Can you believe this?

The Royal Bank has made more than $1.6 Million A DAY over the last 90 days



Royal Bank profit rises 35 per cent

Tara Perkins

Royal Bank of Canada , the country's largest bank, reported a first-quarter profit of $1.5-billion Wednesday, up 35 per cent from a year ago.

That's the bank's second-highest quarterly profit ever, further justifying Ottawa's decision to begin scaling back the support programs it had established for the country's banks during the height of the crisis in late 2008. (Royal Bank's largest profit came in the third quarter of 2009, when it earned $1.56-billion).

The bank's cash earnings amounted to $1.03 per share, slightly shy of the consensus estimate of analysts, who forecast profits of $1.04 per share.

“We continue to see signs of improvement in market and economic conditions and we are taking advantage of opportunities,” chief executive officer Gordon Nixon stated.

The biggest contributor to the bank's bottom line is its Canadian business and consumer lending business, which earned $777-million this quarter, up 12 per cent from a year ago, despite putting aside more money for troubled loans.

RBC's international banking business narrowed its loss to $57-million, compared to $100-million a year ago, as it actually set aside less money for soured loans.

“We continue to see signs of improvement in our U.S. banking loan portfolio and we are working hard to restructure the business to improve client service and achieve greater operational efficiency,” Mr. Nixon said.

While Royal Bank's results show lower than expected provisions for troubled loans, in line with the three other Canadian banks that have reported so far, RBC was the first not to top analysts' expectations for profits.

“With expectations likely raised by the results of the previous three banks, we cannot help but believe the market will be disappointed by these results,” said Barclays Capital analyst John Aiken.

Canada tightens mortgage rules

* New rules come into force on April 19

* Flaherty says no compelling evidence of a housing bubble (Adds details)

By Ka Yan Ng

Feb 16 (Reuters) - Canada will bring in new mortgage rules to cool the country's red-hot housing sector, but does not think the market has entered into bubble territory, Finance Minister Jim Flaherty said on Tuesday.

Concerned that new homebuyers may overextend themselves, the government said it is implementing three changes to mortgage rules that will help prevent the problems seen in other countries that helped trigger the global financial crisis.

"Today's measures are part of a larger picture. We will continue to closely monitor developments in the housing sector in Canada," said Flaherty at a news conference in Ottawa.

"There is no compelling evidence of a housing bubble, but we're taking proactive, prudent, measured and cautious steps today to help prevent a housing bubble."

Changes to Canada's mortgage insurance guarantee framework that come into effect on April 19 include the requirement that borrowers will need to qualify for a five-year fixed-rate mortgage even if they go with a lower variable rate.

The government will also lower maximum amounts that can be withdrawn when borrowers refinancing mortgages. And it will require a minimum downpayment of 20 percent for insured mortgages tied to non-owner occupied properties bought for speculation.

Flaherty described the housing market as "healthy and stable" and said that the government's early action can help prevent negative trends from happening.

The government has been concerned that some borrowers who are taking out variable-rate mortgages will struggle with their monthly payments when interest rates rise.

Bank of Montreal, while noting it did not believe the country faced a housing bubble, said it supported the government's actions. (Editing by Jeffrey Hodgson)

Housing market continues slow recovery
by Castanet

The Central Zone of the Okanagan Mainline Real Estate Board reported January 2010 sales activity of all MLS property types improved over 2008 and the early part of 2009 as the market continues to recover slowly but steadily.

“We are pleased to see a strong start to the New Year in the Central Okanagan as sales activity remains relatively strong and an increase in listings provides more choice for Buyers,” says Brenda Moshansky, OMREB Director and realtor in the Central Zone.

“While inventory is down 11% from last January (4,120 units compared to 4,648), the 1,021 new listings taken rose slightly (15%) from the 884 last year but increased significantly (94%) over the 525 in December.”

