The News Bin

Half of Manitobans Not Saving Their Money

2011-10-26T22:54:00.000-07:00

Half of Manitobans Not Saving Their Money
Canadians are not saving enough money and don’t feel optimistic about the future, that’s according to a new study out today. The survey conducted by Royal Bank of Canada says 57 percent of Canadians don’t have savings for a rainy day fund, and those who do, tend to use the funds to pay for every day expenses. “It speaks to the importance of having a plan for a rainy day, for retirement and for some of the unfortunate unforseens in life such as disability.” says financial consultant Leslie Hamilton with Investors Group. The study also found nearly half of people in the prairies aren’t saving for a rainy day fund with 27 per cent saying they dip into their savings for every day spending or emergency. 27 year old Jason Andrews says he’s struggling to save money these days. “It still just seems like you could never really get ahead, it’s tough to save,” said Andrews. Andrews who recently bought Winnipeg Jets season tickets says he now plans on cutting back on expenses he doesn’t really need. “I’d say anything on my car would be too much, buying a TV big screen just anything that I would have to use my credit card,” said Andrews.

Some say inflation is also hurting consumers but the survey also found Manitobans are also optimistic about the future and plan on reducing their debt this year. “Consumers here in Saskatchewan and Manitoba are concentrating on very positive ways to help mange their debts,” said Rob Johnston, regional president for RBC. University of Winnipeg student Brittany Thiessen isn’t hopeful she’ll be able to save until she pays off her debt. “Well a lot of my money goes towards paying tuition and books are also very expensive and then once you pay for that you really don’t’ have much left over,” said Thiessen.

Most British Columbians Put Savings on Hold to Pay Down Expenses
Nearly six in 10 British Columbians – 58 per cent — are not saving for a rainy-day fund, while 32 per cent are using savings for daily expenses or emergencies, according to the October RBC Canadian Consumer Outlook Index released Wednesday. While the B.C. numbers are slightly higher than the national average — 57 per cent and 30 per cent, respectively — British Columbians also intend to take action in managing their finances in the coming year, with 28 per cent planning to reduce debt, 30 per cent planning to spend less, 19 per cent hoping to save or invest more and 24 per cent planning to do all three. The report found that 58 per cent of B.C. consumers have delayed making a major purchase such as a car, household appliances or vacation because of the economy.

Canadian Delusions of Debt

2011-08-29T21:54:00.000-07:00

Delusions of Debt Freedom Abound
Canadians have an unrealistic vision of their financial futures. A new CIBC poll conducted by Harris-Decima found most Canadians think they’ll be debt-free in another decade or so when, in fact, that isn’t likely to happen.One key finding is that across all age groups (18 to 64), Canadians, on average, believe they will be debt-free 10 to 15 years from their current age. However, the CIBC report notes that many Canadians still hold debt beyond the average age identified by each age group.For example, Canadians 25 to 34 believe they will be debt-free, on average, by age 44. Yet among today’s 45 to 54-year-olds, only 18 per cent report being debt free, suggesting today’s 25 to 34-year-olds are in for a bit of a rude shock. Overall, the poll found Canadians expect they will be debt-free by age 55, but in fact only 35 per cent of today’s 55 to 64-year-olds have actually reached credit nirvana.

Record Household Debt Could Be Canada's Undoing

2011-07-30T21:46:00.000-07:00

Record Household Debt Could Be Canada's Undoing
The very thing that lifted the economy from the depths of the recession — Canadians’ passion for owning a home — could also be its undoing, warns the chief economist for RBC Global Asset Management. Central to Eric Lascelles’ concern is that the availability of cheap credit has driven household debt levels to record highs and soon-to-be-rising interest rates will bear a “palpable” impact on individuals as well as the broader economy.“The very source of Canada’s relative success during the worst of the credit crunch — a banking sector that kept on lending and households that kept on buying — could yet spell its undoing if newly enlarged household debt loads prove too onerous to bear,” Mr. Lascelles says in a report issued Tuesday.

Canada House Prices vs Rent 1980-2010

2011-07-15T22:29:00.000-07:00

A Case For Renting

Canada's Income Gap Widens

2011-07-15T21:57:00.000-07:00

Canada's Income Gap Widens
The income gap between rich and poor in Canada widened in the period from 1993 to 2009, the Conference Board of Canada reported Wednesday. The richest Canadians increased their share of total national income while the poor and those with middle incomes saw their portions shrink, according to the board's analysis, entitled "How Canada Performs." Incomes of the poor increased marginally in the period, it said, but the gap between rich and poor widened. The average income of the poorest Canadians rose from $12,400 in 1976 to $14,500 in 2009....The average income in 1976 was $51,100. By 2009, it had increased by 17 per cent to $59,700, even after adjusting for inflation.But using the measure of median income, which divides the sample into two equal parts and better reflects how the majority of people are doing, the growth was only 5.5 per cent.

Is Gold Money

2011-07-14T00:18:00.000-07:00

TD Warns, House Prices To Fall

2011-07-13T21:48:00.000-07:00

Home Prices To Fall, TD Warns
The average price of a resale home in Canada will fall by more than 10 per cent over the next couple of years, an analysis by TD Economics predicted Wednesday. Calling it a "moderate correction," the report's authors also say sales will decline by more than 15 per cent over the same period."A combination of more subdued job and household income growth, rising interest rates, the recent tightening in borrowing rules for insured mortgages and fewer first time home buyers are expected to be the chief culprits behind the slowdown," the report said. TD economists profiled 12 urban markets across the country. They highlighted Vancouver and Toronto — currently the two most expensive housing markets in Canada — as the cities most vulnerable to a larger-than-average decline, "reflecting in part their exposure to the condominium segment, which appears particularly ripe for a correction."

TD Report

Canadian Debt Hits Record High

2011-07-06T20:50:00.000-07:00

Canada Household Debt Rises
Canadian household debt hit a fresh high as consumers continued to borrow at a faster rate than their wages grew—heightening a key vulnerability of the country's otherwise healthy-looking economy. Economists, as well as the nation's central bank, have increasingly warned against rising household debt, as Canadians borrow at a healthier clip than even their typically more profligate American neighbors. U.S. borrowers have recently reined in their own debt after a deep recession and housing-market bust there. Canadians, meanwhile, have binged on debt, encouraged by mostly rising home prices, low interest rates and economic-growth prospects that are among the best in the Group of Seven. The quarterly ratio of household credit debt—incorporating mortgages and consumer loans—to disposable income hit 147.3% in the January-to-March period, up from 146.2% in the preceding quarter, according to Statistics Canada data released Monday. That's the highest level since the agency began keeping these figures, dating back to 1990. It is also up sharply from just four years ago, when the figure was 127%.

Canada's Bubble About to Burst
The London-based research firm Capital Economics Ltd. has added a new spark to Canada's housing debate with its assessment that the country's real estate market is a bubble that is about to pop. The boom in Canadian real estate has "resulted in the largest rises in house prices ever seen in Canada," the firm says. "And the trigger of an increase in the Bank of Canada's trendsetting interest rates could result in a 25-per-cent drop in property values," it adds. The organization released the research earlier this year in a report for its subscribers, and it received new currency from Bank of Canada Governor Mark Carney's statement, given earlier this week, warning Canadians that they should expect real estate prices to begin to moderate. However, while Carney did not use the word bubble, Capital markets wasn't shy about doing so.

Household Debt Hits Record $1.5-trillion

2011-06-15T21:30:00.000-07:00

Household Debt Hits Record $1.5-trillion
Household debt has hit a troubling $1.5-trillion, sparking new fears that the heavy burden on Canadian consumers could hurt the economy, particularly as fiscal stimulus fades.The figure, from a report Tuesday by the Certified General Accountants Association of Canada, means that if household debt were distributed evenly across all Canadians, a two-child household would owe an estimated $176,461, including mortgage costs...About 27 per cent of working Canadians aren’t saving, while single-parent families, retirees and households with an income of $50,000 and under are in particularly dire straits. Single parents were the only family category listed in the report where debt climbs with age, and one-third of retired households are burdened by an average debt of $60,000. Households with an income of less than $50,000 are “six times more likely to be financially vulnerable in terms of their debt-service ratio,” the study said.

