chpc.biz
  • Home
  • Chart Book
    • 6 Canadian Metros
    • Vancouver Housing
    • Calgary Housing
    • Toronto Housing
    • Compare Toronto & Vancouver
    • Housing Price Momentum
    • Real Price of Housing
    • Sales Listings
    • MAR-MOI
    • TSX Indexes
    • Millionaire Metric
    • Real Price of Gold & RE
    • Canadian Housing in USD
    • Bitcoin Gold & RE
    • Housing Starts
  • Plunge-O-Meter
    • Real Interest Rates
    • Real 10yr Rate
    • Interest Rate Spread
    • Yield Curve
    • Yield Calculator
  • Earnings Employment
    • Household Debt
    • Affordability
    • Demographia
    • Census
  • History Readings
  • Contact
    • Data Sources
    • Featured Links
    • Terms of Service

Beveridge Curve

11/27/2013

 
Beveridge Curve 2000-2013CLICK CHART TO ENLARGE
Are You Qualified?

Here is a continuation of the theme that North American Labour needs to retrain that I posted about last month from the point of view of who is benefiting from wealth creation.

Now, this chart mashup shows the Beveridge Curve which is the inverse relationship between the unemployment rate and the vacancy rate. It demonstrates that since the Pit of Gloom in 2009, the unemployment rate has been falling while job vacancies have been rising, BUT the counter-clockwise outward shift indicates a higher unemployment rate along the job openings curve. Employers cannot fill job vacancies either because labour is unwilling or untrained. The longer the unemployed remain so, the less likely they will fit the demands of the employer; hence the question "Are you qualified?". Can you retrain while you are idle? Can you move to where the demand for labour is? 

Employers are increasingly free to locate near or attract high skill low cost labour from a giant "free trade" low barrier pool.

  • 2011: McDonalds Hires 62,000, Turns Away Over 938,000 Global Applicants For Minimum Wage, Part-Time Jobs (16:1)
  • 2012: Delta Air Gets 22,000 Applications for 300 Attendant Jobs (73:1)
  • 2013: In China 1.2 Million Candidates Apply For 19,000 Government Jobs (63:1)
  • 2013: Why did 1,701 people apply for just eight Nottingham U.K. barista jobs? (213:1)

It's another realization that the compounding effects of multilateral "trade" agreements since post WWII (GATT 1947, WTO 1995) have been changing the value of labour. Since 1994, NAFTA has been the arbiter of disputes via the dispute settlement system known as "Chapter 19" and members have agreed to ignore conventional national judicial review in favour of NAFTA's panel review. The removal of dispute resolution from judicial systems is a hallmark of Capital's ability to not just lobby government but to become government. The latest but not yet manifest "trade" agreement is TPP (Trans Pacific Partnership 2010) which aims to "liberalise the economies of the Asia-Pacific".

TPP meetings and negotiations are kept secret except for what WikiLeaks has managed to publish and ...

... anti-globalization advocates accuse the TPP of going far beyond the realm of tariff reduction and trade promotion, granting unprecedented power to corporations and infringing upon consumer, labour, and environmental interests. One widely republished article claims the TPP is "a wish list of the 1%" and that "of the 26 chapters under negotiation, only a few have to do directly with trade. The other chapters enshrine new rights and privileges for major corporations while weakening the power of nation states to oppose them." (Wikipedia)

Condo 101

11/22/2013

 

CBC DOC ZONE VIDEO "The Condo Game"

"Downtown condos are "more a commodities play than a housing market". Charles "King Cobra" Hanes, Toronto condo broker.
Condo Game
CLICK IMAGE TO VIEW CBC DOC ZONE VIDEO "The Condo Game"
The Condo Game was produced by Helen Slinger and directed by Lionel Goddard and Helen Slinger.

Are you thinking of buying a condo? If you do, you should set aside money for special strata assessments that are additional to any regular monthly "contingency" strata fees. AND read this CONDO USER'S GUIDE prepared by Ted Kesik, University of Toronto building science professor.

Here is an excerpt from the BC Housing Home Owner Protection Office website "Managing Strata Repairs FAQ"
Can the strata corporation use the Contingency Reserve to fund repairs? What options are available to fund the repairs?

According to the BC Strata Property Act, monies in the Contingency Reserve Fund can be used for emergency repairs without approval from the owners. Beyond emergencies, owners must give their approval at a general meeting to use these funds.

The strata corporation has two options for raising money:

1) The strata corporation can borrow money and collect additional amounts from owners each month to repay the loan

2) Special assessments can be levied against each strata unit

Either course of action requires approval by the owners at a general meeting of the strata corporation.

What happens if not all owners are able or willing to contribute their share of the repair costs?


Once the strata corporation has approved a resolution to levy special assessments, the Strata Property Act provides remedies for those who do not pay on time. Ultimately, the strata corporation can place a lien against the strata lot requiring it to be sold and monies owing to the strata corporation are collected from the sale proceeds.

