Understanding the Financial Crisis

Ever wondered how US Real Estate crisis started and why? This is great video that will give a very good idea

Bubble or not?

Anyone living in Toronto gave this question some thoughts. It doesn’t matter if you are renting or own your home, arrived just a week ago or lived here all your life. Everyone wonders how high the prices can go and what’s next.

I came across an article about Support, Resistance and Rounded numbers which offered an interesting perspective to this question.  Support and resistance is one of the fundamental foundations of technical analysis. It is believed that securities (property value in our case) have predetermined price levels where they stop falling (i.e., find the support necessary to stop falling) and predetermined price levels where the stock will reverse its upward climb (i.e., when it meets a price level that resists further climb upward).

Traders never buy or sell simply based on support and resistance, as it just one of the tools in technical trader toolbox. However it can help identify entry and exit points, and increase the probability of making a winning trade.

On the other hand our society seems to favor rounded numbers to ten, hundred, thousand etc. Whether it is learning to count, our currency or the special emphasis we put on new years that start a new decade.

For example, let's suppose company XYZ is on a bullish tear and approaching 100 for the first time. This is a milestone for many companies and there is a tendency for traders to pause at this moment. Many stocks in this situation will find resistance at 100, and a short pullback may occur. After a few days the resistance level is often tested again. Either resistance will hold again, resulting in either stagnation or a pullback, or resistance will be broken.

So how is all this important to housing prices? Well, according to Toronto Real Estate Board the average selling price in the first 2 weeks of July 2011 was $464,277.  Looks like the next milestone to hit is a nice round number of half a million. At this point we either find resistance or break this barrier. So let’s keep an eye on this

Your network is your net worth

Everyone knows that to be successful in today's world you need to network. It doesn’t really matter if you are using your network to find next job or to fund a billion dollar deal. Your network is your net worth. So naturally we try to grow our network and utilize existing connections, but some people seem to be better at this than others.

This week I came across a very inspiring video by Lisa Mattam, who was nominated by Profit Magazine in 2009 as one of the top 10 emerging women entrepreneurs in Canada. In her talk, Lisa offers very clear Strategies for Successful Networking.

     1. Know your brand

Remember in Bridget Jones's Diary Introduce people with thoughtful details. Such as: "This is Mark Darcy. Mark's a top barrister. He comes from Grafton Underwood. ..."

How do you want to be introduced? What do you want people to recognize in you? When networking, make first 30 seconds most impactful. Introduce yourself by answering these two questions

What do you do that is truly unique and what have you done that has impact

2. Build your message

Have you ever come back from an event and found your mailbox full of “Nice to meet you” messages? And then what? You didn’t connect to these people just to keep you company that night. Make sure you clearly state what is your message to people you’ve met. Are you offering help? Or may be looking for support? Or whatever it happens to be, make sure to give people on the other end a reason to connect back with you.

3. Develop a map (how will you know where you are going?)

After you first signed up for Facebook, all over sudden your kindergarten friends who you haven’t seen for ages want to keep up with your news. But is it any good in growing your useful network? Social networks are a very powerful tools if used wisely.

Create an actual map of your network, but include only people you had meaningful connection, not just met once. Analyze your network map:

•       How big is it? Do you need to grow it?
•       How interconnected is it? Do people you know also connect with each other? If they do you actually need access to only one of them to have access to full network.
•       How diverse is your network? And not only culturally diverse. What sectors are represented? What roles? Levels?
•       Where do you have gaps?

4. Be consistent

Do you get back to people when you promise? Do you reply to e-mails promptly, even when reply is just “I’ll get back to you in 3 days”? People will keep you in their network if they can rely on you. They will refer you to other people if they can trust you.

5. Embrace the unexpected

Your network can expand in many ways, shapes and forms. You can find new missing pieces of your map on the street, in the gym or at the grocery store. Be ready to embrace what chance has to offer you.

Simon Sinek: How great leaders inspire action

Why are some businesses more successful than others? Funding? Just right market conditions? The right people on your team? Although all these points are very important they are not the only requirements for success. Sometimes are not even requirements at all… more like “nice to have to make your life easier”.

Look at the Write brothers. All funding they had came from the bike shop they were running. They had no college education and no one to help them, only a wild thought they believed in. And yet they were successful in delivering an idea that changed the world and taught the mankind flying.

Why is Apple with their iPods, iPhones, iPads, iWhatever considered a flagship of today’s progress and technology? Apple was not the first one to invent MP3 Player, and their initial iPads at the time of release were missing many cool existing features. Then why are they always leading the race?

Behind every successful business there is an idea why this business exists. Why it was introduced to the world in the first place. Only if you believe in this idea and put it before yearn for material gain and fear of obstacles, only if you speak from the bottom of your heart, not mind or wallet, you will be successful. Successful in anything: science project, finding a job, building new business or just living your life.
Recently a friend of ours posted below video. Above is our thoughts on it. How about you?

