Targeted : Measured
Caliber Capital is a capital markets advisory firm that assists emerging private and publicly traded companies to achieve their growth potential, strengthen their brand and establish a fair market value within the global financial markets. Our programs are targeted to the right audience and measured for their success.
T-Ray Science / THZ.V
T-Ray Science, Inc. is seeking to harness the power of Terahertz (“THz”), the last unexplored region of the electromagnetic spectrum.
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Riverside Resources / RRI.V
Riverside Resources creates value through a “prospect generator business model. Riverside’s technical team identifies early stage exploration projects and advances prospective mine sites with experienced in-house technical knowledge and joint venture partnerships with proven technical teams.
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Zecotek / ZMS.V
Leading The Way In Photonics
Zecotek is a biophotonics technology company developing leading-edge products: high performance crystals, photo detectors, lasers, imaging and 3D display technologies, for medical, science and industrial applications.
Eighth Avenue Development
Eighth Avenue is undertaking development projects in the luxury home market, multi-family residential and land development. They offer both development and custom design/build services, specializing in creative, architecturally inspiring environments.
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Central Resources / CBC.V
Central Resources is a junior exploration company formed by a dedicated group of professionals with broad experience in the mining and exploration industries, focused on precious and base metal exploration in the Americas.
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EnWave Corp. / ENW.V
EnWave Corporation has developed commercial technology used to dehydrate sensitive pharmaceuticals, food, and live or active liquids in bulk.
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Caliber Comment on EnWave/Nestlé agreement
Fantastic news by EnWave today concerning an agreement with Nestlé the world’s largest food and beverage company and #48 on Forbes Global list of the largest companies.
Although the news release itself is pretty skinny on ‘news’ it says volumes concerning the level of respect and credibility that the technology is receiving. No one in their right mind can believe that Nestlé would ever allow their name to be used in a news release if they had not tested the technology extensively and were willing to move toward deployment across a broad spectrum of their products.
“the Nestlé division interested in nutraREV is planning a broad evaluation through their current brand network to establish whether the technology can improve current brands or be used to create new brand opportunities.”
was what one employee told me today.
This credibility will also provide John McNicol a great deal of momentum in discussions with other customers currently interested in REV in different product fields. I have to think that with the Nestlé name attached ‘Big-Pharma’ is more likely to step into the fray as are other large food companies. Can Kraft be far behind?
John’s ability to interest large institutional investors to the stock will also be vastly enhanced.
In my past discussions with the president and co-CEO John McNicol he has stated many times that with one more multinational under his belt he would expect a great deal of success interesting institutions to the stock. I have mentioned in past letters that John’s last company was the subject to a takeover offer resulting in a massive win for all invested, of which many institutions participated heavily. John’s credibility is noted on the street in institution-land as are his past successes.
I can’t see how Nestle can do anything but make EnWave stronger in credibility and stock price. Ahhhhh but remember this is NO RECOMENDATION … be sure to read the disclaimer at the bottom of the page!
In the mean time I am sincerely looking forward to the next several months … and am sticking to my prediction that ENW will hit $3 before Christmas, Nestlé just makes that a little more likely.
“It’s so rich and thick and choco-lit! But you can’t drink it slow if it’s Quik!” – The Nesquik Bunny
Doug Robb
Caliber Capital Partners Inc.
“Capital Market Strategies & Solutions”
510-1199 West Pender Street
Vancouver, BC
V6E 2R1
888.743.0590 toll free
250.715.5975 mobile
www.CaliberCapitalPartners.com
NO This is NOT a recommendation in any way. Do anything and everything but first DO YOUR OWN DUE DILIGENCE. Contact someone who is a registered rep to help you make the decision if you need to, but don’t come back whining to me that I forced you to do anything beyond your own aptitude or control.