Carney Warns On Housing Markets

2011-06-15T21:26:00.000-07:00

Carney Warns On Housing Markets
Mark Carney is issuing a sharp warning that the housing market may be overheating, as his ultra-low interest rates, combined with too much optimism on the part of buyers, fuels prices in the country’s hottest markets. Even as growth in mortgage credit has started to slow and prices are expected to moderate, investment in residential properties nationwide is now near peak levels, Mr. Carney said in a speech to the Vancouver Board of Trade. Without using the word “bubble” to describe a housing market where prices are now 13 per cent above their pre-recession peaks, and without saying the Bank of Canada will take specific measures to tame the sector, Mr. Carney left little doubt that he is concerned.

The risk is that expectations become extrapolative, prompting the classic market emotions of fear and greed – greed among speculators and investors, and fear among households that getting a foot on the property ladder is a now-or-never proposition,” he said. Tellingly, Mr. Carney noted that in Vancouver, the country’s priciest market, as in other “globalized” markets like Sydney and Hong Kong, Asian wealth is coming in as investors diversify and look for hard assets, fuelling valuations that in some cases are “extreme.”...Indeed, while the mortgage market in Canada is more conservative than in the United States, where the subprime lending collapse triggered the 2008 financial crisis and Great Recession, Mr. Carney said real estate loans now make up more than 40 per cent of Canadian banks’ assets, compared with 30 per cent a decade ago, a situation he called “unprecedented exposure.”

Retire At 80?

2011-06-10T19:04:00.000-07:00

Many Of Us Won’t Be Able To Retire...
We all think it’s a panacea. If you don’t have enough money saved for retirement, you’ve got a few ways to close the gap between what you have and what you need in your nest egg: Save more, invest more aggressively, and/or work longer. Well, it turns out that working longer is indeed an option, according to the Employee Benefit Research Institute latest study. The only problem is that the latest research shows that you’ll have to work much longer than you anticipated. In fact, many Americans will have to keep on working well into their 70s and 80s to afford retirement, according to the study, titled “The Impact of Deferring Retirement Age on Retirement Income Adequacy.”

What’s more, it’s even worse for low-income workers, according Jack VanDerhei, one of the co-authors of the study. Those who earned (on average over the course of their careers) less than $11,700 per year, the lowest income quartile, would need to defer retirement till age 84 before 90% of those households would have just a 50% chance of affording retirement. Those who earned between $11,700 and $31,200 will need to work till age 76 to have a 50% chance of covering basic expenses in retirement. Those who earned between $31,200 and $72,500 will need to work to age 72 to have a 50% chance and those who earned more than $72,500, those in the highest income quartile, catch a break; they get stop working at age 65 to have a 50/50 chance of funding their retirement.

Asian Real Estate Influx

2011-06-08T21:01:00.000-07:00

Vancouver Primed For Housing Correction: BMO

2011-06-08T20:51:00.000-07:00

Vancouver Primed For Housing Correction
Vancouver’s housing market looks primed for a correction, according to a report from BMO Nesbitt Burns, with the average house now costing “an astounding” 11.2 times a family’s average income -- more than double the national average. But senior economist Sal Guatieri said there’s hope that any drop in prices could be less severe than previous corrections -- “if interest rates stay low and wealthy immigrants continue to pour into the city, prices could stabilize sooner than in past downturns.”The city has seen four corrections in the last 30 years -- in 1981-82 (-30 per cent), 1990-91 (-14 per cent), 1995-96 (-20 per cent) and 2008-09 (21 per cent). Even so, the average house has gained 21 per cent in the last year, or a whopping 188 per cent in the last decade and was worth $815,000 at the end of April.

Government Intervention Needed In Canadian Real Estate

2011-06-08T20:49:00.000-07:00

Is Government Intervention Needed To Stop The Rise In Canadian House Prices?
High housing prices across the country have some wondering if government intervention is needed to make owning a house a realistic goal for the average Canadian family. A BMO Capital Markets report, released Tuesday, suggests that while a real estate market correction is imminent, low interest rates, and levels of immigration and foreign investment have buoyed home prices to historic heights when compared to family incomes. "At 5.1-times median family income, housing is by no means cheap, costing an extra two years of gross income compared with 2001, when the boom began and valuations were closer to historic norms," noted the report. In Vancouver, Canada's most expensive city, the average-priced home is now an astounding 11.2 times family income, more than double the decade earlier ratio and the current national figure. "Riding a wave of wealthy immigrants, Vancouver's house prices have nearly tripled in the past decade, spiralling beyond the reach of most first time buyers or non-lottery winners," the report stated.

Madani: Canadian Real Estate Overvalued

2011-06-06T23:50:00.000-07:00

Building Permits Drop
But Madani said he does see trouble down the road — in late 2011 and 2012 — because Canadian home prices are substantially overvalued. He predicts as much as a 25 per cent drop in home prices in the coming years. As soon as prices drop, he said, construction activity follows because builders want to avoid a glut of unoccupied homes on the market. "We're of the opinion that we've simply built too many homes," Madani said.The housing market has been slowing in many parts of Canada and in some cities. An overbuilt condominium sector — especially in big cities like Toronto and Vancouver — has also started to weigh down the market.

Canadian Consumer Debt At 26,000

2011-06-01T22:53:00.000-07:00

Canada's Personal Debt Rises
Canadians rang up five per cent more in personal debt in the first three months of 2011 compared with 2010, according to a report released Wednesday. TransUnion, a Chicago-based credit specialist, said the average Canadian had almost $26,000 on his or her credit card, bank lines of credit and other borrowing vehicles — excluding mortgages — during the January-to-March period. That amount represented a jump of more than $1,200 compared to the same three months one year earlier.

Home Prices Continue Climb

2011-05-17T22:07:00.000-07:00

Home Prices Continue Climb

Canadian home prices continued their upward march in April, driven by strong investor demand in Vancouver, as cracks in the Toronto condominium market may be starting to appear.The Canadian Real Estate Association said yesterday the average price of a home sold in April in Canada was $372,544, up 8% from a year ago. It was the third straight month that the average price rose 8% on a yea-over-year basis but the Ottawa-based group cautioned that the figure was skewed due to “surging multimillion-dollar property sales in selected areas of Greater Vancouver.”...orries about the sustainability of the housing market could be stoked by a report from Urbanation Inc., which monitors the Toronto condominium market. The group says more than 50% of condominiums purchased in the last year were by buyers who do not intend to occupy their units and plan to rent in many instances. Condominium rents in Toronto in the first quarter of 2011 were $2.11 per square foot compared to $2.09 a year earlier, a 0.8% increase. Condominiums being registered now and ready to be occupied are priced for sale at $450 per square foot range while newer units are going for $550 per square foot.

Canadians Struggling To Save

2011-04-23T20:18:00.001-07:00

Canadians Struggling To Save
Many Canadians are finding themselves caught between the struggle to save money and repay their debts, says a survey from TD Bank. And with interest rates expected to rise this summer, clearing debts probably won't get any easier. In the report, 38 per cent of Canadians surveyed said they had no savings at all. "I think it's worrisome," said Carrie Russell, senior vice-president of retail banking at TD Canada Trust (TSX:TD). "The reality is that we are all going to come into unexpected expenses from time to time, be it a car or health or a job loss and this can really derail you and your family if you have no cushion behind you," Russell said from Toronto. Russell said the major factor preventing Canadians from saving is that they are using disposable income to pay down debt, whether it be credit cards, car loans or mortgages. She recommends a cushion of three to six months of income saved to get through unexpected financial shocks. One-third of Canadians who responded to the recent online survey also said they didn't have enough money to cover living expenses like rent or food bills. The survey found that 54 per cent of the 1,003 people who took part in the survey said it was a real struggle or impossible to save.

