dreams & money: 2nd issue of november 2012
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Dreams & Money: 2nd Issue of November 2012TRANSCRIPT
12 NOVEMBER 2012WEEKLY
PPI Exposé: How the Banks Drove Staff to Mis-Sell the Insurance
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Toronto andGlobal MarketReview
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(Calgary Herald) Harper issued a brief written statement congratulating the Democratic president. Hours later, after touring a Sikh temple in the Punjab region of India, Harper met with reporters.
“I congratulate President Obama on his victory,” he said. “I know it was a very hard-fought election. We look forward to working with the president for the next four years. We've had a very good and productive working relation-ship.
“We'll focus on jobs and growth in the global economy, particularly in
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Dream Issue2 23
North America.”
Harper said he looks forward to working with Obama in implementing the Beyond the Border initiative — a deal reached a year ago which was designed to enhance security while also easing traffic congestion at the border.
Harper told the audience at that gather-
09/11/2012 - The balance and mail”of economic power is Canada gets a cautious, expected to shift dramatically middle-of-the-road, not that over the next half century, exciting (dare I say 'Cana-with fast-growing emerging- dian-style?') rating from the market economies account- OECD. Like most other ing for an ever-increasing countries, Canada is aging share of global output, and in the absence of radical according to a new OECD report. moves, potential growth is headed
The United States is expected to cede lower. Between 1995 and 2011, its place as the world's largest economy Canada's economy grew by an average to China, as early as 2016. India's GDP of 2.6 per cent per year. All things being is also expected to pass that of the equal, that's headed down to 2.1 per cent United States over the long term. between now and 2030, and 2.6 per cent Combined, the two Asian giants will between 2030 and 2060. That's a little soon surpass the collective economy of slower than the world and U.S. average the G7 nations. Fast-ageing economic for the short term, and a little higher for heavyweights, such as Japan and the the longer term. (all figures are percent-euro area, will gradually lose ground on age change in gross domestic product the global GDP table to countries with a expressed in U.S. dollar adjusted to younger population, like Indonesia and 2005 Purchasing Power Parity terms). Brazil In practical terms, that growth a bit too
weak to meet all the demands of an aging population --without sacrificing Here's a comment from “The globe something else.
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Balance of Economic Power will shift, says OECDDramatically over the Next 50 years
4PAGES
(Reuters) - Canadian housing starts decisive one yet that a housing correc-fell more sharply than expected in tion is under way," said Jonathan Basile, October, according to data on Thursday director of economics at Credit Suisse that confirms a welcome slowing in the Canada.country's once-booming property market after the government repeatedly tightened mortgage rules.
Other data from Statistics Canada showed new home prices continued their modest rise in September while the trade deficit narrowed in that month on an oil-led export recovery.
Markets focussed on the housing starts, which were down 8.9 percent from a year earlier as both single and multiple urban housing starts slumped, Canada Mortgage and Analysts polled by Reuters had Housing Corp (CMHC) said. forecast starts would decline to 211,500
The seasonally-adjusted annualized in October.rate of housing starts was 204,107 units The report echoes a string of data in October, down from 223,995 in that the Canadian housing market is September and 18.9 percent below the cooling, but does not appear to be cyclical peak reached in April. heading for a crash landing as happened
"The October move was the most in the United States.
Weekly Statistics Canada News
News & ViewsDigest
Stephen Harper says he'll Work on Economy with Re-Elected Obama Stephen Harper says he'll Work on Economy with Re-Elected Obama
ing that Canada will not abandon plans for a western pipeline to ship oil to Asia even if the U.S. suddenly allows the Keystone XL pipeline to be constructed in that country.
He said it is crucial for Canada to avoid being tied down to the U.S. as our only oil customer.
(CBC.)The single most important Jacobson, the U.S. Ambassador to thing the U.S. can do for Canada is to get Canada told host Evan Solomon the one its economic house in order, says U.S. issue that will have the most implica-President Barack Obama's representa- tions for Canada is the U.S. economy — tive in Ottawa. more than border security, trade, energy
or foreign policy. "When we do well, In an interview airing Saturday on you do well."CBC Radio's The House, David
Fixing U.S. economy key to helping Canada, ambassador says
Canada's Housing Market Cools, Trade Gap Narrows
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One former NatWest employee, who worked in a branch in the north of England between 2002 and 2004, reveals the intense pressure staff were under to sell unsuitable payment protection insurance
"After graduating I needed work and was recommended NatWest by a recruitment agent. I thought working in a branch would involve helping people with their money and might offer long-term career prospects. Initially I enjoyed it, but it became apparent the primary focus was to sell PPI.
