• TSX -138.14 amid fluctuating commodity prices, as traders eyed the U.S. Federal Reserve's two-day meeting in which the Fed is widely expected to leave interest rates unchanged at record lows near zero
• DOW -148.89
• Dollar -.45c to 97.17cUS
• Oil -$.61 to $77.21US per barrel.
Gold +$..20 to $1,239.90 USD per
In economic news, Statistics Canada said the consumer prices index (CPI) rose 1.4% year-over-year in May following a 1.8% increase in April. Economists were expecting CPI to rise to 1.3% year-over-year in May
U.K. Unveils Canada-style Austerity Budget -Paul Vieira, Financial Post •
Britain, Germany and France stood united yesterday in announcing plans to impose a bank tax -- yet another sign of a growing rift among Group of 20 countries ahead of the leaders' summit in Toronto on how to restructure the global economy after they had banded together to pull it out of the abyss.
The disagreements, ranging from banking reform to whether additional stimulus or deeper budget cuts are now required, throw a major wrench into Canada's call for "solidarity" among G20 members to nurture the global recovery while at the same time putting in place the pieces to assure strong but sustainable growth. These divisions are likely to be reflected in the final communique from the Toronto meeting, which may indicate countries are on their own in terms of implementing measures best suited for their economies.
"There's now major differences amongst the players," said Glen Hodgson, senior vice-president and chief economist at the Conference Board of Canada, adding this is a reflection of the uneven recovery underway in the global economy. "The G20 is searching for common interests, and a year on from the peak of the crisis, it doesn't look like it is there."
The debate over the global bank tax was one of those hot-button G20 issues that pitted the big European economies against Canada and other countries that did not bail out their financial institutions. While there is no consensus in the G20 to proceed, that didn't stop Britain, Germany and France from saying banks in their countries would be taxed.
Britain was first off the block, as that country's Conservative-led coalition government unveiled a £2-billion annual levy on banks as part of its budget. At the same time, French President Nicolas Sarkozy and German Chancellor Angela Merkel released a joint letter they sent to Prime Minister Stephen Harper--who is hosting the leaders this weekend -- demanding the G20 agree on a transaction tax. That is highly unlikely, given Canada's stern opposition. Instead, the G20 communique may suggest it will be up to individual countries to determine what measures are required to ensure taxpayers aren't stuck with footing the bank bailout bill.
Canada had proposed an alternative, called embedded capital, which would see lenders insure themselves through the issue of debt securities that could be converted into shares in a crisis. But a spokesman for Finance Minister Jim Flaherty said the Canadian alternative has, so far, won over few converts as "concerns" have been raised.
"I think embedded capital is dead," said Paul Masson, a professor at Rotman School of Management and former senior Canadian official at the International Monetary Fund. "The uncertainty about how the conversion into equity would be triggered makes it a fifth wheel."
With no agreement on a tax or embedded capital, this means more focus will be on changes to banking regulatory standards--governing capital levels and leverage limits -- to curb the type of excessive risk-taking that sparked the crisis. Canada is keen to get further agreement at this G20 summit to ensure a deal is ready later this year. But Mr. Masson said the timetable is too optimistic as the issues are too complicated. And, he said, unanimity is not assured, nor is implementation, as some countries might balk given their weak economies.
The Bank of Canada warned as much this week in its semiannual financial system review, when it said there's a risk the required changes to banking rules could be "diluted."
As if this weren't contentious enough, there's a division emerging on what the global economy requires now. Canada and others want G20 members to outline credible, yet aggressive, plans to reduce debt-to-GDP levels as part of the effort to unwind global imbalances. However, the Obama administration in Washington -- one of the biggest debtor nations -- is now talking about the need to press on with additional stimulus in an effort to avoid a potential double-dip recession.
Canada will seek an agreement among G20 members in Toronto to halve their deficits by 2013, and get debt-to-GDP ratios on a more sustainable level by 2016.
---------
FINANCE MINISTER VOWS TO SLASH DEFICIT BY £135B. HERE'S HOW HE MEANS TO DO IT:
SPENDING
- Three-quarters of reduction to come from spending cuts.
- Cuts of 25% to all departments outside health, foreign aid.
- Two-year public-sector wage freeze.
- Queen
Elizabeth's public allowance frozen at £7.9-million.
- £11-billion cut from welfare bill. Single mothers enticed to return to work when children reach school age.
TAXES
- Banks to face annual extra levy of £2-billion.
- VAT (like GST) will jump to 20% in January from 17.5%
- Capital gains on sale of assets rises to 28% from 18%.
