Rate decision

Bank of Canada leaves key rate unchanged

Malcolm Morrison, The Canadian Press

The Canadian dollar gave up early gains and moved lower after the Bank of Canada’s announced it was leaving interest rates unchanged and warned of the negative effects of a rising currency.

The loonie was 0.12 of a cent lower to 102.82 cents US after the central bank announced its decision to keep the key interest rate at one per cent.

The bank observed that the economic recovery in Canada is proceeding slightly faster than expected and that “while consumption growth remains strong, there are signs that household spending is moving more in line with the growth in household incomes.”

But the bank also warned that “the export sector continues to face considerable challenges from the cumulative effects of the persistent strength in the Canadian dollar and Canada’s poor relative productivity performance.”

The currency is riding at a three-year high.

http://www.winnipegfreepress.com/business/breakingnews/canadian-dollar-up-traders-await-bank-of-canada-rate-announcement-117145598.html

Bank of Canada maintains overnight rate target at 1 per cent

OTTAWA – The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

The global economic recovery is proceeding broadly in line with the Bank’s projection in its January Monetary Policy Report (MPR), although risks remain elevated.  U.S. activity is solidifying and remains supported by stimulative fiscal and monetary policies.  Ongoing challenges associated with sovereign and bank balance sheets will limit the pace of the European recovery and are a significant source of uncertainty to the global outlook. Robust demand from emerging-market economies is driving the underlying strength in commodity prices, which could be further reinforced temporarily by supply shocks arising from recent geopolitical events.

The recovery in Canada is proceeding slightly faster than expected, and there is more evidence of the anticipated rebalancing of demand.  While consumption growth remains strong, there are signs that household spending is moving more in line with the growth in household incomes. Business investment continues to expand rapidly as companies take advantage of stimulative financial conditions and respond to competitive imperatives.  There is early evidence of a recovery in net exports, supported by stronger U.S. activity and global demand for commodities. However, the export sector continues to face considerable challenges from the cumulative effects of the persistent strength in the Canadian dollar and Canada’s poor relative productivity performance.

While global inflationary pressures are rising, inflation in Canada has been consistent with the Bank’s expectations. Underlying pressures affecting prices remain subdued, reflecting the considerable slack in the economy.

Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. This leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in an environment of significant excess supply in Canada. Any further reduction in monetary policy stimulus would need to be carefully considered.

Information note:

The next scheduled date for announcing the overnight rate target is 12 April 2011. A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 13 April 2011.

Service Please

For those who don’t know, we took advantage of the kids two week break to take a little vacation. The reason that I am telling you this is to tell you a story about good service. Something that we far too often take for granted until we experience the complete opposite. 

P1000634We took a Disney Cruise out of LA down to the Mexican Rivera and it was awesome, and the service was fantastic. Food was great, ship was nice and clean and the staff were wonderful. On the way back home we flew with United airlines from LA to Chicago, during this flight one of my girls became ill and was getting sick. My wife rushed her to the bath room while holding on to an air sickness bag. The bath room closest to us was occupied so my wife took her to the next closest which was in the business class section. No member of the flight crew attempted to help her or check to see if she was alright, in fact an off duty flight attendant sitting in business class told her she could not use that bath room. To top it all off they canceled our connecting flight from Chicago to home and then lost our bags.

The moral of this story is that we should not take good service for granted. We ended up flying Air Canada back home and I doubt we will ever fly United again.

My service promise to you is that I will return calls within 2 business hours, e-mail’s same day and always present the best rates and terms for every situation.

P1000644

Cheers,

Pat

p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.

Here is my wife’s take on United’s lack of service, from the letter that we sent to United Airlines Customer Service Dept;
To whom it may concern,

