Bond market forces TD to raise rates; CPP changes suggested; Diverging confidence readings

TD hikes mortgage rates

The recent sell-off in Canadian bonds and associated higher interest rates have caused TD to hike their posted 5 year fixed mortgage rate by 0.25%to 5.44%.

Expect the other big banks to follow suit.

CPP changes suggested

One of the main topics discussed on this blog is the social fallout of credit bubbles.  I strongly believe that entitlements will become a significant source of generational stress over the next few years as the younger generation realizes that it faces significant tax burdens and a reduction in standard of living to support promises made during times of stronger economic and population growth.

A new study by the University of Toronto Mowat Centre suggests that Canada is lagging the rest of the developed world in implementing pension reforms.

Is 70 the new 65?

“Canada has become a “laggard” in the worldwide trend toward raising retirement ages, a new study says, and needs to increase the CPP eligibility to 67 from the current age of 65.”

“The paper cites earlier studies that found two thirds of citizens would oppose such a scheme”

No kidding!   Take a lesson from France, the UK, or Greece.

Both the pension reforms and bitter opposition are inevitable.

Diverging confidence readings

Canadian consumers reported feeling more optimistic about their finances in the third quarter.  Good news for those hoping our consumers will continue on their credit binge.

Investor confidence on the rebound

“For the quarter ended September 30, Canadians scored an average 48.6 (on the survey), up from 47.37 in the previous quarter. Still, the index is down compared to the first quarter and far below the 53.8 benchmark.”

“The results reflect the cautiously optimistic mood of investors, as the capital markets made positive strides,” said Fred Pinto, managing director of distribution services at Russell.”

But while consumers are feeling a bit better about their finances, stock insiders have been busy dumping their shares as insider selling hit a record $4.5 last week on the US markets.

 

Not only do insiders in US companies have a less than rosy outlook, we found out today that economic optimism among Canadian execs has tanked.

“There has been a steep decline in optimism about the Canadian economy among Canadian executives, a new study shows.

The Canadian Institute of Chartered Accountants and the Royal Bank of Canada’s Business Monitor for the third quarter found only 39% of C-level executives are confident about the economy’s prospects over the next 12-months, down from 57% in the second quarter.”

Both groups can’t be right.

-Ben

 

 

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