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The Bank of England warned banks and borrowers on Wednesday about risks from a potential abrupt rise in global interest rates, and said banks might need to further bolster their capital cushions to protect against this.The past week has seen a sharp rise in global bond yields since U.S. Federal Reserve Chairman Ben Bernanke said that the U.S. central bank may scale back bond purchases later this year.BoE Governor Mervyn King said on Tuesday that markets had "jumped the gun" in their sharp reaction to Bernanke's comments, but the BoE's half-yearly Financial Stability Report said more bond yield rises could hurt UK banks, insurers and borrowers.The BoE said that it had ordered an investigation into the vulnerability of Britain's financial institutions and borrowers to higher interest rates, to report back by September to its new risk watchdog, the Financial Policy Committee."Financial institutions and markets are also vulnerable to an abrupt rise in global interest rates. And some UK borrowers remain highly indebted, which could result in losses for UK banks," the FPC said.
Angela Calla, Host of "The Mortgage Show" on CKNW AM980 Saturdays at 7pm, was named the "AMP of the Year" in 2009 by CAAMP. Angela has also ranked in the Top 50 Mortgage Brokers in Canada 5 years in a row!
You opened the envelope a few months ago to find out that your mortgage is actually higher than the assessed value of your property. So now what? Call the Angela Calla mortgage team...
Don't worry about alarmist economists - those at the Organization for Economic Cooperation and Development, for example, or Nobel Prize-winner Paul Krugman - who are predicting a real estate crash.
Because house prices in Canada are poised to edge up, not plunge down, according to a new analysis from the Conference Board of Canada. And Vancouver - despite having the highest real estate prices in the country, and despite being the target of incessant warnings from worrywarts who see a bubble poised to pop - will turn out to be one of the most resilient markets of all.
Vancouver's steady population growth, in particular its unusually high percentage of foreign-born residents, is the basis of this confidence."The foreign-born population can significantly alter the landscape of a country's housing market," Lefebvre wrote. "In many instances, immigrants arrive in a new country with some pre-established wealth. If a specific market welcomes a relatively large share of wealthy immigrants, their arrival creates a new source of demand that not only stimulates demand for housing, but can also raise house prices significantly without any changes to personal disposable income per capita."
This is true not only in our market, but also in another seven of the 27 countries that the OECD identified, using two different measures, as having housing stock that is over-valued by 20 per cent or more. (The others with demographics similar to ours are Belgium, Norway, New Zealand, France, Austria, Sweden and the United Kingdom.)
"You've seen some declines (in house prices). But that seems to be slowly, slowly ending. You're actually bottoming out."
"As long as you have population growth," he said, "people will need housing."For as far as Lefebvre can see into the future, he is confident Vancouver will continue to have population growth. And this region will continue to lead the way in attracting a steadily expanding proportion of foreign-born residents, many of them arriving with quite a lot of money.The bottom line: Most parts of Canada will see, very soon, a modest upward trend in housing prices, and those that don't are unlikely to see anything worse than a small decline. Meanwhile, Vancouver is high on his list of the least likely places to see any problem at all.
"If it were... marketing companies wouldn't go on your TV station and deceive vieweres about the demand for those condos from offshore Asians."
The Nobel prize winner suggested Canada is an important test case for what lies behind the 2008-09 recession and the sluggish recovery. In other words, if the U.S. experience is anything to go by, Canada might be undergoing a housing and debt bubble, and if so, he advised people to watch what happens next.With interest rates at ultra-low levels and Canadian household debt and housing market stabilizing, market strategists and economists like Krugman here are scrutinizing every bit of economic data for clues on what the economic outlook will bring....
Krugman sees potential red flags in the large spread between U.S. and Canadian house prices, and the fact that Canadian household debt levels are climbing even as U.S. ones are declining.
"So if the new non-centered bank view is right, Canada ought to be quite vulnerable to a big deleveraging shock despite its boring banks," he wrote. “Of course, people have been saying this for several years, and it hasn’t happened yet — but remember, the U.S. housing bubble took a long time to pop, too."
"housing corrections often last years...and this one is unlikely to be any different"
"Prices in Vancouver are... fairly valued... It's a wonder that prices aren't even higher"
Total home sales in Richmond for May 2013 totaled 375 units were 7% higher than the 350 sales recorded a month ago. Higher home sales the past 2 months helped to improve the housing market in Richmond slightly. The slow down in new listings, and improved sales helped to improve the market outlook for townhomes and condos. The slow down in the supply of new listings the past 3 months helped to improve the housing market in Richmond significantly.
Total active listings in May at 2,230 units was at around the same level compared to the previous month’s total listings of of 2,225 homes. With an average past 3 months home sales of 335 units, the MOI for homes in Richmond at 6.66 months for May is a vast improvement compared to the previous 2 months.