- Payroll tax to rise one percentage point.
- Threshold at which people
begin paying taxes raised £1,000 to £7,475, exempting 880,000.
- Corporate tax rate falls to 24% by 2014 from 28%.
Read more: http://www.financialpost.com/RIFT+WIDENS/3188568/story.html#ixzz0rg1AoHW4
Forget market timing, it's all about life timing
Garry Marr, Financial Post •
'You know, you're making the biggest mistake of your life. The housing market is going to fall."
I got this great piece of advice from another journalist at the Financial Post, who has since left the newspaper, after buying my first home. Not exactly the type of thing you want to hear after taking on huge debt and making the biggest financial decision of your life.
Lucky for me, I didn't heed that advice about Toronto's red-hot real estate market -- in 1998. I'm not going to say I made a shrewd business decision 12 years ago, or even six years later when I bought a larger house.
For me, it wasn't a case of not following what turned out to be bad advice from a fellow business journalist. Nor was it about trying to time the market.
I was simply following the same pattern as most Canadians: I got married and decided to stop renting and buy something. Later came the need for a bigger home when the second kid was on the way.
Which brings us to today. The supply of housing is rising fast as people try to list their homes for sale before the market "crashes." This is happening at the same time that demand is starting to wane. Economists and even the real estate industry are all predicting a correction, the only argument being how severe it will be.
So, the question for anyone buying is, should you wait?
Don Lawby, chief executive of Century 21 Canada, thinks the strategy of waiting for a crash is not going to work during this economic cycle. "For a market to crash, you have to have people who are desperate to sell," says Mr. Lawby. "People will [only sell] if they can't afford their mortgage or they don't have a job."
He doesn't see a decline in prices, "unless you are predicting that mortgages will renew at a hefty premium, which is not the case, or a whole bunch of people are going to lose their jobs."
Mr. Lawby believes neither will happen.
And, he adds, you are really into a risky game if you are timing the market. "A house is a home. If all you are doing is looking at it as an investment --that's what happened the last 15 years--it's not just that. It's a place to live and a place to raise a family," says Mr. Lawby.
Even Benjamin Tal, a senior economist with CIBC World Markets, who last month said in a report that Canadian housing is 14% overvalued, has doubts about playing the market. But he suspects that's exactly what some Canadians will do.
"Is there a sense that prices will go down and people will wait? I think it might be an issue," says Mr. Tal. "It won't be the main reason [people don't buy], but it will happen at the margins. The fact that people sell at the peak and wait to buy is a normally functioning market."
But even if you do make the right call on housing prices, it could end up backfiring on you in other ways. For example, if interest rates rise fast enough, any gains you make on price could be erased by interest charges, says Mr. Tal.
Edmonton certified financial planner Al Nagy says you need to think of your house the way you think about any long-term investment. "Whether it's an investment for use in your retirement or a house to live in, it's a long-term thing. The timing becomes less critical than it would be if it is a speculative [investment]."
And he says making a call on the housing market is as tricky as any other investment call. "It's very rare you catch the bottom. You can't let the market dictate when it's time to buy. The time to buy is when you can afford it," says Mr. Nagy.
I'm not sure that philosophy would fly with my former colleague, but the problem with timing the market is, what if your timing is off?
Read more: http://www.financialpost.com/personal-finance/mortgage-centre/Forget+market+timing+about+life+timing/3129672/story.html#ixzz0rJ3cAHut
Wednesday, June 23, 2010
Tuesday, June 22, 2010
Financial Update For June 22, 2010
• TSX +8.49 beat a profit taking retreat due to China’s signal that it will let its yuan currency appreciate is a boost to airlines, insurers and consumer firms operating in China
• DOW -8.23
• Dollar -.30c to 97.62cUS
• Oil -$.64 to $77.82US per barrel.
Gold -$.17.50 to $1,239.70 USD per eased from record highs as safe-haven demand eased.
Garry Marr, Financial Post • Friday, May 7, 2010
Here’s one way to tackle the red-hot Canadian housing market: Get someone to buy you a home.
That someone would be your parents. According to a new survey from TD Canada Trust, 10% of Canadians are considering buying a condominium for their adult children. A year ago, only 5% of parents thought about buying the kids a condo.
“It could be something that the parents are looking at as a long-term source of income, letting their children live it in for now,” says Chris Wisniewski, associate vice-president of real estate and secured lending with TD.
It could also be that parents know condominium prices, like detached homes, have climbed to unprecedented levels, making it difficult for adult children to come up with a minimum 5% down payment, let alone the 20% needed to avoid costly mortgage default insurance.
