Canadian banks could withstand severe housing crisis + MORE Jun 20th

Canada’s Big 6 banks have wrapped up another earnings season, raking in more than $8.5 billion in the second quarter. Among the highlights: Most of the banks anticipated losses from the Fort McMurray wildfire, but nothing headline-making. Scotia and TD both reported small declines in their residential mortgage portfolios. Net interest margins dropped almost across the board. In keeping with CMT’s quarterly ritual, we’ve sifted through the Big Banks’ quarterly earnings reports, presentations and conference calls, and compiled all the mortgage-related goodies. We have to admit though, this quarter was really kind of dull. Whatever was notable is in blue. ********* Bank of Montreal Q2 READ MORE

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10 years after housing peaked, US is more of a renter nation
MOUNT PLEASANT, South Carolina (AP) — It’s a troublesome story playing out across America in the 10 years since the housing bubble burst: homeowners are thriving while renters are struggling.
Longtime owners are enjoying the benefits of growing equity and reduced mortgage payments from ultra-low rates. But for America’s growing class of renters, surging costs, stagnant pay and rising home values have made it next to impossible to save enough to buy.
Ownership has become a more distant dream for the many Americans who still regard it as a route to prosperity and pride.
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US stocks rise as investors grow hopeful about British vote
NEW YORK (AP) — U.S. stocks rose sharply on Monday as investors grew more hopeful that Britain will remain in the European Union, letting go of fears that have pulled stocks down in the last two weeks.
Asian stocks traded higher and indexes in Europe soared as the latest opinion polls and betting markets suggest it’s more likely Britain will stay in the EU than leave it…

TORONTO – Ratings agency Moody’s says that despite soaring home prices and household debt levels, Canadian banks could weather the effects of a severe housing crisis.
Moody’s says it conducted stress tests to determine the impact on major Canadian banks in the event of a 25 per cent drop in home prices countrywide.
The analysis also included an additional 10 per cent decline in Ontario and British Columbia, where prices have skyrocketed in recent years.
Who’s to blame for high home prices »
In a report published Monday, the ratings agency says that under such a scenario total direct losses to the banking system would reach almost $18 billion. However, Moody’s says the banks would be able to generate internal capital to cover those losses within several quarters.
The ratings agency says the negative impacts of a housing downturn in Canada would be reduced by a number of factors that differentiate Canada from U.S. mortgage markets.
Those factors include government-guaranteed mortgage creditor and lender insurance, as well as lower rates of subprime lending and a lower prevalence of certain kinds of securitization practices…

WASHINGTON – Interest rates on short-term Treasury bills were unchanged in Monday’s auction.
The Treasury Department auctioned $31 billion in three-month bills at a discount rate of 0.270 per cent, the same as last week. Another $26 billion in six-month bills was auctioned at a discount rate of 0.400 per cent, also unchanged from last week.
The three-month rate over the past two weeks was the lowest since May 9. The six-month rate over the past two weeks was the lowest since May 16.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,993.18, while a six-month bill sold for $9,979.78. That would equal an annualized rate of 0.274 per cent for the three-month bills and 0.406 per cent for the six-month bills.
Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, fell to 0.53 per cent last week from 0.59 per cent the previous week…