EnWave signs R&D agreement with Nestlé
ENWAVE SIGNS RESEARCH AND DEVELOPMENT AGREEMENT WITH NESTLE
EnWave Corp. has signed a research and development agreement with Nestec Ltd., a subsidiary of Nestle S.A. of Vevey, Switzerland. The agreement involves EnWave’s nutraREV food dehydration technology.
Terms of the agreement are confidential.
“I am extremely pleased to be working with the world’s largest food and beverage company,” stated Dr. Tim Durance, chairman and co-chief executive officer of EnWave. “Nestle is well known as a leader in innovation, early technology adoption and open innovation.”
EnWave’s nutraREV technology offers continuous high-speed drying in a low-temperature vacuum environment.
About Nestle S.A.
With sales of 108 billion franc in 2009, Nestle is the world’s leading nutrition, health and wellness company. Founded in 1866 in Switzerland, the company now employs more than 280,000 people and has factories in 83 countries.
We seek Safe Harbor.
EnWave hits front page of Vancouver Sun business section.
VANCOUVER – Parastoo Yaghmaee holds out a bag of dried pineapple, so I say thanks and take out a couple of chunks.
It’s dry and crunchy. I pop it in my mouth. It’s tart, sweet and aromatic, indistinguishable in flavour from fresh pineapple.
On the same display table as the pineapple are bags of pinkish cantaloupe, fire red chilies, forest green brussels sprouts, beige bananas and more than a dozen other dried foods including fish and shrimp.
The foods have a few things in common. They are in their pure form — free of additives, colouring agents and preservatives, they retain most of their original nutrition and colour — and they were all produced in a research laboratory at the University of British Columbia using a leading-edge dehydration technology that its developers hope will turn the processing of food, food ingredients, and even vaccines and antibiotics on its ear.
Yaghmaee, who has a doctorate in food science, and her boss Tim Durance have been fine-tuning the technology for more than a decade, taking it from the realm of theory to practical science and engineering.
A company formed around the science, EnWave Corp., has sold one dehydrator to a local blueberry producer and is collaborating with Danisco, a leading global producer of food components, on pilot tests for the manufacture of probiotics for yogurt.
Earlier this year, the Canadian Institute of Food Science and Technology recognized EnWave with an award for “outstanding applied development in the food sector.”
Durance, who has been a professor in UBC’s food, nutrition and health program since 1987, and holds 14 patents, accepted the award on behalf of EnWave.
The technology is straightforward in concept, involving a microwave generator not unlike the one you’ve got in your kitchen, connected to a vacuum chamber where the food is rotated in a manner similar to a front-load washing machine in order to ensure even exposure to the microwaves.
The key is the vacuum chamber, which is where Durance and EnWave co-CEO John McNicol believe their technology has a significant edge over conventional freeze-drying.
“When you put something under vacuum it lowers the boiling point. Just like going up a mountain, water boils at a lower temperature because the pressure is lower,” Durance explains during a visit to the company’s test lab.
“We reduce the pressure [in the vacuum chamber] until the boiling point of water is about body temperature. The problem with vacuum is that it reduces the transfer of energy — it doesn’t cross a vacuum well, except for radiant energy. So we use microwave as a source of radiant energy.
“So then, you can dry things as fast as you want. You can dry it in minute if you want.
“Practically speaking, we usually end up around 10 or 15 minutes but it’s really just as fast as you want to put the energy in.”
EnWave calls the process “radiant energy vacuum” or REV.
Rapid dehydration in a vacuum means there’s no time for food to spoil: no opportunity for oxidization to turn apple slices brown because there’s no oxygen to set it off, moisture to allow micro-organisms to release enzymes that cause food to decay. “You will never get anything growing on it,” Durance said. “You won’t get bacteria or mould growing if the water level is low enough. So we dry it to the point where microbial spoilage is not a problem, not an issue.
”Drying is an excellent preservative. Actually it’s the same preservative as freezing which removes the water as ice — while drying just removes the water.”