The situation for detached homes in Richmond did not improve much. The MOI for Richmond detached homes for May at 9.35 months will continue to exert pressure on home sellers. The only way out for home sellers who must sell is to reduce their prices significantly.
Richmond detached home prices are under pressure to decline further due to the high supply of homes and lower than expected demand from home buyers.
Currently, there are 642 detached homes over $1,000,000 for sale in Richmond. The average monthly sales the past 3 months for homes over $1.0 million was 49 homes. With 13 months of supply, detached home sellers are not seeing much demand for their homes.
The situation for detached homes over $1.5 million is far worst. With 357 homes listed for sale and average monthly sales of 17 homes, these home sellers are confronted with 17 months of supply, with little hope of finding buyers. The demand for detached homes over $1.5 million is not expected to improve much.
There are not signs of the market changing for the better for million dollar homes in Richmond.
The market for townhouses in Richmond appeared to have stabilized and home prices are holding at current level.On the face of it, decent news.
On the other hand, resale condo sellers in Richmond are in a dire situation trying to sell their condos. The Richmond condo MOI for May at 6.6 months is not a true reflection of the market situation for condos in Richmond. When the unlisted inventories of new condos are added to the pool of resale condos for sale on the MLS® system, there are far more condos for sale than buyers. The competition for buyers by resale condo sellers and new condo developers will inevitably result in lower condo prices in the coming months.
SUSPENSION ORDER: Johnson Castaneto Salanga, Sutton Group-West Coast Realty and Royal Pacfic Realty (Kingsway) Ltd., Vancouver
Upon reading the Affidavit of Sonya Jakovickas, Compliance Officer of the Real Estate Council of British Columbia, sworn June 11, 2013,
I AM OF THE OPINION that:
There has been conduct on the part of Johnson Castaneto Salanga in respect of which a Disciplinary Committee could make an Order under section 43 of the Real Estate Services Act.
The length of time required to complete an investigation or hold a disciplinary hearing, or both, would be detrimental to the public interest.
I CONSIDER IT in the public interest to, and hereby make an Order under section 45(2) of the Real Estate Services Act suspending the licence of Johnson Castaneto Salanga effective immediately and Order that he not provide any real estate services to or on behalf of any member of the public.
I CONSIDER IT in the public interest to, and hereby make an Order under section 46(3) of the Real Estate Services Act requiring the Royal Bank of Canada, located at Fraser St. and 49th Avenue, Vancouver, British Columbia, branch 003, to hold any and all accounts, trust account, client funds, securities, term deposits, registered savings accounts, and/or general accounts on deposit for, or in the name of any of: “Johnson Castaneto Salanga”, “Johnson Salanga”, “John Salanga”, and “Sutton Group – Johnson Salanga”, held solely or jointly, until further order of the Real Estate Council, including but not limited to:
1. Account Number XXXXXXX
2. Account Number XXXXXXX
I CONSIDER IT in the public interest to, and hereby make an Order under section 46(3) of the Real Estate Services Act requiring the Vancouver City Savings Credit Union (“Vancity”), Branch 809, located at Fraser St. and 47th Avenue, Vancouver, British Columbia, to hold any and all accounts, trust account, client funds, securities, term deposits, registered savings accounts, and/or general accounts on deposit for Johnson Castaneto Salanga, or in the name of any of: “Johnson Castaneto Salanga”, “Johnson Salanga”, “John Salanga”, and “Sutton Group – Johnson Salanga”, held solely or jointly, until further order of the Real Estate Council.
Traders at some of the world’s biggest banks manipulated benchmark foreign-exchange rates used to set the value of trillions of dollars of investments, according to five dealers with knowledge of the practice.
Employees have been front-running client orders and rigging WM/Reuters rates by pushing through trades before and during the 60-second windows when the benchmarks are set, said the current and former traders, who requested anonymity because the practice is controversial. Dealers colluded with counterparts to boost chances of moving the rates, said two of the people, who worked in the industry for a total of more than 20 years.
It may be difficult to prosecute traders for market manipulation, as spot foreign exchange, the trading of one currency with another at the current price for delivery within two days, isn’t classified as a financial instrument by regulators, said Arun Srivastava.
The behavior occurred daily in the spot foreign-exchange market and has been going on for at least a decade, affecting the value of funds and derivatives, the two traders said. The Financial Conduct Authority, Britain’s markets supervisor, is considering opening a probe into potential manipulation of the rates, according to a person briefed on the matter.
We can therefore deduce that, following the process of elimination, gold and silver are the only markets that are unmanipulated and where transparent price discovery is allowed to take place without intervention from key players. Sarcasm off.
