· TSX -262.21pts a selloff in gold and oil pushes TSX as concern over global recession fuels fear that commodity prices have hit their peak
· Dow +43.97pts
· Dollar +.38c to $94.43US
· Oil -$1.24 to $113.77US per barrel.
· Gold -22.40 to $792.10US per ounce suffering its largest weekly decline after just 5 months ago breaking through $1000 US per ounce
Almost a year to the day the ABCP market ground to a halt, investors find out Monday whether a plan to restructure the $32b asset-backed commercial paper market can proceed from the Ontario Court of Appeals
Monday, August 18, 2008
Friday, August 15, 2008
Financial Update
· TSX -18.31pts
· Dow +82.97pts
· Dollar -.07c to $94.05US
· Oil -$.99 to $115.01US per barrel.
· Gold -16.80 to $808.20US per ounce –
A recent report showed US foreclosures were up 8% in July compared to June and up 55% compared to July 07
National Post online article below says 17% of people surveyed do not understand the recent gov’t changes, including 25% of non-homeowners.
A great opportunity to contact your customers or to post information to your website to explain the changes.
Attached is the informative article that Merix provided at the end of July explaining the changes as well
--------------------------------------------------------------------
Many Canadians oppose tougher mortgage rules
But then again, many don't understand them, says survey
Eric Beauchesne, Canwest News Service
Published: Wednesday, August 13, 2008
OTTAWA -- Nearly one-quarter of Canadians do not agree with the federal government's mortgage lending crackdown, a proportion that rises to nearly a third among non-homeowners, survey results done for a mortgage lending firm suggest.
And only 45% agree with the tighter mortgage lending rules and that the federal government needs to protect Canadian homeowners, a level of support for the changes that falls even further to just one-quarter among non-homeowners, according to the online survey conducted by pollster Angus Reid for ResMor Trust Co.
In an effort to avoid a U.S.-style housing market meltdown, Finance Minister Jim Flaherty last month tightened up the rules governing mortgage lending practices in Canada, including limiting the amortization period for government insured mortgages to 35 years from 40 years, requiring a minimum down payment of 5% for such mortgages, virtually eliminating zero-down mortgages, and requiring that anybody with an insured mortgage have a minimum credit score.
Those who disagree with the measures said they reduce options for people wanting to buy a home.
However, the results also indicate that 17% do not understand the changes, including 25% of non-homeowners.
Further, the findings suggest that the higher the level of understanding, the lower the level of opposition to the new rules.
"I was surprised that 23% do not agree with the measures," Darren Thompson, vice-president of lending for ResMor Trust, said in an interview.
"This survey clearly demonstrates a need for industry professionals to educate Canadians about the new measures, specifically those entering the market for the first time," he said, adding that's something that the federally licensed trust company is doing.
"The measures are not seriously impacting the ability of consumers to get a mortgage," he said, citing as an example an industry finding that more than half of those who took out 40-year mortgages would have qualified for a 25-year mortgage. "It was just enabling them to get a lower monthly payment but at a much greater interest cost."
Mr. Thompson also disagreed with critics of the measures who have warned that the tighter rules will put an added chill on an already cooling housing market.
"There's still lots of financing out there," he said, adding that the measures protect the Canadian taxpayer from having to foot a large bailout if the market goes south as it has in the U.S.
The survey, meanwhile, also revealed a regional divide in the level of support for the tighter rules and the level of understanding of the rules.
Agreement with the new rules in the heated housing markets of the Western provinces and in Ontario is significantly higher than in the Eastern provinces and Quebec, the report said, noting support for the crackdown was 64% in British Columbia, 56% in Alberta, 47% in Saskatchewan and Manitoba, 46% in Ontario, but only 35% in the Atlantic provinces and 34% in Quebec.
The proportion indicating a lack of understanding of the new rules was highest in Quebec and Atlantic Canada, at 23% in both markets, and lowest in British Columbia at only 7%, followed by 13% in Manitoba and Saskatchewan, 18% in Alberta, and 16% in Ontario.
The online survey of at least 1,000 adults conducted last month following the release of the new rules is considered accurate within 3.1 percentage points 19 times out 20
· Dow +82.97pts
· Dollar -.07c to $94.05US
· Oil -$.99 to $115.01US per barrel.