The difference is that the REV method is faster than freeze-drying by several orders of magnitude.
However, even after the technology proved viable for food, EnWave foundered both as a potential commercial enterprise and as a publicly traded company.
Some of that was a due to a lack of promotional acumen. Some was due to the need for an innovation that would increase the number of ways the technology could be applied, expanding EnWave’s potential to market its technology.
Things began to fall into place in 2007 when Durance finally figured out how to tweak the food-drying method to encompass other organic materials — particularly for medical applications by lowering the temperature at which the biological material can be successfully processed.
At present, vaccines can be preserved for a few months with refrigeration, but EnWave’s tests with its dehydration method suggest that something like a flu shot or an inoculation against polio could remain viable for a longer period of time without being kept cold.
EnWave achieves that result by exposing the pharmaceutical materials to a level of vacuum that lowers the boiling point of the material to a level below that which would be required to freeze it — essentially freeze-drying without using refrigeration.
I t remains to be proven that REV will be cost effective at a mass production level, but the implications are intriguing for efforts to distribute medical aide in the Third World, or quickly vaccinate large numbers of people against an H1N1 flu outbreak.
One of the company’s pharmaceutical dehydrators is undergoing tests by the Saskatchewan Research Council, one of Canada’s leading agencies for research into the commercialization of technology.
McNicol came aboard in 2007 as the broader possibilities of REV became apparent, bringing a level of entrepreneurial acumen he’d acquired in the successful development of an unrelated drying technology, using paper products, a decade earlier.
Today the company has $6 million in capital, a $175,000 a month cash-burn rate, no debt and a market cap of $60 million.
”The freeze-dry industry has been around for 50 years. It was extremely established,” McNicol said in an interview. “When I got in there and looked at how they do it, it was anywhere from 24 to 72 hours of processing time in batches.
”It’s old, very slow, and very expensive. I call it a beautiful science but it’s an awkward operating method.”
EnWave’s business model will centre on licensing the technology and collecting royalties from the companies that use it.
June Commentary
Is the Bear upon us? June has been marked by a continued decline in almost every stock market in the world, the most concerning to us being the TSX, down 4% on the month and the venture exchange falling 6.5%. This adds up to 7.7% decline on the TSX and a whopping 16% for the Venture in just the past two months! The DOW Industrials was also down 3.5% in June adding up to an 11.5% drop in the past 60 days. The Canadian dollar ran up again nearly reaching par in June but come under severe pressure late in the month along with every other commodity producing nation when the “double dip recession”, “China’s engine slowing” and “Employment Slips again” headlines took the limelight sending shivers through global financial markets. The highlights in the world centered on the ‘beautiful game’ in South Africa and the FIFA World Cup which will run to the middle of July. Other notes of interest was the replacement of the United States top military commander in Afghanistan for near insubordination and the G-20 meeting in Toronto where global leaders decided that in times of low employment and slowing economies that less spending and debt reduction was the order of the day …. leaving one to wonder where Keynesian style stimulus economics has gone when it is needed most?
T-RAY ANNOUNCES ADDITION TO BOARD OF DIRECTORS
2010-06-28 10:07 ET – News Release
Mr. Thomas Braun reports
T-Ray Science Inc. has nominated Joseph Biegel to the T-Ray board of directors to stand for election at the company’s annual general meeting on July 15, 2010. Mr. Biegel is currently the vice-president of product management and marketing for the medical imaging division of McKesson Provider Technologies. He joined McKesson in 2004 and is responsible for developing product strategy and its plans for the growing family of diagnostic imaging information technology solutions from the McKesson Imaging Group.