Firstly I would like to advise you I will, in no uncertain terms NEVER fly United Airlines again!  Here is why. On February 21 my family and I boarded our flight in Los Angeles after a lovely 7 day cruise to Mexico.  My husband and our 3 children(our 6 year old twin girls and 4 year old son) had flown down 12 days prior on our national carrier Air Canada .On which, our son became ill and vomited about 40 minutes after leaving Toronto for L.A.  The attendants on Air Canada promptly helped helped my son get cleaned up gave him a blanket and pillow and did not charge us for our meals. My son arrived in L.A in underwear and a T-shirt, but in no way was I disappointed in the treatment I received from the airline.
Twelve days later we boarded our flight in L.A with United Airlines, not long into this flight my 6 year old daughter began vomiting. I immediately ran her to the nearest bathroom, which was occupied, on the advice of another passenger I ran her down the aisle to the first class bathroom(air sickness bag over her mouth ) where I was stopped by a male attendant who advised I was in the wrong section. When I advised of my child’s situation he relented.  After coming out of the bathroom, no attendant inquired about my child’s well being. I had to ask the same attendant for more airsickness bags and he told me they were in the bathroom.  At no point in the duration of the flight, in which my child vomited throughout, did any staff on the plane offer any help or even inquire about my child.
As we departed the plane she was sick again-nothing, NOTHING!!!!!! I cannot imagine a group of people so singularly without a shred of compassion(for a child no less!) . I even met up with the male attendant in the airport a little later and advised him of my displeasure, he had the nerve to tell he was a passenger ( yet in his uniform) and not working-SCUM!  We were then stuck for the next 5 hours (my child still vomiting) at O’hare before our flight was cancelled.  Luckily we did get rescheduled the next day with Air Canada!!!  My disgust with United Airlines  is so immense, it was hard to put into words.
I do not expect a response from you, nor do I think this will even be read, but I felt it needed to be said.  I would like to commend Ruth in customer service who helped find a very frantic and tired mother a way home. As we are members of Air Canada’s Aeroplan and thus their Star Alliance program, we would expect higher level’s of service from their member partners.

Customer Service
Excellence in customer service is a key to United’s success. Each employee is expected to deal fairly, honestly and ethically with all customers to ensure customer satisfaction.  You may want to get the members of your flight crews to look at your customer service code of conduct and know it by heart.

Sincerely,
Gillian Sawler

Committed?

Are you or should you be? To your goals that is. This hit me when one of my friends from the gym saw me today and commented that I must not be committed as I did not make it in for my regular workout time of 05h30 yesterday. My excuse was that one of our kids was up a few times over night. However excuses be gone, come hell or high water I will certainly be there for tomorrow.

When you think about it, are you committed to the successful attainment of your goals? If you are not, or worse if you don’t have your goals written down ( shame on you if that is the  case) then you are just breathing and not really living.

If getting out of debt is your goal. Then you should write your goal like this, ” I am making X per month or year” rather than ” I am paying off my debt”. When you include what you do not want in your goals, you end of thinking of what you do not want. See your self as already having acheived your goal, feel it and live it.

Want help in creating your plan? Then feel free to give me a call, I would be glad to help you.

Cheers,

Pat

p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.

I owe, I owe

So as the dwarves in Snow White say “It’s off to work I go”. Below is a great article from The Vancouver Sun, talking about our ever increasing debt load. In fact, that is the number one reason that the finance department reacted with changes to mortgage financing yesterday. As always feel free to contact me if you have any questions.

Cheers,

Pat

Our debt-to-income ratio hits an all-time high

BY JULIE FORTIER, CANWEST NEWS SERVICEFEBRUARY 17, 2010 1:14 AM

Although the recession may technically be over in Canada, many households sank even further into debt in 2009, creating the highest debt-to-income ratio ever in Canada, according to the Vanier Institute’s annual assessment report, released Tuesday.

Read more

Rules, Rules, Rules

Here is the information regarding the new mortgage rules that will come into effect on April 19th of this year. The changes are not as bad as some were predicting. This is the summary, and the text is below.
Starting April 19th
1. Borrowers need to qualify using the 5 year fixed rate
2. Refinances maxed out at 90% LTV
3. 20% downpayment for mortgages tied to non-owner occupied properties bought for speculation.
Canada will bring in new mortgage rules to cool the country’s red-hot housing sector, but does not think the market has entered into bubble territory, Finance Minister Jim Flaherty said on Tuesday.Concerned that new homebuyers may overextend themselves, the government said it is implementing three changes to mortgage rules that will help prevent the problems seen in other countries that helped trigger the global financial crisis.

“Today’s measures are part of a larger picture. We will continue to closely monitor developments in the housing sector in Canada,” said Flaherty at a news conference in Ottawa.

“There is no compelling evidence of a housing bubble, but we’re taking proactive, prudent, measured and cautious steps today to help prevent a housing bubble.”

Changes to Canada’s mortgage insurance guarantee framework that come into effect on April 19 include the requirement that borrowers will need to qualify for a five-year fixed-rate mortgage even if they go with a lower variable rate.

The government will also lower maximum amounts that can be withdrawn when borrowers refinancing mortgages. And it will require a minimum downpayment of 20 percent for insured mortgages tied to non-owner occupied properties bought for speculation.

Flaherty described the housing market as “healthy and stable” and said that the government’s early action can help prevent negative trends from happening.

The government has been concerned that some borrowers who are taking out variable-rate mortgages will struggle with their monthly payments when interest rates rise.

