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Dmitri Tkachenko

Surprise: Low interest rates seen sticking around - The Globe and Mail - 0 views

www.theglobeandmail.com/...article2032075

Low Interest Rates Bonds Financial Industry Inflation Stock Market

shared by Dmitri Tkachenko on 25 May 11 - No Cached
  • Dmitri Tkachenko on 25 May 11
     
    "Interest rates have recently being going somewhere unexpected: down. With the United States government bumping up against its debt ceiling, inflation ticking upward, and a growing debt crisis in Europe, most expected interest rates to be increasing.If so, it will mean pain for savers, but good news for borrowers .A drop in interest rates is equivalent to a sale on the price of money, and corporations are already rushing to take advantage of the easy lending conditions, even if they're in no immediate need of funds. Mortgage rates have fallen, too - good news for homeowners looking to refinance. But lower rates have not turned out so well for some of the market's savviest players, including Bill Gross, the founder of Pimco, the world's biggest bond fund. Earlier this year, he sold his U.S. Treasuries, because he thought interest rates were poised to rocket higher, which would drive down prices of bonds. Oil has been trading consistently around the $100-a-barrel level, thereby lifting inflation, another bond-market negative. Investors are getting nervous and growing more willing to buy super-safe government bonds."
Heshani Makalande

Canadians to get rate hike reprieve - Moneyville.ca - 0 views

www.moneyville.ca/...ians-to-get-rate-hike-reprieve

Mortgages

shared by Heshani Makalande on 28 May 11 - No Cached
  • The Bank of Canada is widely expected to leave its key benchmark interest rate unchanged next Tuesday — and may even sit on the sidelines until September, economists say
  • Even if the central bank leaves its overnight rate unchanged at 1 per cent next week, it’s likely to again warn consumers that the clock is ticking: interest rates will be going up; it’s just a matter of when.
  • “One per cent is not normal. Everybody realizes that. Rates will go up,”
  • ...7 more annotations...
  • Late last year, and even at the beginning of 2011, economists were certain that the Bank of Canada would start increasing its overnight rate this spring. That was pushed to the summer amid continuing worries about the health of the U.S. economy.
  • Now more economists are expecting that the central bank will take a pass at its July policy meeting as well, and begin raising rates in the fall.
  • The central bank is nervously contemplating the continuing European debt restructuring, attempts by China to tame inflation, the impact that will have on commodity prices, and the still-fragile recovery in the U.S.
  • In particular, the U.S. may be susceptible to supply chain disruptions as a result of the earthquake and tsunami in Japan, and the resulting nuclear disaster
  • “The second quarter didn’t start well and the earthquake will weigh on the rest of the quarter. For now Q2 is not looking that great, and when the U.S. doesn’t do well, it affects Canada as well,” Rangasamy said.
  • In Canada, the economy is still expected to expand by a healthy 3.2 per cent in 2011 and 3.1 per cent in 2012, according to the Royal Bank of Canada. Inflation also remains tame, thanks in part to a buoyant loonie.
  • The central bank has been anxious to raise interest rates in order to keep a lid on household debt, which has reached record levels in Canada.
Steven Iarusci

Canadians load up on mortgages, cut card debt - 0 views

www.montrealgazette.com/...story.html

credit card debt mortgage rates bubble housing

shared by Steven Iarusci on 02 Jun 11 - No Cached
  • The bank set aside $145million in provisions for credit losses, down $104-million as more customers repaid their loans.
    • Steven Iarusci
      Steven Iarusci on 02 Jun 11
       
      BMO is the bank in question.
  • consumer credit-card balances are declining as bank customers start to heed warnings about taking on too much debt
  • On the residential mortgage side, Mr. Downe said he expects to see growth start to "soften" in the coming months
  • ...8 more annotations...
  • record household debt levels have left this country vulnerable to economic shocks
  • the Canadian banks will report a slight increase in profit for the quarter as they contend with the impact of declining consumer borrowing, moderating capital markets activity and other headwinds.
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  • With domestic household debt levels hovering close to where they were in the United States prior to the financial crisis, many observers are warning that Canadians need to start paying down debt if the economy is remain on level footing
  • anadian consumers continue to pile on mortgage debt despite repeated warnings that they need to crank back on borrowing if this country is to avoid a painful real estate correction
  • Canadian consumers continue to pile on mortgage debt despite repeated warnings that they need to crank back on borrowing if this country is to avoid a painful real estate correction
  • growth in the overall home loan market "is continuing to be more robust,"
  • Canada's fourth-largest lender on Wednesday kicked off second-quarter bank earnings season with a 7.5% increase in profit on the back of lower provisions for bad loans
dani tav