Winnipeg House Prices Surpass National Average

2011-04-13T21:34:00.000-07:00

Two-storey Digs Ride Price Rocket
THERE'S a new filly leading the local house-prices derby -- the standard two-storey home, according the latest survey by Royal LePage. The real estate firm said Tuesday the average selling price of a two-storey home in Winnipeg increased at one of the fastest paces in Canada during the first quarter this year, jumping by 7.1 per cent to $297,125 from $277,375 a year earlier. The only city among the 16 surveyed with a bigger year-over-year gain was Vancouver, at 9.7 per cent. The surge in two-storey house prices is a change from previous quarters, where bungalows led the charge. But even so, the average price for a bungalow climbed 3.8 per cent to $269,250 from $259,313, and the price of a standard condo rose by four per cent to an average $167,429 from $161,000...Winnipeg also had the third largest year-over-year gain in prices, at 4.6 per cent, eclipsing the national average hike of 2.1 per cent.

Village on False Creek to Lose $250 MM

2011-04-13T21:20:00.001-07:00

The Ignored Election Issue

2011-04-13T21:19:00.000-07:00

Canadian Real Estate – The Ignored Election Issue
As Canadians go through yet another election, politicians of all stripes are busy dusting off campaign slogans, attack ads and policy books. Each party puts forth its best ideas to fix what ails the country and what will propel it forward on a wave of prosperity. The amazing part of this election campaign is that nobody seems to be addressing the 800 pound gorilla in the room. That gorilla is named “Canadian Real Estate”. The overvaluation of real estate(“bubble” is so overused it has lost its shock value)in many parts of Canada has been propelled by a Canadian addiction to debt and federal government policies that helped to create a runaway freight train in the form of real estate prices. Outside of the Canadian political campaigning trail the Conservatives have paid lip service to the issue through their recent series of mortgage lending restrictions, however, this tightening is only undoing the Conservative party’s mortgage lending loosening from a few years earlier. Again, both key facts are rarely mentioned by any of the political parties currently campaigning.

Parties Silent on Possible Housing Bubble

2011-04-13T21:17:00.000-07:00

Jesse Kline: Parties Silent on Possible Housing Bubble
The Canadian housing market is booming, and some economists fear it could come crashing down. There were warning signs for years about the pending housing crisis in the United States, but they all went unheeded. Canadians now have the chance to start discussing how to prevent a similar situation from occurring north of the border, yet politicians from all parties seem intent on turning a blind eye. The only mention of housing in the Conservative and Liberal policy platforms is to say how much the parties have spent, or will spend, to support housing. Yet, the collapse of a government-encouraged housing bubble could endanger the country’s precarious financial situation.

The Liberty Dollar

2011-04-03T20:48:00.001-07:00

How Much Do Canadians Make?

2011-04-02T17:28:00.000-07:00

How Much Do Canadians Make?
Of the 24.5 million returns filed, 18 million Canadians reported total income of $50,000 or less. That’s not a typo. In other words, ignoring individuals who don’t file returns such as children, nearly 75% of tax-filing Canadians earned under $50,000 in total income in 2009. Add another 5 million Canadians who reported total income of between $50,000 and $100,000 and you conclude that about 95% of individuals have income below $100,000 annually.

China's Ghost Cities

2011-03-31T23:03:00.001-07:00

Comedians Now Flipping Houses

2011-03-28T22:40:00.000-07:00

North End housing No Joke
Todd Allen, a transplanted Canadian living in L.A. and working as a stand-up comic, found himself with extra time on his hands last year while performing here at Rumor’s Comedy Club. "I was here working, but my sets were only 45 minutes a night, so I had a lot of time on my hands," he said via telephone from L.A. Allen rented a bike and began exploring the city. His adventure eventually took him to the North End. "I was baffled at how great some of the housing deals were. Then when I looked at the rental market and saw how high it was; I’ve never seen such a situation," he said. Allen was so impressed by what he saw that he decided to buy a house in the area. He has since sold it and purchased another investment property on Aberdeen Avenue. "I’ve been around North America and never seen things like this," said Allen, who plans to fix up the house and resell it later this spring.

Housing Booms North of the Border

2011-03-28T22:39:00.000-07:00

Housing Booms North of the Border
As much of the U.S. housing market limps along, home prices north of the border are on a fresh tear, fired up in part by a borrowing binge that has sent Canadians' debt to record levels—and now higher than their notoriously profligate U.S. neighbors—while income growth pokes along. All that has raised worry at the country's central bank, which repeatedly has warned about rising debt levels, and among some economists, who say the market is ripe for a correction—maybe a steep one. House prices have risen to almost 5.5 times disposable income per worker, well above the long-term historical average of 3.5, he says. "We've been through a fairly hefty housing boom over the last 10 years, and the next three years is going to be an unwinding of that," Mr. Madani says.

Realtors: No Bubble In Real Estate

2011-03-20T20:06:00.000-07:00

Realtors Say Real Estate Bubble Fears Unfounded
Housing prices up 14% over two years, but experts say there’s no fear of sudden drop A healthy labour market, coupled with low interest rates, are behind the strong appreciation in the value of residential real estate in the nation’s capital, several local realtors say.

B.C Realestate Up 18%, National Avg Up 8.8%

2011-03-20T20:04:00.000-07:00

Average Price of B.C. Home
The average price of a home in B.C. was up 18 per cent in February compared to the same month last year, according to the B.C. Real Estate Association. The price surge was largely due to sales in Metro Vancouver, the BCREA said in a survey, with the average residential price climbing 19.4 per cent, compared to February 2010, to $791,000 from $663,000.

Ground Zero

2011-03-08T21:07:00.001-08:00

Krugman On Canadian Real Estate

2011-03-07T19:50:00.000-08:00

Oy, Canada
My take on the US economic crisis has increasingly been that banks were less central than many people think, while the housing bubble and household debt are the key players — which is why financial stabilization by itself wasn’t enough to produce a V-shaped recovery.

But if I take all that seriously, I should be very worried about Canada

Rising Food Prices

2011-03-03T23:14:00.001-08:00

George Weston to Boost Food Prices
George Weston Ltd., the baked goods giant, will raise prices by an average of 5 per cent starting April 1, as it grapples with mounting costs due to soaring prices of commodities such as wheat, sugar and oil. More price increases could be in the offing later this year if commodity costs continue to climb.

Canadian Housing Overvalued

2011-03-03T23:07:00.001-08:00

Housing Overvalued
A new report warns Canada's housing market is reaching the limits of sustainability and could tumble if there is no moderation.The Bank of Montreal's followup on its November analysis finds that Canada's hot housing market is still not in the red zone for prices, but it's close.The bank notes that after slowing last summer, Canadian home sales rebounded in the fall and house prices have kept rising. On average, home prices rose five per cent in the past year to January, while in Vancouver they rocketed 20 per cent. Incomes, however, have not increased nearly as fast. The bank says the ratio between average resale prices and personal incomes nationally is 14 per cent above the long-run trend, up from last summer, but still below the 21 per cent peak that preceded the 1989 crash. But that is not the case in all markets. Five provinces are currently in the danger zone, led by Saskatchewan, where the ratio is 39 per cent above historic norms. Also well-above the long-run levels is Newfoundland, 34 per cent higher; British Columbia and Manitoba, 31 per cent, and Quebec, 23 per cent above.

