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  • The aussie and the loonie are about to enter the big leagues with the IMF considering breaking the two currencies out from the "other" category in its Cofer data. Less than 2% before the financial crisis, the reserves in the "other" is now over 5%, with much of that apparently flowing into those two units. This happening amidst rising official calls for a weaker aussie is - in a word - interesting. A chart of FXA and FXC vs. the dollar index since January 2009.  [View news story]
    Just until it gets high enough to kill what little manufacturing we still have in Eastern Canada and our Housing crash enters full swing in spring of 2013.
    Nov 20, 2012. 03:08 PM | 4 Likes Like |Link to Comment
  • Stocks take a decided turn down as Bernanke speaks and seems to rule out any more stimulus for the moment. Seriously? The chairman again promised QE will continue even after the economy recovers and the market wants more? DJIA -0.6%, Nasdaq -0.6%.   [View news story]
    You Americans are turning socialist. Big government, social programs for everyone, take some advice, it doesn't work very well. Once on the titty its impossible to get off without unparalleled social unrest...see Spain/Greece.
    Nov 20, 2012. 01:26 PM | 2 Likes Like |Link to Comment
  • A high-profile group of nine Democratic and nine Republican senators urges Pres. Obama to quickly issue a permit for the northern leg of the Keystone pipeline (TRP +1.8%), citing the need to create jobs and to reduce oil imports from the Middle East. The senators' letter comes just ahead of a protest against the pipeline planned for the White House on Sunday.  [View news story]
    Forget it...we are sending it West to China. Why deal with a socialist state when you can deal with a capitalist one.
    Nov 16, 2012. 02:51 PM | Likes Like |Link to Comment
  • Canadian Housing: It Actually Is Different This Time  [View article]
    Correction is just starting and will hit frothiest areas first, the following properties are in Calgary - compare these prices to comparable homes in your area.

    Link to an apartment in Calgary, downtown. 2600 square feet for 1.44 million CDN. $552/square foot

    4 Plex built in 1912 - 1.45 Million CDN (probably renting for +/- $800/unit/month after property tax) - bad area of the city

    2800 square foot two story in outlier neighborhood, 1.1 million CDN

    1.4 million Two story in burbs
    Nov 7, 2012. 04:02 PM | 1 Like Like |Link to Comment
  • Canadian Housing: It Actually Is Different This Time  [View article]
    If you look at our housing price charts, prices were correcting quickly from late 2008 to early 2009. The Bank of Canada had to follow the US bank rate reductions or our dollar would have went through the roof. Lower interest rates created a frenzy of buying that went unabated until this spring. Vancouver and Toronto are now showing signs of stress, sales of existing homes are substantially lower yoy, prices are starting to soften as well.
    Nov 7, 2012. 01:26 PM | 1 Like Like |Link to Comment
  • Canadian Housing: It Actually Is Different This Time  [View article]
    Ahem, have you looked at a chart of Canadian house prices from 2003 to present.

    Here is a great Chronology of the CMHC ponzi scheme:

    1954-1990- Somewhere along this time, 10% became minimum down payment.
    1990- 5% was introduced as a trial run, then officially accepted in 1999.
    2001 – Genworth (GE Capital) enters the Canadian mortgage insurance market
    2001 – CIBC offered below-prime mortgages.
    Pre-2003 – CMHC: 5% down with price limit depending on area, 25 yr amortizations, no price limit if 10% or more down
    Sep 2003 – CMHC: 5% down, 25 yr amortizations, removed all price ceiling limitations. Now any mortgage would be insured regardless of the cost.
    Mar 2004 – CMHC: Flex-Down product allows 5% down to be borrowed and 1.5% closing costs to be borrowed (essentially zero down, but 95% insured)
    Mar 2006 – AIG enters the Canadian mortgage insurance market
    Mar 2006 – CMHC: 0% down, 30 yr amortizations (Genworth announces 35 yr amortizations)
    Jun 2006 – CMHC: 0% down, 35 yr amortizations, interest only payments allowed for 10 years
    Nov 2006 – CMHC: 0% down, 40 yr amortizations, interest only payments allowed for 10 years
    Oct 2008 – CMHC: 5% down, 35 yr amortizations, investors need 5% down.
    April 2010- CMHC did some minor tightening of their guidelines, investors need 20% down.
    March 2011- CMHC only allows 30 yr amortizations, restrictions on pulling equity out
    2012 - CMHC only allows 25 yr amortizations, insured mortgages limited to $1 million, home equity refinance drops from 85% to 80%.

