Alberta wildfire could cost insurers as much as C$9 billion - BMO

TORONTO (Reuters) - A wildfire in the Alberta city of Fort McMurray could cost insurers as much as C$9 billion, making it by far the costliest ever Canadian natural disaster, according to research by Bank of Montreal Capital Markets.

BMO Capital Markets analyst Tom MacKinnon said that figure was a worst-case scenario based on a comparison to a wildfire in Slave Lake, Alberta in 2011. The bill for insurers was C$700 million in that fire, and the Fort McMurray fire is bigger and the properties more valuable.

"Since Fort McMurray is nearly 10 times the size of Slave Lake, a disaster of the same magnitude impacting nearly all of Fort McMurray could potentially lead to C$9 billion in insured industry losses," MacKinnon said in a research note.

MacKinnon said a "more reasonable estimate" might be for total industry losses of between C$2.6 billion and C$4.7 billion, still by far the largest potential catastrophe loss in Canadian history.

The Slave Lake fire was previously Canada's biggest insurance loss from wildfire. The costliest natural disasters were the C$1.9 billion in losses from the North American ice storm of 1998 and the Alberta floods of 2013.

The Fort McMurray fire, now in its fifth day on Thursday, has grown to five times its initial size and prompted the full evacuation of the area's 88,000 residents.

The uncontrolled blaze has so far destroyed 1,600 buildings compared with 374 in the Slave Lake Fire, with another 19,000 potentially under threat.

(Reporting by Matt Scuffham; Editing by Cynthia Osterman)

Fort McMurray wildfire remains out of control after city evacuated.

60,000 flee as wildfire leaps highway and into city

A huge wildfire in Fort McMurray, Alta., destroyed an entire neighbourhood and burned homes and businesses in several others Tuesday, and continues to rage out of control.

By late afternoon, the entire city of 60,000 had been ordered evacuated. Residents by the thousands fled the fire and for hours caused gridlock on Highway 63, even overwhelming oilsands work camps, where beds and meals were offered. Police were patrolling the highway with cans of gas, after fuel supplies ran out in Fort McMurray, Wandering River and Grasslands.

Fire chief Darby Allen said the entire neighbourhood of Beacon Hill "appears to have been lost" and the fire burned many homes in other parts of the city.

No buildings were lost in the city's downtown area, Allen said. Despite the devastation, there were no reports of deaths or serious injuries. 

As of 10:30 p.m. MT, officials reported the neighbourhoods of Abasand, Wood Buffalo, Dickensfield, and Waterways saw only some damage.

No estimates were available on the number of homes and businesses that were destroyed.

Witnesses reported the Flying-J gas station exploded, while the Super 8 Motel and a Denny's restaurant were gutted. 

Officials said about 17,000 residents escaped the city to the north, while another 35,000 drove south, at least half that number headed for Edmonton, 430 kilometres away.

Gas stations were emptied of fuel along the way leaving many motorists stranded on the highway. 

Fire officials said they expect Wednesday could be just as bad, with the wind expected to pick up and the hot, dry weather to continue.

Allen called Tuesday "a devastating day," and said fire crews were simply overwhelmed by the speed and power of the wildfire.

"Everybody has given everything today to do the very best they could," Allen said. "I can categorically state that everything that was absolutely possible to protect the community was done."

Conditions changed quickly

Conditions on the ground changed quickly as the day progressed.

Allen said firefighters were "a little worried" earlier in the day, but with the 30 C heat and dry conditions, once the wind came up the fire became an inferno.

"It's been the worst day of my career," Allen said earlier. "It's a nasty, ugly fire and it hasn't shown any forgiveness."

By 6:30 p.m., the entire city was under a mandatory evacuation order, making it the largest wildfire evacuation in the province's history, far surpassing the Slave Lake fire that made international headlines five years ago.

Courtesy:  http://www.cbc.ca

Tesla's Wild New Forecast Changes the Trajectory of an Entire Industry

Elon Musk's plan is a really big deal, and not just for electric cars.

 

Tesla just took the most ambitious automotive production timeline since the Ford Model T and moved it up two years.

 

The company now plans to produce 500,000 electric cars every year starting in 2018. That's 10 times the number of vehicles it produced in 2015, and enough to ensure that all 400,000 customers who put down a $1,000 deposit on the forthcoming Model 3 will qualify for a significant U.S. subsidy.

Talk about doubling down—even the original 2020 goal was considered a long shot by Wall Street. This new target would pledge the carmaker to a faster production growth rate than Ford Motor Co. managed in the early 1900s. That's when Henry Ford pioneered the production line with the Model T, the first mass-market combustion-driven car.

