CA Economic Fundamentals 2008 (07,08)

[joeiannuzzi]

Financial illiteracy a big part of current debt crisis

A few years back, the person winning the dream home raffle at Edmonton`s summer fair now known as Capital Ex was shocked to find out how much she would have to pay for things like property taxes and utilities.

Similarly, one reason for the housing crisis in the United States is that many first-time homebuyers didn`t understand that mortgage interest rates kept unusually low in the wake of the 2001 terrorist attacks would soon rise and in many cases become unmanageable.

"That whole sequence of events initiated the subprime issue, and I don`t know that the consumer understands this causal web," said Dave Salloum, portfolio manager with RBC Dominion Securities.

http://www.canada.com/saskatoonstarphoenix...d4-be233fd1436b

 

[joeiannuzzi]

Home Trust to offer traditional mortgages

Alternative lender Home Trust Co. is launching a line of traditional mortgage products that will compete directly with those offered by the banks.

The Toronto-based lender hasn`t been pushed out of lending to riskier borrowers, a problem encountered by some of its competitors as a result of the U.S. subprime crisis.

Instead, the company, which uses a deposit-based funding model, believes the move will help fuel the growth of its core alternative-loan business and its relationships with mortgage brokers.

http://www.theglobeandmail.com/servlet/sto...PStory/Business

 

[joeiannuzzi]

Canadians uncomfortable talking about money: survey

OTTAWA -- Canadians are more uncomfortable talking about money than religion, says a Bank of Montreal survey released Wednesday showing we are losing sleep over personal finances and our biggest fear is not having enough to retire.

"Families are very worried ... they may be over-spending and they don`t really understand how they can plan for the future," said Sherry Cooper, chief economist at BMO Financial Group.

http://www.canada.com/reginaleaderpost/new...2e-88ca70cf91a3

 

[joeiannuzzi]

Fight recession or inflation? Bankers face tough choice

Pity the world`s central bankers. They are caught between a rock and a hard place. Economies are slowing, inflation is rising and we are in the midst of a credit crisis.

Do they lower interest rates to help stimulate their countries` economies, do they raise interest rates to fight inflation, or do they leave them alone and hope for the best? Then there is the political aspect. Try to find a politician (especially one already in office) who will face up to the truth and tell you their country (or province or state) is already in a recession or that inflation is becoming a major issue. It`s also an election year in the United States. Woe to be the central banker who raises interest rates in the months before an election.

http://www.nationalpost.com/todays_paper/s....html?id=710736

 

[joeiannuzzi]

Slow property market raises fears in Europe

With much of the European real estate market on its knees, the painful death of job security is now haunting property brokers as well as investment bankers.

High-flying real estate dealers are leaving their favourite tables at expensive London restaurants vacant, awaiting a purge that will have much in common with the one that has rocked Britain`s banking sector this year.

Property booms fed and were fed by the global credit boom that ended abruptly last year when U.S. mortgage defaults began to mount, and investment demand in the U.K. and U.S. property markets has crumbled in the ensuing credit crunch. Now, other European markets are wilting fast and job losses may not be confined to those front-line bear markets.

http://www.canada.com/calgaryherald/news/c...da-2f6b8ca465b6

 

[joeiannuzzi]

Online filers more likely to cheat taxman

OTTAWA–Canadians who file their income-tax returns electronically may be more likely to cheat, a newly released report suggests.

An internal analysis from last September by the Canada Revenue Agency found that individuals who sent their tax returns through the Internet – the Netfile option heavily promoted by Ottawa – were more likely to understate the amount of taxes they owed.

http://www.thestar.com/News/Canada/article/475963

 

[joeiannuzzi]

Value of new homes edges up

The value of new homes in Canada barely grew in June, with many regions posting annual declines once adjusted for inflation, new figures show. But despite forecasts for more soft readings ahead, economists say Canadians are not expected to experience a major U. S.-style correction because prices are still historically high.

The continued correction of house prices in the previous boom regions of Western Canada, particularly Alberta, caused growth in the national new-home price index to ease to an annual rate of 3.5% in June compared with 4.1% the previous month, Statistics Canada figures showed yesterday.

http://www.nationalpost.com/todays_paper/s....html?id=716496

 

[joeiannuzzi]

A remote possibility for working
BARRIE, ONT. — As the price of gasoline soared, John Cameron and George Horhota could be excused for believing the universe has been unfolding as it should. Five years ago, the two former commuters set out to offer an alternative to the way Canadians work by starting a business that provides satellite offices for companies.

The idea behind their SuiteWorks Inc. was to offer turnkey facilities - desks, technology, receptionist, meeting rooms and anything else a worker needs - with the hope that companies would see the economic benefit of allowing employees to work closer to their homes, if not from home itself.

http://www.theglobeandmail.com/servlet/sto...0812.wprsuite12

 

[joeiannuzzi]

Rona holds back on store expansions

MONTREAL -- Rona Inc., the leading Canadian-based hardware and home renovation group, may be pinched by sagging consumer confidence well into 2009, CEO Robert Dutton said Tuesday, and he is holding back on store expansions and seeking to buy more independent dealers.

"Some people have decided to paint the kitchen rather than do a renovation job. . . . That sums it all up," Dutton told analysts after Rona announced lower second-quarter earnings. "Consumers hesitate in the face of a prolonged U.S. slowdown, global financial market turbulence and soaring energy prices."

http://www.canada.com/saskatoonstarphoenix...29-19d0f4b8e84d

 

[joeiannuzzi]

Tighter mortgage rules confuse some Canadians

OTTAWA -- Nearly one-quarter of Canadians do not agree with the federal government`s mortgage lending crackdown, a proportion that rises to nearly a third among non-homeowners, survey results done for a mortgage lending firm suggest.