Mr. Biegel has been working in digital imaging for over 27 years, and in diagnostic imaging for 19 years. Prior to joining McKesson, he served as vice-president of business development for Agfa Healthcare. Before joining Agfa through the acquisition of Mitra Corp., he had senior roles in diagnostic imaging product development and marketing at Hewlett Packard’s Medical Products Group, Polaroid Medical Imaging Systems and the DuPont Merck Pharmaceutical Co. Mr. Biegel also was on the faculty of the Rochester Institute of Technology’s Center for Imaging Science, where he taught courses in imaging and computing, and was involved in contract research programs for NASA and other U.S. government organizations.
Along with Mr. Biegel, five current directors are nominated for re-election, including Thomas Braun, T-Ray’s chief executive officer; Ralph Braun, T-Ray’s chief financial officer; Karen Boodram, president of Biomanna Medical Business Development Consulting; Chris Dennis, president of Comcare Health Services Inc.; and Dr. Jake Thiessen, the Hallman director of the School of Pharmacy and the director of the health sciences campus at the University of Waterloo.
“Joe’s extensive medical imaging background is an ideal addition to our board as our skin cancer detection program begins to accelerate,” commented Mr. Braun, T-Ray’s CEO.
Mr. Biegel holds a bachelor’s and a master’s degree in imaging science from the Rochester Institute of Technology (1975 to 1986). He is a technical reviewer for the British Columbia Innovation Council and is a member of the board of Imaging the World, a non-profit organization committed to providing sustainable imaging solutions to help reduce the inequality of the world’s disparate health care access.
“I am very pleased to be nominated to join T-Ray’s board at this time,” commented Mr. Biegel. “I believe there is a strong medical need and commercial opportunity for a non-invasive device to detect both melanoma and non-melanoma skin cancer, and look forward to working with the company as it continues to develop this optical biopsy technology.”
T-Ray has engaged SectorSpeak Inc. to assist its investor relations activities, namely to introduce the company to investors and analysts, organize investor road shows and generally assist in corporate communication. Pursuant to a consulting agreement to be effective as of July 1, 2010, T-Ray will retain the services of the consultant for an initial period of one year. T-Ray has agreed to pay to the consultant a monthly compensation of $5,000 and to grant the consultant an option to purchase 150,000 common shares of the company at a price of 20 cents per share for a period of five years. The options shall vest over a period of 12 months pursuant to TSX Venture Exchange policy. T-Ray also continues to engage Caliber Capital Partners Inc. for investor relations and has amended the number of options issued to Caliber to 150,000 from 250,000. All of the other terms of T-Ray’s agreement with Caliber remain unchanged.
We seek Safe Harbor.
Central Resources (TSX.V: CBC) News & Commentary
Central Resources (TSX.V: CBC) continues to expand its property portfolio in prolific mineral areas with the Company’s announcement to acquire 100% of a number of mineral claims in the White Gold District of the Yukon Territory. My general feeling about mineral exploration is one of high risk combined with high potential reward, but it is interesting to observe that very rarely is a discovery made when it is the only property in the corporate portfolio. On the contrary in every case that I have researched, the discovery property was one of many in the portfolio. The gold apparently goes to those that are active and not to those that are standing still.
It is certainly a challenging process, however in Central’s case it is benefited by a strong corporate structure that is in place as well, simply because tightly held stocks with limited shares outstanding are less likely to be taken advantage of by the ‘sharks’ that are ever present when there is “gold in them thar hills”. Central seems to be neither standing still nor is it held back by its corporate structure.
The White Gold District is home to several large mines but more recently to two new discoveries of note: Underworld Resources (TSX-V: UW) made a substantial discovery and long before it was drilled to its full potential it was gobbled up by Kinross Gold in a friendly takeover to the tune of about $140 million. Since then Kaminak Gold (TSX-V: KAM) has made another discovery and though early stage it is being seen to match all the characteristics of the Underworld discovery.
Interestingly the entire area has been devoid of previous glaciations, so when something is found at surface it is a strong indicator that there is gold in the immediate vicinity if not directly below the sample. Central has picked off a nice property package of identified gold anomalies and with its corporate structure and the heat rising on junior golds particularly in this district, I think it is worth the time for you to pay attention to CBC today, and likely throughout the summer!
