Saturday, October 31, 2009

Easy credit now, housing woes later?

Great Globe & Mail article. Frankly, I have been surprised by the resiliency of the Canadian housing market. Despite the woes south-of-the-border and lofty unemployment rates, home sales here have been robust. The only driving factor as I see is historically low interest rates. And people's need to own a home at any cost.

I have long thought that people are over-extended and have sunk all their "wealth" into the value of their home. It seems to me that interest rates will have to increase eventually and a lot of people who have over-buyed and stretched themselves very thin will feel the sting. The impact won't hit U.S. proportions, but I feel this is inevitable.

Still, the Bank of Canada is in a bind. If they raise rates, the Cdn $ will increase. I suspect they will wait until the U.S. makes a move. Still, it will happen.

Easy credit, soaring prices raise new housing fears

"Ms. Pham, 28, and Mr. Burzese put $57,000 down on the $570,000 house early this year. The couple says they're comfortable with the debt. They make good money and are installing a basement apartment as a “mortgage helper.” But they might not have been able to get into the market were it not for the intervention of the Bank of Canada and the federal government – in the form of a continued low interest rates and federal policies aimed at maintaining the flow of lending and spending.

The interest rate on the their mortgage? Just 1.5 per cent.

By taking advantage of ultracheap interest rates to buy something they couldn't previously afford, the couple are doing exactly what the government wants Canadians to do to restore growth to the economy. Mr. Burzese and Ms. Pham may well be able to handle the new debt. But mounting consumer debt loads across the country are worrying some economists -- and even the bankers who are profiting from it."

“We know that interest rates will rise – the only question is when,” Mr. (Benjamin) Tal (of CIBC) says. “Even if you lock in a five-year mortgage rate, you have to realize that five years from now, they will be significantly higher than they are now. Clearly people have to be much more prudent in this kind of environment.”

"While heftier debt loads obviously make all borrowers more vulnerable to higher interest rates, consumers' increased exposure to real estate also means that they have become more susceptible to changes in the housing market."

"Canada's housing market is certainly not stained by the sort of excesses that characterized the U.S. market before the crash. Subprime lending in Canada is estimated to represent less than 5 per cent of the market, compared with more than 20 per cent in the U.S. prior to the crisis.

"But an ironic scenario could still unfold. In an effort to combat a recession that had its origins in a U.S. housing bubble, Canadian policy makers have responded with low rates that might create a bubble here, giving the mortgage market too much of a kick-start through low interest rates and a program of buying billions in mortgages from the banks."

Been up since 4:30 a.m.

So, my daughter (Olivia, 4.5 yrs) is horrible to sleep with. She is a kicker and a thrasher and queen of her domain. Unlike her brother (Lucas, 6.5 yrs) who sleeps soundly and contently and stays put in his bed, Olivia has developed a habit of wandering into our bed in the middle of the night. She didn't sleep with us as a baby and we have had some short-term success at keeping her in her bed, but it doesn't seem to stick for long. She is stubborn that way.

ANYWAY... she ventured into our bed last night shortly after 3 a.m. or so. She woke Mom and I up and, while she fell into a slumber, we struggled to do the same. Regulated to a narrow strip on the edge of the bed, with knees and elbows and eventually whole body jabbing me in the back and sheet constantly being kicked off, I lay wide awake despite my best efforts. Many sheep were counted. To no avail. At 4:30 I got up. Grr.

It's gonna be a looong day.

Anti-Hit List for October 30

Every Saturday, John Sakamoto has a top ten list of obscure, new release, mash-up and other potentially cool tunes in the Toronto Star. I have discovered a ton of great artists from Mr. Sakamoto and thought I'd post weekly links to his column here!

Here is this week's numero uno:

Friday, October 30, 2009

NEW Blue Rodeo

Easily Canada's best band IMHO, Blue Rodeo is back with a double album The Things We Left Behind. While their last few releases haven't grabbed me, the new tracks I've heard so far are promising. This band had a phenomenal run from their debut Outskirts in 1987 through to Five Days in July in 1994. I'd probably include 1995's Nowhere to Here and 1997's Tremolo in the streak as well. Classic stuff for sure. Since then, there have been great tracks, but no albums that compare to the earlier stuff IMO. I'm listening to the band being interviewed by Jian Ghomeshi on CBC Radio's Q as I type this and I'm feeling very optimistic about this new release.

Check out the new track One Light Left In Heaven.

My song du jour.

What to Do When Your Child is Sick with Influenza

From the Ontario Ministry of Health and Long-Term Care (dated October 23, 2009)...

What to do (for kids with flu):

Self-assessment tool:

These are pretty good guidelines.

First Post... Where to begin?

It is Friday, October 30, 2009. The Ontario economy has flat-lined, our provincial government appears to be paralyzed and people are panicky about the H1N1 virus (a.k.a. Swine flu). To add to these woes, the Maple Leafs have struggled out of the gate at the beginning of the 2009-10 NHL season and have only one victory to date despite their ever improving efforts. Of course, I am a Habs fan (that is, the Montreal Canadiens) so the Leafs' troubles tend to amuse me. That said, despite a better record for my team, I have not much to crow about. The Habbies play the Leafs tomorrow night (following a Habs match-up with the young and talented Chicago Blackhawks tonight) and I'm not feeling too good about that game. We'll see.

Anyhoo, I am off work today to tend to my son who woke up this morning with a fever and low energy. My wife mentioned she heard him coughing in the night, but so far I see no signs of sore throat, coughing or nausea. Knock on wood. He is currently sleeping.

I've been toying around with the idea of blogging for awhile. I'm not really a diary kind of guy nor am I one to make my every coming and going public. I am, however, an information junkie. I love odd news stories, interesting insights and big picture thinking. I'm also a love of music. Not so much what they play on the radio, but more the stuff I think they SHOULD play on the radio.

My intention with this blog is to post articles I come across, music I discover, and sometimes thoughts I have. We'll see where this goes...