Inflation Forecast

11/22/2013

 
BMO Rate ForecastCLICK TO ENLARGE CHARTS
NOPE to NIRP

Sal Guatieri, Senior Economist at BMO Capital Markets Economic Research released their North American Outlook (Nov 13, 2013) which included a forecast for an inflation pickup and an interest rate move up on 10 year Treasury Bonds. 

My chart on the Canadian 10 Year "Real" Treasury Bond Yield indeed looks like it is in an up trend but a lot of that is from deflation, a dropping CPI. This real rate has climbed 226 bps December 2011 through October 2013.

If a major bank research group is getting ready for the beginning of the end of ZIRP, then forget about NIRP (Negative Interest Rate Policy) which has been trial ballooned on both sides of the Atlantic lately. 

Here are a few odd bullet point quotes from the BMO report that makes me wonder if BMO is actually going to sell Treasuries (price down, yield up) or if they are in the market to buy a dip:
  • U.S. sequestration held back government spending, and political uncertainty hurt confidence, slowing business and consumer spending, the latter to the lowest rate in two years.
  • Caught off guard by cooler demand, U.S. businesses produced far more than they sold.
  • U.S. GDP growth is expected to slip below 2% in Q4 as a result of the government shutdown.
  • An improving global economy will support U.S. exports (???).
  • Low U.S. inflation and distorted data imply just 30% odds of a December shift in QE (taper).
  • The U.S. Fed funds rate could stay put until late 2015, possibly longer if the Fed extends its forward guidance to tamp down long-term rates.
  • Canadian exports have gone nowhere in the past two years and factory output continues to contract in response to an overvalued currency and sluggish global demand.
  • Canadian federal and provincial governments are tightening the purse strings.
  • Canadian public sector layoffs have slowed job growth this year to a below normal pace.
  • Canada will quadruple its rail-loading oil terminals, possibly increasing its U.S. bound oil exports by 20%. (??? the U.S. shale energy boom continues to ... reduce oil imports)
  • In most Canadian regions, housing sales are higher now than when the mortgage rules where tightened in mid-2012. (??? Nope... sales are definitely down from mid-2012 see chart)
  • Bank of Canada has stopped warning about future rate hikes and opens the door for possible rate cuts if growth falters or inflation slips below the 1% (currently 1.1%)

I think the metrics to watch to determine whether interest rates rise or not in the next 12 months will be unemployment, labour participation and household earnings. If earnings rise so will aggregate demand and general price inflation; but in both Canada and the U.S. politicians argue that government deficit spending must be reduced. If the government is not spending (investing) into the economy, will the private sector pick up the slack?

Commodity Dependence Vulnerability

11/19/2013

 
Commodity DependenceCLICK CHART TO ENLARGE
Eggs all in 2 Baskets

Government subsidizes the housing and banking industries by price fixing the cost of credit. Direct and indirect employment is disproportionately funneled into construction (see Labour Force Participation post). 

The same story has been repeated globally and according to BMO chief economist Douglas Porter "Canada's rising dependence on commodities trade makes it vulnerable to price declines." 

Canadians do not appear to be willing to add value to their resources by developing infrastructure and manufacturing capacity. 

In the mashup above, the two top charts are from SoberLook.com and they observe:

With prices drifting steadily lower since the spring of 2011, it seems safe to conclude that commodities are not going to bail us out this time—the Super Cycle is over. While global growth will likely be just firm enough to put a floor under resource prices in 2014, Canada simply cannot rely on improving terms of trade to lift incomes further, or to turn around a weak trade performance. The dramatic rise in U.S. oil and gas production further complicates the picture by putting downward pressure on North American energy prices.

Here is what's driving this dependence on commodities exports. 

Canada continues to struggle with lagging labor productivity. Anecdotal evidence suggests that businesses are avoiding opening labor-intensive operations in Canada due to high costs. As a result, manufacturing employment and output failed to grow over the past decade - and in fact have been declining. Without growth in manufacturing, Canada has been increasingly dependent on natural resources for growth... the non-energy component of Canada's trade has declined sharply over the past decade.

Canada vs Ireland

11/14/2013

 
Good Time to RentCLICK CHART TO ENLARGE
Timing is Everything

Now that we are on the seasonal down ramp into the 2014 spring bottom for sales and listings, it might be worthwhile for those Canadians who are heavily debt encumbered to look at what happens to a "C" class income generating country after their real estate bubble gets pricked by a swift change in buyer sentiment. 

As for The Irish Miracle "The case is clear: an economically challenged government, perniciously influenced by the interests of the housing lobby, blew it. The entire Irish episode will be studied internationally in years to come as an example of how not to do things." (David McWilliams Irish economist writer, broadcaster and journalist)

News Item CNN November 14, 2013: Three years after turning to the EU and International Monetary Fund for €85 billion in aid, Ireland is poised to become the first bailed-out eurozone country to make a full return to financial markets.

Notice the polar opposites of the U.S. (B Class GDP) and Japan (D Class GDP) since 1Q 2000 when the DotCom bubble burst; they also experienced severe housing price deflation; Japan's slide began a decade earlier. Timing is everything.

