· TSX +231.58pts (Reuters) as the key resource and financial sectors were lifted by commodity prices and a rally by Canadian banks. All the major banks rose as the heavy hitters release their quarterly results this week, culminating in reports from 3 institutions, including Royal Bank of Canada , which rose 2.7%
· Dow +89.64pts
· Dollar +.15c to $95.53US
· Oil +$1.88to $118.15US per barrel -3rd day of gains as Tropical Storm Gustav was expected to intensify into a hurricane that could threaten U.S. oil and natural gas production in the Gulf of Mexico.
· Gold +5.90to $834.00US per ounce
Often a mortgage originator with integrity and honesty, will question the need to verify documents that seem legitimate. Please see article below from the National Post which emphasizes the severity of fraud in our industry and the amount of damage just two people can cause.
Two charged in $30-million real estate fraud
VANCOUVER -- A marathon investigation into one of the biggest financial frauds in B.C. history has led to multiple criminal charges being filed against former Vancouver lawyer Martin Wirick and Vancouver real-estate developer Tarsem Singh Gill.
Both men were arrested Tuesday after a six-year investigation.
Messrs. Wirick and Gill are charged with two counts of fraud and theft against 77 different homeowners, and two counts of fraud and theft against lenders in 30 different loan transactions. Mr. Wirick is also charged with two counts of uttering false documents and Mr. Gill with one count of possession of stolen property.
The total amount of money alleged to have been unlawfully taken from homeowners and lenders exceeds $30-million.
Three Fannie Mae execs out
NEW YORK (Reuters) - Fannie Mae the biggest U.S. mortgage finance company, on Wednesday announced a shake-up of top executives, including the exit of its chief financial officer, in an effort to better implement a plan to preserve capital and cut losses.
Fannie Mae announced management changes amid a storm of controversy over its ability to survive a wave of mortgage defaults that have caused four straight quarters of losses and recent speculation a government bail-out was near. But the board is "firmly committed" to Chief Executive Officer Daniel Mudd, Chairman Stephen Ashley said in a statement .
Stephen Swad, who was CFO since early 2007 and helped Fannie return to timely filing of financial statements following a major accounting scandal, was replaced by Fannie Mae Controller David Hisey, the company said. Peter Niculescu, head of capital markets, will replace Robert Levin as chief business officer. Fannie Mae's chief risk officer, Enrico Dallavecchia, will also leave.
The changes "signal they are trying to correct some problems," said David Dreman, chairman of Jersey City, New Jersey-based Dreman Value Management, LLC, a Fannie Mae and Freddie Mac shareholder. "When you change risk management people, it has to be viewed as recognizing problems, so it is mildly positive."
Thursday, August 28, 2008
Wednesday, August 27, 2008
Financial Update
· TSX +10.11pts (Reuters)
· Dow +26.62pts
· Dollar +.22c to $95.38US
· Oil +$1.16to $116.17US per barrel
· Gold +2.40to $828.10US per ounce
Articles on the front page of the Globe and Mail -Report on Business August 27, 2008 confirm financial market worries over anticipated poor quarterly results.
CIBC takes $885-million hit
Canadian Imperial Bank of Commerce, the third big bank to report its third-quarter earnings, said Wednesday that it earned $71-million, down from $835-million a year ago, as it took a hit of more than $880-million relating to risky securities. CIBC is the Canadian bank that's been hardest hit by the U.S. subprime mortgage crisis, because of its large exposure to securities tied to subprime housing. The exposure caused it to take a $2.48-billion writedown in the previous quarter
BMO burned by subprime mortgage exposure Bank of Montreal has been dragged further into the subprime mortgage crisis, putting aside hundreds of millions of dollars for troubled loans tied to the U.S. real estate sector.
At the same time, BMO continues to be tripped up by a variety of complicated investment products, demonstrating that financial markets continue to sour.
Chief executive officer Bill Downe – who was cautiously optimistic earlier this year that things might get better – said Tuesday that the challenging times aren't going to let up soon. With the U.S. economy continuing to slow, “falling house prices, rising unemployment, tightening credit standards and high gasoline and grocery bills are all expected to depress consumer spending,” he said. “In particular, house prices will continue to decrease until the large inventory of unsold houses is absorbed.” BMO’s profit fell by 21%.