DR!
“Do more of that which is working, and do less of that which is not.” Dennis Gartman
June 09, 2010
Central Acquires Properties in White Gold District, Yukon
VANCOUVER, BRITISH COLUMBIA–(Marketwire – June 9, 2010) – Central Resources Corp., (TSX VENTURE:CBC) (“Central” or the “Company”) is pleased to announce that is has entered into an option agreement with Strategic Metals Ltd., (“Strategic Metals”) to purchase a 100% interest in six separate groups of mineral claims (the “Properties”) located within the White Gold District, Yukon.
The Properties consist of 522 mineral claims in six separate groups, all of which are located within the Dawson Range, in the west-central portion of the Yukon-Tanana terrane. This area is underlain predominantly by metasedimentary and metavolcanic rocks of inferred Devonian to Mississippian age, which are intruded by numerous Mesozoic granitic plutons hosting copper, molybdenum and gold mineralization.
The Properties were staked by Strategic Metals to cover areas of anomalous stream sediment and soil geochemical surveys. Kaminak Gold Corp. has had recent success drilling geochemical anomalies at their Coffee project, which is underlain by similar rocks of the same terrane. A map showing the property locations can be found on the Company’s website www.centralres.ca.
Option Terms
Under the terms of the option agreement, Central can earn a 100% interest in the Properties, subject to a 3% Net Smelter Royalty (“NSR”), by making staged payments to Strategic Metals of $300,000 cash and 3,000,000 shares by February 15, 2012, as described in the table below. Central has the right to purchase 1% of the NSR at any time for a cash payment of $1,000,000. A finder’s fee is payable to Axeman Resource Capital Inc., an exempt market dealer. The agreement is subject to acceptance by the TSX Venture Exchange.
-----------------------------------------------------------
Detailed Option Terms
-----------------------------------------------------------
Date Cash Payment Share Issuance
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Upon Exchange Acceptance $115,000 500,000
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February 15, 2011 $35,000 1,000,000
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February 15, 2012 $150,000 1,500,000
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Peter Thiersch, M.Sc., P.Geo., a “Qualified Person” as defined by National Instrument 43-101, has reviewed and approved the technical disclosure in this news release.
About Central Resources
Central Resources Corp., is a junior mineral exploration company created to leverage the extensive knowledge and expertise of an experienced team of financial and resource industry professionals.
This news release contains forward-looking information, which involves known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from current expectation. Important factors – including the availability of funds, the results of financing efforts, the results of exploration activities — that could cause actual results to differ materially from the Company’s expectations are disclosed in the Company’s documents filed from time to time on SEDAR (see www.sedar.com). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise
Doug Robb
Caliber Capital Partners Inc.
“Capital Market Strategies & Solutions”
510-1199 West Pender Street
Vancouver, BC
V6E 2R1
888.743.0590 toll free
250.715.5975 mobile
NO This is NOT a recommendation in any way. Do anything and everything but first DO YOUR OWN DUE DILIGENCE. Contact someone who is a registered rep to help you make the decision if you need to, but don’t come back whining to me that I forced you to do anything beyond your own aptitude or control
T-Ray completes prototype counterfeit-drug detector
Vancouver, Canada: T-Ray Science, Inc. (TSX-V: THZ) (“T-Ray Science” or the “Company”), announces a milestone achievement with the completion of the pre-production prototype of Authenticare™, a pharmaceutical tablet analyzer for the authentication of solid dosage pharmaceuticals. The target markets for the device are pharmacies, consumers, law enforcement, corporate security, and others who need to identify counterfeit drugs that otherwise appear identical to the brand name drugs. According to the Center for Medicines in the Public Interest, global counterfeit drug sales will reach US $75 billion by 2010.
