November 2009

[Ally]

Two thirds of Women want to be Financially Independent from Spouse

Despite the stock crash of 2008 and the subsequent shaky economy, the percentage of Canadian women that view themselves as financially successful has risen from 58% to 62%, according to a TD Waterhouse poll. The 9th annual Female Investor Poll says modern women define financial success not in terms of "bling" and other baubles but with such practical matters as bill-paying, emergency funds, debt management and retirement savings. Only 20% of the 1,432 surveyed (between ages 45 and 64) thought financial success translated into having money for the "finer things in life."

"Canadian women have a very pragmatic view of financial success, which is very interesting, but not surprising given the recent recession," says TD Waterhouse senior vice president Patricia Lovett-Reid [pictured], "It is unrealistic to define `financial success` as the ability to buy diamonds when your priority is paying down the mortgage."

Wealth = half a million dollars

The women polled says it takes an average of $542,000 in household investible assets to be considered "wealthy" but the figure varies by province. Alberta women think you need $668,000 while those in Quebec believe $393,000 is sufficient.

Perhaps all too typical of human nature, the more women already have accumulated, the more money they think they`ll need to be considered truly wealthy. Thus, those with less than $50,000 think wealth is $345,000 while those who already have $300,000 think $978,000 would do the trick. No doubt the pattern holds from there: those with $1 million will be thinking $2 million, etc.

Read the full article here.

 

[Ally]

Canada`s trade deficit shrinks in September

OTTAWA -- Canada`s trade deficit with the rest of the world narrowed more than expected in September as exports jumped and imports edged lower.

Statistics Canada said Friday the deficit fell to $927-million during the month.

Most economists had expected a trade deficit of around $1.8-billion in September.

Canada had a trade deficit of nearly $2-billion in August. Up until last December, the country had maintained a surplus since 1976.

"Canadian trade is unlikely to benefit much from the improving U.S. and global economies, as the strong domestic currency continues to erode the competitiveness of Canadian products on the global market,"Millan Mulraine, economics strategist at TD Securities, said ahead of Friday`s report.

Read the full article here.

 

[Ally]

`Ponzipalooza` has hit North America, Financial Regulators say

CALGARY — It`s been called "Ponzimonium" — a surge in the number of Ponzi schemes being probed across North America — and it has watchdogs in Western Canada busy, too.

While none can match the $65-billion audacity of disgraced financier Bernie Madoff, other multimillion-dollar scams are popping up on authorities` radars.

Alberta made headlines this fall when Mounties charged two businessmen with operating the largest Ponzi-style hoax in Canadian history, allegedly soaking investors for as much as $400 million.

Last month, in a different case, four people were fined a total of $26 million in connection with a Ponzi scheme in B.C. that cost roughly 800 investors about $13 million, according to regulators.

And earlier this year, the Alberta Securities Commission followed British Columbia`s lead in banning three people that B.C.`s regulator concluded had lied to investors to entice them into a Ponzi scheme.

Read the full article here.

 

[Ally]

Canada`s inflation Holiday expected to end

OTTAWA -- The holiday from inflation might be over.

The past year`s economic environment has been tough. But one positive thing to come out of it is that we`ve been paying less, overall, for the things we buy.

However, if economists are right, all that came to an end last month.

Statistics Canada is scheduled to release its consumer price index for October on Wednesday. After four straight months of year-on-year price declines -- unheard for almost 15 years up until last June -- the average estimate of the experts is that prices were up 0.3% last month.

Much of it comes down to petroleum-related prices. Oil and gasoline prices were sky-high in the summer of 2008 and fell off a cliff when the market crisis exploded that fall. Gasoline in Canada went from averaging $1.279 a litre in September of that year to 87.6 cents just two months later, according to energy consultancy MJ Ervin & Associates.

We`ve now reached the point of paying higher prices for oil and gasoline than in the corresponding time a year ago.

Read the full article here.

 

[Ally]

Female Financial Success looking up

CAREERS - Canadian women are feeling more "financially successful" today despite the impact of this year`s recession.

