blog
Dear Clients,
Just a quick thanks to all of you referring in clients. I guess you are happy with your super low interest rates! Seriously you are making this year one of the busiest yet.
Mortgage rates couldn't be much better than now. For those of you who are coming up for renewal soon you will not have your below 2% mortgage as currently the variable is 3.05%. I try to reach all of you but in case I do not please call us for advice before doing what the lender wants you to do. It is a very tricky market. I know the fixed terms look fantastic but your penalties to sell or refinance for debt or renovations would be in the tens of thousands.
Above is a great article from CIBC World Markets on portfolio strategy. It sounds like they are a little cautious about the investment markets. They are saying maybe stay out until the end of this year. The bad commercial paper is coming out the chute this fall and they are anticipating a heavy hit. So maybe sitting tight with your investments in a money market is the best bet for now. Move with caution. So if you are moving into money markets for a safe haven have your investment expert contact you for their expert opinion. It is a tough call. I will try to give you more articles.
NOTE: you may know people who took the 5 yr fixed rate mortgage and are up in the 5+%. We can refinance them if they have conventional mortgages. We can include their penalties to break their mortgage up to $10,000 and pay no fees for a switch to a rate of 3.05%. Many times it is worth it. So if you hear complaints about lousy mortgages that people want to get out of, tell them to call us for the solutions.
I.e. mortgage of $250,000 + penalty of 7,000 = new mortgage of $257,000 pay no legal fees or appraisal costs. Of course we are paid by the lender on qualified deals.
Have a great long weekend.
Suzanne
Prime rate unchanged 2.25%
Lock in rates
Firstline Mortgages Merix First National
3yr 3.44 3.79 3.15
4yr 3.79 3.85 3.79
5yr 3.89 3.89 3.89
7yr 5.15 6.25 5.50
10yr 5.25 6.45 5.50
blog
Dear Clients,
Below is a more detailed follow-up to the previous update about "Quantitative Easing or money making" article. As most of us thought Canada will be more than cautious of their position in this easing so if we make it through this rough spot ok, we will not have to fear spell of hyper inflation. Do not doubt rates will go back up but hopefully not with a vengeance with economic recovery. Nothing to worry about right now so continue to enjoy the low rates you will be telling your grand children about.
Canada Quantitative Easing to Be ‘Gentler' Than U.S., CIBC Says
By Greg Quinn
April 6 (Bloomberg) -- Canada will adopt a "gentler" form of quantitative easing than the U.S. has because of its explicit inflation targeting policies and healthier banks, said Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce.
Bank of Canada Governor Mark Carney will adopt so-called quantitative or credit easing within six months of announcing guidelines on April 23, Shenfeld said in a telephone interview from Toronto today. The central bank may purchase corporate debt -- such as short-term commercial paper -- and government bonds that mature in three to seven years, he said.
The Bank of Canada has almost run out of room for using interest-rate cuts to stimulate an economy in recession, after it lowered its key borrowing rate to 0.5 percent on March 3.
Policy makers may be able to boost the economy by purchasing securities to revive debt markets, without using the transactions to inject newly created money into the economy. "It might not be true quantitative easing," Shenfeld said.
Under quantitative easing, asset purchases can be paid for with new money created by the central bank. The extra cash is supposed to encourage banks to expand lending to consumers and businesses.
The U.S. Federal Reserve's extraordinary policies are reflected in its balance sheet, which has more than doubled over the past year. The Fed has taken on assets including mortgage securities, corporate debt and now long-term Treasuries under its latest policy decision last month.
"In Canada, the banking system isn't as broken and therefore a lighter hand will be required," Shenfeld said.
The Bank of Canada's 2 percent inflation target will also limit how far the central bank is willing to go to boost demand, Shenfeld said.
‘All-out War'
"Only in the unlikely event that Canadian core inflation goes negative on a sustained basis would we expect the Bank to launch an all-out war on deflation that also pumped up money growth," he said.
The core inflation rate, the consumer price index excluding eight volatile products, will slow to a 0.8 percent annual pace in the fourth quarter, he predicts.
Governor Carney said at an April 1 speech that publishing guidelines doesn't mean using extraordinary policies is "preordained," and any new steps will be consistent with the inflation target.
The Bank of Canada will probably keep its benchmark lending rate unchanged at 0.5 percent through the first quarter of next year, opting first to scale back its quantitative or credit easing policies when the economy picks up again, Shenfeld also said. Gross domestic product will contract until the fourth quarter when it will expand at a 2.5 percent pace, he said.