Peter Schiff: Canadian Real Estate Overpriced

2011-03-03T23:00:00.000-08:00

Home Ownership Isn't For All
....“We’re no different from Americans, that’s for sure,” says John Cocomile, a broker with GreedyMortgage.com in Toronto. He says of 100 first-time homebuyers he arranged mortgages for in the past three years, 95 of them took the longest amortizations possible. “Generally homeowners are not conservative. They want the most they can get.” Some of those clients are now living hand-to-mouth, Mr. Cocomile says. And he worries that when interest rates correct upwards, as they inevitably will, they’ll be underwater. “I think there’s a lot of homeowners who probably shouldn’t be homeowners.... There’s a lot of teetering right now.” Those who have acknowledged they are on the edge are seeking the help of counsellors like Laurie Campbell, executive director of Credit Canada. She notes that the average Canadian with a credit profile owes $1.48 for every dollar they make in disposable income, the highest debt-to-earnings-power ratio on record. And she says mismanagement of personal finances remains rampant.

Collapsing Canadian Real Estate with Garth Turner

2011-02-25T21:35:00.000-08:00

Stress Test Your Mortgage

2011-02-25T21:33:00.000-08:00

Stress Test Your Mortgage
Nearly 20 per cent of Canadians don't know if they'll be able to make their mortgage payments if interest rates increase, according to a poll released Thursday by Bank of Montreal — disturbing findings given that BMO expects the Bank of Canada to raise its benchmark rate by at least one per cent by the end of the year. "Despite high prices, housing remains reasonably affordable due to record low interest rates," said Sal Guatieri, BMO Economics.

Housing Affordability In Canada Improved

2011-02-25T21:32:00.000-08:00

Housing Affordability In Canada Improved
Housing affordability improved at the end of 2010 throughout Canada, a study released Thursday says, mainly due to slightly lower interest rates and slowing price gains. The RBC Housing Affordability Index has now eased for two consecutive quarters as bond yields remain relatively low, while the economy shows signs of improvement. The country has also been steadily adding jobs, bringing employment levels back to where they were before the 2008 recession. Still, the respite is likely to be short-lived. RBC economist Robert Hogue estimates housing affordability will begin to erode over the next two years, as the Bank of Canada is seen resuming its rate hike campaign this spring. However, once interest rates stabilize in about three years, housing costs are expected to advance only gradually.

Canadian Consumer Debt Up 5.9%

2011-02-18T21:12:00.000-08:00

Credit Card Debt Dropped During Holiday Season
There was a surprising drop in the amount borrowed on credit cards by Canadians during the holiday-laden fourth quarter, but overall non-mortgage debt went up substantially across the country, a credit analysis firm reported Wednesday. TransUnion said average total debt per Canadian consumer, excluding mortgages, was $25,709 in the fourth quarter of 2010 – up 5.6 per cent from $24,346 in the comparable period of 2009.

The Student Poverty Song

2011-02-18T21:05:00.001-08:00

Canadian Household Debt Hits 150%

2011-02-18T20:58:00.000-08:00

Olive: The Danger In Our Savings Shortfall
And yesterday’s alarming report from the authoritative Vanier Institute of the Family confirms our national dilemma. We’re saving too little, for our own sake and our country’s....The average Canadian household is saddled with about $100,000 in debt, a record level, up 78 per cent since 1990’s $58,000. ...The average household’s debt-to-income rate has shot to 150 per cent, up from 93 per cent in 1990. Which means that for every $1,000 we generate in income, we’re burdened with $1,500 in debt.

Mortgage Delinquencies Up 50%
The report suggested the number of households behind in their mortgage payments by three or more months climbed to 17,400 in the fall of 2010, up nearly 50 per cent since the recession began.And credit card delinquency and bankruptcy rates also remained higher than pre-recessionary levels.

Shiller: Canada Is A Purely Random Success Story

2011-02-11T21:16:00.000-08:00

Shiller: Canada Is A Purely Random Success Story
If the historical statistics serve as a guide, Canada looks to be headed for a big drop in home prices, although any decline probably won’t be as pronounced as the U.S. housing bust, he said. U.S. home prices adjusted for inflation surged 79% between 1990 and their peak in 2005. Canada’s gained about 45% over the same period and have continued marching higher, up to about a 50% gain currently, said Prof Shiller.

B.C. Most Indebted

2011-02-11T20:47:00.000-08:00

B.C. Most Indebted
B.C. households are the most vulnerable in Canada to interestrate hikes or an economic downturn, says a new report released Wednesday by TD Economics. B.C.'s debt-to-income ratio -which compares all debt including mortgage debt to personal disposable income -is 160 per cent. That's the same level reached in the United States just before the financial crisis and housing meltdown hit....The number of clients seeking help with their debt from the society, a non-profit organization that helps people find solutions to debt and money problems, has skyrocketed in four years."In 2007 we were seeing 500 new clients a month. Now it's 2,000. In the last 90 days we've seen 50-per-cent more people looking for help. It's huge and we're going to be hiring an additional 20 staff to deal with demand," he said.Hannah said if interest rates rise by two per cent, many people will be seriously affected."In the early '80s we saw interest rates of 18 per cent. But that was on mortgages of $70,000. If rates jump to seven per cent on mortgages of $400,000 is there much of a difference?"

Students Need Help, Not More Debt

2011-02-11T20:46:00.000-08:00

Students Need Help, Not More Debt
The federal government says it will require a transfusion of hundreds of millions of dollars to maintain a student loan program that is hemorrhaging millions as a result of loan defaults. According to budget documents tabled Tuesday in the House of Commons, the Canada Student Loans Program needs $149.5 million just to cover writeoffs of more than 60,000 unexpected defaults. On top of that, another $311.2 million is needed to meet increasing demand for loans.But pouring in increasing amounts of money isn't the solution to a student loan system that is clearly in need of an overhaul, as advocates have been urging for some time.The Canada Student Loan Debt ticker on the Canadian Federation of Students website (www.cfs-fcee.ca) shows the tally at $13.7 billion and climbing steadily. The website points out that average student debt in Canada ranges from a low of $13,000 in Quebec to more than $28,000 in the Maritimes. The rate of delinquent borrowers is rising, too, hitting 13 per cent for 2010-11, up from about 10 per cent a year earlier. That's the result of a combination of tuition fees which have spiked in recent years and a tough economy which has pounded students along with everyone else.

Madani: Canada Housing Prices To Drop 25%

2011-02-06T17:56:00.000-08:00

Housing Prices To Drop 25%
House prices in Canada will fall over the next several years by as much as 25 per cent, creating a massive impact on the economy and possibly pushing the country into recession, says a forecast. “The recent housing boom has resulted in the largest rises in house prices ever seen in Canada, which have been similar in magnitude to those during the recent boom in the U.S.,” said Capital Economics analyst David Madani in a report released Thursday. “Unfortunately, the subsequent falls in prices could also be just as severe as those elsewhere.”Madani is predicting house prices will fall by a cumulative 25 per cent over the next several years, or “in the same ballpark as the recorded declines in the U.S. and other countries.”

CMHC Liabilities Equal 30% of Canada's GDP

2011-02-06T17:53:00.000-08:00

CMHC Liabilities Equal 30% of Canada's GDP
CD Howe released an interesting commentary on the current role of CMHC in the mortgage market. It is well worth the read as it not only highlights the potential (and unnecessary) risks to taxpayers, which we’ll discuss, but also debunks the notion that high home ownership rates are beneficial to the broader economy.On the dominance of CMHC in the mortgage insurance market Dominating the market in Canada means that as of 2010, CMHC insures mortgages worth approximately $500 billion, almost the entire Canadian mortgage insurance market.

Nearly 11 Percent of US Houses Empty

2011-02-06T17:52:00.000-08:00

Nearly 11 Percent of US Houses Empty
More concerning than the home ownership rate is the vacancy rate. The Census tables don't tell the entire story, but they tell a lot of it. Of the nearly 131 million housing units in this country, 112.5 million are occupied. 74.8 million are owned, and that's only dropped by about 30 thousand in the past year. 38 million are rented, but that's up by over a million year over year. That means more new households are choosing to rent.