T-Ray Science, Inc. is a medical device company centered on the development and commercialization of innovative products for skin cancer detection, and counterfeit drug detection. The Company’s patented and patent pending imaging and spectroscopy technologies are the foundation for the development of the Company’s products.
“Counterfeit drugs are a global, systemic problem and a great danger to public health in both developed and developing nations,” said Thomas Braun, CEO of T-Ray Science. “From the seeds of invention at the University of Waterloo, we have developed this innovative new product. Our goal is to offer a counterfeit drug detector which would be affordable in Asia, Africa and South America where the need is the greatest. Our product will cost about 75% less than existing counterfeit drug detectors, and with the completion of the pre-production prototype, we are one step closer to market. ”
With Authenticare™, T-Ray Science is seeking to bring an affordable, portable, non-destructive solution to market which allows users to easily verify tablet authenticity. Authenticare™ connects to a standard laptop computer for control and readout.
The technology Authenticare™ is based on is a result of a successful collaboration with scientists at the University of Waterloo. In 2008 T-Ray Science filed two patent applications for hardware and software used by Authenticare™. Beginning in 2009, the design and production services of Sanmina-SCI Corporation of California were also utilized in the development of Authenticare™. The device will now undergo rigorous validation, safety, and field testing for the remainder of 2010.
EnWave News and Comment
Six point three million dollars in the bank, and a burn rate of less than a hundred and fifty thousand a month … means the only reason that remains to do a financing of any consequence would be to place some institutions and other heavy hitters in the stock.(and that would be at much higher prices than exist right now). Tim and I had a visit with John McNicol last week and he is very excited about where the company stands both financially as well as corporately. He is expecting to release very substantial news before the end of Q2 (that’s the end of June boys!) and that it will be “impact news” as well!
John has to date, been unwilling to offer financial projections to institutions and/or analysts wishing to follow the company, though he has now made the shift and said he will be offering up numbers that will surprise to the upside. He has waited because he wanted the numbers to be accurate and such that they could be defended actively with the contracts in place, and it sounds like they will be understated at that. He is hitting the road to make presentations across Canada and then to Europe and is leaving within the next 10 days.
I am sticking to my $3 prediction before the new year and am more convinced than ever that the stock is a bargain here in the mid 80’s. Full disclosure … I am a buyer. Take it for what it is, but it is NOT a recommendation (see the disclaimer at the bottom of the page!)
DR!
“Flaming enthusiasm, backed up by horse sense and persistence, is the quality that most frequently makes for success.”
- Dale Carnegie
EnWave completes warrant exercise, raises $3.25-million
2010-06-01 08:40 ET – News Release
Mr. John McNicol reports
ENWAVE COMPLETES WARRANT EXERCISE, GENERATING $3.2M IN CASH
All of the 7,223,834 warrants issued to EnWave Corp. shareholders under two non-brokered private placements held in 2008 and 2009, respectively, have been exercised into common shares at a price of 45 cents per warrant generating $3,250,725 in cash for the company over the exercise period of such warrants. All of the warrants were due to expire by May 30, 2010. The total number of EnWave common shares issued and outstanding now stands at 58,453,282.
“With total cash now on hand of approximately $6.3-million, government research and development grants of almost $100,000 still to be claimed, and no debt, EnWave has the strongest balance sheet since its inception and we are exceptionally well positioned to accomplish our targeted business goals,” stated John McNicol, president and co-chief executive officer of EnWave.
We seek Safe Harbor.
Doug Robb
Caliber Capital Partners Inc.
“Capital Market Strategies & Solutions”
510-1199 West Pender Street
Vancouver, BC
V6E 2R1
888.743.0590 toll free
250.715.5975 mobile
www.CaliberCapitalPartners.com
NO This is NOT a recommendation in any way. Do anything and everything but first DO YOUR OWN DUE DILIGENCE. Contact someone who is a registered rep to help you make the decision if you need to, but don’t come back whining to me that I forced you to do anything beyond your own aptitude or control.
