Bonds & Interest Rates

U.S. economic confidence plunged more in the past week than in any week since the collapse of Lehman Brothers on September 15, 2008 — the catalyst for the financial crisis and U.S. recession.

…..read more HERE

Sept. Housing Price Changes for Major Canadian Cities

 
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Summary of Housing Price Changes for Major Canadian Cities September 2013

 
As noted above, Calgarians are willing to trade 1 house for 1.5 townhouses. If land is so valuable, shouldn’t the ratio be 1 house equals at least 3 townhouses?
 
VANCOUVER average single family detached prices in September 2013 ticked up 0.1% M/M but remain 13.4% ($142,200) below their peak set last April 2012 (Vancouver Chart). Vancouver combined residential sales although up 63.5% from last year’s drubbing are down 1.4% M/M (Scorecard) as we head into leaky condo season. Average strata units continue to trade at 3Q 2007 prices and as with SFDs, strata townhouse and condo sales were flat M/M. Prime location inventory remains static (see the Bubble Deflator) If you are thinking of buying a Vancouver Condo as an Investment, see my Vancouver Condo Yield Case Study and now that you have the September data, where do you think Vancouver SFD prices will be one year hence? VOTE HERE.
 
CALGARY average detached house prices in September 2013 met with more resistance and dropped another 0.9% (Calgary Chart) and are down 2.8% from the June peak (Plunge-O-Meter). Strata unit prices caught a bid and Townhouse prices ticked up 0.3% M/M and condo prices were up 0.1% M/M. As noted above in the “Strata Distortion” chart Calgarians are willing to trade one house for only 1.5 townhouses and this is a result of falling inventory (Scorecard) and migrant workers and flood victims competing for housing. Alberta remains a different country with respect to record highearnings and immigration. The sentiment in Calgary is the least bearish (34% bears to bulls) of the 3 markets polled with only 21% of the survey thinking Calgary SFD prices will be 20% lower in 12 months. What do you think? VOTE HERE.

EDMONTON average detached house prices in September 2013 slumped 1.9% M/M (Canada Chart) and townhouse and condo prices also remained flat or falling M/M as sales continue to drop M/M (Scorecard). Bidding has yet to break the May 2007 peak SFD price (Plunge-O-Meter) which remains 4.1% below the high.
 
TORONTO average detached house prices for the GTA in September 2013 zoomed 6.1% M/M and are now only 0.4% away from the trifecta high set in May 2013 (Toronto Chart). Combined residential sales are off 2.1% M/M with average condo sales leading the way down 6.5% M/M. The gap between Vancouver and Toronto SFD housing prices (Vancouver vs Toronto) narrowed to 37% more expensive in Vancouver. The GTA may have appeal to the HNWI as a “safe” haven but the media does not rate Toronto as investment grade. Polled sentiment here continues to suggest that prices will be down another 20% in 12 months. What do you think? VOTE HERE.
 
OTTAWA average detached house prices are not available, instead the chart on this site reflects Ottawa’s average combined residential prices. OREB’s report is sparse and opaque and the CMHC, records for Ottawa inventory remain one month lagging. In September 2013 Ottawa combined residential prices dropped 0.6% M/M on a flagging sales drop of 8.2% M/M (Scorecard) and prices remain 6.8% below the peak price set in April (Plunge-O-Meter).

MONTREAL median (not average) detached house prices in August 2013 (I WILL UPDATE WHEN I GET SEPT DATA) ticked back up 0.7% M/M to the June 2013 record price peak (Canada Chart). SFD prices are range bound held in by negative sales dropping 13.2% M/M and down 0.4% Y/Y. The joy came in with condo sales up 5.5% M/M and up 8.9% Y/Y and condo prices rose 1.8% M/M and 3.3% Y/Y (Scorecard). In the 2011 Census, Montreal added 6.4% more dwelling units while only adding 5.2% more people. There is no shortage of housing, but there is a shortage of earnings; the Province of Quebec ranks 7th in Canada’s 10 provinces for earnings and printed an unemployment rate of 8.2% in July (0.6% above Ontario’s).

 
 

Canada’s merchandise imports grew 2.1% in August, while exports were up 1.8%. As a result, Canada’s trade deficit with the world went from $1.2 billion in July to $1.3 billion in August.

CAD Futures are down 20pts on the day, trading at 9663, the middle of its trading range for the last 13 trading sessions.