Social Security Drained By 2037

2011-01-28T22:41:00.000-08:00

Social Security Drained By 2037
New congressional projections show Social Security running deficits every year until its trust funds are eventually drained in about 2037. This year alone, Social Security is projected to collect $45 billion less in payroll taxes than it pays out in retirement, disability and survivor benefits, the nonpartisan Congressional Budget Office said Wednesday. That figure swells to $130 billion when a new one-year cut in payroll taxes is included, though Congress has promised to repay any lost revenue from the tax cut. Social Security has built up a $2.5 trillion surplus since the retirement program was last overhauled in the 1980s. Benefits will be safe until that money runs out. That is projected to happen in 2037 — unless Congress acts in the meantime. At that point, Social Security would collect enough in payroll taxes to pay out about 78 percent of benefits, according to the Social Security Administration.

The $2.5 trillion surplus, however, has been borrowed over the years by the federal government and spent on other programs. In return, the Treasury Department has issued bonds to Social Security, guaranteeing repayment with interest.

Oil Prices Rise on Egypt Unrest

2011-01-28T16:32:00.000-08:00

Egypt Shows How Easily Internet Can Be Silenced
The move by Egyptian authorities to seal off the country almost entirely from the Internet shows how easily a state can isolate its people when telecoms providers are few and compliant.

Egypt Protests: America's Secret Backing
The American Embassy in Cairo helped a young dissident attend a US-sponsored summit for activists in New York, while working to keep his identity secret from Egyptian state police. On his return to Cairo in December 2008, the activist told US diplomats that an alliance of opposition groups had drawn up a plan to overthrow President Hosni Mubarak and install a democratic government in 2011

Homes Less Affordable Across Canada

2011-01-26T21:35:00.000-08:00

Homes Less Affordable Across Canada
The dream of owning a home in Canada continues to get hazier as housing prices in some of the country's largest markets skyrocket while income growth lags behind, results of a 325-city international survey of housing affordability suggest. "There are a lot of people that tend to be squeezed out of the housing market," said David Seymour, a policy analyst with the Frontier Centre for Public Policy which compiled the survey's findings. "Owning your own little patch of Canada is a dream for a lot of people that is getting tougher." The annual International Housing Affordability Survey, released Tuesday, compared home prices and household income in 325 cities in Canada, Australia, Hong Kong, Ireland, New Zealand, Britain and the United States.

Household Debt At A Near-boiling Point
With average household debt in Canada at nosebleed levels -- it reached 148 per cent of annual disposable income in the third quarter of 2010 -- and interest rates likely to rise later this year, many consumers are flirting with disaster. Some are already in crisis mode, says Hannah, whose New Westminster, B.C.-based non-profit organization offers free credit counselling, education and debt management programs for debt-strapped consumers. "For a lot of people, they've leveraged themselves to an extreme. With the vast majority of our clients, most of them are just a paycheque or two away from financial difficulty. They're that highly leveraged," he says. "The average consumer walking through our door is in their early 40s, they carry six or seven credit cards and owe anywhere from $25,000 to $50,000 on those cards." "So they're just able to keep up with their minimum obligations."

The Triumph of Hacker Culture

2011-01-22T22:19:00.000-08:00

The Triumph of Hacker Culture
It's the best of times and the worst of times for hacker culture. On the one hand, this is a moment of history-making triumph for a cyber-worm, the complex computer virus known and feared as "Stuxnet." A stunning evolutionary leap in development of "malware" (the generic term for the mischief-making software a virus embeds in computers via digital networks). Composed, it has been reported, of 15,000 lines of code. Stuxnet exhibited virtual superpowers last fall by penetrating, taking control of, and jamming into self-destruction some 1,000 precisely calibrated uranium-refining centrifuges in Iran's Natanz nuclear facility.

No More 35 Year Mortgages

2011-01-21T22:10:00.000-08:00

Mortgage Rules Will Sideline Some Buyers
This week, Finance Minister Jim Flaherty did just that. As of March 18, the government will no longer insure mortgages with amortization periods of more than 30 years. That will keep some potential home buyers out of the market, and in theory, help stop already debt-burdened households from going even deeper. Ottawa will also make home refinancing rules tighter, among other moves.

Canadian Real Estate Association - Call To Action

2011-01-08T00:10:00.000-08:00

Additional changes to mortgage financing rules would raise the barrier to homeownership excessively and destabilize housing markets and the economy. In particular, we are concerned about the negative impact modifications to the allowable amortization period or minimum down payment requirements would have. These changes would create affordability problems, especially for first-time buyers. First-time buyers are the first link in a chain reaction of real estate activity. They allow existing home owners to change properties or rent. Creating burdensome barriers for first-time buyers will seriously impact the rest of the market, including retirees looking to downsize.

Further tightening of mortgage rules would have other far reaching consequences for the economy. It risks causing a home price correction, a drop in the net worth of Canadian households, lowered economic growth and reduced tax revenues. Consumer confidence would be damaged, labour mobility would be impeded, and unemployment would stay elevated.

Canada Debt Warnings

2011-01-08T00:04:00.000-08:00

Canada Debt Warnings
Canada's Superintendent of Bankruptcy issued a warning to Canadians about the dangers of high household debt Friday, adding his voice to the chorus from officials concerned about the amount of leverage the average resident now has. In a letter attached to the latest report on bankruptcy statistics, James Callon said it was "important for Canadians to be aware of the risks and possible consequences of taking on a large amount of debt." He noted that a significant event - a change in employment such as job loss, or a change in family status such as a divorce, or a serious illness - "can cause a huge drain on finances." If such an event were to suddenly occur in a household carrying a large amount of debt, that could lead to "the harsh realities of insolvency," Callon said. The number of consumer insolvencies filed in Canada in October 2010 was 22.5% higher than in 2007-08, before the economic crisis that led to the recent recession. Household debt in Canada reached a record C$1.41 trillion in December.

According to Statistics Canada, debt to household income levels has reached a record 148%, rising above comparable U.S. figures for the first time since the late 1990s. Bank of Canada Governor Mark Carney recently warned that a growing number of Canadian households were vulnerable to adverse shocks, and more would become vulnerable if interest rates go up from record low levels as expected. Finance Minister Jim Flaherty has also sounded numerous warnings on household debt levels in recent months.

7 Billion People

2011-01-03T21:29:00.001-08:00

IMF: Canadian Personal Debt A Threat

2010-12-22T21:45:00.000-08:00

Personal Debt A Threat To Recovery
Canada’s household debt burden, now as heavy as that of the United States, represents a significant threat to the country’s economic recovery, the International Monetary Fund says. Sounding a note of alarm, the Washington-based IMF used its latest review of Canada’s economy to highlight the risks that come with Canadians’ record levels of mortgage debt, credit-card debt, lines of credit and other liabilities. Statistics Canada said last week that the ratio of household debt to disposable income reached 148.1 per cent in the third quarter.

U.S Cities Bankrupt

2010-12-20T22:32:00.000-08:00

Debt Crisis Threatens to Bring Down US Cities
More than 100 American cities could go bust next year as the debt crisis that has taken down banks and countries threatens next to spark a municipal meltdown, a leading analyst has warned. Meredith Whitney, the US research analyst who correctly predicted the global credit crunch, described local and state debt as the biggest problem facing the US economy, and one that could derail its recovery."Next to housing this is the single most important issue in the US and certainly the biggest threat to the US economy," Whitney told the CBS 60 Minutes programme on Sunday night.

Shadow War Against Iran

2010-12-15T18:35:00.000-08:00

Stuxnet Virus Set Back Iran
Top German computer consultant tells 'Post' virus was as effective as military strike, a huge success; expert speculates IDF creator of virus. The Stuxnet virus, which has attacked Iran’s nuclear facilities and which Israel is suspected of creating, has set back the Islamic Republic’s nuclear program by two years, a top German computer consultant who was one of the first experts to analyze the program’s code told The Jerusalem Post on Tuesday. “It will take two years for Iran to get back on track,” Langer said in a telephone interview from his office in Hamburg, Germany. “This was nearly as effective as a military strike, but even better since there are no fatalities and no full-blown war. From a military perspective, this was a huge success.”