 

A century later, Tesla Chief Executive Officer Elon Musk wants the Model 3 to be its electric grandchild. He's now aiming for close to a million sales by 2020.

 

"My desk is at the end of the production line," Musk said in an earnings conference call on Wednesday. "The whole team is super-focused."

 

Musk's enthusiasm aside, skeptics say his planned ramp-up is unattainable in the modern era. If Tesla can succeed—and even Musk admits that it's a tough goal—it would be a tectonic shift for the global electric-vehicle market, just like the Model T was for the combustion engine.

 

"It would reshape the entire global car industry," said Bloomberg New Energy Finance analyst Salim Morsy. "But a lot of things have to go right, and they have to go right on the extremes."  

 

BNEF tracked 234,000 electric car sales worldwide last year, of which Tesla made up a fifth of the market, Morsy said. For Tesla to stay on its new track, it would need to produce more cars next year than the entire global electric-car industry made in 2015.  

 

Tesla's first mass-produced car, the $35,000 Model 3, will need to come to market on schedule, and with great momentum, in late 2017. Telsa's battery factory in Nevada must flourish, costs must come down, and car-making capacity must scale up at an astonishing rate.

 

For context: Tesla has never managed to hit one of Musk's timelines for a new product launch. Not once.  

 

But if Tesla can do it this time, U.S. buyers already waiting in line will benefit from a federal tax break currently valued at $7,500. That subsidy will drop by half shortly after the company reaches 200,000 sales in the U.S., which would take place in 2018, assuming a 50 percent compound annual growth rate. The more cars Tesla can sell that year, the more buyers will benefit from the subsidy.

 

Earlier this year, I made some predictions about how quickly electric automobiles could begin to supplant gasoline-powered cars and upend oil markets. One method I used was based on Musk's 2020 timeline, which would deliver enough electric vehicles to disrupt fossil fuel use by as early as 2022. If you believe Tesla can reach its new goal, that timeline just moved up.

 

Courtesy: http://www.bloomberg.com/news/articles/2016-05-04/tesla-s-wild-new-forecast-changes-the-trajectory-of-an-entire-industry

CME, ICE prepare pricing data that could boost bitcoin

CHICAGO (Reuters) - CME Group Inc and rival Intercontinental Exchange Inc plan to publish new pricing data on bitcoin that they say will increase the credibility and transparency for the controversial digital currency.


Starting in the fourth quarter, the CME aims to begin publishing bitcoin prices about once a second during trading days and a daily settlement price based on transactions from several bitcoin spot exchanges, the company said on Monday.


The owner of the Chicago Mercantile Exchange and other futures markets said the data will add "significant credibility to the nascent digital asset market."


ICE, which owns the New York Stock Exchange, will soon launch a real-time pricing index for bitcoin, after it began publishing settlement prices in May 2015, said Dwijen Gandhi, head of indexes for the NYSE, in a statement.


The real-time data will "provide additional transparency and insight into the bitcoin price," he said.


The NYSE also is evaluating the inclusion of data from a number of exchanges for its settlement price, which was initially based only on transaction data from U.S. market Coinbase, Gandhi said.


Bitcoin is a Web-based "cryptocurrency" used to move money around quickly and anonymously with no need for a central authority. But despite being championed by some as the digital money of the future, it is often dismissed as a currency that is too volatile to invest in.


The availability of pricing data from major exchange operators could attract more traders to the bitcoin market and promote the development of derivatives contracts, said Gil Luria, a managing director for Wedbush Securities.


"The more active exchanges like CME or ICE become, the easier, the more liquid it will become for traditional investors" to trade bitcoin, Luria said.


The CME declined to say whether it wants to launch bitcoin futures. ICE did not respond to a question on the matter.


CME is planning to publish its settlement price at 4 p.m. London time (1500 GMT), the same time that the NYSE publishes its settlement price.


The beginnings of bitcoin have been a riddle since the publication of the open-source software behind the currency in 2008, before its launch a year later.


Earlier on Monday, Australian tech entrepreneur Craig Wright identified himself as the creator of bitcoin but experts were divided over whether he really was the elusive person who has gone by the name of Satoshi Nakamoto until now.

Courtesy: https://ca.finance.yahoo.com/news/cme-group-publish-daily-bitcoin-settlement-price-162622759--finance.html

Canadian investment pros share their strategies with author, 28

Robin Speziale picked up the investing bug from a stock-picking exercise in high school, despite the fact his choice in the competition, the now-departed Forzani Group, barely budged.

He bought his first stock at 18 and now, at 28, has an evolving portfolio of 25-40 holdings worth about $250,000.