"Each quarter the branch had to achieve a certain amount of sales points. We earned these through selling mortgages, packaged accounts, credit cards, referrals to the financial planning calls to ask how many loans with PPI manager, and PPI. Large loans with PPI had been sold. The back office had a secured the most points. large whiteboard showing the number
"Our quarterly bonus depended on of loans and other products sold. When how many points the branch as a whole the area or regional manager was due to achieved. I recall that hitting 120% of visit we felt under intense pressure to target meant our bonus would be in a make sure we had sales written on it. higher paying threshold. Working in a "One morning the area manager branch didn't pay very well, so the bonus arrived unexpectedly and no sales had really helped. been made. She shouted 'this isn't good
"In my role as a customer adviser I enough' and started to interrogate staff had to sell 10 loans a week with seven or on their under performance.eight having PPI – this was known as the "If an adviser hadn't hit their target penetration target. There was plenty of for the month they would be placed on a training in 'disturbance techniques', performance development plan. This making the customer feel anxious about could lead to dismissal if sales remained their ability to repay the loan in the event below target for a few months in a row. of accident, sickness, unemployment or In practice, most underperforming death. Every morning we would meet advisers resigned or moved to non-sales with the manager to discuss how many roles. Many advisers had enough after a loans with PPI and other products we year or didn't pass probation, as the would sell. If a customer refused to take pressure was immense.PPI we had to explain to the manager the "I felt that the product wasn't suitable reasons given and which sales objec- for most joint loan applications. We tions techniques we used. were told that personal loan protection,
"If after two weeks an adviser's PPI NatWest's name for PPI, would ensure a penetration was less than 70%, the customer's loan repayments were paid regional manager would phone to ask in the event of accident, sickness, why. Every day managers would receive unemployment or death. I was under the
Insure your dreams
"There were many times I felt a loan was an unsuitable product and PPI was too expensive or didn't cover all the customers' needs. I remember selling a £25,000 loan with protection to one particular customer who earned about £18,000 a year. It was to consolidate all her credit cards. I felt she wasn't in control of her spending and could benefit from impartial debt advice. A few months later she came back saying she had started spending on her credit cards again. If I had given her honest advice I would have been disciplined. As far as banks were concerned the only good advice was further borrowing.
“I do believe people should take responsibility for their own financial decisions. Yet as a part of the decision-impression it would pay out. But if the making process, banks should be giving second applicant was unable to earn an prudent advice relevant to customer income, it wouldn't cover them. This needs, not based on selling expensive meant PPI was unsuitable for most products.”customers taking out a joint loan. We
Source: (The Guardian)had to highlight that only the first applicant was covered, yet we did it in such a way to make it look insignificant.
“We knew PPI was overly expen-sive, with some insurances costing £100 a month. There were plenty of other insurances on the market that could offer similar or more suitable cover at a much lower cost.
PPI Exposé: How the the InsuranceBanks Drove Staff to Mis-Sell
HERE'S A QUESTIONWhen will Canadian Regulators
start looking at the way that banks sell creditor (and other) insurance from their branches (including on-line) in Canada?
POLISH BANK JOKE because the Bank of Warsaw is insured by the National Bank of Poland."This joke relates to the Solidarity
days of Poland. "And if the National Bank of Poland fails?"A man goes into the Bank of Gdansk
to make a deposit. Since he has never kept "Then your money would be insured by money in a bank before, he is a little nervous. the Bank of Moscow."
"What happens if the Bank of Gdansk "And what if the Bank of Moscow fails?"should fail?" he asks.
"Then your money would be "Well, in that case your money insured by the Great Bank of the
would be insured by the Bank of Soviet Union."Warsaw."
"And if that bank fails?""But, what if the Bank of Warsaw
“Well, in that case, you'd lose all fails?"your money. But, wouldn't it be worth
"Well, there'd be no problem, it?"
TorontoMLS Sales Activity
$5
03
,47
9
$4
74
,24
1
October 2012 October 2011
TorontoMLS Average Price
6,896 7,425
October 2012 October 2011
*NOTE: The majority of transac-tions are entered into the TorontoMLS system on business days. There was a mismatch of two business days in September and October of 2012 com-pared to the same months last year. This is why sales on a per business day basis were noted in releases dealing with these months. The business day anomaly between the two months has now balanced out.
