Friday, July 27, 2012

Late to the party...

S and P has done it- they downgraded Canadian Banks based on consumer indebtedness and exposure to the housing bubble (my words)

This is exactly what us chicken little bears have been saying for several years. THIS WILL NOT END WELL. Over-priced housing puts the whole system in peril. Banks,  Provincial, Local and National Governments.

The myth of the rock solid Canadian financial sector and our economic miracle has been exposed to be: the luck of being resource rich and pumping housing by drawing in future demand, dropping rates to zero, transferring the risk to the tax-payer and lax lending. The result.. well we are about to experience that and it gives me no pleasure to say that many of us saw this coming.

S&P: Outlook Negative on BNS, LB, NA, RY & TD

July 27th, 2012
Standard & Poor’s announced:
it has revised its outlooks on seven Canadian financial institution ratings to negative from stable. The financial institutions are:
  • The Bank of Nova Scotia
  • Central 1 Credit Union
  • Home Capital Group Inc.
  • Laurentian Bank of Canada
  • National Bank of Canada
  • Royal Bank of Canada
  • Toronto-Dominion Bank
At the same time, Standard & Poor’s affirmed its ratings on all seven banks.

The outlook revisions are linked to our evolving views of economic risk and industry risk for banks operating in Canada. A prolonged run-up in housing prices and consumer indebtedness in Canada is in our view contributing to growing imbalances and Canada’s vulnerability to the generally weak global economy, applying negative pressure on economic risk for banks. Growing pressure on banks’ risk appetites and profitability arising from competition for loan and deposit market share could also lead to a deterioration in our view of industry risk.

The negative outlook recognizes the potential for deterioration of Canadian banks’ financial performance and capitalization generally, associated with consumer debt burdens proving excessive in an unfavorable economic scenario, or due to competitive pressures amplified by the shift to a consumer deleveraging phase.
Over the past decade, Canadian consumer credit market debt (including residential mortgage loans and consumer credit) has risen to more than 150% from 110% of disposable income, and relative to GDP, consumer debt has increased to more than 90% from about 70%. Over the same period, Canadian house prices have approximately doubled, with compounded real growth in housing prices estimated to be about 5% per year.

Bank risk profiles have benefited from Canadian banks’ underwriting practices, stable performance metrics for banks’ credit portfolios, and the sharing of mortgage risk between the banks, the borrowers (extensively based on full recourse to the consumer), and the providers of mortgage insurance, notably the Canada Mortgage and Housing Corporation (AAA/Stable/A-1+). In our view, Canadian banks’ risk tolerances and risk management capabilities are generally strong and attuned to risks inherent in the Canadian consumer and housing sectors. Even so, we believe there is currently growing potential for deterioration of Canadian bank credit profiles associated with scenarios incorporating consumer sector stress.

Systemic factors are incorporated in Standard & Poor’s rating methodology primarily through its Banking Industry Country Risk Assessment, or BICRA. The BICRA framework takes into account economic and institutional risk factors present in the environment in which banks operate. Canada’s BICRA is currently set at ‘1′ (lowest risk) on a 1 to 10 scale. The BICRA component of the analysis is intended to highlight emergent systemic risks that may not be fully apparent when viewing the sector at the level of individual banks

Family Night-Despicable Me

 Almost every Thursday night we try to sit down as a family and watch a movie and eat lots of junk food. 
If possible, I try to have a theme where the food is concerned.
Since we were watching Despicable Me, I decided to try to make all of the food resemble minions.

When the movie first came out, S.R. referred to the minions as Tater Tots, so that was an absolute must for the menu.

 I found these cute little corn dogs at Publix, and thought they looked like little minions too.
 The minion Twinkies were the hit of the night. Can you tell which one was my first attempt;o)
I have seen these little guys all over the internet, but never took the time to find out how they were made. I did check for the list of ingredients, though. Through trial and mostly error, here is what I found out...
 *mini marshmallows, cut into thirds, are the easiest for the goggles, not the suggested SweeTarts.
*I used black gel icing, which I highly suggest against. It's way too runny.
 *It would have probably been easier if the Twinkies had been in the freezer a bit before icing them. That way the cake part wouldn't crumble as much. 
*On a positive note, the Betty Crocker pre-made blue icing was great to work with, and it tasted great! 
 I took very little time in putting these together, so they don't look all that fantastic. Thankfully the crowd was easy to please:o)
We had a fantastic night, and I am looking forward to many more family nights:o)

Sunday, July 22, 2012

Folding Business Card Designs - Pros and Cons

Folding business cards are one of the current top trends in business card design.