New Report Questions Housing Bubble in Canada
Canada’s housing market is looking increasingly like a bubble in the making, Edward Jones said today in a report.
“Canada’s housing market escaped the recent severe downturns in the U.S. and other countries. However, today’s conditions in Canada share some characteristics of those countries prior to their downturns, leading us to take a cautious stance on housing investments,” wrote analysts Kate Warne and Craig Fehr, adding that Canadians should prepare for “the possible impact” of a housing downturn.
An asset bubble forms when cheap money causes speculators to flood into a market, driving prices higher despite weak underlying fundamentals. With unemployment high and the economic recovery on shaky ground, the rapid recovery of Canada’s real estate market has many economists concerned that prices could head lower. Prices have gained almost 20 per cent in the last year, as a lack of inventory and easy access to cheap money has propelled Canadians toward home ownership.
The analysts said three factors must be in place for a bubble to form – prices that are too high compared to historical averages, easy credit, and lax government policy that allow people to get in over their heads. Last month the federal government made it more difficult to obtain a mortgage, requiring all borrowers to qualify at the five-year rate when applying for credit rather than the variable rate, which can be much lower.
“We think the first two conditions characterize the current Canadian housing market,” the report states. “To avoid the third condition, the government is taking steps to tighten mortgage availability, and regulation remains relatively tight. While we believe any housing downturn in Canada won’t be as severe as the recent U.S. experience, the increasing likelihood of a cooling housing market still poses some risks for investors who are not well-diversified.”
While the economy has shown signs of strength, the analysts suggest the pace of recovery in the housing market has been too high to be sustainable.
“Housing prices have outpaced the overall economy, including unemployment trends and gross domestic product (GDP) growth,” they state. “As a result, our stance on Canadian housing market risk is becoming increasingly cautious.”
Tighter lending standards, rising interest rates and mortgage costs, an increase in new supply and consumer deleveraging could all conspire to take the market lower, they said. Any slowdown has implications for the broader economy, they said, particularly when it comes to consumer spending.
About 30 per cent of all mortgages taken out between 2007 to 2009 have terms of less than three years, they said, which means they will likely be renewed at higher rates.
The extra costs could keep people from spending on other items -a 3 per cent increase in mortgage rates would mean an extra $444 a month for a mortgage of $254,514, they said. That would shift $1.82-billion of Canadians’ $911.5-billion in annual discretionary spending toward mortgage costs.
“In addition, Canadian consumer debt has risen steadily for several years, reaching new highs as measured by debt as a percentage of disposable income,” they said. “Thus, consumers don’t appear to have the flexibility they might have had in the past.”
Last week, Gluskin + Sheff economist David Rosenberg suggested Canada’s housing market was in for a 20 per cent price correction. He said government intervention and easy money has helped the market get ahead of itself.
“The question is not whether home prices slide especially in bubbly Toronto and Vancouver, but just how much froth is there to come out,” he said.
As rates begin to rise and more supply comes on the market, he said the market will be under a lot of pressure to keep advancing.
“The housing market in Canada, the goose that laid the golden egg for the broader economy, is now going to be operating without the crutch of massive government support. It will be fascinating to see how this all plays out.”
Goldman Case Ripples Across Markets
The shock from the US government’s accusation of fraud against banking behemoth Goldman Sachs continued to reverberate across global markets on Monday.
The FTSE All-World equity index fell 0.9 per cent and commodity prices tumbled as investors sold riskier assets.
The dollar rallied, but highly rated government bonds did not see the level of flows normally associated with periods of heightened anxiety.
That could reflect the scepticism of many commentators, who maintain that the Goldman crisis is a sideshow to the important factors affecting the market of late: the improving economic and corporate earnings story.
Sure, they argue, the may have a reputational and financial impact on Wall Street, and other banks beyond, as regulators are emboldened to wield the cosh. Indeed, the FTSE Global Banks index is down a further 1.3 per cent on Monday, after plunging 2.8 per cent on Friday.
