Category Archives: Tracking…

Tracking Canadian House Prices: July 2016

This article uses data on Canadian house prices taken from: Teranet – National Bank National Composite House Price Index ™ unless otherwise noted. The index is published monthly on or slightly after the 12th of each month at www.housepriceindex.ca. The 6-city index includes Vancouver, Calgary, Toronto, Ottawa-Gatineau, Montréal, and Halifax, while the 11-city index adds Victoria, Edmonton, Winnipeg, Hamilton, and Québec City.

As the August 12, 2016 Teranet newsletter (Communiqués tab) summarizes (note that this link is for the current issue only) (emphasis added):

In July, the Teranet–National Bank National Composite House Price Index™ was up 2.0% from the previous month, the second largest July increase since the Index series began in 1999. The advance was not very broad-based; prices were up in only seven of the 11 metropolitan markets surveyed. Gains exceeded that of the countrywide index in the four markets that have been driving it in recent months: Victoria (3.8%), Toronto (3.1%), Hamilton (2.4%) and Vancouver (2.3%). Gains were also noteworthy in Ottawa-Gatineau (1.7%), Winnipeg (1.6%) and Montreal (0.6%). Prices were flat in Edmonton and down from the month before in Calgary (-0.1%), Halifax (-0.4%) and Quebec City (-1.6%). The Quebec City drop cancelled the 1.7% advance of the previous month. For Vancouver it was the 18th consecutive month without a decline, with a new record set in each month. For Toronto it was the 14th rise in 15 months, with new records in each of the last six months. Prices have set records in each of the last five months in Hamilton, in each of the last three months in Victoria and in the last two months in Winnipeg, after seven consecutive monthly rises in that market. In Montreal, five consecutive monthly rises have taken prices above their previous peak of July 2014.

With the good transit link between Toronto and Hamilton and the high house prices in Toronto we are not surprised to see explosive growth in the Hamilton market.

Tracking the Spread of Peace and Democracy by Western Powers

We have not seen any comprehensive tracking of the peace and prosperity brought to places like Iraq, Afghanistan, Libya, Egypt and now the Ukraine by Western nations such as the US, Canada and NATO. This post is a placeholder for articles we come across. By country:

The Failure of Economic Policy

A number caught our eye this morning. Jon Marksman wrote that according to a tally by ISI Group, there have been 158 stimulative policy initiatives announced around the world in the past nine months — and a lot of good they have done. This crystallized a notion that has been appearing as off-hand commentary for several months: economic policy initiatives, which have been compared to economic heroin, are losing their effectiveness. Successive stimuli have to be larger to produce a shorter and smaller impact.

This suggests that economic policy is approaching a zero bound where it will be completely ineffectual in a positive sense but potentially catastrophic in a negative sense in terms of its collapse. To prove this statement would require a lot of research into the various policy initiatives and their effects. We will begin to track such but leave it to others to back-test the hypothesis.

Placing Japan on Deathwatch

When we began our post, Placing Spain on Deathwatch, less than 6 weeks ago, we had no idea we would get so much material for it. We read candidate articles daily but select only the more informative to keep the workload down. We like these ‘tracking’ style posts for a number of reasons:

  • It is easier to accumulate information for an article as the story unfolds than to have to search for it at a later date.
  • If the topic is proposed early enough, the post grows to become a comprehensive source of background information.
  • Diverse items can be collected together and the post becomes an easy first source for responding to any questions or inquiries on the topic.
  • Our preference for a point-form executive style summary of information is in contrast to verbose articles that in the end, we end up creating a point-form summary of anyway.

In some respects, Japan has been comatose for a couple of decades. In the past it was a society of high personal investment. Now, Japan has the worst demographics of all nations, in part because they have virtually no immigration. Consequently, with a rapidly aging and retiring workforce, the propensity to save has been transformed into a propensity to spend in old age.

Japan may continue along its path for years or it may blow up next week. However, we think its time to place it on a deathwatch.

Keeping a Running Tab on the Situation

This section will be updated with selected news and articles on the topic as we find them.

Placing Spain on Deathwatch

Originally with our idea of ‘tracking’ posts, we began them with a discussion or preamble followed by a chronology that is updated as news-worthy events come in. We have decided to reverse the structure so the reader has ready access to the latest events. Below are what we consider to be major events leading to a Spanish default on debt, possible political revolution and withdrawal from the eurozone.

Keeping a Running Tab on the Situation

Tracking the Ownership of US Debt

As of Dec. 2012, we are no longer updating this data monthly. The links provided give the reader access to the base data. In the year we have been tracking it, US debt has shown a steady increase without exceptional events. We have seen no change in the Chinese component that is cause for comment or alarm.

Tracking the Next Recession

It’s a little late in the game to start this tracking series since we have been reading recession forecasts for months. However, the equity markets are skating happily on and the mainstream media is still, after 4 years seeing green shoots.

We have added this graphic for interest (updated 20130517).

Chronologically listed, the reports are:

Tracking the Fed Balance Sheet

The aspects of the Fed’s balance sheet that we track weekly (see The Fed’s Balance Sheet) are shown here in a snapshot view and below in some detail. The snapshot is a visual indication of the week-over-week (wow) and year-over-year (yoy) changes in dollar value shown in Table 8 of the H.4.1 statistical release. We also can track activity through the weekly New York Fed System Open Market Account Holdings.

Aug 7, 2014 (Millions) WOW
Change
YOY
Change
Total assets (size of balance sheet WALCL)  + 3,474 + 824,752
Gold certificate account (WGCAL)  0  0
U.S. Treasury securities (WSHOSNB)  + 2,280  + 832,196
Federal agency debt securities (GSE) (WSHOFDSL)  0 – 24,394
Mortgage-backed securities (MBS) (WSHOMCB)  0  + 427,399
Central bank liquidity swaps (see WACBS)  0  – 1,404
Federal Reserve notes, net of F.R. Bank holdings (WCURCIR)  + 2,493 + 87,549
Other deposits held by depository institutions (WRESBAL)
 + 3,608  + 628,424
U.S. Treasury, General Account (WLTGAL) – 799  + 6,645
Other (deposits) (WLDOL)  – 3,265  – 17,227

This is the first update since May. We are not actively tracking it any more.

Although the balance sheet is still growing the rate of growth is decreasing due to the “Taper”. When QE purchases are finished in Sept. or Oct. it will be interesting to watch the balance sheet to see whether the Fed allows it to shrink by normal maturation of assets or whether the Fed rolls maturing assets over.

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