Iranian Nuclear Scientist Assassinated
Iran's phantom enemies unexpectedly attacked the country on November 29. Two cars exploded in Teheran almost simultaneously. Iranian nuclear physicist Majid Shahriari was killed in the explosions. Another nuclear physicist, Fereidoun Abbasi, was seriously injured.The two scientists worked at the Shahid Behesti University. Professor Shahriari played a key role in the implementation of Iran's nuclear programs. Shahriari chaired the department for nuclear engineering and was involved in the works to develop nuclear reactors of new generation.

Shadow War
The covert operations that target suddenly came to light with explosive violence and stunning implications for the future of warfare on Nov. 29.

Canadian Debt to Income Surpass Americans

2010-12-13T21:58:00.000-08:00

Canadians' debt-to-income ratio now higher than Americans
Canadians’ debt-to-income ratio is now higher than Americans’ for the first time in a dozen years, leaving policy makers with a dilemma: Rein in spending and risk hampering the recovery, or do nothing and risk a cascading financial failure....The ratio of household debt-to-disposable income reached the highest on record in the third quarter, at 148.1 per cent, Statistics Canada said Monday, a 6.7 per cent rise in Canadian household obligations from a year ago. The ratio tops the 147.2-per-cent ratio in the United States and comes as incomes fell 1.5 per cent during the same three-month period.

It’s time for Ottawa to crack the whip on borrowers
It’s time for an intervention. Canadians are unable to shake their enslavement to debt, and our banks are unable to stop themselves from supplying the goods. Warnings to stop living beyond our means from mom and dad, in the form of Bank of Canada Governor Mark Carney, aren’t making much of an impression.

Analysts fret over housing, want to hear from Carney
The Scotia Capital economists noted that the home ownership rate in Canada is at a record high of about 70 per cent - that's a bit more than the peak in the United States. Home prices are also at record levels and the market is overvalued, while the debt-to-income ratio sits at 145 per cent, which is "not terribly lower than a properly defined U.S. comparison." The ratio of debt to assets, meanwhile, is the second-highest in the G7.

Ottawa, banks discuss measures to rein in Canadians’ personal debt
Ottawa is talking to the banks about putting new measures to curb the rise in consumer debt into the next federal budget. Deputy finance minister Michael Horgan has broached the topic in prebudget consultations with executives from Bay Street firms, sources say. Several bankers have told him that they would support further federal moves to cool the mortgage market, including cutting the maximum term of mortgages or increasing the minimum down payment.

Carney Warns Canadians About Debt

2010-12-10T22:41:00.000-08:00

Global risks rising: Bank of Canada
The Bank of Canada warned Thursday that the risk of another global economic shock is rising and Canadians may not be prepared for it.The recovery in Canada and globally is slowing, the central bank said in the December issue of its Financial System Review. It said the main risk is the growing seriousness of Europe's government debt crisis. Another threat is the unwillingness of countries to take action to reduce imbalances in exports and imports between countries.Canadians won't be spared another shock, the bank said, because during the current period of tough economic times, they have continued to take on debt.Household debt has risen to 145 per cent of disposable income as Canadians have taken advantage of super-low interest rates to purchase homes and other consumer items on credit.

Canadian Bankers Sound Alarm

2010-12-10T22:38:00.000-08:00

Bankers Sound Alarm On Loans
Some of Canada’s top bank executives are growing increasingly uncomfortable with the level of debt Canadians are taking on through long-amortization mortgages. “I think all of us are looking at [what to do],” said Ed Clark, chief executive of Toronto-Dominion Bank, adding the current situation “is not a good thing.” Speaking in an interview, Mr. Clark said TD has already acted to slow lending but it’s now up to the federal government to take steps such as reducing maximum amortization periods on home loans to 25 years from 35 years or lowering loan-to-value ratios. “These are exactly the things that government should be doing and there’s been a lot of discussion,” he said.

Jarislowsky: Canadas Lurking Disaster...

2010-12-08T22:53:00.000-08:00

Stephen Jarislowsky
In Canada the hardship still lies ahead. Our houses are still 20 to 30 per cent above normal levels, salaries are shrinking and a lot of Canadians are heavily indebted. There’s a lurking disaster, to the extent that you have reduction of purchasing power and we are just not saving hardly anything as a nation. I think things are going to get a hell of a lot worse. We still have a trade deficit today despite the fact that commodity prices are incredibly high. I hope I’m wrong but I think Canada is on the edge of a lot of trouble.

Fed Made $9 Trillion In Loans

2010-12-01T20:21:00.000-08:00

Fed Made $9 Trillion In Loans
The Federal Reserve made $9 trillion in overnight loans to major banks and Wall Street firms during the financial crisis, according to newly revealed data released Wednesday. The loans were made through a special loan program set up by the Fed in the wake of the Bear Stearns collapse in March 2008 to keep the nation's bond markets trading normally. The amount of cash being pumped out to the financial giants was not previously disclosed. All the loans were backed by collateral and all were paid back with a very low interest rate to the Fed -- an annual rate of between 0.5% to 3.5%...."The $700 billion Wall Street bailout turned out to be pocket change compared to trillions and trillions of dollars in near zero interest loans and other financial arrangements that the Federal Reserve doled out to every major financial institution," Sanders said.

China & Russia Quit US Dollar

2010-11-24T22:54:00.000-08:00

China, Russia Quit Dollar
St. Petersburg, Russia - China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday. Chinese experts said the move reflected closer relations between Beijing and Moscow and is not aimed at challenging the dollar, but to protect their domestic economies."About trade settlement, we have decided to use our own currencies," Putin said at a joint news conference with Wen in St. Petersburg.

Chinese Professor 2030

2010-11-20T21:29:00.001-08:00

Dean Baker: Canada's Housing Bubble

2010-11-20T21:25:00.000-08:00

Housing bubble a danger: expert
One of the first economists to predict the U.S. mortgage crisis warned Wednesday that Canada's housing sector could be headed for a sharp correction. Dean Baker of the Washington-based Centre for Economic and Policy Research said he sees no reason why average home prices in Canada should be about 50 per cent higher than in the U.S. Baker said if interest rates rise by two per cent, Canadians could see house prices collapse by 25 to 30 per cent.

Vancouver Taxpayers Stuck...

2010-11-20T21:23:00.000-08:00

Vancouver Taxpayers Stuck...
Vancouver taxpayers are on the hook for millions of dollars a month in interest payments for the troubled Olympic village project, and there are no plans to start selling the empty condos again until next year. Expenses for building maintenance and security and other costs are adding as much as $1.5 million a month to the multimillion-dollar interest payments. Moreover, the court-appointed receiver Ernst & Young has the power to borrow as much as $7.5 million to carry out its job. The figures emerged this week as part of the backdrop for the city's extraordinary demand to put Millennium Southeast False Creek Properties into a "negotiated receivership" over the $740 million it owed for two taxpayer-funded loans

Wolfgang Schäuble : Q2 Stimulus is "Clueless"

2010-11-08T22:42:00.000-08:00

Clueless' – The German Verdict
They have already pumped endless amounts of money into the economy with extremely high budget deficits, and with a monetary policy which has already pumped in lots of money," Mr Schäuble said. "The results have been hopeless. With all due respect, [the] US policy is clueless."

Q2 - 600 Billion

2010-11-08T22:40:00.000-08:00

Stock Markets Surge on Fed's $600B Plan
Stocks surged today after Wednesday's announcement that the Federal Reserve will purchase $600 billion worth of Treasury securities to boost the stagnant economy.

