Asian Shares to Be Pressured, Chipmakers in Focus: Markets Wrap
Global stocks and Asian currencies rallied as authorities pushed back against a stronger dollar, helping restore a sense of confidence in financial markets.
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Global stocks and Asian currencies rallied as authorities pushed back against a stronger dollar, helping restore a sense of confidence in financial markets.
Ken Griffin’s Citadel and Citadel Securities will move their London spot to a new office campus in the heart of the city.
President Joe Biden called China “xenophobic” while highlighting the Asian nation’s economic woes, as he sought to make the case for US economic strength during a campaign stop in the swing state of Pennsylvania.
Freddie Mac is seeking regulatory approval to expand into guaranteeing second mortgages, a shift that would potentially drive down costs for Americans seeking to borrow against the equity in their home.
The US economy has “expanded slightly” since late February and firms reported greater difficulty in passing on higher costs, the Federal Reserve said in its Beige Book survey of regional business contacts.
Aug 14, 2020
Bloomberg News
,A warning from the head of Canada’s housing agency about risky mortgage lending has won support from at least one other federal agency.
Peter Routledge, chief executive officer at Canada Deposit Insurance Corp., expressed backing for Canada Mortgage & Housing Corp.’s Evan Siddall, who sparked controversy this week when he urged lenders to reconsider offering high-ratio mortgages to less creditworthy homebuyers.
“CMHC is not alone in its risk concerns,” Routledge tweeted late Thursday. CDIC “stands beside” Siddall and his agency’s warning to consumers.
The CDIC insures more than $800 billion (US$604 billion) of deposits held at banks and federally regulated credit unions, as well as loan and trust companies. Routledge declined further comment.
As head of the 53-year-old agency, Routledge brings a long-standing expertise of the housing market and banking industry. Earlier in his career, he led the Canadian financial institutions group at Moody’s Corp. and spent years as a financial-services analyst at National Bank of Canada. He left his analyst job in 2017 to take a senior adviser role at Canada’s finance department, and became head of CDIC in November 2018.
The CMHC fears that exposing mortgagees, and first-time homebuyers in particular, to excessive borrowing creates a “very significant” economic drag on the economy, Siddall said in his Aug. 10 letter to lenders.
Siddall, who declined a request for an interview, reiterated his belief that house prices will weaken later this year and next as government support measures imposed during the COVID-19 pandemic start to unwind, and as bankruptcies increase and unemployment starts to bite.
Individual Tragedies
“We risk exposing too many people to foreclosure,” he said. “These are individual tragedies that also create conditions for exacerbating feedback loops and house price crashes.”
Siddall also suggested the government-backed mortgage insurance provider had lost market share after tightening its underwriting criteria in July. Private insurers opted not to follow, leading to an erosion of CMHC’s market share that Siddall said threatens the agency’s ability to protect the mortgage market in the event of a crisis.
Others questioned the message. Former Royal Bank of Canada CEO Gordon Nixon said Thursday in a BNN Bloomberg TV interview that while Siddall’s concerns are valid, he found the letter “probably a little bit extreme and alarmist.”
Robert McLister, founder of influential mortgage rate-comparison site RateSpy.com, said Siddall’s “divisive” letter undermined confidence in Canada’s financial system.
“Industry leaders confiding in me today were united on two fronts: that Mr. Siddall has lost their trust with such reckless assertions, and by virtue of that, has now officially overstayed his welcome in the Canadian mortgage market,” McLister said in an Aug. 12 post.