Toronto condo research firm Urbanation Inc. says the average existing condominium in the city sold for $331,000 in the first quarter of 2010. Based on an average $369-per-square-foot price, that’s a 900-square-foot unit.
For a new one, prices averaged $443 per square foot in the first quarter, so about $400,000 for that same-sized condo.
Ms. Wisniewski says low interest rates are convincing parents to step up and buy their children homes. The condominium represents an attractive alternative to those parents because the costs are stable.
“They know what the maintenance costs will be,” she says. “[Parents] are thinking, ‘I’m not worried my children are too young to accept the responsibilities of home ownership if I set them up in an apartment. They don’t have to recognize the responsibilities of maintenance in an apartment.’ ”
Parents might also see a condominium as a way to get their kids to start a family. The survey found 36% of Canadians are willing to raise families in a condo.
“One of the reasons for that is affordability,” says Ms. Wisniewski. “Where are the new condominiums being built? They are being integrated in really nice existing neighbourhoods with all the infrastructure and all the schools and amenities.”
Brian Johnston, president of developer Monarch Corp.’s Canadian division, says he doubts families will ever be integrated into the condominium stock, but does agrees with the premise that parents are helping to buy housing for their children. He says parents often want to keep children close to them so they’ll chip in for a condominium in a nearby neighbourhood.
“How do we know they’re helping out? They tell us when they are writing the cheques for the deposit,” Mr. Johnston says.
Mr. Johnston said when it comes to recent immigrants to Canada, there is “lots of help” from family members to get that first home. “Condominiums are not inexpensive and they’re going to need that help, particularly if the younger ones have not had time to build up their finances.”
The builder has his own children and, based on today’s prices, he figures he’s going to have to lend a helping hand. “I don’t expect them to be able to buy a condo … before they are 30. That is just part of the deal [for parents],” says Mr. Johnston.
It’s not like Baby Boomers don’t have the cash. There have been endless studies that suggest the Boomers are set to inherit billions of dollars in the coming years from their parents.
Craig Alexander, deputy chief economist with TD Bank Financial Group, says there is no hard data to suggest how much parents are helping children, but they certainly have the financial capacity to lend a hand.
Canadians have $1.5-trillion invested in stocks and mutual funds with $500-billion of that figure in capital gains.
“The generation before the Baby Boomers were big savers and, as a consequence, there is a very large income transfer going to take place over time,” says Mr. Alexander, adding it makes sense that some of that money is going to end up in housing and real estate.
For first-time buyers facing rising rates and increasing prices, the helping hand couldn’t come at a better time — just ahead of tighter mortgage financing rules. Most of them probably hope their folks go from “considering” buying a condo to actually doing it.
Read more: http://www.financialpost.com/personal-finance/mortgage-centre/Invest+real+estate+your+kids/2999480/story.html#ixzz0rJ4pBdc4
Eric Lam, Financial Post • Monday, Jun. 21, 2010
What the @#$!?
In this occasional feature, the Post tells you everything you need to know about a complex issue. Today, Eric Lam explains what a yuan is, and why the Chinese government has decided to let it appreciate.
So what’s a yuan anyway? Is it the same as a renminbi?
The renminbi, aptly translated as “the people’s currency,” is the official name of the currency of the People’s Republic of China except for Hong Kong and Macau. Meanwhile, the yuan is the primary unit of said currency, along with corresponding terms for 10 cents and a cent. However, in common usage renminbi and yuan are basically interchangeable, kind of like how we also call the Canadian dollar the loonie. At the moment, a loonie gets you a little less than 7 yuan.
What exactly did the Chinese government announce over the weekend?
On Saturday night the People’s Bank of China said it had decided to “proceed further with reform of the RMB exchange rate regime and to enhance the RMB exchange rate flexibility.” It’s pretty vague, as grand pronouncements from central banks go, but the gist of the message is the PBoC has decided to let the renminbi’s value fluctuate compared with the U.S. dollar.
Which means?
Essentially, the renminbi has been pegged to the greenback at a fixed rate since September 2008, a move to protect China’s economy from the financial crisis. However, economists estimate this peg has undervalued the currency as much as 40% as China’s economy roared out of the gates following the crisis. While the renminbi’s value could go either way, it is likely to move in a positive direction in the near-term considering the strength of China’s economy and the relative weakness everywhere else.
Why should anyone care what China’s doing with its money?
