Moody’s down on Canadian Banks

In one fell swoop the credit rating agency Moody’s brought down the credit rating of six Canadian banks.

RBC was the only big bank to escape this downgrade cycle.

So why is Moody’s picking on us?

“High levels of consumer indebtedness and elevated housing prices leave Canadian banks more vulnerable than in the past to downside risks the Canadian economy faces,” David Beattie, vice-president at Moody’s said in a note.

Canadian consumer debt has risen to a record-high 165 per cent of disposable income in the third quarter of 2012, up from 137 per cent in mid-2007. Bank of Canada governor Mark Carney has repeatedly warned about these levels, but they remain stubbornly high.

Sure, Mark Carney has warned about this, but he’s gone now… doesn’t that mean the problem is gone too?

As always Mr. Flaherty is there to reassure us Canadas banks are the ‘soundest in the world’.

In other news… it’s not a bubble, it’s a balloon.

Image source: wreckonomics at Vancouver Peak.

 

 

Sort by:   newest | oldest | most voted
C.Junta
Guest
C.Junta

Last week I noticed quite a few new/refreshed “for sale” signs in the neigh… ahem, excuse me, in the borough. Just crunched some numbers and here we go:

Greater Vancouver inventory increase on last calendar week (or close 7-day interval) of January by year:


2007 3.4%
2008 5.7%
2009 3.5%
2010 1.1%
2011 2.6%
2012 4.7%
2013 7.4%

The wildest numbers come from PoCo for SFH (sample size varies from 80 to 160 from year to year, not sure how statistically valid it is):

2007 2.8%
2008 4.0%
2009 3.2%
2010 2.1%
2011 -2.6%
2012 1.3%
2013 15.1%

Just thought you find these numbers interesting.

Anonymous
Guest
Anonymous

Don’t bother trying to raise a family in Canada unless you want to shovel all your hard earned money into overpriced shelter while you dine on canned beans heated with a candle,

Short'em High
Guest
Short'em High

Misleading article fails to mention RBC was already steeply downgraded in 2012:

http://www.cbc.ca/news/business/story/2012/06/21/moodys-bank-downgrade.html

As well, for Carney to say that consumer debt remains stubbornly high in between breaths of pushing the monetary air pump is beyond the pale. Of course there will be dead money and high consumer debt. Effectively negative rates create the incentive to use borrowed money instead of your own money – and to create enterprises and jobs that will immediately evaporate when the free money is taken away.

Q
Guest
Q
HAM is still alive and well in Toronto and will persist in Canada, according to this article: “On a quiet leafy street north of Toronto, Mr. Zhang – who asked that his full name not be used – taps the walls and inspects the furnace of a $2.68-million home. He’s got five days in the city to make his decision. This five-bedroom house, with Jatoba cherry wood floors and a home theatre, is a little over his $2-million budget, but he’ll see half a dozen others this week before making a selection. He’s looking to buy because his 15-year-old daughter will be attending private school in Canada later this year… Foreign appetite for Canadian homes will persist, says Michael Adelson, Toronto-based sales rep for ReMax Realtron, who recently represented a seller that sold their bungalow for $421,800 over asking to… Read more »
specialfx3000
Member
specialfx3000

http://www.vancouversun.com/business/technology/Sierra+Wireless+sells+AirCard+unit+million/7884700/story.html

About 160 Sierra Wireless employees will be transferred to Netgear in the sale, along with facilities in Richmond and Carlsbad, Calif.

Beuller
Guest
Beuller

HAM is still alive and well in Toronto – Mr. Zhang – who asked that his full name not be used.

Wonder why he doesn’t want his name used? There should be a reward for turning these creeps into the PRC.

Bo Xilai
Guest
Bo Xilai

An apt metaphor for the Chinese Real Estate Market:

http://player.56.com/v_ODU2NjM1MTM.swf

Anonymous
Guest
Anonymous

RealtyCheck: “For the downvoters: yeah, continue to live in a fantasy world…you’re really helping out your kids. They will thank you for it.”

1. You are in a fantasy land of somehow you think the best way to build wealth for your children is through buying/owning overpriced Vancouver real estate. That would be about the worst thing you could do.

2. FFS if you are worried about your childrens future quality of life the best thing that could happen would be for real estate to correct to normal levels. Even if your kids end up being doctors and lawyers they won’t be able to afford a decent house in Vancouver at current prices. That is exactly why prices must correct.

Anonymous
Guest
Anonymous

“HAM is still alive and well in Toronto – Mr. Zhang – who asked that his full name not be used. Wonder why he doesn’t want his name used?”

The story was probably fabricated by a realtor and his Chinese assistant Mr. Zhang. Why anyone believes anything the real estate industry puts out is beyond me.