And only 45 per cent agree with the tighter mortgage lending rules and think the federal government needs to protect Canadian homeowners, a level of support for the changes that falls even further to just one-quarter among non-homeowners, according to the online survey conducted by pollster Angus Reid for ResMor Trust Co.

http://www.canada.com/saskatoonstarphoenix...ce-614c19f6b6f3

 

[joeiannuzzi]

Opening the door to savings

The other day my wife, Carolyn, and I were walking through the parking lot at the mall when she noticed a young man opening the car door for the young lady with him.

"Look, Tim, he opened the door for her. Isn`t that sweet? Why don`t you open the door for me as much any more?"

Now, I`ve learned over the years that a man ought not respond with the first thing that comes to mind in this type of situation. I immediately thought: `If he`s opening the door for her, I bet that either the car is new or the girl is new.` Turns out they were newlyweds. `Tis the season for weddings.

http://www.theglobeandmail.com/servlet/sto...PStory/Business

 

[turkytom]

Would you happen to have the IMF article that says housing in Canada (and Denmark I think it was) is still undervalued when taken into context with the regional economics? I can`t seen to locate it anywhere.

 

[joeiannuzzi]

Here is the link for the IMF report:





http://myreinspace.com/rein_members_only/Economic_Fundamental_Research/139-4584-19968-IMF_Report_on_International_Real_Estate.html

 

[joeiannuzzi]

Soaring gas prices haven`t deterred Canadian drivers

Skyrocketing gasoline prices have done nothing to throttle back fuel-thirsty drivers in Canada for most of this decade, says a new report.

"Despite the steady escalation of gasoline prices since 2002, Canadian drivers have so far not cut back their consumption," said the report Thursday by Statistics Canada, co-authored by the agency`s chief of current analysis, Philip Cross.

http://www.canada.com/calgaryherald/news/s...53-15e913f97022

 

[joeiannuzzi]

Time to get ready for a fall vote

OTTAWA -Canadians will go to the polls just before the U. S. election this fall. Go ahead, roll your eyes. Election predictions have been kicking around since early 2007, only to be proven premature with yet another whimpering surrender by Liberal MPs in the House of Commons.

But there`s a hefty difference now. After a year of enduring false starts and bogus threats, the Prime Minister has moved beyond baiting the Liberals, signalling yesterday that he is willing to ignore his own fixed voting date and force an election himself, probably for Oct. 27.

"I think, quite frankly, I`m going to have to make a judgment in the next little while as to whether or not this Parliament can function productively," Stephen Harper said during a visit to Newfoundland.

http://www.nationalpost.com/todays_paper/s....html?id=725922

 

[joeiannuzzi]

No shelter from tax storm

This past week, the Canada Revenue Agency followed through on an earlier threat and revoked the charitable status of International Charity Association Network (ICAN).

Never heard of ICAN? Not too many Canadians have, unless you`re one of those unlucky donors currently being reassessed by the CRA because of your investment in tax shelters in which ICAN has been involved.

According to testimony from the CRA, ICAN was one of the highest-grossing charites in Canada in 2006, issuing about $464-million in donation tax receipts through its participation in various tax-shelter programs. That`s nearly 900 times higher than its 2001 revenue of about $528,000.

http://www.nationalpost.com/todays_paper/s....html?id=727794

 

[joeiannuzzi]

No tax-free way to transfer RRSP funds to son

Q: I`m turning 69 later this year and know that I have to turn my RRSP into a RRIF. My son would like to buy a home and I wonder if I can transfer $20,000 from my RRSP to his so that he can use the home buyer`s plan ?

http://www.canada.com/ottawacitizen/news/h...07-f8bdda2d9ad7

 

[joeiannuzzi]

Windows big issue for energy savers

This is the time of year when Canadians customarily renovate their homes. Some, primarily those residing in very old dwellings, are considering replacing windows for greater comfort and better appearance.

Reducing energy bills has become a major challenge in recent years, and windows are a major issue.

Heat losses through the building envelope can occur via conduction, convection, and radiation. In all three cases, windows are the weakest link, and, as such, they represent the most important investment in the construction or renovation of any dwelling.

http://www.canada.com/saskatoonstarphoenix...f1-2f6c98b1c60e

 

[joeiannuzzi]

Real estate agents going for `green`

EDMONTON -- "Green realtor" sounds like the punchline of a bad joke involving aliens, nausea or inexperience.

In fact, it`s a label increasingly being applied to agents with a keen eye on sustainable homes, energy efficiency and a growing niche market.

While some realtors specialize in condos, second homes or acreages, green realtors focus on green homes. Their clients are looking for environmentally friendly houses or seeking to retrofit older homes, either to live in themselves or sell to green buyers.

http://www.canada.com/saskatoonstarphoenix...7d-2fb636c84bbd

 

[joeiannuzzi]

Alabama county headed for largest U.S. municipal bankruptcy

BIRMINGHAM, ALA. -- Alabama`s largest county appears headed for the biggest municipal bankruptcy in U.S. history, a $3.2-billion (U.S.) mess created by the nation`s credit crunch and a colossal, corruption-riddled sewer project. Politicians in Jefferson County - which has 658,000 residents and includes the state`s biggest city, Birmingham - are struggling to find a way out of the jam, but they have mostly abandoned talk of raising taxes and fees after running into fierce opposition at raucous public meetings.

http://www.theglobeandmail.com/servlet/sto...6.RBANKRUPTCY16