A lot of stuff these days is made in China. The Chinese have been accused of manipulating their currency to artificially drum up business for Chinese corporations, and cut other countries out of the global export market. The United States was worried enough about this that it almost ignited a trade war with China earlier this year, after President Barack Obama threatened to impose punishing tariffs on Chinese exports.
Does this mean China caved, then?
Neither side is going to give an inch when the stakes are so high. Most economists do not believe China is simply caving in to the demands of the IMF and the United States. Rather, the move was made to slow runaway growth of China’s economy by making its exports more expensive. At the same time it is expected to boost the development of the consumer side of the economy as imports become cheaper. Also, the timing is likely not a coincidence, with the intense scrutiny and criticism China has faced regarding its currency expected to rise to a fever pitch at the G20 meetings in Toronto this weekend.
Read more: http://www.financialpost.com/news/What+yuan/3182698/story.html#ixzz0ra3prxkU
• DOW -8.23
• Dollar -.30c to 97.62cUS
• Oil -$.64 to $77.82US per barrel.
Gold -$.17.50 to $1,239.70 USD per eased from record highs as safe-haven demand eased.
Garry Marr, Financial Post • Friday, May 7, 2010
Here’s one way to tackle the red-hot Canadian housing market: Get someone to buy you a home.
That someone would be your parents. According to a new survey from TD Canada Trust, 10% of Canadians are considering buying a condominium for their adult children. A year ago, only 5% of parents thought about buying the kids a condo.
“It could be something that the parents are looking at as a long-term source of income, letting their children live it in for now,” says Chris Wisniewski, associate vice-president of real estate and secured lending with TD.
It could also be that parents know condominium prices, like detached homes, have climbed to unprecedented levels, making it difficult for adult children to come up with a minimum 5% down payment, let alone the 20% needed to avoid costly mortgage default insurance.
Toronto condo research firm Urbanation Inc. says the average existing condominium in the city sold for $331,000 in the first quarter of 2010. Based on an average $369-per-square-foot price, that’s a 900-square-foot unit.
For a new one, prices averaged $443 per square foot in the first quarter, so about $400,000 for that same-sized condo.
Ms. Wisniewski says low interest rates are convincing parents to step up and buy their children homes. The condominium represents an attractive alternative to those parents because the costs are stable.
“They know what the maintenance costs will be,” she says. “[Parents] are thinking, ‘I’m not worried my children are too young to accept the responsibilities of home ownership if I set them up in an apartment. They don’t have to recognize the responsibilities of maintenance in an apartment.’ ”
Parents might also see a condominium as a way to get their kids to start a family. The survey found 36% of Canadians are willing to raise families in a condo.
“One of the reasons for that is affordability,” says Ms. Wisniewski. “Where are the new condominiums being built? They are being integrated in really nice existing neighbourhoods with all the infrastructure and all the schools and amenities.”
Brian Johnston, president of developer Monarch Corp.’s Canadian division, says he doubts families will ever be integrated into the condominium stock, but does agrees with the premise that parents are helping to buy housing for their children. He says parents often want to keep children close to them so they’ll chip in for a condominium in a nearby neighbourhood.
“How do we know they’re helping out? They tell us when they are writing the cheques for the deposit,” Mr. Johnston says.
Mr. Johnston said when it comes to recent immigrants to Canada, there is “lots of help” from family members to get that first home. “Condominiums are not inexpensive and they’re going to need that help, particularly if the younger ones have not had time to build up their finances.”
The builder has his own children and, based on today’s prices, he figures he’s going to have to lend a helping hand. “I don’t expect them to be able to buy a condo … before they are 30. That is just part of the deal [for parents],” says Mr. Johnston.
It’s not like Baby Boomers don’t have the cash. There have been endless studies that suggest the Boomers are set to inherit billions of dollars in the coming years from their parents.
Craig Alexander, deputy chief economist with TD Bank Financial Group, says there is no hard data to suggest how much parents are helping children, but they certainly have the financial capacity to lend a hand.
Canadians have $1.5-trillion invested in stocks and mutual funds with $500-billion of that figure in capital gains.
“The generation before the Baby Boomers were big savers and, as a consequence, there is a very large income transfer going to take place over time,” says Mr. Alexander, adding it makes sense that some of that money is going to end up in housing and real estate.
For first-time buyers facing rising rates and increasing prices, the helping hand couldn’t come at a better time — just ahead of tighter mortgage financing rules. Most of them probably hope their folks go from “considering” buying a condo to actually doing it.
Read more: http://www.financialpost.com/personal-finance/mortgage-centre/Invest+real+estate+your+kids/2999480/story.html#ixzz0rJ4pBdc4
Eric Lam, Financial Post • Monday, Jun. 21, 2010
What the @#$!?
