If Gadhafi is ousted, oil prices should fall!

NEW YORK, N.Y. – Oil prices around the world should start falling if Libyan rebels succeed in toppling Moammar Gadhafi’s regime, though the full effect won’t be felt for months.

On Sunday night, rebel forces pushed into Tripoli without meeting much resistance, hours after they overran a major military base that defended the capital. Opposition fighters captured Gadhafi’s son and one-time heir apparent, Seif al-Islam.

Independent analyst Andrew Lipow said oil markets will likely respond Monday by sending prices lower in “a sign of relief that conflict has come to the end.” But Lipow said it will take time for the market to erase the hefty price increase that resulted from the suspension of Libyan oil exports since the rebellion began in February.

Brent crude for October delivery was down $3.22 per barrel to $105.40 on London’s ICE Futures exchange. Benchmark oil for September delivery was down 25 cents to $82.01 a barrel in electronic trading on the New York Mercantile Exchange. Crude fell 12 cents to settle at $82.26 on Friday.

When fighting broke out, oil was trading at around $84 a barrel. It quickly spiked above $93 and kept rising to a high above $110 at the end of April. Demand from emerging markets including China was also a factor in the rise. Oil has fallen recently along with stocks because of concerns about the global economy.

Libya used to export about 1.5 million barrels of oil per day, almost all of which have been cut off. Although Libyan oil amounted to less than 2 per cent of world demand, its loss affected prices because of its high quality and suitability for European refineries.

The European refineries have struggled to make up for the production loss despite an increase from Saudi Arabia. As a result, European markets should see the first and most significant drops in oil prices, Lipow said.

He added that any developments in the ongoing European financial crisis could also move stock markets around the world this week and oil prices along with them.

Independent analyst Jim Ritterbusch said that even if rebels manage to push Gadhafi out soon, the near-term effects on oil prices will be limited.

“Psychologically anyway, it’s going to force some additional selling,” Ritterbusch said. “But selling may not be pronounced because there’s still a lot of question marks remaining” on how long it would take for production to resume.

Michael Lynch, president of Strategic Energy & Economic Research, said that once Gadhafi is pushed out, Libya’s new government could take the path of the Iraqis after the fall of Saddam Hussein and spend years fighting over every detail. Or it could follow Kuwait’s example and quickly decide to bring in an outside company to get production restarted right away

He added that there’s always a chance that the process could come to a halt if one of the rebel generals tries to seize power, or if different factions get caught up debating the country’s new constitution and put off making decisions about oil production.

“They do have a good cadre of educated people, but they don’t have a long record of competent self-government,” Lynch said. “It would not be a bad bet to think there might be a chaotic period for a few months till they get organized.”

Understanding House Prices

Understanding house prices

What factors affect the value of a home?

Location: Real estate people always say “Location, location, location.” That’s because the area you live in will be the biggest factor affecting your home’s price. It’s smart to buy a home where housing prices are likely to increase. Also, the people who may buy your home from you one day may be willing to pay more for a home that is close to schools, sports centres, stores, services, and so on. Keep that in mind as you look.

The condition of the home and the property it is on: Does the home need a lot of repairs? How is the roof, plumbing, and electrical wiring? A home in good repair may be worth more. Also, the condition of the outside of the home, the lawn, gardens, driveway, and trees will all affect the value of a home. These are the first things that buyers see, and are together known as curb appeal.

Renovations and updates: An older home might need some work to keep it safe, modern, and comfortable. If you are buying at a home that has had some renovations, check the quality. When you do work on a home you own, do it as well as you can. Poor work can lower the value.

The economy: There are some things you can’t control that affect house prices, like interest rates. Higher interest rates mean it costs more for a mortgage, so fewer people buy homes. When that happens, the prices of homes can fall. Lower interest rates, on the other hand, can boost buying and drive prices up. House prices often go up for a while, and then come down a bit. Try to find out as much as you can about how prices are changing, or may change, when deciding to buy or sell a home. Often there will be stories in the paper about housing prices.

How much is my home worth today?

If you’re considering buying a home, or you just bought one, you know how much it’s worth. But if you’ve owned your home for a while, its value has probably changed. Here’s how you can find out how much it’s worth now:

Call a real estate agent: Ask them for an estimate of your home’s value. You may be able to get an agent to do this for free, because they hope to get your business in the future. — check our website for the names of a few great realtors.

Ask an appraiser: Your bank or a real estate agent should know a number of appraisers. Banks use them to estimate house values before they approve mortgages. You can also look in the yellow pages. An appraiser will charge a fee for the service.