416 905 Total 416 905 Total
Detached 931 2,417 3,348 $779,484 $573,598 $630,850
Yr./Yr. % Change -7% -1% -3% 5% 8% 7%
Semi-Detached 347 458 805 $575,618 $390,459 $470,273
Yr./Yr. % Change -4% -9% -7% 7% 5% 6%
Townhouse 286 775 1,061 $453,477 $357,237 $383,179
Yr./Yr. % Change -10% -1% -3% 2% 5% 3%
Condo Apartment 1,141 427 1,568 $358,741 $286,138 $338,969
Yr./Yr. % Change -14% -20% -16% -2% 4% 0%
Sales Average PriceSales & Average Price By Major Home Type October 2012
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Dreams and Money takes care to present all the information as accurately and efficiently as possible. Any advice or recommendation appearing in the paper is also part of information only. They should not be construed as an expert opinion. Please note that no representation or warranty with respect to the accuracy or the completeness of the information is given. Information always keeps changing. Hence all the information, including advice and recommendations are to be treated as of general nature only. For your specific circumstances, you are always advised to consult an expert before acting on any information.
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Average Price Up in October, Despite Fewer Sales TORONTO, November 3, 2012 – The average selling price for October
Greater Toronto Area REALTORS® transactions was $503,479 – up 6.2 per reported 6,896 transactions through the cent compared to October 2011. The TorontoMLS system in October 2012 – a MLS® Home Price Index composite decrease of 7.1 per cent compared to benchmark price, which allows for an October 2011. There were two more apples-to-apples comparison in terms of business days in October 2012 versus home attributes, was up by 5.1 per cent. October 2011. On a per business day "We continue to see price increases basis, transactions were down by 15.6 well above the rate of inflation. Active per cent.* listings have remained low from a
"Sales have decreased in the second historic perspective, so substantial half of this year compared to 2011, competition between buyers still exists, especially since the onset of stricter especially for low-rise homes," said mortgage lending guidelines at the Jason Mercer, TREB's Senior Manager beginning of July. The prospect of of Market Analysis. higher monthly mortgage payments due "It should be noted, however, that the to the reduced maximum amortization annual rate of price increase has been period has prompted some households to edging lower over the past few months delay their home purchase," said as the market has gradually become Toronto Real Estate Board (TREB) better supplied," continued Mercer. President Ann Hannah.
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THE MISSION
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12 NOVEMBER 2012MONEYDREAMS & INVESTING
Global markets dropped at the end of president on Wednesday defeating the week on US fiscal worries and on Republican opponent Mitt Romney.concern over euro zone debt crisis. ECB said that the euro zone econ-Investors are worried about US fiscal omy shows little sign of recovering cliff . The "cliff" refers to the year-end before the year-end despite an easing of deadline for the expiration of hundreds financial market conditions and left the of billions of dollars worth of tax cuts interest rates at a record low. The and the triggering of $109 billion in European Commission slashed its 2013 across-the-board spending cuts. The US euro-zone growth forecast to 0.1% from Congress created the hazardous 1%. deadline of 31 December 2012 in China's consumer price index rose August 2011 when it agreed to a deficit 1.7% from a year earlier and producer deal as a way out of a deadlock over price index fell 2.8% from the year-raising the US debt ceiling. earlier period.
Barack Obama was re-elected as US The Reserve Bank of Australia kept
The Central Statistical Organization of India will unveil industrial output data for the month of September 2012 on Monday, 12 November 2012.. The CSO will also unveil inflation data its key cash rate on hold at 3.25% after based on the wholesale price index monetary policy review, citing an uptick (WPI) for October 2012 on Wednesday, in prices.14 November 2012. T h e I n s t i t u t e f o r S u p p l y
On global front, China's week-long Management reported its index of non-conference to usher in the country's next manufacturing activity in the United leaders and policies kicked off on 8 States fell to 54.2 in October from 55.1 November 2012. Vice President Xi the month before.Jinping is widely expected to become the next general secretary of the
Indian markets followed the global Communist Party of China's Central trend. The domestic bourses gained in Committee and soon after take over as three out of five trading sessions. China's president from current leader Sensex down by 0.38% to 18755.45 and Hu Jintao. Li Keqiang, one of China's Nifty down by 0.2% to 5686.25 in the vice premiers and, like Xi, a current week ended 9 November 2012. standing committee member, is
expected to take over as premier, replacing Wen Jiabao. Xi and Li's new seniority will likely be confirmed publicly at next week's Communist Party Congress closing ceremony, when they appear with the rest of the new Central Committee, as selected by the party's 25-member politburo.