“I’m not super intelligent. I didn’t get the best grades in school,” the Toronto resident said in an interview. “I just kept at it. I’ve read about 100 books (on investing).”

Now he’s written one, Market Masters (ECW Press, $22.95), a series of interviews with some of Canada’s top investment managers.

Not many names will ring a bell with the average Canadian, but people like Francis Chou, Kiki Delaney, Jason Donville and Benj Gallander have a long history of above-average returns.

Speziale, who works in financial services but not as an investment manager, approached about 50 industry professionals in his quest to get them to share some of their investing acumen with do-it-yourselfers. He didn’t want stock tips from them, but insight into their methodology.

“I’d read a lot of books, but I couldn’t find a Canadian one that covered all the investment styles and distilled them,” he said.

After letters, emails and phone calls, Speziale finally got 25 to agree to face-to-face interviews. Three others did it by phone.

There is only one Quebec name: Charles Marleau of Palos Management. “I wanted to meet more people from Quebec, but I wasn’t aware of everyone there. For the follow-up, I’d like to meet more,” he said.


“People I did talk to kept mentioning to me how a lot of the best stocks in the Toronto Stock Exchange were companies from Quebec.”


Each manager has a distinct set of insights, anecdotes and dos and don’ts. No two use exactly the same approach.


Bargain-hunter Gallander mentions how he’ll average down only once on a falling stock, and counsels “avoid the noise, because there’s more noise now in the market because of the internet.”


Barry Schwartz describes the Toronto Stock Exchange as “a stupid index, a terrible index … too small and poorly diversified.”


Chou mentions that he’s a voracious reader, of biographies and newspapers as well as trade publications, because “nothing is irrelevant. Investing is not done in isolation.”


Even the pros have had their share of flops.


Speziale’s worst call was Lundin Mining, which plummeted 85 per cent after he bought it. The lessons learned there? “As a do-it-yourself investor, you can’t be passive. And no more resource stocks.”


He said one of reasons he enjoys stock-market investing is that it’s both challenging and fun.


“It’ll help you in life. You learn a lot about yourself. You learn to control your emotions. It’s liberating to be financially literate and able to take control of your finances and build a portfolio. Even if you don’t want to (manage investments) yourself, you’ll be able to take the advice you’re getting from your banker or adviser with a grain of salt.”


But he concedes it’s not something that seems to interest most twentysomething Canadians.


“Some of them still don’t know what a TFSA is. I still get asked ‘how do I open an (investment) account?’ It’s a bit of a step from there to the material in my book.”

Courtesy: http://montrealgazette.com/business/canadian-investment-pros-share-their-strategies-with-author-28?__lsa=a19e-1fbc

CMHC says many major housing markets showing signs of overvaluation

Canada's national housing agency says nine of Canada's 15 largest housing markets are showing signs of being overvalued.

The Canada Mortgage and Housing Corporation said in its quarterly Housing Market Assessment Wednesday that a majority of Canada's large housing markets are showing either "moderate" or "strong" evidence of being overvalued.

The housing agency looks at housing markets to gauge their health based on four factors: ■overheating — when demand is significantly and persistently outpacing supply ■overvalued — when prices are higher than they should be based on economic fundamentals ■accelerating — when house prices are increasing faster than household costs of living are ■overbuilding — when supply of new homes significantly outpaces demand.

The agency rates each market on a colour coded scale where green means there is little evidence of that factor, yellow means there is moderate evidence of it and red means there is strong evidence of it.

On the overvaluation front, the CMHC says there is moderate or strong evidence of that happening in Vancouver, Edmonton, Calgary, Saskatoon, Regina, Hamilton, Toronto, Montreal and Quebec City.

Four of those cities — Toronto, Quebec City, Vancouver and Saskatoon — now show "strong" signs of overvaluation.

The first two were singled out in the agency's last report on housing in January. But the latter two were only recently given their red warning on overvaluation.

In Vancouver's case, the housing agency said "Single-detached home prices are now observed to be at levels higher than those consistent with financial, economic and demographic fundamentals."

But the problem in Saskatoon, meanwhile, is tied to recent downward revisions to the area's population, which makes it harder to justify. House prices in the greater Saskatoon area declined 2.7 per cent in March, data from the Canadian Real Estate Association showed.

Across the country, Canada's housing market set a record last month both in terms of prices — now up to $508,567, on average — and the volume of sales, CREA said.

Aside from overvaluation in pockets, the CMHC's assessment sees little cause for concern nationally. "Overheating and acceleration in house prices are not a concern at this time," the CMHC said.

(Courtsey: image: Google Images, Article: http://www.cbc.ca/news/business/cmhc-housing-vancouver-toronto-prices-1.3555680)