But this is a sector-specific issue. And while it may make the banking cogs of commerce grind with a bit more grit in their teeth, it will not derail what appears to be a deepening global economic recovery. Earnings from the likes of Intel and JPMorgan, and stronger-than-forecast industrial data from the US, Europe and Asia during the past week support this bullish view.
What the Goldman news has provided is an excuse for the long-awaited pullback in the stock market. The S&P 500 index, for example, had risen virtually uninterrupted from February’s trough by nearly 14 per cent before Friday’s news broke. Such a dip, particularly from a (hopefully) non-terminally damaging catalyst, was necessary.
That’s not to say there are no further hurdles for risk investors. The Greek debt crisis – and what that tells us about the state of public budgets elsewhere – still festers. As does fear of monetary tightening: Shanghai has stumbled badly on worries about another clampdown on speculative activity.
But the US first-quarter earnings season is in full swing – Citigroup has released better-than-expected numbers and IBM reports later – and a continuation of generally good recent results may calm nerves. Goldman releases its results on Tuesday.
Wall Street appeared to have stemmed the selling in early trade, the S&P 500 was only fractionally lower at 1,191 – after dropping 1.1 per cent in the previous session. Christopher Verrone at Strategas in New York said investors should keep an eye on the 20-day moving average support at 1,182.
“A move below the 20-day average brings longer-term support at the recent breakout level (1151) into play,” he warned.
Asian bourses caught up with the west’s slide on Friday. The FTSE Asia-Pacific slumped 2 per cent, with the Nikkei 225 in Tokyo dropping 1.7 per cent following its recent strong run. Sydney lost 1.4 per cent as resource stocks suffered from a drop in metals prices.
Hardest hit was Shanghai, which plunged 4.8 per cent, as the general global malaise exacerbated a sharp drop in property and banking shares after Beijing ordered local authorities to take more action against real estate speculation. Hong Kong fell 2.1 per cent in sympathy.
In Europe the FTSE Eurofirst 300 fell 0.5 per cent and the FTSE 100 in London lost 0.4 per cent as banks proved unpopular.
The yield on US 10-year benchmark bonds fell 1 basis point to 3.76 on a modicum of haven buying.
Greek bonds were again under pressure. The yield on the 10-year note breached hit a fresh eleven year high of 7.71 per cent at one stage and was later up 44bp at 7.70 per cent as investors continued to fret about the ability of Athens to tackle its budget difficulties. The cost of insuring Greek debt against default rose 5 per cent to a record high.
Portuguese 10-year bond yields also continued to climb, up 15 basis points to 4.61 per cent, a fresh seven-week high on sovereign debt contagion fears. The cost of insuring Lisbon’s debt against default also rose 5 per cent.
? The euro struggled as concerns about Greece lingered. The single currency fell 0.2 per cent versus the dollar to $1.3451.
The dollar added 0.5 per cent on a trade-weighted basis to 81.17.
Industrial commodities saw broad selling – partly on fears that the monetary garrotte being applied in China may hurt demand, and also as a result of the decline in risk appetite and the concomitant rise in the greenback. Copper lost 1.3 per cent to $7,670 a tonne, while oil fell 2.6 per cent to $81.06 a barrel, with pressure also coming from a possible fall in oil demand as a result of the no-fly zone over Europe.
Gold also struggled in the face of the stronger dollar, falling 0.5 per cent to $1,131 an ounce.
Current Numbers
| CBC.V | 0.15 | ||||
| ENW.V | 1.30 | ||||
| RRI.V | 0.87 | ||||
| THZ.V | 0.20 | ||||
| ZMS.V | 0.45 |
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T-Ray Sciences' non-invasive skin cancer detector featured in the Vancouver Sun... check it out: http://bit.ly/ce4dy2 via @addthis #