Check to see what other homes in your area have sold for recently: Compare your home with similar ones that have sold. Unless you keep up with what’s happening in your area, this information may be hard to get. Ask your real estate agent if you can’t find it yourself.

How much will my home be worth in the future?

To estimate a home’s future value, you will have to do some informed guessing. Start with finding out what has happened to prices in your location over several years.

This chart shows how house and condo prices in 12 Canadian cities changed from 1990 to 2010. Note that there has been a sharp rise in prices in the last few years. Still, the average growth for these cities since was 4.6%, close to the historical average of 5% a year.

Average house price in 1990 was $254,890 in 2010 it is $409,000.


Jack Layton dies at only 61

Jack Layton lost his biggest battle early Monday morning, succumbing to cancer. He was 61.

Surrounded by his wife, NDP MP Olivia Chow, other family members and friends, Mr. Layton died “peacefully at his home,” according to a statement issued by his wife and children Monday.

Mr. Layton looked gaunt, his voice very weak, when he held a news conference last month in Toronto to announce he was suffering from a second cancer. He vowed, then, that he would be back to work when the House of Commons resumed on Sept. 19.

He did not reveal what that cancer was. It is still not known.

At that time, he asked his caucus to accept a rookie MP, Nycole Turmel, as interim leader. It is not clear now whether she will continue in that role or how a formal leadership transition will work.

A popular politician – nicknamed Smiling Jack, for his charm and enthusiasm with life and politics – Mr. Layton orchestrated his party going from third place to Official Opposition status in the May 2 election.

Although he had been fighting a prostate cancer diagnosis and a fractured hip, he appeared healthy during the campaign. In fact, the cane he used to support himself became a lightning rod as the party’s support grew and grew.

The NDP victory in the election was based primarily on a huge breakthrough in Quebec and the collapse of the Bloc Québécois

In an lengthy interview with The Globe and Mail the day before the government fell last March, Mr. Layton said that he was fine, did not know why his hip had fractured but said the cancer had not spread.

He had led the NDP since 2003, and had just turned 61 on July 18.


Ontario family suing RBC for $62K

Montreal Gazette – Thu, 18 Aug, 2011

Signing cheques without proper power of attorney. Using the life savings of a senior to buy a car, furniture, travel and dine out. Leaving that senior penniless and destitute.

Sound familiar? This time it’s not Earl Jones doing the defrauding, it was a 44-yearold caregiver in Essex, Ont., southeast of Windsor.

But like the Jones case, the victim and her family are going after the Royal Bank of Canada for alleged negligence and breach of fiduciary duty.

The family of Dorothy Linklater, 93, are suing the RBC after $82,000 was bled dry from her account over a two-year period.

The Royal Bank branch in Essex contacted Linklater’s family in August 2009 to say that the account was empty after cheques began bouncing.

Carrie Bertrand, the daughter of Linklater’s neighbour, was supposedly taking care of the elderly woman. Bertrand looted the account of the woman between March 2007 and August 2009, and used the money to buy televisions, a computer, tattoos, body piercings, a car and pay for casino outings and restaurant meals.

“She was living rent-free and was supposed to cook, but she brought her son and his girlfriend into the house and they went on a spending orgy with the lady’s money,” said Windsor Star reporter Doug Schmidtr, who covered the case against the caregiver.

Bertrand was sentenced to 14 months of house arrest in Windsor earlier this year after she plead guilty and made $20,000 in restitution to her victim.

Now the family wants RBC to pay up the remaining $62,000 plus legal costs. The lawsuit against the bank alleges RBC failed to monitor who had access to Linklater’s money, and accuses the bank of “breach of contract,” “negligence” and “breach of fiduciary duty” for not checking that Bertrand had the right papers and permission to remove money from the account. The claim was deposited on Aug. 2.

The petitioners allege during those two years no one at the bank ever questioned Bertrand’s withdrawals or the cheques that were drawn on the account where she was not the acting power of attorney.

When the bank discovered that cheques were bouncing, they seized those cheques and the ATM cards that Bertrand had been using and destroyed them. And then called police.

“The bank alerted police after they destroyed the evidence? That’s where the obstruction of justice investigation comes in,” Schmidtr said of additional claims against RBC by the Ontario Provincial Police.

Linklater is now living with a niece in Ottawa.

In Montreal, the victims of Jones are seeking $40 million from the Royal Bank.

Rina Cortese, director of media relations for the RBC was asked by The Gazette how many lawsuits are currently outstanding against the bank from victims of fraud who allege negligence and breach of fiduciary duty.