Government Collaboration Builds Growth - 0 views

business-journal.com/ion-builds-growth-p19266-1.htm

Government Collaboration Building Growth USA

shared by dani tav on 31 May 11 - No Cached
  • effective local government would play in improving northeast Ohio's economic future
  • conomic competitiveness component of the Fund for Our Economic Future
  • government efficiency and collaboration are relevant and timely topics in our region
  • ...5 more annotations...
  • We are beginning to see the positive results collaboration can bring, including significant savings to protect vital services and ensure our communities invest in innovation and education to create jobs and keep the region competitive in the global economy."
  • he rate of local government spending in Northeast Ohio is 70 times the region's population growth, 2.8 times its inflation rate and 2.4 times its economic output
  • government entities spend $20 billion to operate
  • ortheast Ohio residents have made it clear that more efficient local government is a regional priorit
  • collaboration of 100 foundations, organizations and philanthropists from across Northeast Ohio
Joey Keum

Canadian HR Reporter - Article - February job growth weaker than expected - 1 views

www.hrreporter.com/articleview

jobs canadians market

shared by Joey Keum on 03 Jun 11 - No Cached
  • Net employment gains in the month were a modest 15,100, below market forecasts of a 21,000 increase, said a Statistics Canada report.
  • he report disappointed hopes that hiring momentum in the previous two months would persist. Net job gains were 69,200 in January and 30,400 in December.
  • Canada has recovered jobs lost during the recession faster than the United States but the February data bucked that trend.
  • ...5 more annotations...
  • The labour market is not going to create any further inflationary pressure, either coming from wage (gains) or the general strength in the labor markets," said Sebastien Lavoie, assistant chief economist at Laurentian Bank Securities.
  • In further signs of slowing, Canada's labour report said the economy shed 24,000 full-time positions in February, partially offset by the addition of 39,000 part-time jobs. The number of self-employed workers rose, while the number working in the private sector edged lower.
  • The February jobless rate was unchanged at 7.8 per cent, versus the 7.7 per cent forecasts by analysts in a Reuters poll.
  • The average hourly wage of permanent employees — which is closely watched by the Bank of Canada for inflation pressures — rose 2.5 per cent from February 2010, up from 2.3 per cent year-on-year rate in both January and December.
  • "It probably lowers the probability of any near term tightening by the Bank of Canada and as a result (will) probably weigh on the Canadian dollar," said Paul Ferley, assistant chief economist at the Royal Bank of Canada.
Joey Keum

Canadian job market will get worse: TD - 1 views

www.financialpost.com/...story.html

jobs canadians market

shared by Joey Keum on 03 Jun 11 - No Cached
  • Derek Burleton, deputy chief economist with TD Economics, forecasts net job creation to slide to less than 200,000 in 2011, almost half of the 350,000 jobs created in 2010, before headwinds start to clear out in 2012.
  • This boosted the total share of service employment relative to overall employment to 78.1% in August 2010 from 74% in 1998.
  • Wage growth is also expected to remain "tepid," hovering at about 2% or around the rate of inflation in an environment of relatively high unemployment.
  • ...2 more annotations...
  • This challenge ... will be more pronounced across the economy than that suggested by the comparatively high rates of unemployment," he said. "The sectoral shifts evidenced across the economy over the past decade — and in particular away from manufacturing to services — has created an increased mismatch in job skills along with the growing problem of skills atrophy."
  • Long-term, the solution is education and training, but there are limits on what can be done in the near-term, Mr. Burleton said.
Chris Lee

We're ignoring inequality at our peril - The Globe and Mail - 0 views

www.theglobeandmail.com/...article1820187

shared by Chris Lee on 02 Jun 11 - No Cached
  • The richest 1 per cent accounted for a third (32 per cent) of all income gains from economic growth between 1997 and 2007. This is four times the share of growth in the 1960s, and double the share of growth in the Roaring Twenties
  • The richest 1 per cent accounted for 14 per cent of all personal income by 2007 -- levels comparable to the mid 1920s.
  • Well if hard work and a good education was the fool-proof recipe for success, the middle class should have seen big gains in the past generation. This generation of workers is better educated than any previous generation, and they are working more hours per household than ever before. But median pre-tax incomes were essentially at the same level in 2007 as in 1980 (about $55,000 in inflation-adjusted dollars).
  • ...1 more annotation...
  • Rising inequality, in good times and bad, is another inconvenient truth of our era, and every bit as unsustainable.
Maria Li