Firstline \ First National \ Merix Rates
3yr 4.19%
4yr 4.14%
5yr 4.05%
7 yr 5.15%
10 yr 5.40%
Suzanne Boyce
Dear Clients,
MY RANT
Here are two articles that I found of interest for you. # 1 is something I find quite disturbing, the Harmonized Sales Tax. This tax will be mean more than $4,500.00 and that is just personally not including the cost of running my business. No wonder people are building up so much debt, by the time the government takes their share we end up with diddly squat to live off of. And some politicians think the credit card companies are charging too much at 18% a year?
Some quick figures, and these are very rough - your income is 85,000 - 30,000 income tax - 5000 property tax = 50,000 - 20,000 in mortgage payments - 3000 insurances - 6000 utilities and hook-ups - 3000 gas - 350 wk groceries =18,200. leaves you with 5,800. to do everything else with. OH, but then you have to pay 13% Sales Tax on the 30,000 you had to spend to live which is 3,900. so I guess you really only have 2,000 for all other expenses like daycare, meds, clothing, a beer a week, a movie a year 3 nights camping, forget Santa and the Easter Bunny. Birthdays are gone.
Then they have the nerve to give all our work away to a few executives who could only show a track record of sinking the company they worked for. If it was my company I trashed my reward would be lots of debt and no income. That makes many of us small business owners wonder what in the heck we are doing.
Are we just going to roll over on this one too? Where is the responsibility? Obama, ( in the second article ) is going to scare the right wing wickedly but someone has to bring back fair play into our "free" society before we all become tax slaves. Who is kidding who here? I think we already are.
RANT COMPLETE
Suzanne
Ontario budget '09
March 27, 2009
$57B Ontario deficit over 7 years
Dwight Duncan tables a budget that sets out to spend Ontario out of the recession. It brings in a record deficit and tax reforms to help battered businesses. But there is a stinger that is going to bite consumers in the pocketbook and carries the risk of a political backlash.
13% - GST and PST merge in 2010
New HST will hit gasoline, heating fuel, tobacco, gym memberships, haircuts, dry cleaning, newspapers, magazines, fast food, taxi fares, legal fees, real estate fees, labour on car repairs, golf green fees, all our insurances and a host of other goods and services not previously taxed by the province.
U.S. unveils finance regulations
Sweeping plans from Obama administration would expand federal authority over major institutions
March 27, 2009 Martin Crutsinger The Associated Press WASHINGTON
The Obama administration yesterday unveiled a sweeping overhaul of the financial system designed to impose greater regulation on major players such as hedge funds.
Treasury Secretary Timothy Geithner told legislators in Congress that the changes are needed to fix the flaws exposed by the current financial crisis, the worst to hit the country in seven decades.
The goal is to repair a system that has proven "too unstable and fragile,'' he said.
"Over the past 18 months, we have faced the most severe global financial crisis in generations,'' Geithner said in testimony to the House financial services committee. "To address this will require comprehensive reform. Not modest repairs at the margin, but new rules of the game.''
The administration's proposal, which will require congressional approval, would represent a major expansion of federal authority over the financial system. It would impose tougher standards on financial institutions judged to be so big that their failure would represent a risk to the entire system.
It also would extend federal regulations for the first time to all trading in financial derivatives, exotic financial instruments such as credit default swaps that were blamed for much of the damage in the meltdown.
The administration also wants larger hedge funds to be required to register with the U.S. Securities and Exchange Commission.
In addition, the administration proposed the creation of a systemic risk regulator to monitor the biggest institutions. Geithner did not designate where such authority should reside, but the administration is expected to support awarding this power to the Federal Reserve.
The plan includes a measure that Geithner and Fed Chair Ben Bernanke discussed before the committee Tuesday to give the administration expanded powers to take over major nonbank financial institutions, such as insurance companies and hedge funds that were teetering on the brink of collapse.
That power was aimed at preventing a repeat of the problems surrounding insurance giant American International Group Inc., which sparked a furor last week when it was revealed the company had distributed $165 million US in bonuses to employees of its financial products group. The unit specialized in trading credit default swaps, the instruments that drove the company to near-collapse last fall.
"Let me be clear,'' Geithner told the committee. "The days when a major insurance company could bet the house on credit default swaps with no one watching and no credible backing to protect the company or taxpayers must end.''
The administration, pushing for quick action on its reform agenda, sent Congress a 61-page bill dealing with the expanded powers to seize control of nonbank institutions late Wednesday.
Democrat Barney Frank, who chairs the House committee, said the overhaul should ensure the U.S. government has more options and can avoid repeating the unattractive choices it faced last fall of letting Lehman Brothers fail, which sent a shock wave to the entire financial system, and propping up AIG with billions of dollars.
Republicans questioned whether the overhaul would give federal regulators too much power.
Suzanne Boyce
Broker\ Owner