Total sales of 252 units jumped 123% last month from the 113 sold in January 2009 and eased slightly (5%) from the 241 sold in December.

Residential units sold showed a 100% improvement over last year at this time (219 from 109) – a 2% increase from last month (214).

Sales of single family units were up 121% over last January (122 from 55) – a 12% increase from December (109). Townhouse and apartment sales improved 92% (25 townhouses sold compared to 13) and 75% (49 apartments from 28) over January 2009.

“With the market looking more positive compared to this time in 2009, we look forward to more balanced conditions in the months to come."

She says low mortgage interest rates and lower home prices than before the downturn will continue to spur first-time buyers.

"We are hopeful that the upcoming Winter Games could provide a golden opportunity for the Okanagan to attract the attention of Olympic visitors and potential buyers to consider investment and recreation property here instead of the Lower Mainland where prices are at an all-time high.”

Canadians think a retirement of their dreams is out of reach: RBC Poll

Retired Canadians are spending less in their first year of retirement but still more than they expected

TORONTO, Jan. 18 /CNW/ - Nearly all Canadians (90 per cent) feel they will have enough income to cover their necessities in retirement but only one-in-four Canadians (25 per cent) feel they will have enough money to fulfill their retirement dreams, according to the 20th Annual RBC RRSP Poll.

The poll found that most retired Canadians (75 per cent) didn't know how much they spent in their first year of retirement, virtually unchanged from 2008 (76 per cent). Those who know how much they spent had lower costs in their first year of retirement, having spent close to $35,000, down from $51,000 in 2008. However, half of these respondents (52 per cent) said they spent more than expected, up from 46 per cent in 2008.

"How much money you'll need in retirement depends on how you'll be spending your time, with many Canadians underestimating the amount they will need," said Lee Anne Davies, head, Retirement Strategies, RBC Royal Bank. "Financial planning is more than just number crunching and your retirement is not a single phase of your life, but a series of stages. A personalized financial plan can look at options to make your nest egg last and help ensure your retirement needs and dreams are met."

When thinking about retirement, the study found that Canadians who have not retired were most worried about having enough savings (48 per cent), while only 29 per cent of retirees had this concern. Both pre-retirees and retirees are concerned about maintaining their standard of living (40 per cent). Retirees are also more likely to be worried about healthcare (33 per cent) than pre-retirees (28 per cent).

"All of these concerns are valid. Whether retired or not, your life will be somewhat unpredictable at times and you need to be ready when life throws you a curve ball.

This is where having a plan can provide peace of mind - you'll know you've considered the unexpected and you've taken the steps to save for your retirement," said Davies.

These are some of the findings the RBC 20th Annual RBC Poll conducted by Ipsos Reid between October 21 and November 2, 2009. For this survey, a national sample of 1,457 adults from Ipsos' Canadian online panel was interviewed online. Weighting was then employed to balance demographics and ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. A survey with an unweighted probability sample of this size and a 100 per cent response rate would have an estimated margin of error of +/-2.56 percentage points 19 times out of 20 of what the results would have been had the entire population of adults in Canada been polled. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.

Most of us hire a mechanic to fix our cars but don't or won't hire a financial planner to fix our retirement plan!

If you would like to be introduced to a financial planner who I trust send me a quick email or text

Bank of Canada backs off housing bubble talk
Says raising interest rates could hurt entire economy
Last Updated: Monday, January 11, 2010 | 3:31 PM ET Comments0Recommend0
CBC News

The Bank of Canada backed away Monday from its recent warnings about a real estate bubble in Canada.

In a speech in Edmonton, bank official David Wolf ruled out increasing interest rates to discourage mortgage lending.
The Bank of Canada says it sees the housing market 'requiring vigilance, not alarm.'The Bank of Canada says it sees the housing market 'requiring vigilance, not alarm.' (CBC)

Wolf, an adviser to bank governor Mark Carney, said that in the central bank's view it is premature to be talking about a housing bubble in Canada.

