These are stories Report on Business is following Thursday, Oct. 4, 2012.
Toronto heads for buyers' market
Here’s the bottom line on Toronto’s housing market from Robert Kavcic at BMO Nesbitt Burns: Toronto is on its way to becoming a buyers’ market for the first time since the slump.
The BMO economist was referring today to the Toronto Real Estate Board’s latest numbers, released yesterday and which showed residential real estate sales plunging 21 per cent in September from a year earlier, though you’ve got to factor in two more business days a year ago.
Still, the signs are clear, particularly in the condo market, which has been a major area of concern and where sales lost 27 per cent. Standard detached homes sank by 19 per cent.
Prices climbed, by 8.6 per cent on average, but that’s bound to change.
“With new listings up 4 per cent year over year against a backdrop of falling sales, and with plenty of potential resale condo supply coming over the next year, Toronto is quickly heading for buyers’ market territory for the first time (depending on your definition) since the recession,” Mr. Kavcic said.
As National Bank Financial pointed out, the ratio of active listings to sales in Toronto hit its highest level in at least 14 years, excluding periods of recession.
Canada's housing market has been slowing in general, though some cities, such as Calgary, are still seeing sales increases.
The markets in Toronto and Vancouver, in particular, have worried observers.
- Home prices rise in third quarter, but slowdown seen coming
- Tighter mortgage rules start to take toll on high-end homes
- Rob Carrick: Why Gen Y should tough it out in the rental market
ECB holds rates
European Central Bank chief Mario Draghi painted a bleak outlook today, but still refused to budge on the interest rate front.
The ECB held its benchmark rate at 0.75 per cent. These people care more about inflation creeping up – 2.7 per cent in September – than they do about crippling levels of unemployment.
“Economic indicators, in particular survey results, confirm the continuation of weak economic activity in the third quarter of 2012, in an environment characterized by high uncertainty,” Mr. Draghi said, noting that the economy of the euro zone contracted by 0.2 per cent in the second quarter.
“We expect the euro area economy to remain weak in the near term and to recover only very gradually thereafter. The growth momentum is supported by our standard and non-standard monetary policy measures, but is expected to remain dampened by the necessary process of balance sheet adjustment in the financial and non-financial sectors, the existence of high unemployment and an uneven global recovery.”
Okay, there he talked about high unemployment. But he also said:
“Based on our regular economic and monetary analyses, we decided to keep the key ECB interest rates unchanged. Owing to high energy prices and increases in indirect taxes in some euro area countries, inflation rates are expected to remain above 2% throughout 2012, but then to fall below that level again in the course of next year and to remain in line with price stability over the policy-relevant horizon ... Let me repeat again what I have said in past months: we act strictly within our mandate to maintain price stability over the medium term; we act independently in determining monetary policy; and the euro is irreversible."
Yes, the ECB is an inflation-fighting central bank.
But the people who sit on its governing council all have jobs. Unlike the 18.2 million people who can’t find work in the 17 countries that make up the monetary union.
- Eric Reguly's Economy Lab: Draghi tosses euro zone mess back to politicians
- ECB paints bleak picture, awaits Spain's request for aid
- Euro zone considering bond insurance for Spain: Report
- Greek police, shipyard workers clash over austerity measures
- Fed weighs linking policies to inflation, jobless numbers: Minutes
Macklem on jobs
The Bank of Canada's senior deputy governor Senior Deputy Governor Tiff Macklem says it’s time to change the way we think about jobs.
“In the last five years since the start of the financial crisis, the most significant labour market challenge has been creating enough good jobs for workers,” Tiff Macklem said today, The Globe and Mail's Kevin Carmichael reports.
“Over the next five years, the most important challenge is more likely to be finding enough good workers for the jobs.”
Trouble in Tehran
The collapse of Iran’s currency is taking a severe toll on the country, sparking social unrest amid spiralling costs.
Iranians are having trouble paying for ordinary goods, while importers have lost millions of dollars, Agence France Presse reported.
As The Globe and Mail’s Brian Milner reports today, the rial has lost about 40 per cent against the U.S. dollar this week.