 

Drew Zimmerman

Investment & Commodities/Futures Advisor

604-664-2842 – Direct

604 664 2900 – Main

604 664 2666 – Fax

800 810 7022 – Toll Free

dzimmerman@pifinancial.com

Silver Leads Gold Higher

  1. Chinese investors should be back on the “gold buying job” today. To understand why that is, please click here now. Twice a year, Chinese citizens celebrate “Golden Week”. Businesses are generally closed, and workers spend time with their families.
  2. Chinese gold buyers should become quite active in the next few days, as Golden Week ends, and the nation goes back to work. India’s Diwali festival is also approaching. In the coming weeks, physical demand for gold is likely to be relatively strong.
  3. imagesI’ve suggested that demand for silver could be even stronger than for gold, and the most recent price action shown by gold’s “little brother” is superb.
  4. On that note, please click here now. You are viewing the daily silver chart. A week ago I highlighted the $20.75 price zone as a key buying area, and you can see how nicely the price has surged from there.
  5. Although it’s still early, today marks the second day that silver is trading over the key red downtrend line, and that should attract buying from technical traders.
  6. There’s more good news for silver enthusiasts. Note the position of my stokeillator (14,7,7 Stochastics) at the bottom of the chart. The lead line is at about 41, and there’s a crossover buy signal in play.
  7. Please click here now. That’s the daily chart for gold. Note the green wedge pattern that I’ve highlighted. It’s very bullish. An upside breakout would be a very positive event.
  8. While the stokeillator is still exhibiting action that is sluggish, it does favour the bulls.
  9. The Dow has not been doing very well recently, and I’ve highlighted the precarious technical position of most general equities.
  10. At this stage in the super-crisis, rising bond prices are bullish for gold. That should change, but not for several years. In the very short term, bonds are a bit overbought, but I don’t see anything to be overly-concerned about.
  11. Please click here now. That’s the daily T-bond chart. There is a new stokeillator sell signal in play, and that could derail the gold rally in the short term. In the bigger picture, a decline from here should create a powerful head and shoulders bottom pattern.
  12. In turn, that pattern could fuel a massive rally in T-bonds, and in gold!
  13. Please click here now. That’s a daily chart of the Dow. For the past several decades, I’ve labelled the September – October time frame as “crash season”.
  14. Each year I warn investors to exit the market around August 7th. My suggestion is to stay out of the market until the end of October.
  15. Substantial fear created by the US government shutdown is beginning to envelop a lot of mainstream investors. Worse, it seems that many of them just entered the market, during the summer months. If so, they are already underwater on their positions.
  16. Investor fear could get a lot worse, and the Dow could get hit a lot harder, if this shutdown drags on for a long period of time.
  17. Gold stocks have exhibited very little volatility, despite the withering general equity market. Some analysts believe in an “imminent parabola”, while others are predicting a decline to the lows of 2008.
  18. I don’t think either scenario is the correct one at this juncture in time. Gold stocks are trading in the COP (cost of production) zone, and that is going to attract value-oriented investors.
  19. Their buying is probably providing a “soft floor” under gold stocks, but momentum players are needed to produce the kind of “barn burner” rally that really excites the gold community.
  20. What technical event would trigger buying from these powerful momentum-oriented players? For the answer, please click here now. That’s the daily GDX chart. Gold stocks have declined along with the Dow recently, but the decline is relatively modest.
  21. Volatility is increasing in the general stock market now, while it’s declining in the gold stock sector. A move above the thick black downtrend line is likely to trigger momentum-based buying.
  22. There’s also a red trend line that may be important. Note the powerful surge that occurred when Ben Bernanke announced “no taper” a couple of weeks ago.
  23. In the very short term, GDX needs to push out of the price channel that I’ve highlighted with thin black trend lines. Note the position of my stokeillator at the bottom of the chart.
  24. The lead line sits at about 10, which is a dramatically oversold condition for this key oscillator. Gold stocks are certainly not in a position that is appealing to momentum players. Regardless, technical analysis and liquidity flows in the physical markets in Asia suggest that both short and long term investors should be focused on the buy-side of the market.

Oct 8, 2013
Stewart Thomson
Graceland Updates
website: www.gracelandupdates.com
email for questions: stewart@gracelandupdates.com 
email to request the free reports: freereports@gracelandupdates.com

Peter Grandich: Things

Jim20131004 

I know many readers continue to ask me about two Grandich clients (and personally my two largest holdings) Geologix Explorations and Sunridge Gold. Several have noted how little or no comment has come from someone “paid’ to open his mouth. Hopefully in the not-too-distant future, I will be able to do so.