"We see the housing market requiring vigilance, not alarm," he said.

He added that even if the bank was convinced housing prices were getting out of hand, raising interest rates would be too blunt an instrument, since it would mean cooling off all economic activity.

"We would, in essence, be dousing the entire Canadian economy with cold water, just as it emerges from recession," he said in a speech delivered on behalf of deputy governor Timothy Lane, who could not travel to the Alberta capital for personal reasons.

"As a result, it would take longer for economic growth to return to potential and for inflation to get back to target," he added.

Wolf said the bank considers the current hot market to be a phenomenon based on temporary factors, such as pent-up demand from the recession, and low mortgage rates. Moreover, he noted with starts below long-term demographic requirements, the number of houses on the market is still declining.
Better ways to cool market

Wolf, a former chief economist with Merrill Lynch Canada, said there are better ways to cool the housing market.

Finance Minister Jim Flaherty has also mused about such measures, including raising the minimum down payment requirement above five per cent, or reducing the maximum length a house can be amortized from the current 35 years.

The bank has been highlighting for months the danger of Canadians getting in over their heads in purchasing homes, warning that buyers should ensure they don't take on too much debt.

The bank's worry is that homeowners with large mortgages that are manageable now with interest rates at record lows won't be able to afford their monthly payments once interest rates start rising, as is expected later this year.

On the economy as a whole, Wolf said the bank believes the economic recovery is still dependent on government support and that "growth drive by the private sector has yet to materialize."

Notes from the speech were posted on the bank's website.
With files from The Canadian Press

Bank of Canada concerned about government, household debt
By Julian Beltrame, The Canadian Press

OTTAWA - Mounting governmental and household debt are posing new risks to the stability of financial systems, the Bank of Canada said Thursday in its most recent analysis.

The central bank's semi-annual "Financial System Review" finds that overall conditions have improved in the short term since it last reported in June.

But it adds that record-high debt by Canadian households pose an elevated medium-term risk if a second financial or economic shock were to materialize.

Bank of Canada governor Mark Carney has warned in the past about Canadians getting in over their heads with large mortgage commitments that don't appear problematic given today's low interest rates.

The bank repeats the warning in its systems review, stressing that rates aren't going to remain at historic lows forever and mortgage payments will rise.

This is both a potential problem for households and banks, the report states.
"When borrowing funds, especially in the form of mortgages, households need to assess their ability to service these debt obligations over their entire maturity, taking into account likely changes in both income and interest rates," the report stresses.

And the bank says lenders, such as the chartered banks, should be careful about extending mortgage loans even if they are insured.

That's because a borrower's default on mortgages would impact other loans.
The Bank of Canada notes that its review of potential risks is not intended as a prediction of what is likely to occur, but an early warning system of potential risks.

In this regard, one risk that is emerging is massive debt being taken on by governments throughout the world as they try to cope with the fall-out the deep recession.

The deteriorating fiscal positions leaves many governments vulnerable to future economic shocks, in that they are left with fewer resources.

The bank adds that the ability of governments to address current account imbalances - one of the believed root causes of the global downturn - would be hindered by the debt overload.

Although Canada remains in a fiscally strong position in relation to many other economies, with a debt-to-gross domestic product ratio projected to peak at about 35 per cent, it too would be impacted by the problems of others.

"Our financial system would be affected indirectly," the bank says, "since higher borrowing costs facing those countries with large financing needs would mute the global recovery."

"In addition, disorderly fluctuations in exchange rates could cause financial stress for Canadian businesses, financial institutions, and households."

The central bank says the outlook for the global economy has improved since June, but cautions that growth "is nonetheless likely to remain subdued for some time."

This makes global economies more vulnerable to any new shock that may emerge, the bank states.
======================================

If you would like a FREE 30 minute debt consultation, please contact email me at lewis @ vtmm.ca to set up an appointment.

Here is a sample household budget for your use.

Lewis