Last week CMHC issued its latest Housing Market Outlook and the next 2 years look very promising. We thought you might be interested to learn some details.

Market Watch July 2011: Great Toronto Area

Toronto Real Estate Board reported 10,230 home sales through the Toronto MLS system in June 2011 – up 21 per cent compared to June 2010. This number represented the third best June result on record behind 2007 and 2009. The number of transactions during the first six months of 2011 amounted to 48,189 – down by 4.5 per cent compared to the first half of 2010.

The average price for June transactions was $476,371 – a 9.5 per cent increase over June 2010. Though the first six months of the year, the average selling price was $467,169 – almost an eight per cent increase compared to the same period in 2010.

In June 2011, the median price was $405,000, from the $367,750 recorded during June of 2010.


Read full report

Housing Market Outlook Q2 2011

Earlier this month CMHC issued its latest Housing Market Outlook and we are presenting a summary for you.

Existing homes sales have increased since July 2010. On the other hand, new listings have not kept pace with existing home sales. As a consequence, the resale market has moved from balanced to sellers’ market conditions.  As a result, the average price increased to $365,648 compared to $342,441 in the fourth quarter of 2010. For the remainder of 2011, the average price is expected to moderate but still increase (possibly up to $374,300 in 2011 and $385,000 in 2012).

In 2011, Ontario will experience a modest decline in housing starts.  A recovering economy and improving employment situation will push Ontario starts up in 2012

In Ontario a recovering economy and improving employment situation will push province starts up, but not until 2012. As is the case for most other provinces, new construction growth is expected to slow in 2011. While less first time buyer demand and slightly higher interest rates will dampen housing activity, stronger full-time employment, income growth and in-migration will provide offsetting support for housing into 2012.

Mortgage rates

On April 12th, the Bank of Canada announced that it was leaving the Target for the Overnight Rate unchanged at 1.0 per cent. The last increase in the overnight rate occurred on September 8, 2010 when the Bank of Canada raised it by 25 basis points.  Although the Bank of Canada is expected to resume raising the overnight rate in the fourth quarter of 2011, mortgage rates, particularly short term mortgage rates and variable mortgage rates are expected to remain at historically low levels. This will continue to support housing demand.

According to CMHC’s base case scenario, posted mortgage rates will remain flat in 2011 before increasing moderately in 2012. Rates could, however, increase at a faster pace if the economy ends up recovering more quickly than presently anticipated.

Employment and income

Employment is forecast to improve along with overall economic conditions and increase by 1.6 per cent in 2011 and by 1.7 per cent in 2012. The unemployment rate is expected to decrease to 7.6 per cent in 2011 and about 7.2 per cent in 2012.

The composition of employment growth is shifting from part-time employment to more full-time employment. Continued employment growth in 2011 and 2012 will support the housing market

Growth in incomes improved in 2010 because of the economic recovery and the resulting improvement in the labour market. Income will continue to grow at a modest pace in 2011 and 2012 and will positively affect housing demand.

Regulation

The Department of Finance introduced some adjustments to the rules for government-backed insured mortgages. These rules change will moderate housing activity, as some potential home buyers will have to save a larger down payment and thus postpone their purchase or consider a less expensive home.

Vacancy rates

Modest rental construction and strong rental demand due to high immigration will be partly offset by increased competition from the condo market.  As a result, vacancy rates across Canada’s metropolitan centres will remain relatively stable this year and next.

Read full report

Don't Eat The Marshmallow Yet! The Secret to Sweet Success in Work and Life

All of us have thousands of wishes. To be thinner, to be bigger, have more money, have a cool car, a day off, a new phone, to date the person of your dreams. Sometimes we even know a way to reach these wishes. Often it requires self-discipline and persistence. We recently learned about following and though you might find it not only interesting, but also applicable to you.

Many years ago there was a study at Stanford University. Four years olds were left in a room, each with a marshmallow, and given a choice of eating it then or fifteen minutes later, when they were promised a marshmallow as an extra reward for waiting. When you are 4 years old, 15 mins is like entirety! Some ate theirs right away. Others waited. But the study's real significance came a decade later when the researchers discovered that the children who held out for the reward had become more successful adults than the children who had gobbled their marshmallows immediately.

The "marshmallow theory" answered a thirty-year quest to find a compelling explanation for why some people succeed and others fail. The key difference between success and failure is not merely hard work or superior intelligence, but the ability to delay gratification. "Marshmallow resisters" achieve high levels of success while the rest of us eat all our marshmallows at once, so to speak--accumulating debt and dissatisfaction no matter what our occupations or incomes. But it doesn't have to be that way.