BMO: No Canadian Housing Bubble

2010-11-08T22:36:00.000-08:00

Canada’s Housing Market ‘Pricey, Not Dicey,’
Canada's housing market is moderately overvalued but not a bubble waiting to be burst, BMO Nesbitt Burns says. “All things considered, the Canadian housing market does not appear to be in a bubble, and is unlikely to suffer a U.S.-style collapse,” economists Earl Sweet and Sal Guatieri said in a research note. “A key and overriding difference is the quality of loan origination in the past decade, as well as other institutional factors such as mortgage insurance and recourse against defaulters,” they wrote in the report titled “Canadian housing: Pricey, not dicey.”

Canadian Mortgage Debt Tops $1 Trillion

2010-11-08T22:35:00.000-08:00

Canadian Mortgage Debt Tops $1 Trillion
Canadians are holding more than $1 trillion worth of mortgage debt, the first time the total has passed that level, and a 7.6 per cent increase over the past year.The gain in the country's total residential mortgage debt is in keeping with the 7.5 per cent average seen over the past fifteen years, the Canadian Association of Accredited Mortgage Professionals (CAAMP) said in its annual report Monday. Over that time, Canadians total mortgage debt has increased by 194 per cent.

US Economic Collpase

2010-10-28T22:06:00.000-07:00

Buy/Rent Ratio Shows Real Estate ‘Vulnerable’

2010-10-28T21:36:00.000-07:00

Buy/Rent Ratio Shows Real Estate ‘Vulnerable’
Canadian house prices have rebounded markedly from the depths of the recession, hitting a fresh record in may and bringing the buy/rent ratio to about 1.85x. That means that, even excluding major factors such as taxes and maintenance, homeowners pay about twice what renters pay.

Housing Correction Possible: Carney

2010-10-28T21:33:00.000-07:00

Housing Correction Possible: Carney
Bank of Canada governor Mark Carney agreed Tuesday that an abrupt correction in Canada's housing market is possible.Appearing before the Commons finance committee and responding to a question from Nova Scotia MP Scott Bryson, Carney said he was not predicting a significant drop in prices, but given how far prices have risen and the high level of Canadians' household debt, it could not be ruled out.

Canada's Real Estate Overvalued

2010-10-28T21:24:00.000-07:00

Canada's Real Estate Overvalued
Canadian house prices are overvalued, but not as much as those in Australia, Hong Kong or France, according to a new worldwide survey. The data published in The Economist magazine's annual survey shows Canadian homes cost on average 23.9 per cent more than they are worth. That's somewhere around the middle of the pack. The scale ranged from Australia at the high end, where homes are 63.2 per cent overvalued, to Japan at the low end, where houses are 34.6 per cent undervalued. Canada's house prices were up 4.5 per cent from one year earlier. And between 1997 and 2010, prices rose a whopping 70 per cent, the report said.

Canada Should Provide More Stimulus

2010-10-28T21:22:00.000-07:00

Canada Should Provide More Stimulus
The Canadian government and the Bank of Canada should be ready to provide more stimulus to the economy if the downside risks it now faces come to pass, the International Monetary Fund said on Thursday. The multinational agency said authorities were taking the right steps by winding down Canada's fiscal stimulus plan and halting an interest rate hike campaign started in June. But the IMF warned risks to the economic outlook have increased -- including the high debt of Canadian households and the impact of housing market weakness in the United States.

China's Takes Supercomputer Crown

2010-10-28T21:19:00.000-07:00

China's Takes Supercomputer Crown
China has overtaken the US as home of the world's fastest supercomputer. Tianhe-1A, named for the Milky Way, is capable of sustained computing The US scientist who maintains the international rankings visited it last week and said he believed it was 1.4 times faster than the former number one, the Cray XT5 Jaguar in Oak Ridge, Tennessee. That topped the list in June with a rate of 1.75 petaflops a second. The US is home to more than half of the world's top 500 supercomputers. China had 24 in the last list, but has pumped billions of pounds into developing its computational ability in recent years. The machines are used for everything from modelling climate change and studying the beginnings of the universe to assisting aeroplane design.

Housed in the northern port city of Tianjin, near Beijing, Tianhe-1A was developed by the National University of Defence Technology. The system was built from thousands of chips made by US firms – Intel and Nvidia – but domestic researchers developed the networking technology that allows information to be exchanged between servers at extraordinary speeds.

TD: Canadian Housing Debt A Cause For Concern

2010-10-22T22:02:00.000-07:00

Canadian Household Debt Rising Faster
Household debt is rising faster in Canada than in the United States and will continue to climb as low interest rates encourage consumers to spend beyond their means, warns a report from one of the country's largest banks. Canadian debt loads have become excessive as consumers become accustomed to easy borrowing, TD Economics said in the report released Wednesday. And it believes debt will continue to rise as long as the Bank of Canada keeps its key lending rate at a historically low level.

Canadian Housing Debt A Cause For Concern Report

Jarislowsky on Potash Ash and Housing Bubble

2010-10-16T16:40:00.000-07:00

Kill BHP bid for PotashCorp
One of the biggest shareholders of Potash Corporation of Saskatchewan has called for Ottawa to reject BHP Billiton's $38.6-billion US takeover offer for the Saskatoon-based fertilizer giant..."Whether it's Australia, Russia, China, Japan, Venezuela, Mexico, nobody except a few fools. And we have fools from sea to shining sea."

Housing Bubble
Stephen Jarislowsky, chairman of Montreal-based investment adviser Jarislowsky Fraser Ltd., said he is “convinced” there’s a bubble in Canada’s housing market, fueled by government measures that encouraged consumers to take on debt. “They have basically encouraged people to buy houses based on cheap mortgages,” Jarislowsky, 84, said in a telephone interview from Montreal. “That has created the opposite effect of what was desirable.

US Medical Tests 'Crime Against Humanity'

2010-10-01T21:31:00.000-07:00

US Medical Tests In Guatemala 'Crime Against Humanity'
US testing that infected hundreds of Guatemalans with gonorrhoea and syphilis more than 60 years ago was a "crime against humanity", Guatemalan President Alvaro Colom has said. President Barack Obama has apologised for the medical tests, in which mentally ill patients and prisoners were infected without their consent. Mr Obama told Mr Colom the 1940s-era experiments ran contrary to American values, Guatemala said. The US has promised an investigation... The experiment ran from 1932 to 1972, with President Bill Clinton eventually apologizing for it.

Big Oil Pulling Out Of Iran

2010-09-30T21:13:00.001-07:00

European Oil Companies Pledge to End Oil Investment
The United States announced Thursday that four of Europe's five biggest oil companies would end their energy investments in Iran, a significant advance in the Obama administration's efforts to pressure the Iranian government to enter negotiations over its alleged nuclear weapons program.

Japanese Energy Group To Quit Iran Oilfield
Inpex, the Japanese state-backed energy group, is poised to relinquish its remaining share of Iran’s Azadegan oilfield as tightening sanctions threaten companies that do business with Tehran.

Carney Warns About Canadian Debt Levels

2010-09-30T20:19:00.000-07:00

Household Balance Sheets and the Outlook for Consumption
With Canadians working, but not as much as they would like, they have been borrowing. Real household credit expanded rapidly throughout the recession, in contrast to previous downturns, and has continued to grow through the recovery. Canadian households have now collectively run a net financial deficit for 37 consecutive quarters. That is, their investment in housing has outstripped their total savings for over nine straight years. In effect, households are demanding funds from the rest of the economy, rather than providing them, as had been the case through the 1960s, 1970s, 1980s and 1990s.

This cannot continue. The ratio of Canadian household debt to disposable income reached 146 per cent in the first quarter of this year, an all-time high and very close to the current level in the United States . In a series of analyses over the past year the Bank has found that Canadian households are increasingly vulnerable to an adverse shock and that this vulnerability is rising more quickly than had been previously anticipated.