In this occasional feature, the Post tells you everything you need to know about a complex issue. Today, Eric Lam explains what a yuan is, and why the Chinese government has decided to let it appreciate.
So what’s a yuan anyway? Is it the same as a renminbi?
The renminbi, aptly translated as “the people’s currency,” is the official name of the currency of the People’s Republic of China except for Hong Kong and Macau. Meanwhile, the yuan is the primary unit of said currency, along with corresponding terms for 10 cents and a cent. However, in common usage renminbi and yuan are basically interchangeable, kind of like how we also call the Canadian dollar the loonie. At the moment, a loonie gets you a little less than 7 yuan.
What exactly did the Chinese government announce over the weekend?
On Saturday night the People’s Bank of China said it had decided to “proceed further with reform of the RMB exchange rate regime and to enhance the RMB exchange rate flexibility.” It’s pretty vague, as grand pronouncements from central banks go, but the gist of the message is the PBoC has decided to let the renminbi’s value fluctuate compared with the U.S. dollar.
Which means?
Essentially, the renminbi has been pegged to the greenback at a fixed rate since September 2008, a move to protect China’s economy from the financial crisis. However, economists estimate this peg has undervalued the currency as much as 40% as China’s economy roared out of the gates following the crisis. While the renminbi’s value could go either way, it is likely to move in a positive direction in the near-term considering the strength of China’s economy and the relative weakness everywhere else.
Why should anyone care what China’s doing with its money?
A lot of stuff these days is made in China. The Chinese have been accused of manipulating their currency to artificially drum up business for Chinese corporations, and cut other countries out of the global export market. The United States was worried enough about this that it almost ignited a trade war with China earlier this year, after President Barack Obama threatened to impose punishing tariffs on Chinese exports.
Does this mean China caved, then?
Neither side is going to give an inch when the stakes are so high. Most economists do not believe China is simply caving in to the demands of the IMF and the United States. Rather, the move was made to slow runaway growth of China’s economy by making its exports more expensive. At the same time it is expected to boost the development of the consumer side of the economy as imports become cheaper. Also, the timing is likely not a coincidence, with the intense scrutiny and criticism China has faced regarding its currency expected to rise to a fever pitch at the G20 meetings in Toronto this weekend.
Read more: http://www.financialpost.com/news/What+yuan/3182698/story.html#ixzz0ra3prxkU
Monday, June 21, 2010
Financial Update For June 21, 2010
• TSX -18.38 record bullion prices kept a lid on otherwise broad-based losses across nearly all sectors.
• DOW +16.47
• Dollar +.55c to 97.92cUS
• Oil +$.39 to $76.79US per barrel.
Gold +$9.70 to $1,257.40 USD per ounce a new record high close for gold as investors bought the metal to protect wealth from Europe’s financial turbulence and on concern that the economic recovery isn’t as strong as expected. Gold, up 15% this year, is heading for its 8th straight weekly gain and its 10th consecutive annual gain, the longest winning streak since at least 1920
Seeing through home sellers' camouflage
by Stephanie Farrington, Bankrate.com
Mortgage rates have started to climb again. While that's probably a good sign for the economy, it may also be a wake-up call for people who have been hitting the snooze button on the time in which they hoped to buy a house.
If you're one of the many Canadians just entering the buyer's market, it's easy to get caught up in the critical aspects of home buying and forget some of the details. The clock is ticking, rates are rising and what matters in a house is location, location, location, right?
Yes and no. Location matters, but if you're not careful and observant when making your choice, you could get a great location and still end up with a money pit.
In some cases, people anxious to sell their home have been known to make a few cosmetic adjustments to hide the areas where their house might need a little extra care or even some serious repairs. Here's what to watch out for.
A fresh coat of paint in the basement
Dean Langner, a Canadian Residential Appraiser, or CRA, with Kors & Associates, in Victoria, has worked for 15 years as an appraiser and home inspector. During that time, he's seen a lot.
"One thing I find suspicious is a recently painted concrete floor and two or three feet of foundation in an unfinished basement," he says. "A lot of times, basements will leak, and they'll get that mineral stain around the concrete. Before they sell, some owners will cover it up with a coat of paint."
Langner says if you suspect a problem, go back for a second visit. "The only way to tell is to wait for a good heavy rain and visit again to check for moisture. If you're still uncertain, you can hire a plumber with a camera, and they can look down the pipes."