· Gold -16.80 to $808.20US per ounce –
A recent report showed US foreclosures were up 8% in July compared to June and up 55% compared to July 07
National Post online article below says 17% of people surveyed do not understand the recent gov’t changes, including 25% of non-homeowners.
A great opportunity to contact your customers or to post information to your website to explain the changes.
Attached is the informative article that Merix provided at the end of July explaining the changes as well
--------------------------------------------------------------------
Many Canadians oppose tougher mortgage rules
But then again, many don't understand them, says survey
Eric Beauchesne, Canwest News Service
Published: Wednesday, August 13, 2008
OTTAWA -- Nearly one-quarter of Canadians do not agree with the federal government's mortgage lending crackdown, a proportion that rises to nearly a third among non-homeowners, survey results done for a mortgage lending firm suggest.
And only 45% agree with the tighter mortgage lending rules and that the federal government needs to protect Canadian homeowners, a level of support for the changes that falls even further to just one-quarter among non-homeowners, according to the online survey conducted by pollster Angus Reid for ResMor Trust Co.
In an effort to avoid a U.S.-style housing market meltdown, Finance Minister Jim Flaherty last month tightened up the rules governing mortgage lending practices in Canada, including limiting the amortization period for government insured mortgages to 35 years from 40 years, requiring a minimum down payment of 5% for such mortgages, virtually eliminating zero-down mortgages, and requiring that anybody with an insured mortgage have a minimum credit score.
Those who disagree with the measures said they reduce options for people wanting to buy a home.
However, the results also indicate that 17% do not understand the changes, including 25% of non-homeowners.
Further, the findings suggest that the higher the level of understanding, the lower the level of opposition to the new rules.
"I was surprised that 23% do not agree with the measures," Darren Thompson, vice-president of lending for ResMor Trust, said in an interview.
"This survey clearly demonstrates a need for industry professionals to educate Canadians about the new measures, specifically those entering the market for the first time," he said, adding that's something that the federally licensed trust company is doing.
"The measures are not seriously impacting the ability of consumers to get a mortgage," he said, citing as an example an industry finding that more than half of those who took out 40-year mortgages would have qualified for a 25-year mortgage. "It was just enabling them to get a lower monthly payment but at a much greater interest cost."
Mr. Thompson also disagreed with critics of the measures who have warned that the tighter rules will put an added chill on an already cooling housing market.
"There's still lots of financing out there," he said, adding that the measures protect the Canadian taxpayer from having to foot a large bailout if the market goes south as it has in the U.S.
The survey, meanwhile, also revealed a regional divide in the level of support for the tighter rules and the level of understanding of the rules.
Agreement with the new rules in the heated housing markets of the Western provinces and in Ontario is significantly higher than in the Eastern provinces and Quebec, the report said, noting support for the crackdown was 64% in British Columbia, 56% in Alberta, 47% in Saskatchewan and Manitoba, 46% in Ontario, but only 35% in the Atlantic provinces and 34% in Quebec.
The proportion indicating a lack of understanding of the new rules was highest in Quebec and Atlantic Canada, at 23% in both markets, and lowest in British Columbia at only 7%, followed by 13% in Manitoba and Saskatchewan, 18% in Alberta, and 16% in Ontario.
The online survey of at least 1,000 adults conducted last month following the release of the new rules is considered accurate within 3.1 percentage points 19 times out 20
Thursday, August 14, 2008
Financial Update
· TSX +210.22pts broke out of a 4session slump as the heavyweight resource sectors benefited from strong commodity prices and outweighed the sagging financial sector
· Dow -109.51pts amid continuing credit crunch worries and a report from the U.S. Commerce Department stating that retail sales dipped 0.1 % last month, the first decline since February and a worse showing than the flat reading economists had been expecting
· Dollar +.03c to $94.12US
· Oil +2.99to $116.00US per barrel. after a bigger-than-expected decline in gasoline supplies in the U.S
· Gold +16.80 to $825.00US per ounce –
Investors still jittery one year after ABCP collapse
Email the author
David Friend The Canadian Press TORONTO
A year has passed since the collapse of Canada's $33-billion asset-backed commercial paper market and small investors are still waiting for the Ontario Court of Appeal to decide what happens to a restructuring plan that has served as the only hope of investors recovering some of their money.