You Don't Own It

11/13/2013

 
How to sell your Pre-construction Condo
by David Fleming
Hat tip to Ben Rabidoux for tweeting this excellent review of the perils of buying un-built real estate. Time is a huge risk if market prices do not rise; then the risk of negative yield takes over. Calculate your yield.

David's Sample Pre-Constructed "Condo" and the road to attempting to sell the assignment:

  • $500,000 Original Purchase Price on a 714sf Toronto Condo ($700/sf) and after 12 months, the assignment is offered for sale with the following costs included in the price: 

  • $12,200 Ontario Land Transfer Tax
  • $18,000 Closing Costs (can be much higher; read fine print)
  • $25,000 Realtor Fees
  • $3,000 Legal Fees
  • $9600 Occupancy Fees

  • $567,800 New Asking Price a 13.6% increase based on hard costs (now $795/sf) and in direct competition with the developer who can offer incentives to a buyer for the same or better unit.
    Follow @Brian_Ripley

    RSS Feed



    History, Charts & Curated Readings

    "History, real solemn history, I cannot be interested in.... I read it a little as a duty; but it tells me nothing that does not either vex or weary me. The quarrels of popes and kings, with wars and pestilences in every page; the men all so good for nothing, and hardly any women at all - it is very tiresome." Jane Austen spoken by Catherine Morland in 'Northanger Abbey'


    Archives

    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012
    February 2012
    January 2012

    Categories

    All
    AI
    Airbnb
    Apt
    Austerity
    Australia
    Balance Of Trade
    BNN
    BTC
    Bubbles
    Budget
    Bulls
    Busts
    Calgary
    Canada
    Capital Flight
    Case Shiller
    Case Study
    Charlie Rose
    China
    Chris Kimble
    Climate
    Cmhc
    Commodities
    CPI
    Credit
    Cullen Roche
    Currency
    Debt
    Deflation
    Demographics
    Dubai
    Employment
    Energy
    Environment
    Europe
    Exports
    Fair Value
    Flippers
    Future
    FX
    GDP
    Gold
    Greenspan
    Hong Kong
    Hyperinflation
    Id
    Imports
    Inflation
    Interest Rates
    Japan
    Labour
    Martin Armstrong
    MM
    Money Laundering
    Money Velocity
    Montreal
    Mortgage
    Net Worth
    New York
    OECD
    Oil
    Olympic Village
    Pandemic
    Pmi
    Poverty
    Productivity
    Recession
    REIT
    Rent Or Buy
    Russia
    Savers
    Savings
    Solar Cycle
    Stock Market
    Super Rich
    Tax
    Technology
    Tesla
    Toronto
    Trade
    Trump
    TV
    U.K.
    Unemployment
    U.S.
    Vancouver
    Victoria
    Wages
    War
    Weather
    Whale Watching
    WTO
    Yield

    "Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement; and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it." George Santayana Vol. I, Reason in Common Sense​​
Home | Chart Book | Earnings | Plunge-O-Meter | History & Readings | Contact

BRIAN RIPLEY'S CANADIAN HOUSING PRICE CHARTS & Blog for
#Vancouver #Calgary #Edmonton #Toronto #Ottawa #Montreal
Real Estate Prices, Sales & Inventory with Plunge-O-Nomic Post Peak Price Action featuring the PLUNGE-O-METER
Data reporting changes by Real Estate Boards and other data collection notes are listed on the DATA SOURCES page.

If you want to be notified when I update this site, go to: twitter.com/Brian_Ripley and click "Follow".

GET A FREE TRIAL DISCOUNT TO CHRIS KIMBLE'S FINANCIAL MARKETS CHARTING SOLUTIONS
ADVERTISE YOUR REAL ESTATE FOR SALE TO THIS INFORMED AUDIENCE
Thousands of Unique Visitors and Page Views Every Month TRAFFIC CHART

Picture
Picture
Picture

Weebly - Websites, eCommerce & Marketing in one place.
Compare Weebly Plans
​This website & blog was built with Weebly; a very easy to use drag and drop cloud based app. TRY IT FOR FREE​
CHPC.biz (this site) is a SAFE BROWSING SITE according to Google's Safe Browsing Diagnostic

  • Home
  • Chart Book
    • 6 Canadian Metros
    • Vancouver Housing
    • Calgary Housing
    • Toronto Housing
    • Compare Toronto & Vancouver
    • Housing Price Momentum
    • Real Price of Housing
    • Sales Listings
    • MAR-MOI
    • TSX Indexes
    • Millionaire Metric
    • Real Price of Gold & RE
    • Canadian Housing in USD
    • Bitcoin Gold & RE
    • Housing Starts
  • Plunge-O-Meter
    • Real Interest Rates
    • Real 10yr Rate
    • Interest Rate Spread
    • Yield Curve
    • Yield Calculator
  • Earnings Employment
    • Household Debt
    • Affordability
    • Demographia
    • Census
  • History Readings
  • Contact
    • Data Sources
    • Featured Links
    • Terms of Service