Checking pipes like this is not done in the course of a usual inspection, but Langner says it's worth making it a condition of the sale if you're really worried, because drainage problems can be very difficult to fix.
New sewage or drainage pipes
Around the foundation of every house is a permanent, porous piping system, called weeping tile, that acts as a drain and keeps water from entering your basement. "Over time, this pipe can fail. It can fill with debris and mud and stuff, and it is not easily fixed," says Langner.
In older houses, weeping tile isn't even made of pipes -- it's a series of half-round, clay tiles placed next to each other. So, if the house or the land shifts, you could be in for trouble.
The money you spend to have a plumber look at your drains could end up saving you thousands of dollars, to say nothing of the time and inconvenience of digging a trench around the perimeter of your house to replace the draining system.
A recently pumped septic tank
Jeffrey D. Leiser, author of "The Home Buying Inspection Guide" and "You Can Sell Your House: For Sale By Owner," has his own cautionary tales about plumbing. "The worst is when a home owner is hiding problems with a septic or sewer system. Having the septic tank pumped out prior to an inspection can give the appearance of a well working system," he says. "A failed septic system can cost well over $20,000 in replacement costs."
He says sewer systems can also be bladed -- which involves using a long tube with a rotating blade at one end to clean pipes and cut out blockages -- so that they appear to be working without backups. But, again, this is a short-term solution to an expensive, long-term problem.
Unusual smells
Your senses are your first and one of your best methods of avoiding deception. Mould smells like mould. It's easy to hide the visual signs of mould with paint, but it's a hard smell to mask. Don't be afraid to sniff around any area that makes you feel uneasy.
Suspicious piles and large plants
If something looks out of place, ask about it. A pile of bricks stacked against the side of the house could just be a pile of bricks, but it could also be a way of hiding a cracked foundation.
That newly planted yet mature tree in the back yard, the one in front of the retaining wall? Look behind it. Just as people will paint over stains, they sometimes landscape over cracked retaining walls or other problem areas.
Protect yourself
Follow your gut. If you think someone is lying to you, ask more questions and use your written offer as a means to get the truth. Contracts are there to protect you, and conditions of sale are a good way to ensure you're covered. If you're unsure about how to do this, ask your real estate agent or your lawyer, but do not go in unprotected. It's usually easier to avoid buying a problem than it is to fix it.
If, in the end, you find yourself left holding the bag despite your best efforts, where can you turn?
Danny Berehula, director of the Saskatchewan branch of the Better Business Bureau, or BBB, says the BBB will try to help, but the help they can offer is limited because the transaction does not typically take place between a business and an individual but rather between two individuals.
"We're another resource for them, but most people, when this happens, would probably want to call their lawyer," he says. "There are laws in place, and if it's a serious matter, then it will become a legal matter. They can use us as a mediation service, but once it becomes a legal issue, we stand out of it."
So, take your time and think through your purchase carefully. All of the experts agree on one point -- sometimes you have to accept a few problems to get your dream house, but it's best to understand how much the trouble your home might cost you before you sign on the bottom line. http://ca.finance.yahoo.com/personal-finance/article/bankratecanada/1597/seeing-through-home-sellers-camouflage
RBC to fund programs helping Canadians avoid credit problems
Garry Marr, National Post • Sunday, Jun. 20, 2010
You find yourself deep in debt and you can’t get out. Who is responsible? Is it the financial institution who handed you the rope you used to hang yourself? Or should you be looking in the mirror?
This past week, Credit Counselling Canada awarded Royal Bank of Canada with its creditor of the year award. “They won it for thinking outside the box,” says Patricia White, executive director of the Toronto-based group.
For years, not-for-profit credit counselling groups have received donations from banks to assist their debt management services. Credit counselling agencies help people organize their finances to avoid bankruptcy. But RBC is also giving money to financial education aimed at helping Canadians — especially younger ones — avoid debt problems.
Until they come up with a vaccine for taking on debt you can’t afford, a little preventative education is probably the next best thing.
“Hopefully, it will stop people from getting into trouble in the first place,” said Ms. White, noting other banks have also been supportive of counselling and education. “But RBC has stood up and said they will support this with some funding. We already go into high schools, but this will help us do more.”
With Father’s Day tomorrow, I can’t help think there is an important role for parents to play in terms of helping children avoid serious credit problems.
Ms. White agrees. “As a parent, I started educating my kids early. I said here’s 5¢ and tried to get them to understand the value of money.”
A survey out of the United States this week by the National Foundation for Credit Counseling found 41% of Americans say they learned their personal finance skills from their parents. Is there any reason to believe Canadian children are any different?
