Canada, debt, economy, rates

Bank ratings go negative

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At the end of last week S&P cut the rating for Canadian banks to negative.

Royal Bank of Canada, Toronto- Dominion Bank and four other Canadian lenders’ rating outlooks were cut to negative by Standard & Poor’s, which cited regulations that seek to limit government support in a crisis.

Canadian officials issued regulatory proposals Aug. 1 aimed at relieving taxpayers from the burden of potential bailouts if key banks fail. The new rules mandate any new senior unsecured debt issued by a so-called systemically important bank must be convertible to equity if the firm faces insolvency. The proposals are open to public consultations until Sept. 12.

Read the full article here.

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[…] course for soft landing -TD: housing starts unsustainable -Statscan rushing to redo July jobs data -Apartments vs inflation -OECD better life […]

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bullwhip29

@ ham I think rates will stay low for longer than most think (or want) simply because TPTB have no alternative. They are astutely aware that there is a massive credit bubble in this country (perhaps larger than the one in the US on a per capita basis) not to mention the fact that a soaring loonie would likely be the final nail in the coffin for many sectors of the Cdn economy. For all the old school mattress stuffers out there, this is not what you want to hear. I know you were all taught to work hard, save your money and reward yourself later in life. Unfortunately, the world is much different today and has become a playground for reckless speculators who have no skin in the game, reap massive gains in good times and have everyone else… Read more »

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gah

@ham maybe you’re right about the rates staying low for a long time. But then, maybe you’re wrong. The upside seems pretty low if you’re right. How much more expensive do you figure anything can get? If you’re figuring 10% correction is possible without a rate trigger, what if there is a rate trigger? Not advocating people sell, but would advocate against buying. It seems really risky to me, predicated solely on “rates probably won’t go up”.

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ham

canada does have a housing bubble. Just not Vancouver. Any weakness was sucked up quickly. Small towns and cities likely to correct harder. Vancouver will see no more than 10% decline if it even happens. Rates will stay low longer than anyone can imagine. By then many people will pay off their mortgage.

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southseacompany

“Canada’s housing market on course for soft landing, says CMHC”, Financial Post

http://business.financialpost.com/2014/08/13/canadas-housing-market-on-course-for-soft-landing-says-cmhc/

“After consistently bucking predictions that a slowing trend was just around the corner, Canada’s housing market is now showing signs that it is, indeed, headed for a soft landing.”

“Both prices and construction are still rising, but the pace of construction is expected to taper off over the next two years as homebuyers increasingly turn their attention to excess supply in the market.”

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Lynn

@fitzrovia, seems you know the sales details, can you give us some insight what types of property are moving? What price ranges etc? Thanks in adv.

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Oracle

@thiaisadisstaer:

Strong sales because anyone who wants to get into “immigrate” into Canada can.

Vancouver area population is rising much faster than stats show. Heck, students who are couples are coming here to have babies…. I won’t go on.

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#thisisadisaster

Am I the only one surprised to see such strong sales persist this far into summer?

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Microsoft

Actually, Tedder, there is a Microsoft office here…I know, I know, it’s not a head office.

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fitzrovia

HAM invested another $8 M in 3 houses today. Some local tax-payers bought some cheap houses.
next….

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midnite toker

Lol good one ted

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tedeastside

vancouver’s career opportunities LOL!!!!!!

so where are these UBC grads planning to work at. i dont see any Boeing’s or Microsoft’s in vancouver

i dont see any industry in vancouver beyond real estate speculation

maybe thats why UBC students are getting into fist fights over government job applications , since vancouver’s private sector pays peanuts

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paulb

New Listings 207
Price Changes 96
Sold Listings 150
TI:16411

http://www.paulboenisch.com

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Barb Rennie

“ – UBC already reserves or plan to reserve 25% of its 1st year space to foreign students. At this rate, by the time the pre-schoolers get to grade 12, it will probably be easier and cheaper for them to go to Harvard than UBC.”

It has already happened. I personally know a student who did not get accepted into UBC Science with 93% average but did get accepted at Harvard. I don’t care if you call me racist but asians like to get into Science and that is why local kids don’t have a chance. Give your kids a broom because that’s where they are headed – janitor’s closet.

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Bo Xilai

As if the trading desk of every brokerage firm represented at that meeting won’t be getting insider (sorry, I meant “privileged”)information on interest rates and currencies. Nice to see Poloz throw the traders some actionable information.

Hey, those cottages on Lake Joseph don’t pay for themselves…

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Aggregator

Closed-Door Poloz Speech Breaks Bank of Canada’s Custom

Bank of Canada Governor Stephen Poloz is breaking with an almost decade-long practice by taking a speech to an annual meeting of financial economists behind closed doors.

His Aug. 25 remarks in Kingston, Ontario to the Canadian Association for Business Economics — whose members include representatives of the country’s major banks — are closed to media according to the group’s description of the event, and the audience will be told not to share the contents. The Ottawa-based central bank doesn’t mention this year’s event in its schedule.

Obviously there's something Poloz doesn't want the public to know.

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vangrl

no he didn’t, I listened to the interview.
Plus there’s this
http://www.huffingtonpost.ca/2014/08/13/brad-lamb-condo-king_n_5674350.html

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bert

@ 59 he said less than 15 %

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vangrl

Brad Lamb was saying on BNN today that foreign ownership of condos is around 50%, rather than the much lower percentage that’s been talked about, but basically says “it’s no big deal”..

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Oracle

I Have told many local students to take university classes with high foreign student populations. Easy way to get A’s for professional schools.

The hard part is getting in to university as less per capita spots available for locals.

The K-12 system is bending over backwards for international students. Locals get crammed into portables while foreign students get it all. Public schools for them open Monday August 18th….orientation week…

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Son of Ponzi

#53
bang on!
What people are forgetting is that the foreign students are getting a free ride on the fixed costs, which the Canadian taxpayers are footing.

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space889

– exactly! Plus it is not like Robson shops have stuff that you just can’t get anywhere else in easy driving/commute distance in Metro Van. Plus given the rain, I prefer indoor shopping as well.

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YLTNboomerang

I blame a lot of Robson Streets future failure on Moonbeam and city hall’s war on the car. It has gotten so difficult to get downtown, get around downtown, and park downtown (not to mention expensive) that folks don’t want to shop downtown – at least folks with cars. When I go shopping, I like to have a car to go back to to dump off my goods, I don’t want to carry it all and ride public transit and the inevitable walk from station to door. This is why Park Royal and Oakridge are seeing expansion – free parking close to downtown. I expect Pacific Centre will slowly crater next as they charge way too much for parking.

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space889

@cris – if you are a guy then you probably aren’t too smart trying to attract those smart foreign students at UBC/SFU/etc. Those girls are likely to drain your bank account pretty fast….a Coach bag and $100 dinner on V-Day just isn’t going to cut it with these ladies….maybe for the 1 week anniversary.

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space889

The UBC class room size are fairly fixed and most of the new constructions are for residential, not actual education facility in the last 15 years. So that is a supply constraint and something has to give when you keep increase foreign students intake. Already there is talk about foreign students getting earlier/preferential course registration ahead of locals. If there are only 200 spots for a required/popular 2nd year commerce course and 60 foreigners gets first crack at it, that just makes it much tougher for locals to get in and finish the degree in 4 years. So on paper, it looks like locals aren’t being squeezed out but they are in reality. Also, given that foreigners are a cash cow/profit center while locals are at best breakeven, and government is basically telling university to be more financially independent, and… Read more »

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