According to TD Waterhouse`s 9th Annual Female investor Poll, 62 per cent of Canadian women define themselves as financially successful, compared with 58 per cent in 2008. Financial success for them is defined as paying bills on time, being able to deal with unexpected emergencies, being debt-free and having enough money saved for a comfortable retirement.

Read the full article here.

 

[Ally]

Downturn helps unmask Mortgage Fraud in Alberta

CALGARY - The recent downturn in housing prices has started to reveal the scope of mortgage fraud in Calgary, said investigators at the Alberta Mortgage Fraud Symposium on Tuesday.

As financial and law enforcement officials gathered to discuss the growing trend of mortgage fraud, experts said it`s an issue that`s becoming more common and often can be tied to marijuana grow ops and organized crime.

"We are getting numerous reports coming in; I think it`s just the tip of the iceberg," said Det. Ronda Ruzycki of the economic crimes unit of the Calgary Police Service.

Ruzycki said when Calgary was booming, mortgage fraud -- lying to obtain credit or money from banks or lenders -- became more prevalent.

It works when the perpetrator convinces someone to sign for a property they`ll never live in, though technically own, and be paid thousands of dollars for signing the papers. These are straw buyers.

Read the full article here.

 

[Ally]

Danish Diclosure Policy has Value

Since writing about the lack of protection for consumers against the discovery of defects in their home after closing (read more here and here), I have been swamped with emails from consumers, real estate salespeople and insurance experts. I also have learned my favourite new word: "ejerskifteforsikring."

For consumers, it is the same old story. They conducted home inspections, then found problems after closing, such as water in the basement, fireplaces improperly connected, mould or even cracks in the foundation. In all cases, home inspections were conducted but nothing was found. Given that the home inspection typically takes two to three hours and the inspector does not search behind walls, it is very difficult, if not impossible, for these problems to be detected.

Sometimes there is suspicion that the seller knew about the problem or deliberately concealed it, yet in other cases, the seller had no knowledge about the problem whatsoever. In either case, the buyer is left with a negative outcome: deciding to either sue the seller, pay a substantial sum to fix the problem, or both.

I received an email from Anthony Caruso, a Canadian living in Denmark, who read my column. Anthony indicated that in Denmark, there is a policy of insurance that can be purchased by a buyer on closing to protect them against unforeseen hidden defects in a home that are discovered after closing. The policy is called "ejerskifteforsikring."

The meaning of an ejerskifteforsikring is to protect parties from unforeseen major hidden defects, expensive lawsuits and economic calamity.

Read the full article here.

 

[Ally]

Dollar Parity imminent, Royal Bank says

Canada`s strong housing market recovery "is providing Canadian dollar bulls with more fodder to retest parity," Royal Bank currency strategist Matthew Strauss said Friday.

"We remain confident that …parity is not an issue of `if` but `when`," Mr. Strauss said in a research note.

The Canadian dollar (CAD/USD-I0.94-0.01-1.28%) closed at 95.37 cents (U.S.) Friday, up 0.68 of a cent from Thursday`s close.

"Data this past week confirmed three important differences between the U.S. and Canadian housing sectors: the depth and breadth of the corrections; the smaller wealth destruction in Canada; and, although still in its infant stage, the more advanced state of the Canadian housing recovery," Mr. Strauss wrote.

"This week`s Canadian housing starts and new-house prices confirm that the housing recovery is gaining momentum following a clear bottom in April. The sharp increase in building permits bodes well for a continuation of this recovery," Mr. Strauss said in his report.

Read the full article here.

 

[Ally]

Jobless Rate jumps to 8.6%

Canada`s unemployment rate jumped two notches to 8.6 per cent last month as employers unexpectedly shed jobs, suggesting the country is still struggling for a sustained recovery.

Employers cut 43,200 positions in October, reversing two months of gains, Statistics Canada said Friday. Economists had expected about 10,000 new jobs for the month.

The report marks a full year of employment data on the economic crisis, from October of last year when the labour market peaked, to October of this year. About 400,000 positions have evaporated in that time, though the agency noted the majority of that decline was in the first five months of the downturn.