It is true that the strength of housing and other assets has meant that the net worth of Canadians remains about six times their average disposable income compared with slightly below five times in the United States. However, while asset prices can rise or fall, debt endures. Despite the buoyancy of the housing market, the debt-to-asset ratio has risen to its highest level in more than 20 years.

In short, Canadian household balance sheets are becoming increasingly stretched. It is possible that Canadians are beginning to address some of these vulnerabilities. This would be consistent with recent data that indicate a slowdown in household consumption expenditures and housing activity, amid a labour market recovery that has been longer on jobs than on hours or incomes.

Bank Raises Red Flag Over Housing Affordability

2010-09-28T18:59:00.000-07:00

Bank Raises Red Flag Over Housing Affordability
RBC economist Robert Hogue is raising a "red flag" about housing affordability in Vancouver.The bank's quarterly report on housing trends and affordability, released Monday, said Vancouver is one of a handful of Canadian markets where the share of household income taken up by home ownership costs "is at worrisome levels." RBC said the proportion of median pre-tax household income required to service the cost of a mortgage on an existing housing unit exceeds 70 per cent for both two-storey homes and detached bungalows. A standard condo consumes about 43 per cent of income, according to RBC.

Canadian Housing Bubble

2010-09-16T22:23:00.000-07:00

Canadians In Debt

2010-09-16T20:10:00.000-07:00

Six In 10 Live Pay to Pay
The recession may be officially over, but six in 10 Canadians are still surviving from paycheque to paycheque, a national survey showed Monday. Fifty-nine per cent of Canadian workers say they would be in financial trouble if their paycheque was delayed by just a week – the same proportion as last year when the economy was still mired in a downturn, according to a poll of 2,766 people by the Canadian Payroll Association.

OECD Warns Canadians
High personal debt levels have left many Canadians financially vulnerable just when the country's economy is projected to slow, the Organization for Economic Co-operation and Development warned in a report on the Canadian economy Monday.

One In Seven Americans Is Living In Poverty

2010-09-16T19:26:00.000-07:00

One In Seven Americans Is Living In Poverty
One in seven Americans is living in poverty, the highest number in the half-century that the government has kept such statistics, the Census Bureau announced Thursday. Last year was the third consecutive year that the poverty rate climbed, in part because of the recession, rising from 13.2 percent in to 14.3 percent, or 43.6 million people, last year.

Foreclosures Rise; Repossessions Set Record

2010-09-16T19:19:00.000-07:00

Foreclosures Rise; Repossessions Set Record
US foreclosure activity rose in August from the previous month, and banks and lenders took ownership from homeowners at a record pace, according to a new report released Thursday. Overall, foreclosure fillings rose 4.18 percent in August from the previous month, and were down 5.48 percent from a year ago. In all, 338,836 properties were in the foreclosure process. One in 381 U.S. households received a foreclosure notice in August. (Foreclosure notices are defined as a default notice, auction sale notice or bank repossession.)

10 - Hawaii - One in every 315 households
9 - Illinois - One in every 314 households
8 - Michigan - One in every 255 households
7 - Georgia - 1 in every 246 households
6 - Utah - One in every 230 households
5 - Idaho - One in every 220 households
4 - California - One in every 194 households
3 - Arizona - One in every 165 households
2 - Florida - One in every 155 households
1 - Nevada - One in every 84 households

Uh-Oh Canada

2010-08-31T21:18:00.000-07:00

Uh-Oh Canada
My trip yesterday was actually to Niagara Falls, to talk to the Canadian Bar Association. In preparation, I did some homework; and to be honest, I came away a little less sanguine about Canada than I started. Everything I and others have said about the Canadian banking system and its virtues is true. But in other respects, there do seem to be some worrying signs. First of all, Canadians borrow and spend like, well, Americans.

Ron Paul: Show Me The Gold

2010-08-31T19:52:00.001-07:00

Ron Paul to Fed, Ft. Knox:
Congressman Ron Paul is in the news today doing what he does best: dropping firebombs on the Fed. The Republican from Texas told Kitco News that he plans to introduce a bill next year that will allow for an audit of U.S. gold reserves. Paul reportedly said that, in his opinion, it’s a “possibility” that there in fact isn’t any yellow metal in Fort Knox or the New York Federal Reserve.

Meltup

2010-08-31T19:49:00.001-07:00

Canada's Housing Bubble

2010-08-31T19:22:00.000-07:00

Threat of Housing Bubble Has Resurfaced
Canada's housing market could still be in for a U-S style correction, despite a slow down in home sales across the country. The warning comes from the Canadian Centre for Policy Alternatives, which released a report that analyzed the factors that cause a bubble. A real estate bubble is an artificial increase in property values which maxes out a homeowners ability to pay. When the bubble bursts, and values drop, owners are stuck with mortgages worth more than their homes. The CCPA found that prices in six of the country's largest housing markets, including Calgary, have hit 30-year highs and are in bubble territory. It says home prices are roughly five to 11 times greater than Canadians' annual income -- much higher than historical comfort levels.

An Accident Waiting to Happen

The Biggest Company You've Never Heard Of

2010-08-28T18:14:00.000-07:00

Terrorist Caught By Canadian Internet Monitoring Software

2010-08-28T16:47:00.000-07:00

Parliament Hill Alleged Terror Goal
Parliament Hill and the Montreal subway system were the targets of an alleged terror plot foiled this week with the arrests of three suspects, says a former counterterrorism officer with the RCMP and Canada's spy agency.Michel Juneau-Katsuya said he has learned that at least one of the suspects used Ottawa Public Library computers to communicate with other members of the Ottawa-based cell. Internet messages between the men triggered computer "sniffers" used to monitor electronic signals at Ottawa's Communication's Security Establishment (CSE), the national cryptologic agency, which alerted the Canadian Security Intelligence Service (CSIS).

The Tillman Story

2010-08-22T20:07:00.001-07:00

David Kelly's Death 'Textbook Suicide'

2010-08-22T20:04:00.000-07:00

David Kelly's Death 'Textbook Suicide'
The death of Iraq weapons expert David Kelly was a "textbook case" of suicide, according to the pathologist who performed the post-mortem examination.

Money Supply

2010-08-15T17:40:00.000-07:00

Kotlikoff: "U.S Bankrupt"

2010-08-15T17:38:00.000-07:00

Foreclosures Rise In July

2010-08-12T21:22:00.000-07:00

Foreclosures rise in July
The latest foreclosure numbers carried a mixed message: They're up 3.6% from the month before but down 9.7% from 12 months earlier. In July there were more than 325,000 foreclosure filings -- including notices of default, auctions notices and bank repossessions. That is the 17th month in a row total filings exceeded 300,000, said RealtyTrac's CEO, James Saccacio.

Social Security In The Red

2010-08-05T15:30:00.000-07:00

Social Security In The Red This Year
Social Security will pay out more this year than it gets in payroll taxes, marking the first time since the program will be in the red since it was overhauled in 1983, according to the annual authoritative report released Thursday by the program's actuary.

40+ Million on Food Stamps

2010-08-05T15:27:00.000-07:00

Food Stamp Use Hit Record 40.8m
The number of Americans who are receiving food stamps rose to a record 40.8 million in May as the jobless rate hovered near a 27-year high, the government reported yesterday.

China Becomes Second Largest Economy

2010-08-01T09:37:00.000-07:00

China's Economy Passes Japan
China is set to overtake Japan as the world's second-largest economy in a resurgence that is changing everything from the global balance of military and financial power to how cars are designed.By some measures it has already moved to second place after the U.S. in total economic output — a milestone that would underline a pre-eminence not seen since the 18th century, when the Middle Kingdom last served as Asia's military, technological and cultural power.China is already the biggest exporter, auto buyer and steel producer, and its worldwide influence is growing. The fortunes of companies from Detroit automakers to Brazilian iron miners depend on spending by China's consumers and corporations. And rising wealth brings political presence: Chinese pressure helped to win developing countries a bigger voice in the World Bank and International Monetary Fund.