“We work hard to earn the right to be our customers’ first choice, and to live our values of service, teamwork, responsibility, diversity and integrity. We are proud of the trust we’ve earned, and our first priority is to address our clients’ concerns,” Cortese wrote to The Gazette in response.

asutherland@ montrealgazette.com http://ca.news.yahoo.com/ontario-family-suing-rbc-62k-091315342.html

Canadian Real Estate – Change Coming

TORONTO – Canada’s real estate market is now expected to grow this year rather than decline, as buyers take advantage of continued low interest rates that are intended to offset recent economic turmoil, economists said Tuesday.

The comments came after the Canadian Real Estate Association revised its 2011 national forecast for home resales, citing stronger than expected sales and higher prices in the second quarter.

An earlier CREA forecast that called for a one per cent dip in sales this year from 2011. But the association said Tuesday sales should grow this year — albeit less than one per cent above 2010.

CIBC deputy chief economist Benjamin Tal said recent stock market uncertainty due to the European debt crisis and the United States credit downgrade is actually helping boost sales in Canada’s real-estate market.

Bad economic news abroad tends to keep Canadian interest rates low, he said.

Since the European and American debt issues came to a head in recent weeks, economists have been predicting the Bank of Canada will leave its key rate untouched at one per cent until at least next year.

That’s a change of opinion since last winter, when economists widely expected Canada’s central bank would begin hiking its rates sometime in 2011 as the economy strengthened — putting upward pressure on the price of borrowing.

With the global economy now looking weaker than expected, and the U.S. Federal Reserve promising last week that it will keep its key short-term rate at an all-time low for another two years, the Bank of Canada is now expected to put off raising its short-term lending rates.

“The uncertainty globally is really benefiting mortgage holders because it’s really postponing the increase in interest rates in Canada,” Tal said, explaining that when the stock market turns volatile, real estate becomes an attractive investment because of its security.

“Many people can use this opportunity to look into extremely low mortgage rates, so again the misery of other people elsewhere is helping Canadian home buyers.”

Sonya Gulati, an economist at TD Economics said the bank is anticipating that sales will be a bit more subdued in the next two months, but buyers, especially first timers and immigrants won’t likely be deterred in the longer term as interest rates stay low.

“People may be waiting to see whether or not they want to purchase homes, see if things turn for the better. It really has been a roller coaster for the last little while so we anticipate a little bit more subdued activity in August and September,” she said.

“(The stock market) will be a factor in their decision making process, but at the end of the day one of the key things for people is the interest rate and mortgage rates are still very low and they may actually want to enter the market for that reason despite the uncertainty out there.”

Meanwhile, CREA’s chief economist Gregory Klump said it is too early to judge whether buyers are moving towards or shying away from real estate due to volatile stock markets. But he said historically, real estate does well during times of uncertainty.

“During periods of financial market upheaval the Canadian real estate market has remained far more stable,” he said, adding that even though some investors put off buying high end homes during the financial crisis of 2008 and 2009, those buyers returned to real estate soon after recovery began.

“The last time we had financial market instability, the housing market wasn’t immune, but it was certainly less volatile and certainly Canadians recognize that and feel comfortable investing in their home.”

Overall, CREA said Tuesday that 450,800 housing units are expected to be sold across Canada under its Multiple Listing Service in 2011, and the average selling price will be slightly higher. In May, it had estimated 441,100 units would be sold through the MLS.

About 90 per cent of home resales in Canada are listed on MLS.

Both Gulati and Tal said they expect the market to cool off in 2012 once interest rates rise again. Gulati said home prices could fall as much as 10 per cent, while Tal said they could fall between five and 10. Gulati described this as a “correction” while Tal said it was an “adjustment,” but “nothing to write home about.”

Meanwhile, the association said it was revising its sales expectations for 2012 downward to 447,000 units, roughly on par with the 10-year average.

On a regional basis, British Columbia’s 2011 sales forecast has been revised slightly higher as home sales in the province appear to have bottomed out soon than predicted, while stronger than expected activity in Ontario is expected to offset slightly softer than anticipated demand in Quebec, Manitoba and Newfoundland and Labrador.

CREA said it now expects the national average home price will rise 7.2 per cent in 2011, to $363,500. The previous estimate in May was $352,500.

The upward revision reflects increases in the second quarter in Vancouver and acceleration in other parts of the country, particularly Toronto. Vancouver has experienced a surge in multimillion-dollar home sales this year.

CREA said the two markets have a high number of sales and average price, so they play a big part in influencing the national average.

Additional new listings should also result in a more balanced resale housing market in most provinces, with the national average price forecast to stabilize in 2012.

Canadian’s Record Debt

Household debt has hit a troubling $1.5-trillion, sparking new fears that the heavy burden on Canadian consumers could hurt the economy, particularly as fiscal stimulus fades.