They are designed to fold to the size of a standard business card, so easily fitting in a regular wallet or card-holder, but have twice as much space to fill. You can choose between the long fold, which will look like a mini greetings card, or the short fold, which allows it to stand vertically and fold out into a long bookmark shape. There is also the offset fold where the front is shorter than the back revealing the lower panel of information both open and closed. Well designed, all these formats can be appealing, functional and cutting edge, but there are also pitfalls to avoid.

You get a whole lot of extra space to include more information on products or services. You can add pictures, maps and all sorts of details on the inside of the fold, even making your cards into dual function mini-brochures.

The fold makes the cards self-supporting, so they can stand up and stand out on a table display making them far more noticeable and eye-catching than ordinary flat cards.

This format allows for plenty of creative design ideas and making your business cards into useful giveaways that people might want to keep longer - think about printing a reference guide relevant to your business in the middle: perhaps a weights and measures conversion guide; keyboard shortcuts list; a calendar; a planting guide; a colour chart, anything that your contacts might like to prop up on a desk or kitchen counter as a long-term reference.

You might prefer this format just because it allows for a whole lot of blank space inside to scribble notes. Some people print on the outside and leave the whole inside blank - especially in a business where the personal element is important. You can then scribble a twitter handle, a blog address a personal cellphone number inside before handing it over - whatever information is most relevant to that particular contact thus making your conversation more memorable.

Folding business cards can get too cluttered, as you try to cram in as much information as possible into what is still a relatively small space. Don't forget the prime design mantra of the business card - less is more.

These cards will cost more than ordinary business cards - they are effectively twice the size with twice as much printing and design involved, as well as the scoring for the fold. Weigh up whether you are saving money on other flyers and informational material by having the extra space inside - it could still be cost-effective if it saves you printing and giving out several other pieces of printed paper.

At double the size they are double the bulk, so you will have to carry more weight around in your pocket to have the same number of cards on hand: a small consideration, but worth remembering if you like to travel light.

In a similar vein, if you are going for the green approach they might not be your best bet - they use double the amount of card and ink, so even if you do choose recycled card stock and natural vegetable based inks, you are doubling the amount of resources used in your business cards.

If you decide to go for a fold, then make sure your designers make the most of it, so that it really does stand out from the crowd.

Thursday, July 19, 2012

Must listen to...

Garth Turner on the Howe Street channel.

How we got here and how it is changing big-time!

For those who think 'we are different'. Garth explains the situation where banks gave cash-back they gave someone with no skin in the game, the 5% deposit and the CMHC (tax-payer) insured the other 95%!

So no incentive for the lending institution to be sensible since they are throwing the risk right at the CMHC. The mortgage broker gets a commission IF the deal is done, not for being cautious. The bank manager builds up his book. The CMHC gets to pump up it's chest and the buyer, seller and realtor are all happy.

So who loses? We all do, when this ponzi scheme come apart.

Monday, July 16, 2012

Who's fault is it that the` volume and price of homes fell in Canada last month?

Not Flaherty's- he hadn't brought in his mortgage changes yet.

Vancouver- according to Sherry Cooper it's our fault. We brought the class average down. Sorry, I know some of you find her voice grating :

Bad little old Vancouver

But don't worry too much. This is not the US for goodness sake. They had much more lax lending than us. We only had a few Billion HELOC here and a few Hundred Billion high-risk mortgages insured there.

Oh and of course we won't worry that our per capita debt is now at their pre-bust levels.

And we know why we are having a bad time in lotusland. Not enough Chinese money washing ashore this year:

Hat tip Best place on Meth  The video shows the invasion of money slowed to a trickle,  however we do know that the Chinese Government is loosening the spigots a bit, so we may have a few more Government officials on 50K salaries buying $2M westside homes :)

Friday, July 13, 2012

Fun Ideas for the Kids

On Wednesday, we had another rainy day, so I thought I would do some creative things for the kids. I surprised them with this fun breakfast. I used a cookie cutter to cut the centers out of their toast & cooked a fried egg in the center...they were really unsure about the fried egg, and when E gagged after eating the yolk, I learned that next time I will at least scramble the egg before cooking:o) Regardless, it started the day off right(minus the gagging part).