While the currency has been crashing, yesterday saw the first widespread social unrest, sparked by a strike by bazaar sellers and currency traders, according to The Financial Times.
Police with tear gas clashed with protesters in Tehran.
As Bloomberg News reported, costs for items such as meat are surging. Some stores are hoarding goods, hoping for higher prices still. Many are closed today.
“Most of my customers just look at products behind the window and pass,” Behrouz Madani, who owns a butcher shop in the city, told the news agency.
“I see them going to the next store, which is a bakery, to feed their families with bread.”
Iran’s currency, the rial, has plunged as sanctions by Western nations translate into less foreign currency coming into the country from oil exports.
Of presidential hopefuls and big birds
Take a deep breath and relax. Despite what Mitt Romney threatens, Big Bird is not on the endangered species list. Though he might have some household budget issues, like the rest of America.
The Republican presidential hopeful got tongues wagging, sparking an outcry on Twitter last night (and countless jokes), when he said during his debate with Barack Obama that he would axe funding to PBS, which, among other things, would cut child support for Big Bird.
“I’m sorry, Jim,” he told the debate moderator, Jim Lehrer of PBS.
“I’m going to the stop the subsidy to PBS. I’m going to stop other things. I like PBS. I love Big Bird. I actually like you, too. But I’m not going to keep on spending money on things to borrow money from China to pay for it.”
Sesame Workshop, home of Big Bird and his friends, had a little fun in responding today. I suspect I wasn’t the only journalist to call.
“We do not comment on campaigns, but we’re happy we can all agree that everyone likes Big Bird,” it said in a statement.
Sesame Workshop, which as a nonprofit group has charitable status in the United States, gets 35 per cent of its funding from corporations, foundations and governments. That suggests that, compared to its overall budget, a smallish amount is at stake should Mr. Romney actually win and divorce himself from Big Bird. The rest of the funding comes from distribution fees and royalties, at 32 per cent, and licensing of products, at 33 per cent.
Indeed, according to the Hollywood Reporter, federal funds represent some 15 per cent of over all funding to the Corporation for Public Broadcasting, the umbrella group, which was on track to get $444-million (U.S.) from the government in 2015.
(And just a thought here: Remember Goldman Sachs Group and the controversy over its "muppets" clients? I wonder if Mr. Romney thought about that when he decided to attack the Muppets.)
Facebook’s new mark
Its stock may be rocky, but Facebook itself has hit a new high.
The social network now has more than 1 billion active monthly users, chief executive officer Mark Zuckerberg announced today.
“Helping a billion people connect is amazing, humbling and by far the thing I am most proud of in my life,” Mr. Zuckerberg said in a statement.
Facebook said it hit the billion mark at 12.45 p.m. Pacific Time on Sept. 14.
Some highlights cited by Facebook, since its launch:
- More than 1.13 trillion “likes.”
- More than 140 billion “friend connections.”
- Almost 220 billion photos uploaded.
- Some 17-billion “location-tagged posts.”
- Almost 62 million songs played 22 billion times.
- Median user age of 22.
- Mobile users now number 600 million.
“I am committed to working every day to make Facebook better for you, and hopefully together one day we will be able to connect the rest of the world too,” Mr. Zuckerberg said.
Hopefully together one day we’ll be able to get the stock back to its $38 (U.S.) IPO price, too.
Mr. Zuckerberg said today in a televised interview that Facebook is “in a tough cycle now and that doesn’t help morale, but people are focused on what they’re building.”
He reiterated that the company has been putting its focus on the mobile market.
- Facebook reaches 1 billion monthly active users
- Read Zuckerberg's comments
- Russia accepts Facebook's friend request
- Zuckerberg sketches new areas of growth for Facebook
- Rob Carrick on money: My iPhone ate my paycheque
- Tim Cestnick: Buying U.S. property? Here are 5 options for reducing taxes
- NDP rejects Nexen foreign takeover bid
- U.S. jobless claims point to steady labour market
- U.S. factory orders post largest fall since recession
- Google expands job cuts at Motorola unit