The figure, from a report Tuesday by the Certified General Accountants Association of Canada, means that if household debt were distributed evenly across all Canadians, a two-child household would owe an estimated $176,461, including mortgage costs.

World markets bleed

7:09 PM ET | Last Updated: Aug 4, 2011 7:13 PM ET

Investors are losing faith in the global economy and the policymakers in charge of keeping it afloat, putting the two and a half-year bull market in serious jeopardy.

Stock markets around the world plummeted their most since the financial crisis on Thursday, as escalating U.S. recession fears and Europe’s ballooning sovereign debt crisis were further exacerbated by an emergency intervention of the Japanese yen.

“It’s getting more and more difficult to see the glass half full,” says Serge Pepin, head of investments at BMO Investments Inc. “I’ve always been sort of an optimist if anything, but it is definitely not a rosy picture.”

The S&P/TSX composite index, Canada’s key equity benchmark, suffered its biggest drop since June 2009, by falling 435.90 points or 3.4% to close at 12,380.13. It was the eighth time in the past nine sessions that the market has tumbled.South of the border, the Dow Jones Industrial Average dropped 512.76 points or 4.31% to 11,383.68. It was the Dow’s worst point drop since December 2008.  With each market now down 13% and 11% respectively since their most recent peaks in April, stocks have dropped well below the 10% pullback that marks an official correction.

Mr. Pepin said investors are starting to question whether the bull run that began on March 9, 2009 has finally come to an end.

“We are now more than 20% off the market’s all-time high in 2007, so by some people’s definition, we’re already in a new bear market,” he said. “If we can get a clear signal from the U.S. economy that things are moving to the positive, that’s when people will get some solace. At this point we just aren’t seeing that.”

In this type of environment, it makes sense that investors are selling some of their riskier assets including cyclical stocks and commodities, in favour of so-called safe haven investments, such as bonds, defensive equities like consumer staples and healthcare, and gold, which briefly hit another record high at US$1,684.90 an ounce on Thursday.

That said, Mr. Pepin thinks it’s premature to compare the market’s recent malaise with the extreme meltdown that occurred in 2008 at the height of the financial crisis.

“I think this is strictly sentiment and we are getting close to a bottom, ” he said. “I don’t believe we are headed for recession and corporate earnings are still very strong. That has to matter for investors.”

Just how much futher markets will fall could hinge on Friday’s crucial U.S. jobs report for July. If figures are better than estimates calling for an increase of 85,000 in non-farm payrolls and an unchanged unemployment rate at 9.2%, then a relief rally could take place. If the opposite transpires, the sell-off will likely only get worse, as the risk of a U.S. recession moves closer to reality.

“The economy is only one shock away from falling into recession,” said Michelle Meyer, an economist at Bank of America Merrill Lynch, in a note to clients Thursday.

Ms. Meyer believes there is now a 35% chance of a U.S. recession in the next year, about double what her odds were this spring.

With this week’s new debt deal in place, there is no appetite in Washington to provide more fiscal stimulus in aid of the slumping recovery, she said. At the same time, the Federal Reserve, which has left interest rates at near zero for nearly three years, may not have enough ammunition left to prevent another contraction.

On the one hand, investors are in a state of confusion and alarm, not knowing if the world’s problems can be resolved, said Andrew Pyle, a financial advisor at ScotiaMcLeod. On the other hand, panic is often the mother of all innovation.

“The [market slide] is creating the same pro-growth elements as we’ve seen before, such as lower energy prices and interest rates,” he said.  “This doesn’t mean we jump and start loading up on equities, but as Warren Buffett says the best time to buy is when there’s blood in the streets.”

Moody maintains Canada triple-A credit rating, citing resilient economy

The Canadian Press, On Thursday July 28, 2011, 11:59 am EDT

By The Canadian Press

TORONTO – Moody’s Investor Services is renewing Canada’s debt rating at triple-A, the highest possible.

The firm said the AAA rating was warranted due to the country’s high degree of economic resiliency, efforts by Ottawa and the provinces to deal with their debt ratios over the coming years and other factors.

Moody’s says the state of Canada’s housing market and Quebec’s sovereignty issues do pose some risk, but the risks are low.

The housing market also poses some risk because many mortgages are insured by a federal Crown corporation.

But Moody’s says it considers a major downturn of the housing market as unlikely and, even in an extreme case, Ottawa’s extra costs would be relatively small.

Similarly, Quebec’s sovereignty movement doesn’t seem to pose a significant risk since the issue doesn’t appear high on the political agenda.