It wasn't supposed to happen like this, with hundreds of Canadians anxiously hoping their retirement savings wouldn't be whittled down to a mere fraction of their worth -- then again, the market wasn't supposed to crumble last summer either.
Signs of the ABCP troubles began on Aug. 14, 2007, when Coventree Inc. (TSX: COF), the largest nonbank arranger of ABCP in Canada, announced that a "market disruption'' tied to the default of U.S. mortgages resulted in the firm being unable to find investors interested in rolling over the investments as they matured.
The trading of Canadian commercial paper was quickly frozen, and over time the ABCP deterioration spread to world markets.
In Canada, a committee was formed to clean up the problems, headed by Bay Street lawyer Purdy Crawford.
All of the unpredictability has left some Canadians that invested in ABCP, many of them retired, reconsidering their savings, their futures and even looking at selling their homes to gain some financial certainty.
But some say that they've chipped away at their short-term savings over the past year and are nearing dire straits.
"I think we all knew the restructuring plan was going to take a lot of time to put together,'' said Daryl Ching, an independent consultant who spent months working alongside corporations holding ABCP, and last summer dealing with securities at Coventree.
"What's shocking to me is how long the court of appeals is taking.''
Two-and-a-half months ago the restructuring plan seemed to be close to a finale.
An Ontario Superior Court judge had accepted an amendment to the plan that would allow certain noteholders to pursue claims of fraud against brokerages and dealers that sold them ABCP, while protecting banks and rating agencies from litigation.
But the decision also left open a 21-day window for individual and corporate investors to file appeals on the case, and the three judges assigned to the process have been working on a decision since late June.
The date for a final decision is anybody's guess because of scheduling and summer holidays.
"I thought there was a sense of urgency,'' Ching said.
"I've heard people give me stories like, 'The court should not be rushed into making decisions like this.' But we do have 2,000 retail investors who have their life savings in limbo.''
"I think this is a unique enough situation that the decision should be expedited.''
For investors like Yulan Wong, who lives in Vancouver, a resolution can't come soon enough.
The 60-year-old retired real estate agent says she was forced to return to work this summer after realizing she might not have enough money to pay for her bills and the university education of her niece, who is under her care.
"I'm hoping and I'm hoping, and getting really scared they might not pay back the money,'' she said.
"I was looking after money for my niece, because she lost both parents, and I'm feeling very guilty.''
All together Wong estimates that she has $300,000 frozen in the ABCP debacle, and she said that if the assets remain frozen past the current Aug. 31 deadline she might have to consider other major changes to her life.
"I really don't know what I'll do . . . Going back to real estate is difficult at this stage because of the (housing) market, and I've given up all my leads thinking I was going to retire this year,'' she said.
"I could sell my house but I still have two kids who are living here.''
Stories like Wong's dilemma have sprouted up across the country but were virtually unknown when the troubles first emerged.
Ching remembers the uncertainty that surrounded his final weeks at Coventree, before he became an independent consultant.
"I didn't even know there was a single retail investor at Coventree,'' he said, recalling the order of events late last summer.
"For me, it was when a retail investor went on my ABCP blog and made a comment saying 'I'm a Canaccord client and I've got ABCP.' And that was probably (months later) in December.''
"I'm sure there's some that knew about it. Certainly we didn't,'' he added.
A list of ABCP holders has never been officially compiled because of confidentiality laws, but it quickly became apparent that the known investors were just the tip of the iceberg when a Vancouver businessperson launched a suit against Canaccord for selling him the assets, and more lawsuits followed.
Crawford said it wasn't until the ABCP restructuring committee embarked on a three-day whirlwind tour to talk to retail investors in March that he understood just how many average Canadians were affected by the frozen assets.
"We started in Toronto, and it wasn't so obvious there,'' he remembers, saying that the numbers grew when they moved on to Montreal and Edmonton. In Vancouver, "the place was packed. It was good for those investors to have a face to talk to. I saw the anger.''
· Dow -109.51pts amid continuing credit crunch worries and a report from the U.S. Commerce Department stating that retail sales dipped 0.1 % last month, the first decline since February and a worse showing than the flat reading economists had been expecting
· Dollar +.03c to $94.12US
· Oil +2.99to $116.00US per barrel. after a bigger-than-expected decline in gasoline supplies in the U.S
· Gold +16.80 to $825.00US per ounce –
Investors still jittery one year after ABCP collapse
Email the author
David Friend The Canadian Press TORONTO
A year has passed since the collapse of Canada's $33-billion asset-backed commercial paper market and small investors are still waiting for the Ontario Court of Appeal to decide what happens to a restructuring plan that has served as the only hope of investors recovering some of their money.