"We are in a recovery, but it`s tepid, and for a lot of Canadians it probably doesn`t feel like much of a recovery at all," said Patricia Croft, chief economist at RBC Global Asset Management.

Read the full article here.

 

[Ally]

Rapid Rebound fuels fears of Housing Bubble

Canadian existing home prices are now rising at a pace not seen in 20 years, fueling talk that a bubble may be forming in the market.

The average price of a home sold last month was $341,079, a 20.7% increase from a year ago, the Ottawa-based Canadian Real Estate Association said Monday. Sales also continued to climb with 42,288 units trading hands, a 41% jump from October, 2008.

At the same time that demand continues to surge and interest rates remain at historic lows, supply remains critically low. New listings last month in the country`s 25 largest market were off 16% from a year ago.

"I don`t think it`s a bubble yet," said Doug Porter, an economist with Bank of Montreal. "The rapid-fire rebound in Canadian housing is showing no sign of letting up. While that may be causing some sweaty palms among bubble-phobes, the quick turn is a vivid illustration that monetary policy still works in this country."

Mr. Porter says large markets are skewing average prices, creating a national picture that might seem more buoyant than it is in reality. Toronto, the largest market in the country, saw a 20% increase in price last month from year ago. In Vancouver, the most expensive market in the country, sales were up 170.8% from a year ago.

Read the full article here.

 

[Ally]

Canada`s Coolest Housing MarketsCanadian home sales increased 41.5% in October from a year previously, confirming the housing market is as hot as ever. But as Toronto and Vancouver see home prices skyrocket, other regions are slumping. Click to find out which areas are struggling.Canada
October `09: $341,079
October `08: $282,583
Change: + 20.7%
Number of units sold: 42,288
Unit sales Oct. `08: 29,887

View the gallery here.

 

[Ally]

Canada`s Hottest Housing MarketsThe Canadian real estate market is hot and shows no signs of slowing down, with prices climbing 20% in October from the previous year. Naturally, some markets are hotter than others. Which ones, you ask? Click to find out.Canada
October `09: $341,079
October `08: $282,583
Change: + 20.7%
Number of units sold: 42,288
Unit sales Oct. `08: 29,887
Change: + 41.5%

View the gallery here.

 

[Ally]

Foreigners load up on Canadian Stocks

OTTAWA - Foreign investors were heavy buyers of Canadian securities in September, buying a much greater than expected net $13.6-billion in Canadian stocks and bonds, Statistics Canada said Thursday.

Analysts had forecast the monthly data would show non-residents buying a net $3-billion in Canadian securities.

The buying was concentrated in equities, with foreign investment in Canadian stocks reaching $12.9-billion in September, the largest flow of funds since April 2004, the federal agency said. Two thirds of that buying was in new issues of Canadian shares.

As well, foreign demand for existing Canadian shares generated an inflow of $4.3-billion, a level not seen since April 2007. Gold and banking shares attracted sizable foreign buying, Statistics Canada said.

Meanwhile, non-residents also bought $2.6-billion in Canadian bonds in September while selling $1.9-billion in money market instruments.

Read the full article here.

 

[Ally]

Canada`s Economic Indicators rise for Fourth straight Month

OTTAWA - Key indicators of Canada`s economic performance rose in October for a fourth straight month, led by the housing sector, Statistics Canada said Thursday.

The federal agency`s composite leading index was up 0.7% during the month after a 1.1 increase in September.

The October reading was in line with economists` forecasts.

Ian Pollick, economics strategist at TD Securities, said that "in terms of implications, the leading indicators do a reasonably good job of capturing broader trends in the Canadian economy that are sometimes missed by GDP, suggesting that Q4 got off to a decent start."

Seven of the index`s 10 components were higher in September.

Read the full article here.

 

[Ally]

Aisa to help Western recovery: OECD

PARIS -- Asia is leading the global economy out of the deepest downturn in decades but the recovery will be marred by high unemployment and huge government debt across the industrialized countries, the OECD said on Thursday.