LOS ANGELES (MarketWatch) -- Traders at a number of major global banks have been manipulating spot foreign-exchange rates for at least a decade, altering the values of trillions of dollars worth of investments, Bloomberg News reported Tuesday, citing five unnamed dealers. The scheme involves the WM/Reuters Closing Spot Rates, which are used to provide daily benchmarks to value portfolios. However, market participants have been front-running client orders to rig the rates by pushing through trades before and during a 60-second window when the rates are set. British regulators are considering a probe into allegations of this practice, the report said.
In my estimation, there has not been in American history a more important leak than Edward Snowden's release of NSA material – and that definitely includes the Pentagon Papers 40 years ago. Snowden's whistleblowing gives us the possibility to roll back a key part of what has amounted to an "executive coup" against the US constitution.
Since 9/11, there has been, at first secretly but increasingly openly, a revocation of the bill of rights for which this country fought over 200 years ago. In particular, the fourth and fifth amendments of the US constitution, which safeguard citizens from unwarranted intrusion by the government into their private lives, have been virtually suspended.
The government claims it has a court warrant under Fisa – but that unconstitutionally sweeping warrant is from a secret court, shielded from effective oversight, almost totally deferential to executive requests. As Russell Tice, a former National Security Agency analyst, put it: "It is a kangaroo court with a rubber stamp."
For the president then to say that there is judicial oversight is nonsense – as is the alleged oversight function of the intelligence committees in Congress. Not for the first time – as with issues of torture, kidnapping, detention, assassination by drones and death squads –they have shown themselves to be thoroughly co-opted by the agencies they supposedly monitor. They are also black holes for information that the public needs to know.
The fact that congressional leaders were "briefed" on this and went along with it, without any open debate, hearings, staff analysis, or any real chance for effective dissent, only shows how broken the system of checks and balances is in this country.
Obviously, the United States is not now a police state. But given the extent of this invasion of people's privacy, we do have the full electronic and legislative infrastructure of such a state. If, for instance, there was now a war that led to a large-scale anti-war movement – like the one we had against the war in Vietnam – or, more likely, if we suffered one more attack on the scale of 9/11, I fear for our democracy. These powers are extremely dangerous.
There are legitimate reasons for secrecy, and specifically for secrecy about communications intelligence. That's why Bradley Mannning and I – both of whom had access to such intelligence with clearances higher than top-secret – chose not to disclose any information with that classification. And it is why Edward Snowden has committed himself to withhold publication of most of what he might have revealed.
But what is not legitimate is to use a secrecy system to hide programs that are blatantly unconstitutional in their breadth and potential abuse. Neither the president nor Congress as a whole may by themselves revoke the fourth amendment – and that's why what Snowden has revealed so far was secret from the American people.
In 1975, Senator Frank Church spoke of the National Security Agency in these terms:
"I know the capacity that is there to make tyranny total in America, and we must see to it that this agency and all agencies that possess this technology operate within the law and under proper supervision, so that we never cross over that abyss. That is the abyss from which there is no return."
The dangerous prospect of which he warned was that America's intelligence gathering capability – which is today beyond any comparison with what existed in his pre-digital era – "at any time could be turned around on the American people and no American would have any privacy left."
That has now happened. That is what Snowden has exposed, with official, secret documents. The NSA, FBI and CIA have, with the new digital technology, surveillance powers over our own citizens that the Stasi – the secret police in the former "democratic republic" of East Germany – could scarcely have dreamed of. Snowden reveals that the so-called intelligence community has become the United Stasi of America.
So we have fallen into Senator Church's abyss. The questions now are whether he was right or wrong that there is no return from it, and whether that means that effective democracy will become impossible. A week ago, I would have found it hard to argue with pessimistic answers to those conclusions.
But with Edward Snowden having put his life on the line to get this information out, quite possibly inspiring others with similar knowledge, conscience and patriotism to show comparable civil courage – in the public, in Congress, in the executive branch itself – I see the unexpected possibility of a way up and out of the abyss.
Pressure by an informed public on Congress to form a select committee to investigate the revelations by Snowden and, I hope, others to come might lead us to bring NSA and the rest of the intelligence community under real supervision and restraint and restore the protections of the bill of rights.
Snowden did what he did because he recognised the NSA's surveillance programs for what they are: dangerous, unconstitutional activity. This wholesale invasion of Americans' and foreign citizens' privacy does not contribute to our security; it puts in danger the very liberties we're trying to protect.
History of Central Banks and why we must End the Federal Reserve
- Ralph Nader on CNN
The author(s) of the posts on this site are not investment advisors and they do not offer investment advice. They try to provide some hopefully useful data with sources - especially concerning real estate - and then add their own analysis.
All the content on this website is solely an expression of the author's personal interests and is posted as free-of-charge opinion and commentary. Nothing here is intended as investment advice. If you seek investment advice, consult a registered, qualified investment advisor.