Director, Private Client Group
Senior Investment Advisor HollisWealth
A division of Scotia Capital Inc Office: (905) 336-8600 Toll Free: 1 (800) 336-8606
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Economic Monthly Reports
2015 Economic and Market Outlook Series
Outlook on Canadian Real Estate - Tom Dicker, Portfolio Manager, 1832 Asset Management L.P.
We are pleased to present the latest editions of the Economic Monitor and the Market Monitor from Dynamic Funds Economics, prepared by Chief Economist Dr. Martin Murenbeeld and William Tharp, Senior Economist; a division which provides independent analysis and research to retail and institutional interests from across the globe.
Dynamic Funds Economic Monitor
Financial Markets Overview
In recent weeks, through speeches, testimony and the minutes of the last meeting, Federal Reserve officials have made it abundantly clear that the FOMC (the Federal Open Market Committee) is considering raising the FF-rate on December 16. This much-speculated hike will be the first since before the Great Recession in 2008.
We have forecast a December hike for some time, and there is nothing we can find in recent employment/economic/inflation data that will discourage the Fed from “liftoff” on December 16.
The Canadian economy continues to struggle, notably in the oil-rich Western regions, where retail sales and house prices are reflecting a localized recession.
The Canadian Housing Market; Not Coming to a Theatre Near You
I love seeing movies over the holidays, and like many of you, I did see the new Star Wars flick. I also checked out The Big Short, the movie adaptation of Michael Lewis’ eponymous book about the build-up of the housing bubble and the collapse and financial carnage that followed. The film’s focus is on several investors who identified the bubble in advance then built massive positions against the housing market. As it turned out, these guys were right and their bets paid off big-time. For them, finding evidence that a bubble existed was simply a matter of looking a little bit harder than everyone else. And then waiting.
The movie did a good job of reviewing some of the questionable practices that led to the bubble and pinned most of the blame on the players in the mortgage market and greedy bankers. Borrowers were portrayed as being victims of a broken system. There were the frat boy mortgage brokers who provided mortgages to anyone with a heartbeat. There was the stripper who was carrying multiple mortgages on multiple properties, all with adjustable rates. There was the guy who laid out how the investment banks were creating securitized fixed income products that were filled with junk mortgages, along with the woman at S&P who admitted that ratings agencies were willing to overlook the poor quality of those instruments and assign triple-A ratings out of fear of losing business. And there were the idiotic pension managers who were willing to buy as much of the securitized mortgages as the banks could pump out. Of course, the whole thing collapsed like a house of cards (or, as the movie would suggest, a Jenga tower).
The particulars contained herein were obtained from sources which we believe are reliable, but are not guaranteed by us and may be incomplete. The opinions expressed have not been approved by and are not those of HollisWealth. This website is not deemed to be used as a solicitation in a jurisdiction where this HollisWealth representative is not registered.
Scotiabank's Global Forecast Update
Scotia Economics provides clients with in-depth commentary regarding the factors shaping the outlook for Canada and the global economy, including macroeconomic developments, currency and capital market trends, commodity and industry performance, as well as monetary and public policy issues.
More Of The Same, More or Less
The global economy is expected to regain some modest traction this year, with the expansion supported by still-accommodative financial market conditions throughout much of the world and very low energy prices. Nevertheless, the globe’s overall performance will remain historically subpar, with the pace of growth dampened by the slowdown in China, the persistent underperformance in the euro zone and Japan, and ongoing weakness in most commodity and manufacturing sectors. As well, chronically high private and public sector debt burdens, the ongoing restraint on investment stemming from oversupply conditions in most commodity markets, and the elevated level of uncertainty associated with recurring geopolitical strains will also contribute to the lacklustre advance.