· Dow +26.62pts
· Dollar +.22c to $95.38US
· Oil +$1.16to $116.17US per barrel
· Gold +2.40to $828.10US per ounce
Articles on the front page of the Globe and Mail -Report on Business August 27, 2008 confirm financial market worries over anticipated poor quarterly results.
CIBC takes $885-million hit
Canadian Imperial Bank of Commerce, the third big bank to report its third-quarter earnings, said Wednesday that it earned $71-million, down from $835-million a year ago, as it took a hit of more than $880-million relating to risky securities. CIBC is the Canadian bank that's been hardest hit by the U.S. subprime mortgage crisis, because of its large exposure to securities tied to subprime housing. The exposure caused it to take a $2.48-billion writedown in the previous quarter
BMO burned by subprime mortgage exposure Bank of Montreal has been dragged further into the subprime mortgage crisis, putting aside hundreds of millions of dollars for troubled loans tied to the U.S. real estate sector.
At the same time, BMO continues to be tripped up by a variety of complicated investment products, demonstrating that financial markets continue to sour.
Chief executive officer Bill Downe – who was cautiously optimistic earlier this year that things might get better – said Tuesday that the challenging times aren't going to let up soon. With the U.S. economy continuing to slow, “falling house prices, rising unemployment, tightening credit standards and high gasoline and grocery bills are all expected to depress consumer spending,” he said. “In particular, house prices will continue to decrease until the large inventory of unsold houses is absorbed.” BMO’s profit fell by 21%.
Tuesday, August 26, 2008
Financial Update
Financial worries knock Toronto stocks lower
· TSX -158.33pts (Reuters)prompted by weak financials, as worries over growing fallout from the credit crisis rattled investor confidence. Home-grown anxiety also weighed on the large financial sector as the major Canadian banks are set to report quarterly results this week.
· Dow -241.81pts In New York, stocks fell sharply on credit concerns, while global growth worries stung big technology and industrial companies.
· Dollar -.21c to $95.16US A negative tone in North American equity markets hurt the Canadian dollar, as financials sold off on both sides of the border on credit market fears, and the heavyweight energy sector of the Toronto Stock Exchange fell as oil prices fluctuated
· Oil +$.52to $115.11US per barrel
· Gold -$7.80 to $819.90US per ounce
Data on gross domestic product for the second quarter will be released on Friday. That will also be the last major piece of data before the Bank of Canada makes its Sept. 3 rate announcement.
Existing U.S. home sales up in July
MARY ANN CHASTAIN, THE ASSOCIATED PRESS
The Associated Press
The listing agent has boldly stated a change in the sales price to attract buyers to this home in a neighborhood in Columbia, S.C. Monday Aug. 25, 2008. Sales of existing homes rose 3.1 percent in July, surpassing expectations, as buyers snapped up deeply discounted properties in parts of the country hit hardest by the housing bust. (AP Photo/Mary Ann Chastain)
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Deeply-discounted properties being snapped up in parts of the country hit hardest by the housing bust
August 26, 2008 Alan Zibel The Associated PressSales of existing homes in the United States rose 3.1 per cent in July, easily beating Wall Street's expectations, as buyers snapped up deeply discounted properties in parts of the country hit hardest by the housing bust.
However, the number of unsold properties hit an all-time high, the latest indication that the worst housing market slump in decades is far from over.
The National Association of Realtors reported yesterday that sales rose to a seasonally adjusted annual rate of five million units. Sales had been expected to rise by only 1.6 per cent, according to economists surveyed by Thomson/IFR.
Home sales were 13.2 per cent lower than a year ago and prices were down dramatically. The median price for a home sold in July dropped to $212,000 US, down by 7.1 per cent a year ago.
Despite the third monthly sales jump this year, the number of unsold single-family homes and condominiums rose to 4.67 million, the highest number since 1968, when the Realtors group started tracking the data.
That represented a 11.2 month supply at the July sales pace, matching the all-time high set in April.
Sales were up in all regions of the country except the South, which posted a 0.5 per cent decline. Sales rose by 5.9 per cent in the Northeast, 0.9 per cent in the Midwest and 9.7 per cent in the West.