The funny part is, the same U.S. survey asked parents to rate their own financial literacy and 34% gave themselves a grade of C, D or an F. At least they are being honest.
The U.S. group points out that children learn by watching. If they see you saving, they’ll save. If they see you unorganized with your expenses, guess what? The group also suggests involving your children in family financial decisions.
Jeff Bennett, managing director of RBC Collections, says educating consumers earlier in their lives is something the bank is interested in promoting. “We are trying to separate the two important components the not-for-profit credit counselling firms are doing — the educational and financial literacy component from the debt management and budgeting component,” he says.
“We’d like to move things further up in the life cycle to keep people out of trouble, rather than helping them once they are in trouble.”
While some people blame the high interest rates the banks charge on things like credit cards for getting them into trouble, Mr. Bennett says financial institutions have no interest in seeing customers wrestle with debt problems.
“The best thing we can have is a customer who understands the financial requirements of his life and makes plans for the future. Someone who doesn’t have problems is a happy client and a client who will refer people to us,” he says.
Everybody has a role in financial education and Mr. Bennett says it’s never too early to begin teaching about money.
Read more: http://www.financialpost.com/news/fund+programs+helping+Canadians+avoid+credit+problems/3166884/story.html#ixzz0rU9rbZkJ
• DOW +16.47
• Dollar +.55c to 97.92cUS
• Oil +$.39 to $76.79US per barrel.
Gold +$9.70 to $1,257.40 USD per ounce a new record high close for gold as investors bought the metal to protect wealth from Europe’s financial turbulence and on concern that the economic recovery isn’t as strong as expected. Gold, up 15% this year, is heading for its 8th straight weekly gain and its 10th consecutive annual gain, the longest winning streak since at least 1920
Seeing through home sellers' camouflage
by Stephanie Farrington, Bankrate.com
Mortgage rates have started to climb again. While that's probably a good sign for the economy, it may also be a wake-up call for people who have been hitting the snooze button on the time in which they hoped to buy a house.
If you're one of the many Canadians just entering the buyer's market, it's easy to get caught up in the critical aspects of home buying and forget some of the details. The clock is ticking, rates are rising and what matters in a house is location, location, location, right?
Yes and no. Location matters, but if you're not careful and observant when making your choice, you could get a great location and still end up with a money pit.
In some cases, people anxious to sell their home have been known to make a few cosmetic adjustments to hide the areas where their house might need a little extra care or even some serious repairs. Here's what to watch out for.
A fresh coat of paint in the basement
Dean Langner, a Canadian Residential Appraiser, or CRA, with Kors & Associates, in Victoria, has worked for 15 years as an appraiser and home inspector. During that time, he's seen a lot.
"One thing I find suspicious is a recently painted concrete floor and two or three feet of foundation in an unfinished basement," he says. "A lot of times, basements will leak, and they'll get that mineral stain around the concrete. Before they sell, some owners will cover it up with a coat of paint."
Langner says if you suspect a problem, go back for a second visit. "The only way to tell is to wait for a good heavy rain and visit again to check for moisture. If you're still uncertain, you can hire a plumber with a camera, and they can look down the pipes."
Checking pipes like this is not done in the course of a usual inspection, but Langner says it's worth making it a condition of the sale if you're really worried, because drainage problems can be very difficult to fix.
New sewage or drainage pipes
Around the foundation of every house is a permanent, porous piping system, called weeping tile, that acts as a drain and keeps water from entering your basement. "Over time, this pipe can fail. It can fill with debris and mud and stuff, and it is not easily fixed," says Langner.
In older houses, weeping tile isn't even made of pipes -- it's a series of half-round, clay tiles placed next to each other. So, if the house or the land shifts, you could be in for trouble.
The money you spend to have a plumber look at your drains could end up saving you thousands of dollars, to say nothing of the time and inconvenience of digging a trench around the perimeter of your house to replace the draining system.
A recently pumped septic tank
Jeffrey D. Leiser, author of "The Home Buying Inspection Guide" and "You Can Sell Your House: For Sale By Owner," has his own cautionary tales about plumbing. "The worst is when a home owner is hiding problems with a septic or sewer system. Having the septic tank pumped out prior to an inspection can give the appearance of a well working system," he says. "A failed septic system can cost well over $20,000 in replacement costs."
He says sewer systems can also be bladed -- which involves using a long tube with a rotating blade at one end to clean pipes and cut out blockages -- so that they appear to be working without backups. But, again, this is a short-term solution to an expensive, long-term problem.
