Canada housing correction could trigger another recession BMO report says

OTTAWA — A sudden and sharp correction in the housing market could have a devastating impact on the Canadian economy overall, enough to trigger another recession, says a new Bank of Montreal report.[np_storybar title=”Bank of Canada holds rate at 1%, cuts growth forecast for 2014″ link=”https://business.financialpost.com/2014/04/16/bank-of-canada-holds-rate-at-1/”%5DThe Bank of Canada says it is keeping interest rates at historically low levels for the foreseeable future while shaving its previously posted expectation for the economy’s performance in the first quarter and 2014 as a whole. Keep reading. [/np_storybar]The analysis by senior economist Sal Guatieri finds that even a 10% correction — what many would call a soft landing — could sap as much as one percentage point from gross domestic product growth, or basically halve the current growth rate.The findings stems from an analysis on the contribution of the brisk housing market on the Canadian economy between 2002 and 2007, when prices rose five percentage points faster than incomes.According to the BMO, the rapid escalation in home prices and construction added 0.56 percentage points to annual growth during those six years, and “lifted household wealth, confidence and borrowing ability.”But now, with home values at or near record levels throughout the country and many economists predicting some kind of correction, the opposite scenario would unfold from a price and accompanying construction drop.“This suggests a moderate correction could have a meaningful slowing effect,” Guatieri says in a report issued Friday.“Based on our model, a 10% decline in prices and construction reduced annual growth by one percentage point, with the two channels contributing equally. Given underlying growth of just over 2%, prices and construction would need to fall more than 20% to spur a contraction.”Guatieri adds that given the record levels of household debt accumulated by families, the negative impact of a correction could even be worse than the bank’s models project.On Wednesday, Bank of Canada governor Stephen Poloz said while a housing correction remains a risk to the economy, the most likely outcome was for a “soft landing.”The central bank took comfort in the fact price increases had moderated and that household debt levels had stabilized — while remaining elevated — at 164% of disposable income.The BMO report does not suggest a major correction is in the offing, as some economists have predicted. In fact, it argues the opposite. Guatieri says the so-called “bubble” in housing is exaggerated and that Canada is not in the same position the U.S. found itself prior to the 2007 crash.He notes that while the run-up in housing prior to the recent recession may have been similar in both countries, the boom was smaller in Canada and had been preceded by years of below average homebuilding, so was in part a response to pent-up demand. That was not the case south of the border.He also points out that with the exception of Toronto, Calgary and a few other hotbeds, Canada’s housing boom essentially ended in 2008. Since then, price increases have risen only moderately more than incomes.Still, Guatieri’s findings agree with the central bank’s contention that housing remains a key vulnerability to the economy as a whole.“This speaks to the need for households to manage their debt prudently,” he said.The Canadian Press read more

Green River Rocks Out Third Annual Festival

The John Wesley Powell Museum opened its facilities to the Green River Rock and Mineral Festival on Friday. This is the third year for the festival and not the last.Rebecca Hunt-Foster, the new monument paleontologist and museum curator at Dinosaur National Monument, highlighted the festival as the first speaker to kick off the weekend. She spoke on the significant fossils that have been discovered in Eastern Utah and how Utah has become a “hot spot” for North American paleontology.The festival also included many vendors selling rocks, minerals and handmade items such as jewelry. Festival goers could also sign up for field trips led by paleontologists and experts. These guides took interested parties to locations that have fossils, dinosaur bones and beautiful views. Field trips were free and took place each day throughout the three-day festival. Attendees were able to learn more on trips to the Hanksville-Burpee Dinosaur Quarry, Mill Canyon Dinosaur Tracks, Fossil Point Dinosaur Graveyard and much more.On Saturday, a bake sale was also hosted by the PTA at the festival. Those in attendance were also able to enjoy a poetry reading with Dasha Bulatova at Fossil Point.The third annual festival was made possible by the City of Green River, Epicenter, Emery County Travel Bureau, Alison Jean Cole, Lisa Ward, Bureau of Land Management, Sorenson Legacy Foundation, George S. and Dolores Eccles Foundation and the J.W. Powell River History Museum. read more

Its Data Protection day are you up to speed on your data

first_imgRead: Users of public wi-fi may have had personal details stolen> A right to be forgotten: When you no longer want your data to be processed and there are no legitimate grounds for retaining it, the data will be deleted. Easier access to your own data: A right to data portability will make it easier for you to transfer your personal data between service providers. Allowing you to decide how your data is used: When your consent is required to process your data, you must be asked to give it explicitly. It cannot be assumed.The right to know when your data has been hacked: for example, companies and organisations must notify the national supervisory authority of serious data breaches as soon as possible (if feasible within 24 hours) so that users can take appropriate measures. Data protection first, not an afterthought: ‘Privacy by design’ and ‘privacy by default’ will also become essential principles in EU data protection rules – this means that data protection safeguards should be built into products and services from the earliest stage of development, and that privacy-friendly default settings should be the norm – for example on social networks or mobile apps. TODAY IS DATA Protection Day 2014, marking the signing of the 1981 Convention 108, an international treaty dealing with privacy and data protection.Vice-President Viviane Reding, the EU’s Justice Commissioner said data protection in the European Union is a “fundamental right” with Europe already having the highest level of data protection in the world, she said.New reformsEU data protection reform was proposed two years ago, with the Justice Commissioner stating that the rules will benefit citizens who want to be able to trust online services, and the small and medium sized businesses looking at a single market of more than 500 million consumers as an untapped opportunity.“The European Parliament has led the way by voting overwhelmingly in favour of these rules. I wish to see full speed on data protection in 2014,” she said.The European Parliament is expected to adopt the proposals in first reading in April 2014, with an agreement on the data protection reform possible before the end of this year.Under the European Directive for Data protection, they hope technology firms will have a single standard across the common market. New laws could even offer a competitive advantage for Europe in the eyes of business customers for whom data protection is a priority.This will reduce regulatory fragmentation and could lower the cost of compliance for firms. Yet even under these new laws, the Irish Regulator will still have responsibility for monitoring standards for the global companies based in this country.In control of your data Under the reforms, the European Commission states that the new rules will “put citizens back in control of their data, by:Under the new reforms, the European Commission states that people will have: center_img Your rightsSo, do you know your rights when it comes to your personal data? The Data Protection Commissioner says that under data protection regulations people have a number of rights:1. Right to have your details used in line with data protection regulationsA data controller who holds information about you must:get and use the information fairlykeep it for only one or more clearly stated and lawful purposesuse and make known this information only in ways that are in keeping with these purposeskeep the information safemake sure that the information is factually correct, complete and up-to-datemake sure that there is enough information – but not too much – and that it is relevantkeep the information for no longer than is needed for the reason statedgive you a copy of your personal information when you ask for it.2. Right to information about your personal detailsData controllers who obtain your personal information must give you – the name of the organisation or person collecting the information or for whom they are collecting the information; the reason why they want your details; and any other information that you may need to make sure that they are handling your details fairly.3. You have the right to access your personal details and a right to know if your details are being held.4. You have the right to change or remove your details and you have the right to prevent your details being used.5. You have the right to remove your details from a direct marketing list6. You have the right to object to you details being usedData protection and safety was pushed to the fore last year in the wake of Edward Snowden’s NSA “Prism” programme revelations. In response to the US spying on its European counterparts, the European Commission said that “trust had been lost” and that means a loss of revenue between the two. (YouTube/ EU Justice)To find out more about data protection, click here.Are you concerned about the data that is held on you or does it not bother you? Why not tell us in the comments section.Read: 77 per cent of company data breaches are caused by employees>last_img read more