Analysts say that until the inventory level is reduced to more normal levels, the housing slump is likely to persist. The inventory level is being driven higher by a massive wave of mortgage foreclosures.
Despite the rise in sales, Lawrence Yun, the Realtors' chief economist, was reluctant to conclude that the U.S. housing market has hit bottom.
While buyers are pouncing on lower prices -- especially in places like California, Florida and Nevada -- sales are sluggish in formerly stable states like Texas.
"People are responding to lower prices,'' Yun said, but there is "too much uncertainty'' about the housing market's future to mark a definite bottom.
One key unknown is the ability of mortgage finance companies Fannie Mae and Freddie Mac to supply money for loans. The two government-sponsored companies have cut back the availability of mortgages significantly as they cope with mounting losses from foreclosures and officials ponder whether to shore up the two struggling companies.
· TSX -158.33pts (Reuters)prompted by weak financials, as worries over growing fallout from the credit crisis rattled investor confidence. Home-grown anxiety also weighed on the large financial sector as the major Canadian banks are set to report quarterly results this week.
· Dow -241.81pts In New York, stocks fell sharply on credit concerns, while global growth worries stung big technology and industrial companies.
· Dollar -.21c to $95.16US A negative tone in North American equity markets hurt the Canadian dollar, as financials sold off on both sides of the border on credit market fears, and the heavyweight energy sector of the Toronto Stock Exchange fell as oil prices fluctuated
· Oil +$.52to $115.11US per barrel
· Gold -$7.80 to $819.90US per ounce
Data on gross domestic product for the second quarter will be released on Friday. That will also be the last major piece of data before the Bank of Canada makes its Sept. 3 rate announcement.
Existing U.S. home sales up in July
MARY ANN CHASTAIN, THE ASSOCIATED PRESS
The Associated Press
The listing agent has boldly stated a change in the sales price to attract buyers to this home in a neighborhood in Columbia, S.C. Monday Aug. 25, 2008. Sales of existing homes rose 3.1 percent in July, surpassing expectations, as buyers snapped up deeply discounted properties in parts of the country hit hardest by the housing bust. (AP Photo/Mary Ann Chastain)
Email the author
Deeply-discounted properties being snapped up in parts of the country hit hardest by the housing bust
August 26, 2008 Alan Zibel The Associated PressSales of existing homes in the United States rose 3.1 per cent in July, easily beating Wall Street's expectations, as buyers snapped up deeply discounted properties in parts of the country hit hardest by the housing bust.
However, the number of unsold properties hit an all-time high, the latest indication that the worst housing market slump in decades is far from over.
The National Association of Realtors reported yesterday that sales rose to a seasonally adjusted annual rate of five million units. Sales had been expected to rise by only 1.6 per cent, according to economists surveyed by Thomson/IFR.
Home sales were 13.2 per cent lower than a year ago and prices were down dramatically. The median price for a home sold in July dropped to $212,000 US, down by 7.1 per cent a year ago.
Despite the third monthly sales jump this year, the number of unsold single-family homes and condominiums rose to 4.67 million, the highest number since 1968, when the Realtors group started tracking the data.
That represented a 11.2 month supply at the July sales pace, matching the all-time high set in April.
Sales were up in all regions of the country except the South, which posted a 0.5 per cent decline. Sales rose by 5.9 per cent in the Northeast, 0.9 per cent in the Midwest and 9.7 per cent in the West.
Analysts say that until the inventory level is reduced to more normal levels, the housing slump is likely to persist. The inventory level is being driven higher by a massive wave of mortgage foreclosures.
Despite the rise in sales, Lawrence Yun, the Realtors' chief economist, was reluctant to conclude that the U.S. housing market has hit bottom.
While buyers are pouncing on lower prices -- especially in places like California, Florida and Nevada -- sales are sluggish in formerly stable states like Texas.
"People are responding to lower prices,'' Yun said, but there is "too much uncertainty'' about the housing market's future to mark a definite bottom.
One key unknown is the ability of mortgage finance companies Fannie Mae and Freddie Mac to supply money for loans. The two government-sponsored companies have cut back the availability of mortgages significantly as they cope with mounting losses from foreclosures and officials ponder whether to shore up the two struggling companies.
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