House prices fall sharply in May - Hometrack | Reuters - 0 views

uk.reuters.com/...ometrack-idUKTRE74S2XA20110529

Housing Prices

shared by Maria Li on 03 Jun 11 - No Cached
  • House prices in England and Wales dropped at their fastest annual pace in over 1-1/2 years in May as demand fell for the first time since January
  • Property research company Hometrack said prices were 3.7 percent lower in May compared with a year ago, the biggest decline since October 2009.
  • Economists expect high inflation, weak wage growth, tax rises and public spending cuts to weigh on consumer spending and house prices this year, despite record low interest rates.
  • ...5 more annotations...
  • The GfK NOP measure showed its biggest rise in almost 20 years in May, although analysts said it may have received a temporary boost from unusually fine weather, the royal wedding and a run of public holidays.
  • The Hometrack survey showed that the number of new buyers registered with estate agents fell by 0.5 percent in May, the first decline since January.
  • The number of sales agreed rose by 1.6 percent in May, lower than the 8 percent jump seen in April and March's 12.6 percent rise.
  • London continued to buck the national trend, with prices up by 0.2 percent on the month.
  • "With concern over household finances and the wider economic outlook, demand for housing is likely to continue to post further modest declines over the summer,"
Benjamin Gray

Age of outperformance ends for Canadian banks - The Globe and Mail - 0 views

www.theglobeandmail.com/...article2034967

leverage

shared by Benjamin Gray on 03 Jun 11 - No Cached
  • Between 1990 and 2010, the Canadian prime rate declined by more than 10 percentage points, while inflation fell significantly. The result was a near-perfect environment for financial assets, pushing values for stocks and bonds ever higher.
  • Empowered by the regulator, the Canadian banks have leveraged their massive size and distribution powers to dominate virtually all the financial services sector.
  • The combined outcome was an explosion in trading and market-sensitive revenues, which grew by more than 15 per cent a year for two decades, and today are approximately 20 per cent of gross revenues. Although the process is not quite complete, the banks are also well on their way to dominating the domestic mutual fund business.
Heshani Makalande

Canadian debt load: $26,000 - excluding mortgages - Moneyville.ca - 0 views

www.moneyville.ca/...ebt-26-000-excluding-mortgages

housing prices

shared by Heshani Makalande on 01 Jun 11 - No Cached
  • Already at record levels, Canadians now owe just under $26,000 on average on their lines of credit, credit cards and auto loans, according to credit rating agency, TransUnion.
  • That’s an increase of 4.5 per cent, or another $1,000, over the same period last year.
  • The fear is that higher rates could push more consumers beyond their ability to repay their loans
  • ...10 more annotations...
  • Debt growth in Canada is slowing from the double-digit pace seen before the recession
  • And total borrowing, including mortgages, typically the biggest household loan, is slowing, major Canadian banks said recently in their quarterly reports.
  • The Bank of Canada’s trend-setting overnight lending rate is just 1 per cent. But with inflation running at 3.3 per cent, above the central bank’s ideal range, Carney is under pressure to start raising lending rates to dampen demand.
  • Total debt per consumer increased to $25,597 in the first three months of this year,
  • Among types of loans, TransUnion said credit card debt, usually the most expensive to carry, barely budged from a year ago, falling $25 to an average of $3,539.
  • In a sign some borrowers may already be struggling, the national credit card delinquency rate rose 11 per cent. The rate measures the ratio of consumers who take 90 days or more to pay their bill.
  • The average line of credit, the most popular loans for their low cost and high flexibility, rose 5.9 per cent to $33,762 compared to last year. However, total line of credit debt declined for the first time in five quarters.
  • One noticeable shift was the decreased use of lines of credit, Higgins said. The category is the largest among consumer loans, making up 41 per cent of the total, and even more in Ontario, at 57 per cent
  • The study found debt loads rose in all provinces, led by Quebec and Newfoundland and Labrador. British Columbians had the highest load at $36,649.
  • Lines of credit are the most popular form of consumer debt, excluding mortgages, accounting for more than 41 per cent of outstanding debt at the end of the first quarter. Debt on lines of credit stood at an average $33,981, up 5.9 per cent from $31,867 in the first quarter of 2010.
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