Unusual smells
Your senses are your first and one of your best methods of avoiding deception. Mould smells like mould. It's easy to hide the visual signs of mould with paint, but it's a hard smell to mask. Don't be afraid to sniff around any area that makes you feel uneasy.
Suspicious piles and large plants
If something looks out of place, ask about it. A pile of bricks stacked against the side of the house could just be a pile of bricks, but it could also be a way of hiding a cracked foundation.
That newly planted yet mature tree in the back yard, the one in front of the retaining wall? Look behind it. Just as people will paint over stains, they sometimes landscape over cracked retaining walls or other problem areas.
Protect yourself
Follow your gut. If you think someone is lying to you, ask more questions and use your written offer as a means to get the truth. Contracts are there to protect you, and conditions of sale are a good way to ensure you're covered. If you're unsure about how to do this, ask your real estate agent or your lawyer, but do not go in unprotected. It's usually easier to avoid buying a problem than it is to fix it.
If, in the end, you find yourself left holding the bag despite your best efforts, where can you turn?
Danny Berehula, director of the Saskatchewan branch of the Better Business Bureau, or BBB, says the BBB will try to help, but the help they can offer is limited because the transaction does not typically take place between a business and an individual but rather between two individuals.
"We're another resource for them, but most people, when this happens, would probably want to call their lawyer," he says. "There are laws in place, and if it's a serious matter, then it will become a legal matter. They can use us as a mediation service, but once it becomes a legal issue, we stand out of it."
So, take your time and think through your purchase carefully. All of the experts agree on one point -- sometimes you have to accept a few problems to get your dream house, but it's best to understand how much the trouble your home might cost you before you sign on the bottom line. http://ca.finance.yahoo.com/personal-finance/article/bankratecanada/1597/seeing-through-home-sellers-camouflage
RBC to fund programs helping Canadians avoid credit problems
Garry Marr, National Post • Sunday, Jun. 20, 2010
You find yourself deep in debt and you can’t get out. Who is responsible? Is it the financial institution who handed you the rope you used to hang yourself? Or should you be looking in the mirror?
This past week, Credit Counselling Canada awarded Royal Bank of Canada with its creditor of the year award. “They won it for thinking outside the box,” says Patricia White, executive director of the Toronto-based group.
For years, not-for-profit credit counselling groups have received donations from banks to assist their debt management services. Credit counselling agencies help people organize their finances to avoid bankruptcy. But RBC is also giving money to financial education aimed at helping Canadians — especially younger ones — avoid debt problems.
Until they come up with a vaccine for taking on debt you can’t afford, a little preventative education is probably the next best thing.
“Hopefully, it will stop people from getting into trouble in the first place,” said Ms. White, noting other banks have also been supportive of counselling and education. “But RBC has stood up and said they will support this with some funding. We already go into high schools, but this will help us do more.”
With Father’s Day tomorrow, I can’t help think there is an important role for parents to play in terms of helping children avoid serious credit problems.
Ms. White agrees. “As a parent, I started educating my kids early. I said here’s 5¢ and tried to get them to understand the value of money.”
A survey out of the United States this week by the National Foundation for Credit Counseling found 41% of Americans say they learned their personal finance skills from their parents. Is there any reason to believe Canadian children are any different?
The funny part is, the same U.S. survey asked parents to rate their own financial literacy and 34% gave themselves a grade of C, D or an F. At least they are being honest.
The U.S. group points out that children learn by watching. If they see you saving, they’ll save. If they see you unorganized with your expenses, guess what? The group also suggests involving your children in family financial decisions.
Jeff Bennett, managing director of RBC Collections, says educating consumers earlier in their lives is something the bank is interested in promoting. “We are trying to separate the two important components the not-for-profit credit counselling firms are doing — the educational and financial literacy component from the debt management and budgeting component,” he says.
“We’d like to move things further up in the life cycle to keep people out of trouble, rather than helping them once they are in trouble.”
While some people blame the high interest rates the banks charge on things like credit cards for getting them into trouble, Mr. Bennett says financial institutions have no interest in seeing customers wrestle with debt problems.
“The best thing we can have is a customer who understands the financial requirements of his life and makes plans for the future. Someone who doesn’t have problems is a happy client and a client who will refer people to us,” he says.
Everybody has a role in financial education and Mr. Bennett says it’s never too early to begin teaching about money.
Read more: http://www.financialpost.com/news/fund+programs+helping+Canadians+avoid+credit+problems/3166884/story.html#ixzz0rU9rbZkJ
Subscribe to:
Posts (Atom)