AG Sage
Member

“The owner of a steel business in Beijing has applied to immigrate to Canada, and figures he may as well purchase a home now.”

All he has to do is fake his invoices to keep his export money abroad and he can spend all he wants without the Chinese authorities knowing. I don’t expect this to stop. If the authorities actually build the database of holdings they are threatening their bureaucrats with, it may slow THEM down. But not the businesspeople.

jesse
Member

“All he has to do is fake his invoices to keep his export money abroad”

Corrupt industrialists now? When can a guy make money and come to Canada without his gains being considered crooked? Just asking before this comment gets voted down. 🙂

N
Guest
N

“When can a guy make money and come to Canada without his gains being considered crooked?”

When the guy is not making millions in modern-day China.

jesse
Member

“When the guy is not making millions in modern-day China”

Many British Columbians are making “millions” in modern-day China by virtue of robust commodity exports. Whatever though.

UBC in crisis mode
Guest
UBC in crisis mode

New listing in Van West:

Half duplex, asking for $2,28,000 Assessed: $2,419,000

http://www.realtylink.org/prop_search/Detail.cfm?MLS=V987311&REBoards=All&From=MLS

Where is Mr. Zhang when you need him.

N
Guest
N

“Many British Columbians are making “millions” in modern-day China by virtue of robust commodity exports. Whatever though.”

I totally agree with the “whatever” sentiment, but I’ve got to say that you can make money doing business with China without breaking any Canadian laws, but it is really hard to make millions in China without breaking Chinese laws. Let’s not forget that China is a semi-totalitarian communist kleptocracy. Just saying.

frustrated job searcher
Guest
frustrated job searcher
Just a taste of what young people looking for jobs are going through these days. Just about every company wants you to apply online, using their online forms. Target is opening up in Canada and they are hiring! They will needs lots of staff! I am applying on their online system. First, according to Target, there is no Surrey in BC. They want you to specify your ‘region’–whatever that is. They have a drop down menu with Vancouver, Langley, etc. No Surrey on the list!!! Do I pick Vancouver or Langley? I guess Langley is closer to Surrey than Vancouver so I pick Langley, trying to be as honest as possible. But what if I get hired and later on they fire me because they say I falsified my application?! After tediously entering all my employment history–separate fields for name… Read more »
Short'em High
Guest
Short'em High
jesse Says: January 29th, 2013 at 9:30 am “All he has to do is fake his invoices to keep his export money abroad” Corrupt industrialists now? When can a guy make money and come to Canada without his gains being considered crooked? Just asking before this comment gets voted down. There are problems with presumption of lawful wealth in regards to Chinese nationals of any background. An equally valid question is why not stay in the country that made one rich in the first place? Is the cost of living so much lower in Canada? Is the prospect for easy business wealth so much better in Canada? A wealthy person cannot afford good healthcare and education in China? Also, why Canada instead of a US State which would not extradite for capital offense in another country http://www.deathpenaltyinfo.org/states-and-without-death-penalty. Could it be… Read more »
patriotz
Member

“it is really hard to make millions in China without breaking Chinese laws.”

There is really only one law in China and it’s you can do anything you want as long as you don’t cause problems for the guys higher up than you.

scotty
Guest
scotty

@N
Blackberry is going into Chinese hands and they will make money on it. We can just bullshit about kleptocracy but they are making money on most of the trade deals in the world right now.

Many Franks
Guest
Many Franks

@frustrated job searcher: With respect — I know job hunting is unpleasant — how hotly do you think Target ought to pursue a potential employee who can’t make it through the application process without a side trip to an online forum to rant about how unprofessional the company is?

frustrated job searcher
Guest
frustrated job searcher

@Many Franks:

It’s more of a frustration with the rising use of online application forms. Target won’t be pursuing me. I am too much of an original, unique person with too many peculiar unique job/education experiences that can’t comform to their predefined computer fields. So I am not applying. They’ll hire all the robots who can conform to their online forms. Remember that when you’re having terrible customer service at Target.

Anonymous
Guest
Anonymous

@Short’em High

“Could it be HAM attracts HAM and the infection is now well established in Canada?”

BINGO. I think that is very true. That is why I tend to agree that HAM will persist in Canada, even during and after any real estate crash.

midnite toker
Member
midnite toker

Re : online forms

http://xkcd.com/327/

jesse
Member

“There are problems with presumption of lawful wealth in regards to Chinese nationals of any background.”

Strike the word “Chinese” and I agree. There are no country of origin requirements to lie on immigration applications. Londoners are complaining just as loudly about Russians, Nigerians, and Saudis. People in Miami are complaining about Brazilians and Mexicans, and people at Sun Peaks are complaining about Australians.

Conrad
Guest
Conrad

Working at Target won’t get you a house in vancouver son…even with a crash

wpDiscuz