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Global Indian Market and Weekly Review - Week Ended 9 November 2012
Exports to the United States grew Cheers! Exports up! 1.3% to $27.8 billion, on higher exports Canada's merchandise exports rose of aircraft and other transportation
1.9% and imports were unchanged in equipment and parts. Imports from the September. As a result, Canada's trade United States edged up 0.5% deficit with the world narrowed from to $24.3 billion. As a result, Canada's $1.5 billion in August to $826 million in trade surplus with the United States rose September. from $3.2 billion in August to $3.5
Exports rose to $38.0 billion, as billion in September.prices increased 1.9%. Exports of Exports to countries other than the energy products led the overall gain. United States increased 3.6% to $10.2
Imports remained at $38.8 billion in billion, while imports were down 0.8% September. Overall, the increase in to $14.5 billion. Consequently, volumes offset the decrease in prices. Canada's trade deficit with countries Metal and non-metallic mineral other than the United States narrowed products registered the largest increase from $4.8 billion in August to $4.3 in total value of imports, while con- billion in September.sumer goods posted the largest decline.
The Retail Services Price Index The Wholesale Services Price Index (RSPI) rose 1.3% in the second quarter, (WSPI) rose 0.4% in the second quarter.its largest quarter-over-quarter advance Margins for wholesalers of petro-since first quarter 2009. leum products (-9.8%) fell year over
Electronics and appliance stores (- year. Declining petroleum margins 9.7%) recorded the largest year-over- could be a result of falling natural gas year decline, marking its seventh and crude oil prices. Wholesalers of consecutive year-over-year margin building material and supplies (-2.3%) decrease and the largest drop observed also reported decreasing margins in the in this sector since first quarter 2011. second quarter. Year over year, margins Year-over-year margins for sporting for the building material and supplies goods, hobby, book and music stores (- sector have been declining since fourth 2.3%) and furniture and home furnish- quarter 2010.ings stores (-2.1%) also fell.
The New Housing Price Index Prices rose 0.5% in both Winnipeg (NHPI) rose 0.2% in September, and the combined region of Saint John, following a similar increase in August. Fredericton and Moncton. The increase
in each was primarily the result of The top contributor to the advance higher land prices.was the combined metropolitan region
of Toronto and Oshawa, where prices Prices were unchanged in 8 of the 21 increased 0.6% from August. Market metropolitan regions surveyed in conditions and higher labour costs were September. Monthly prices declined the primary reasons cited for the higher 0.4% in Victoria and 0.2% in St. John's prices. as a result of lower negotiated selling
prices.
Construction intentions in the non- permits edged up 0.4% to $4.2 billion, residential sector declined 30.8% to following two consecutive monthly $2.2 billion after a 27.7% increase in decreases. Increases reported in four August. Ontario and Quebec accounted provinces offset declines in the others. for most of the decline at the national Ontario posted the largest advance, level. Non-residential construction followed by Quebec. The largest decline intentions rose in four provinces, led by o c c u r r e d i n A l b e r t a , w i t h British Columbia and Nova Scotia. Newfoundland and Labrador a distant
second.In the residential sector, the value of
MARKET IS BEARISHTSX Trend From Oct.5, 2012 to Nov.9, 2012
Stock markets aren't showing much sign of snapping back from declines.
The reelection of President Barack Obama and a divided Congress turned the focus to the "fiscal cliff" -- the combination of more than $600-billion in tax increases and spending cuts scheduled to kick in Jan. 1 unless Washington can reach a deficit-reduction agreement. Most agree that failure to reach a deal will plunge the U.S. economy back into recession, surely sending stocks into a free fall.
The Dow Jones industrial average closed at 12,815.39, up 4.07 points or close to zero per cent. The broader S&P 500 closed at 1379.85, up 2.34 per cent or nearly 0.2 per cent. In Canada, the S&P/TSX composite index closed at 12,196.80, up 5.75 points or less than 0.1 per cent.
On Thursday, the S&P 500 also hit a technical barrier: It closed below its 200-day moving average, which is seen as a bearish development by some investors.
Source : Yahoo Finance
Weekly Statistics Canada NewsRetail Services Price Index rose 1.3%
Building Permits, September 2012
Toronto and Oshawa posts the Highest year-over-year Price Increase