Hilton IPO to raise $2.4 billion by yearend + MORE Dec 2nd

(Photo: Dennis Novak/Getty)
Three economists, two of whom from the Federal Reserve, have a new paper out estimating that foreign capital inflows accounted for between one-fourth and one-third of the increase in U.S. house prices, and over a third in that of U.S. household debt in the run-up to the financial crisis.
The idea here is that massive purchases of U.S. Treasuries by countries like China and the Gulf oil-rich nations, coupled with European banks stocking up on U.S. AAA-rated asset-backed securities, provided some of the capital that fueled America’s borrowing binge and housing bubble. It isn’t a new idea. What’s interesting about this paper is that it tries to quantify the effects of foreign capital inflows and finds a sizeable impact. The economists offer this pretty striking chart:
Source: The Effects of the Saving and Banking Glut on the U.S. Economy, by Alejandro Justiniano, Giorgio Primiceri and Andrea Tambalotti.
This is a cautionary tale for Canada. As Mark Carney noted when he was the governor of the Bank of Canada, “It is reasonable to expect that Canada will attract for the next decade or so sizeable foreign capital … and the question is what are we going to do with that capital…

Ontario on Wednesday passed new legislation with the goal of protecting consumers when it comes to door-to-door sales pitches, debt settlement services, real estate transactions, and real estate fees and commissions. The Stronger Protection for Ontario Consumers Act focuses on these four issues:

Door-to-door water heater rentals and sales
Debt settlement service fees
Real estate fees and commissions
Property bidding wars

Door-to-door water heater rentals and sales
Apparently these porch-side sales pitches were among the most prevalent grievances among consumers last year, with the government receiving more than 2,240 complaints and inquiries about companies offering water heater rentals. These companies often present consumers with hard-to-understand contracts, and salespeople may use aggressive, high-pressure sales tactics, according to the government. The act will crack down on these companies by:

Doubling the existing 10-day cooling-off period to 20 days for water heaters, providing consumers with more time to consider their decision
Banning delivery and installation of water heaters during the new 20-day cooling-off period
Allowing rules to require sales to be confirmed by making scripted and recorded verification calls to the customer within the 20-day cooling-off period
Providing new consumer protections when the rules are not followed, such as requiring the supplier to pay all costs and cancellation fees that a consumer incurs when the 20-day cooling-off period is not observed

Debt settlement service fees
Some of the 18 companies and 34 credit counselling providers offering debt settlement services in Ontario charge customers large upfront fees and describe the services they will provide in hard-to-understand contracts…

RBC Direct Investing didn’t exactly endear themselves to their DIY investing clientele last year when they stopped offering some of Canada’s best and cheapest actively managed mutual funds from Mawer, Steadyhand and Leith Wheeler. This trio of fund companies generally don’t charge any trailing commissions (the 1% fee mutual fund investors typically pay their advisers or dealers each year they own an investment). This meant RBC wasn’t making any money from its customers who bought them through their discount brokerage, so the inexpensive funds were unceremoniously dumped with no advance notice.
Realizing, however, that more and more Canadians are now able to manage their own portfolios and don’t want to pay high MERs for advice they don’t require, RBC is now aggressively making a play for a bigger share of the discount market (and perhaps hoping to regain some of those customers they lost last year)—even if that means its advisers and dealers will earn substantially less in trailing commissions…

Most of Canada’s major banks are expected to report single-digit earnings growth this week, though Bank of Montreal could prove the outlier.

By the end of the year, iconic hotel chain Hilton Worldwide will list on the New York Stock Exchange, raising as much as $2.37 billion US.