It wasn't supposed to happen like this, with hundreds of Canadians anxiously hoping their retirement savings wouldn't be whittled down to a mere fraction of their worth -- then again, the market wasn't supposed to crumble last summer either.
Signs of the ABCP troubles began on Aug. 14, 2007, when Coventree Inc. (TSX: COF), the largest nonbank arranger of ABCP in Canada, announced that a "market disruption'' tied to the default of U.S. mortgages resulted in the firm being unable to find investors interested in rolling over the investments as they matured.
The trading of Canadian commercial paper was quickly frozen, and over time the ABCP deterioration spread to world markets.
In Canada, a committee was formed to clean up the problems, headed by Bay Street lawyer Purdy Crawford.
All of the unpredictability has left some Canadians that invested in ABCP, many of them retired, reconsidering their savings, their futures and even looking at selling their homes to gain some financial certainty.
But some say that they've chipped away at their short-term savings over the past year and are nearing dire straits.
"I think we all knew the restructuring plan was going to take a lot of time to put together,'' said Daryl Ching, an independent consultant who spent months working alongside corporations holding ABCP, and last summer dealing with securities at Coventree.
"What's shocking to me is how long the court of appeals is taking.''
Two-and-a-half months ago the restructuring plan seemed to be close to a finale.
An Ontario Superior Court judge had accepted an amendment to the plan that would allow certain noteholders to pursue claims of fraud against brokerages and dealers that sold them ABCP, while protecting banks and rating agencies from litigation.
But the decision also left open a 21-day window for individual and corporate investors to file appeals on the case, and the three judges assigned to the process have been working on a decision since late June.
The date for a final decision is anybody's guess because of scheduling and summer holidays.
"I thought there was a sense of urgency,'' Ching said.
"I've heard people give me stories like, 'The court should not be rushed into making decisions like this.' But we do have 2,000 retail investors who have their life savings in limbo.''
"I think this is a unique enough situation that the decision should be expedited.''
For investors like Yulan Wong, who lives in Vancouver, a resolution can't come soon enough.
The 60-year-old retired real estate agent says she was forced to return to work this summer after realizing she might not have enough money to pay for her bills and the university education of her niece, who is under her care.
"I'm hoping and I'm hoping, and getting really scared they might not pay back the money,'' she said.
"I was looking after money for my niece, because she lost both parents, and I'm feeling very guilty.''
All together Wong estimates that she has $300,000 frozen in the ABCP debacle, and she said that if the assets remain frozen past the current Aug. 31 deadline she might have to consider other major changes to her life.
"I really don't know what I'll do . . . Going back to real estate is difficult at this stage because of the (housing) market, and I've given up all my leads thinking I was going to retire this year,'' she said.
"I could sell my house but I still have two kids who are living here.''
Stories like Wong's dilemma have sprouted up across the country but were virtually unknown when the troubles first emerged.
Ching remembers the uncertainty that surrounded his final weeks at Coventree, before he became an independent consultant.
"I didn't even know there was a single retail investor at Coventree,'' he said, recalling the order of events late last summer.
"For me, it was when a retail investor went on my ABCP blog and made a comment saying 'I'm a Canaccord client and I've got ABCP.' And that was probably (months later) in December.''
"I'm sure there's some that knew about it. Certainly we didn't,'' he added.
A list of ABCP holders has never been officially compiled because of confidentiality laws, but it quickly became apparent that the known investors were just the tip of the iceberg when a Vancouver businessperson launched a suit against Canaccord for selling him the assets, and more lawsuits followed.
Crawford said it wasn't until the ABCP restructuring committee embarked on a three-day whirlwind tour to talk to retail investors in March that he understood just how many average Canadians were affected by the frozen assets.
"We started in Toronto, and it wasn't so obvious there,'' he remembers, saying that the numbers grew when they moved on to Montreal and Edmonton. In Vancouver, "the place was packed. It was good for those investors to have a face to talk to. I saw the anger.''
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