 I made S.R. this little flash card set the other day as well. I had some laminating sheets, something I always try to have on hand, card stock, & flash cards printed from Homeschool Creations.

 I realized that she had forgotten what her letters looked like...bad mommy:o)
 I used the laminating sheets so that she could use a dry erase marker to work on it over and over again.
 I made them double sided to save space.
 Love that smile:o)
 And I love that I got her seal of approval:o)
We also made homemade pretzels....they were DELICIOUS.
 I had to do the prep-work an hour before, and then my little helpers shaped the pretzels. 

 Definite approval from my little helpers:o)

Tuesday, July 10, 2012

Lazy Days of Summer

Good Tuesday to you all. We are having a great rainy summer afternoon. This is the first time I have felt semi-normal since last Thursday. I had to have two hernias repaired in my belly button, so I am slowly recovering. Today was the first time that the kids and I were home alone, so I needed to find things that wouldn't require any heavy lifting, and that would keep us busy.
Painting is always a good go-to for kids. And I haven't picked up a brush in quite some time.
This morning we worked our magic on some canvas.

 Here is a closer view of what I came up with...a little lamb..or sheep..whichever:o) He is perched upon the mantle for now. 
 After painting we made homemade ice cream in the living room with an ice cream ball. I was quite impressed with this little contraption. It actually works:o)
 You can find one of these Ice Cream Balls Here. We got lucky and found ours at a yard sale for $5...still in the box:o)

After naps, we went outside just before the rain came, and dug into our yummy afternoon snack.

 Smiles all around:o)

Just so you all know, I am jumping back on the crafting wagon again now that things have been forced to a snails pace...just the way I like it. We only have 6 weeks before school starts and I want to take advantage of the time I have with my kids and their creativity. So stay tuned for crafty kid fun:o)

Saturday, July 7, 2012

Very few buys but big sticker's

Volume has really ground to a halt, despite talk on the media of buyers diving in to beat the changes in the mortgage rules which come into effect this Sunday.

Maybe we will see a huge spike in the sales numbers on Monday as last minute buys hit the MLS or maybe buyers have had their epiphany.

Maybe they realised that if they cannot afford to buy a house at the lowest ever interest rates, rigged with Tax-payer insurance for their default, with just a 5 year change in amortization period from 30 to 25 - then they shouldn't buy it!

In any case some lenders started implementing the changes sooner than July 8th .

Meanwhile the really big money, not concerned by questions of CMHC insurance is still buying.

eg West Van has 7 new SFH listings yesterday, 3 price changes and just one sale, a remarkable $3.3 Million under the original asking price! However the sale price was still $8.08 Million.

That sort of huge number will distort the median and average prices up when over-all volume is so low. There was another high ticket sale on the Westside with anemic sales too.

So we will get some skewing in the prices as the lower end (which is now about one MILLION dollars!) pulls back, while big local, Albertan and off-shore money can still buy the upper end. None of this will change the trajectory, but low volumes have this effect.

Wednesday, July 4, 2012

FVREB and REBGV Stats Package


Sales down 9% YOY. Listings up 5% YOY. MOI over 7. YOY HPI - flat apartments and flat attachment, but SFH up 3.6%. Gotta love that HPI secret sauce, it keeps giving and giving.

Here are the numbers


Wording changed to 'buyer's market!'
27.6% less sales that last year. 32.2% below June average.
3% less listings than last June.
List to sales of 13% worse than the FV! (FV is nearer fair value than Vancouver FWIW)
MOI nearer 8 than 7.
Benchmark SFH increased 3.3% YOY. Flat Apartments. Flat Attached. There's that HPI/ Benchmark again. Terrible stats. Average at 2010 levels and yet the HPI for SFH will not go down. The secret sauce that is sooo good, like KFC. Down ask what's in it, just enjoy it.

Here is the stats package. Thanks to VMD who up-loaded it to google.

Two Realtors were on the CBC radio afternoon show discussing the terrible stats for June. One said that it was the media that were whipping negative things up- what?! Our 'Newsapers' are little more than advertising rags pumping the RE industry.