    The amount of loosening that occured starting 2003 to 2006 was crazy. Any wonder home prices doubled over that period?

    Notice how government has been tightening since 2008 - the credit crisis delayed our crash, the reduction of interest has postponed the inevitable for a few years.
    Nov 6, 2012. 02:14 PM | 3 Likes Like |Link to Comment
  • Canadian Housing: It Actually Is Different This Time  [View article]
    I hear lots of my fellow Canucks say it is different here, "we don't have sub-prime mortgages" - that's a laugh, all our mortgages are "sub-prime" - in the USA you can mortgage for 30 years and deduct interest from taxable income. In Canada the long dated mortgages are 5 year terms - when interest rates begin to rise all of our mortgages will "re-set" at higher rates. The fall could be quicker than the USA.

    Up until Oct 31, 2012 our banks were still able to do "cash-back" mortgages.

    Carney and Flaherty are very scared, our banks will be fairly insulated from the carnage, our sovereign debt rating not so much.
    Nov 6, 2012. 12:31 PM | 3 Likes Like |Link to Comment
  • More on the late-day Fed leak: Officials have become impatient with sluggish growth and high unemployment, reports Jon Hilsenrath. MBS purchases, a pledge to keep rates low for longer, or even a move to push down nearly microscopic short rates even lower are among the choices available to the FOMC. Action could come at the July 31 meeting.   [View news story]
    Fed does not weigh in unless they have cover. Unemployment steady, market at 1330, 4 months to election, inflation at target level.....good luck.
    Jul 24, 2012. 04:19 PM | 2 Likes Like |Link to Comment
  • Lockheed Martin (LMT -0.7%) CEO Bob Stevens and COO Chis Kubasik up the ante in their battle against $492B of defense sequestration by sending a letter to employees reiterating the warning they gave Congress yesterday that 10K jobs are at risk. LMT might need "to issue conditional WARN notices to a substantial number of our employees," starting in late Q3.   [View news story]
    "In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.
    We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals so that security and liberty may prosper together."

    Dwight D. Eisenhower
    Jul 19, 2012. 10:13 AM | 2 Likes Like |Link to Comment
  • A trader's timing may have been too good on this one, writes Steve Sears: Yesterday, an investor sold 20K July $25 puts on FXI, using the proceeds to buy 20K July $37 calls - a bet on a big and quick move higher in the popular China ETF. This morning's PBOC rate cut had FXI opening up 2.8% and the calls higher by 83%.   [View news story]
    Relative probably works in central planning.
    Jun 7, 2012. 02:56 PM | 1 Like Like |Link to Comment
  • Bank of Spain Governor Ordonez is stepping down from his post on June 10, one month ahead of the end of his term.   [View news story]
    Skeletons must be falling out of the closets left, right and center
    May 29, 2012. 12:39 PM | 1 Like Like |Link to Comment
  • S&P cuts its ratings on five Spanish banks, and affirms the ratings on another nine. Santander (STD) and BBVA aren't touched, but remain on "CreditWatch with negative implications."   [View news story]
    Those two will be downgraded after the market closes.
    May 25, 2012. 01:18 PM | Likes Like |Link to Comment
  • If Greece exits the eurozone, writes The Tell, the EU should consider replacing it with Turkey. The country's speedy growth and youthful demographics would help a union sorely in need of both. One wonders if the reason Turkey's economy is perky (even overheating) is because it's not part of the eurozone. The EU may want the country, but has anybody checked with Ankara?   [View news story]
    We were unable to get a hold of Turkey for comment, though the lights were on.
    May 23, 2012. 08:48 AM | Likes Like |Link to Comment
  • Alongside a wave of regulatory investigations hitting market sentiment this afternoon, former Greek PM Papademos tells Dow Jones preparations for Greece exiting the euro are being considered; the risk of leaving is real. Estimates of a cost of €500B-€1T underscore the magnitude of the consequences, he says.   [View news story]
    That should accelerate the run on their banks.
    May 22, 2012. 03:57 PM | 2 Likes Like |Link to Comment
  • Moody's downgrades 26 Italian banks by one to four notches noting an economy back in recession, mounting asset quality challenges, and restricted access to funding markets. The ratings outlook for all of the affected banks remains negative. The euro slides another few pips to $1.2825.   [View news story]
    I smell a bank run on Italian, Spanish and Portugese banks coming.
    May 14, 2012. 05:02 PM | Likes Like |Link to Comment