may know a lot about international espionage, but asking them about Canadian economic matters is like asking Wayne Gretzky to opine about football strategy…

jesse
Member

@PCinWA: “Why do we even care what they say about the Canadian economy?”

Because they are conversing directly with central bankers, including Canada’s. What’s important is their data and reasoning as to why Canada needs to be careful.

jesse
Member

@patriotz: “guess Ms. Gibbard’s occupation”

PMO staff member?

N
Guest
N

@Bailing in BC:

A yellow helicopter, generously provided by Bull, Bull, Bull.

jesse
Member
@patriotz: From that article: “If a homeowner was thinking of selling to either upgrade or downsize, they tend to remain in the same home and renovate to make it fit their changing needs rather than sell at a less than profitable price in a downturn,” says Burnaby certified financial planner Satpal Rai. “The general public and my clients for that matter do not purchase a primary residence only to sell it within five to 10 years,” she adds. “They generally purchase a starter home to get into the market and then upgrade when necessary or feasible. Generally clients are living in their principle residences for at least a decade if not 15 years.” Not well worded. Her clients do not purchase with the INTENT to sell within 5–10 years. That doesn’t mean a few will change their minds, either by… Read more »
mclovin
Member
mclovin

Interesting comment I just came across. At least one major Canadian company is calling for interest rates in Canada to go down next year.

Not news a lot of Bears want to hear but with the extremely slow global and Canadian economies I can see one making the case. What this would do for RE prices remains unknown but I would think not a lot.
Rates are already rock bottom and home ownership is record high. The problem people are having now is not the rate but qualifying with things like “rental income” “self employed income” etc and having to actually come up with a down payment.

Anonymous
Guest
Anonymous

@jesse:

I was just making a silly little joke (which nobody I guess found funny). You know, IMF…”Impossible Missions Force” from the highest-grossing Tom Cruise film ever Mission Impossible – Ghost Protocol?

Seriously though, the IMF WEO report is a good read (not as entertaining as the movie), and those interested should take a look for themselves:

http://www.imf.org/external/pubs/ft/weo/2012/02/pdf/text.pdf

victoria
Member
victoria
Jesse, Okay here is my life so far. Bought house is Leaside Toronto – decided to move to Victoria. Husband’s team killed in 9/11. Also had 3rd kid and the house was way too small. Build big fancy house in Victoria. Husband decided to start own business – had to downsize – house too expensive. Moved to very nice house in Oak Bay. But OMG 4th kid on way. House worked for a couple of years but as kids got older became too small – again. Moved to Broadmead. Would love to sell this money pit but taking into account of selling costs we are doing a renovation. We would sell only if we were upsizing or downsizing – hubby’s idea. I Don’t like the neighbors etc. etc. Would happily get rid of this dump and move into two double… Read more »
Anonymous
Guest
Anonymous

@patriotz: your assigment is to brush up your resume and go job hunting.

Londonernow
Member
Londonernow

Patriotz nailed it in the first post. The fact that Canada is running a trade deficit at a time when resource prices have been this high is shameful really. When (not if) prices drop there is going to be some trouble in store me thinks.

TNT
Guest
TNT

If your thinking of buying a home hang on.
The cross border Canadian-Chinese housing enquires are going to result in homes being sold very quickly as nervous buyers try to get out before it hits the fan.
Billions of unreported dollars have migrated into the Canadian market’s and the CP Government is tracking it down.
600 thousand Chinese officials have been punished over the past 5 years, many for corruption.
The Chinese Governnment has accumulated mass amounts of information from officials.
This is another reason for the sudden changes in immigration protocols.
This will contribute to the current downward direction of some housing markets.
Multible links on this have disappeared from the Web, perhaps part of the REBGV trouble shooting.

Vote Down The Facts
Guest
Vote Down The Facts

@patriotz: “Um, paying down debt is saving.”

It isn’t. For example, if you were to pay down your mortgage debt by making a lump sum prepayment then that cash is essentially trapped. If instead you put the same amount of money into a savings account then you could access it again at any time.

I’d say RBC phrased the poll question in a way that was appropriate for the audience.

patriotz
Member

@Vote Down The Facts:
“It isn’t. For example, if you were to pay down your mortgage debt by making a lump sum prepayment then that cash is essentially trapped.”

Irrelevant. It’s still saving regardless of liquidity. A locked in term deposit is saving.

patriotz
Member

@Anonymous:

I was just making a silly little joke (which nobody I guess found funny). You know, IMF…”Impossible Missions Force”

For boomers to get it you’d have to say one or more of Peter Graves, Martin Landau, Barbara Bain, Greg Morris, Peter Lupus, and Leonard Nimoy.

🙂

Patiently Waiting
Member
Patiently Waiting

Tsur was on the CBC radio local news telling us we have unreasonable expectations for housing. He said we need to give up on the idea of SFH. Why is he saying that? He must be worried about condo sales.

People will live in any kind of housing in Vancouver. The vacancy rate tells us that. Its a question of buying. When I buy, if ever, it will be something I truly love and want to live in for a long time. I’m not pegging my hopes and dreams to a badly-built box of air in the sky…especially at two or three times its value.

Tsur, go to hell.

painted turtle
Guest
painted turtle

@TNT
Can you elaborate on this:
“The cross border Canadian-Chinese housing enquires”?
Never heard of it before.
Thanks.

real_professional
Member

Giving up on the dream of a single family home next to Stanley Park with your front door opening up to Sea Wall – sure!

But what about giving up on a single family home in Surrey/Coquitlam/New-West/Langley? Does that sound unreasonable?

That is all anyone is asking for – Tsur is the unreasonable one.

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