The other one said that anyone who buys now and intends to stay put for five years will be ahead. Well lets look at the HPI for 5 years. We are still very near the top of the bubble, even so the 5 year HPI is negative for the following areas:


Whistler, Sunshine Coast and Bowen Island


Burnaby East (-7%), Maple Ridge (-10.8%), Pitt Meadows ( -11.8%), Port Coquitlam and Port Moody, Squamish and West Vancouver.


Maple Ridge, Pitt Meadows.

If we continue with negative growth over 5 years and we know that  renting is cheaper than buying, often a lot cheaper, then being ahead over five years is not a sure thing by any means.

Monday, July 2, 2012

Safe and Efficient Business Records Management Ideal for Every Modern Organization

Records management is regarded as both a management and discipline function that includes the secure document storage of the business records that any contemporary organization owns and keeps.

There are storage companies that also offer online document storage of essential business records at competitive rates.

Financial records are documented transactions that are needed and used by the organization in the regular course of business. They are also legally considered as evidence for every transaction entered into. Transactional records include, but not limited to, orderings, receipts, loans, contracts, notifications and schedules.

A record is defined as the business information that is created and received by a person or organization. It is also maintained as evidence pursuant to the legal obligations of the business.

A record is therefore something that can be taken into a court of law. If called upon, the record must be authentic, reliable and usable, complete and unaltered, so it can fully and accurately represent the facts that it attests to.

Records and Information Management

Records have a distinct life cycle that begins with creation or receipt, processing and distribution. The second phase includes maintenance and evaluation, and concludes with ultimate disposition.

The last phase of the cycle involves either destruction or transmittal of records for permanent housing. The company may either build its own vault, archive or another dedicated facility for the storage of the records or engage the services of an outsourcing storage company.

Recordkeeping systems include people who are directly involved in the creation and use of the organizational records, the policies related to such records and procedures that ensure optimum access to and use of said documents. They also include tools and technologies that are employed in the creation and storage of records in various formats.

An organization with a consistent recordkeeping program can conform itself to statutory requirements specifically for information retention. It has appropriate evidence of its transactions in case of audit and minimizes jeopardy at the discovery phase in case of litigation. There would be continuity of operation in the event of a disaster and costs can be controlled because of the timely disposition of financial information.

A recordkeeping system is required to have reliability, integrity, permanence, comprehensiveness and compliance. Reliability is about the consistent capture and access to organizational documents. Integrity involves no unauthorized alteration, removal and destruction of records. Permanence means that no record can be altered, tampered with or improperly deleted.

With comprehensiveness, it involves the management of all created and stored records that comprises the normal continuous activity that links all the units of the organization. Compliance is the creation and maintenance of the documents consistent with all of the applicable policies and procedures implemented in the organization.

Online Records Storage

Today, any type of financial record can be securely stored online and can be accessed via any web connected Mac or PC anywhere in the world.

As businesses now tend to go global, with employees assigned to various locations locally and internationally, online records storage becomes highly relevant and useful. Employees while travelling or telecommuting will be able to store essential documents and files online and instantly access them when needed.

There are online records storage companies that offer simplified online programs. Employees can easily drag and drop several files and folders and organize them in online libraries and folders. They can then share them with other team members.

There are also online storage systems with collaboration features such as version control, notifications, file locking, commenting and audit trails. Amazingly, there are no restrictions on the type of file to be used like MS Office, audio, images and pdfs.

Online storage programs allow only authorized users to gain access to the stored documents. Also, they save time and money, keeping IT costs low with easy to use online records storage solution that can be used with no software or hardware required.

Records management companies offer secure and efficient storage of documents in their vaults or archiving facilities. They have trained professionals who can handle the storage system, thereby keeping information in its strictest confidentiality. They are also experts in the legal aspects of secure document storage.

Sunday, July 1, 2012

We did it

Look at Larry's graph, it shows we did break the previous lows for SFH average prices.

I think this will have a significant effect on RE psychology in this bubble city. 

Expect a rear-guard defence from the RE interests claiming that this is a buying opportunity and when that fails that RE must be supported or we will be in economic trouble (which we could well be). 

Finally, Bears will be blamed as lacking civic responsibility for wishing the demise of the RE bubble. As if wishes have anything to do with it. To be honest these bogs have very little effect on the market, despite all the words and time we expend on them over the years. They have almost no effect compared with the ill-thought out actions of doubling the CMHC cap or dropping rates to near zero.

 Have a great Canada day!