Central banks and governments in major Western economies should prepare for a gradual upwards shift in ultra-low interest rates and for fiscal consolidation once recovery is stronger, but they will only need to move in late 2010 at the earliest given that inflation is so low, it said in its Economic Outlook.

The Paris-based Organization for Economic Co-operation and Development raised its global growth forecast for next year to 3.4% from the 2.3% it was predicting as recently as June, after an estimated contraction of 1.7% in 2009.

"We are looking at a scenario where disaster has been avoided but we`re still looking at a scenario which involves slow growth and high unemployment," the OECD`s chief economist, Jorgen Elmeskov, told Reuters television in an interview.

In the twice-yearly report, the OECD lowered its estimates of the scale of this year`s recession and substantially raised most of its forecasts for growth in 2010, when it said the economy would remain dependent on government life-support.

Read the full article here.

 

[Ally]

Unemployment Rates erode Consumer Confidence

It appears Canadians remain rattled by high unemployment and a shaky, uncertain economy as a new report forecasts spending levels for the looming holiday season will be the worst since 2005.

The survey, conducted by TNS Canadian Facts earlier this month, asked more than 1,000 Canadians across the country about their spending plans. About a third of those surveyed said they planned to spend less than they did last year, while only 8% planned to spend more.

"These results suggest now is a time for cautious negativism," Michael Antecol, a director of the survey, said in a release. "Clearly, the floor hasn`t collapsed but it might be time to start looking for cracks."

The survey also showed a decline in the TNS Consumer Confidence Index, which slipped 2.5 points to 95.5 between October and November. The index is down 3.7 points since August.

The index`s three subcategories also pulled back in the survey.

Read the full article here.

 

[Ally]

Flaherty says Economy has not recovered

OTTAWA -- Canada`s economy has not yet recovered from recession so the government will follow through on the second phase of stimulus spending next year, Finance Minister Jim Flaherty said on Wednesday.

Mr. Flaherty told reporters he would not introduce any big new spending items in the 2010 budget, however, as he seeks to balance the books in the medium term.

"Our economy has not recovered. I think it is recovering but we need to stay the course during the next year and continue to stimulate the Canadian economy," Mr. Flaherty said.

"That means no big, new spending programs next year."

Canada posted a budget deficit in the 2008-09 fiscal year after a decade of surpluses, as it ramped up spending to offset the economic downturn. It expects the deficits to last another five years.

Read the full article here.

 

[Ally]

Canadian Inflation: Economists Comment
Dawn Desjardins, Assistant Chief Economist with RBC:

Canada`s headline inflation rate emerged from a four-month period of negative readings in October as the deflationary pressures coming from movements in the energy component of the CPI dissipated. We expect that the headline inflation rate will move further into positive territory in the fourth quarter, as long as the extraordinarily large drops in energy prices that occurred in the fourth quarter of 2008 are not repeated.
Benjamin Reitzes, BMO Capital Markets, Economic Research

:


Despite the acceleration in both headline and core yearly inflation, significant excess capacity and the strong loonie (up 2.6% on the month, and 16.1% over the past 6 months) should keep a lid on price pressures. Inflation concerns remain on the back burner for another month.

For more comments, click here.

 

[Ally]

Canadians optimistic about Housing Market, new Report says

CALGARY - Canadians are emerging from the recession confident that the value of their homes is rising and optimistic about their local housing markets, says a new report.

The Canadian mortgage market is also rebounding and will surpass the $1 trillion mark in 2010, says the Canadian Association of Accredited Mortgage Professionals.

The association said the survey, conducted by Maritz Research Canada in October, indicated the majority of those surveyed (40 per cent), expect house prices to go up, which is more than double the opinion of those surveyed in the spring (18 per cent).

"Mortgage consumers have been busy and have effectively capitalized on low interest rates to shop and renegotiate," said Jim Murphy, president and CEO of the organization.

Read the full article here.

 

[Ally]

Canada`s Oilsands

Visit http://www.canadasoilsands.ca/en/ for updates on the oilsands.