Bank of Montreal, while noting it did not believe the country faced a housing bubble, said it supported the government’s actions.

Feel free to contact me if you have any questions, and I look forward to hearing from you.
Cheers,

Pat

p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.

October 2009

Here is October 2009’s monthly update on key economic data. Please contact me if you have any questions.
Cheers,
Pat

p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.


Flexible Juggler

Yes as strange as that may sound, but in order to succeed in this day and age you need to be a “Flexible Juggler”. To put this another way, you need to be able to balance several tasks at the same time while maintaining flexibility in your approach to completing each task. Do you want to know who are good at this? Mom’s! Yes Mom’s, my wife is fantastic at this, I get the kids up, she makes them breakfast, referee’s any disputes that may be happening at the same time, motivates them to finish their breakfast, assembles outfits to get them dressed, gets them ready to get out the door, drop’s two off at school and one at day care and then tends to her 85 year old father, picks up the kids for their lunch then back to school, cleans up the house, plans supper, pick’s up the kids, more referee time, makes supper, tubby time for the kids, story time, then bed, plans her day for tomorrow, then starts it all over again. I am tired just thinking about it.

If you want something done, then give it to someone with a well managed busy schedule. This can also be said of the person who is in control of their finances. They know exactly what is coming in each month, what their expenses are, how much they can put away for a rainy day or retirement and how much fun money they have. Are you one of these people?  Or does your money run out before your month does? If you fall into the latter rather than the former, it may be time to re-evaluate your situation. What you are doing may be working now, but it is not a long term solution. Sort of like relying on shoe boxes for your filing systems.

If you would like a fresh perspective on how you can achieve your financial goals, then please feel free to give my office a call.I look forward to hearing from you.
Cheers,

Pat

p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.

Fired or fired up!

This is not a pep talk, it’s a reality check. Look at your track record, are your results what you want them to be? If not you should either get fired or fired up. By this I mean act as if your were your own boss cause in reality no matter what you do or where you work you are! Think about this for a moment, you did not just wake up today and discover that you were 50 lbs over weight, 150K in debt and in a job that you hated. This was a long time coming and possibly you just realized that today is the day that you are going to do something about it. You have to realize that what you have been doing in the past was not working and should be “fired” and that you need to get “fired up” about a brand new approach. One that will produce for you the results that you want.

You are actually well on your way to your goal, you know what does not work and you are determined to do something about it. Congratulations on coming to this realization. Next make your plan, and work your plan and be flexible in your approach.

If you have read more than one article on this blog, you may be asking yourself why is a mortgage broker writing about personal development? Well it’s because if you stand still too long you end up getting run over. As well people who are high achievers are driven goal originated people who are believe in constant never ending improvement. I also believe that you are one of them or at the very least want to be one of them. I also commit to help you any way that I can to achieve your financial goals. I look forward to hearing from you.

Cheers,

Pat

p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.

Star or supporting part?

Put it this way, if there was a movie made of your life, would you be playing a leading role or a supporting part? By this I mean are you making the decisions that determine the overall direction of your life, or it is some other party like a spouse or boss? Don’t get me wrong, this is not a recommendation to act like a dictator. I simply mean that if you do not have clearly defined goals and plans to achieve them, then you are working to help someone else achieve theirs.

Believe it or not, it is not that hard to do. You can start small and work up. What do you want to achieve tomorrow, next week, next month and next year. Then describe in vivid detail what your long term goal looks like once it has been obtained. Have your big goal firmly in mind even while working on your short term goals.

If your goal is to be in fitness cover model shape then missing your workouts and eating double cheese burgers may not be in your best interest.  If you are in sales and your goal is to qualify for the company trip then you must make the calls. As well if you want to get out of debt then you must be keenly aware of how much money you have coming in and how much you have going out and to where. Then sit down and see if there are opportunities where you can increase your income, and cut expenses if possible. If you would like help developing a plan to help you eliminate your debt as quickly as possible, please feel free to contact my office. I look forward to hearing from you.

Cheers,

Pat

p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.

The importance of Timing

You may, like others think that timing has nothing to do with your overall success, however I believe this is not the case. If you think back to some significant events in your life, either positive or negative, timing played a part . Don’t get me wrong I don’t think that it has everything to do with your outcome, but it definitely plays a part. The harder you work, more opportunities will come your way and the better your timing seems to be. Things just seem to happen when you want them to happen, and that is because you are focused like a laser on your desired end result.

Here are just a few examples that come to mind. Normally I write my blog posts at night and post them first thing in the morning, however last Friday I decided to write and post in the late afternoon. What happened was surprising, normally I get a few hundred hits per article, this one got 33K hits. I did not do anything different other than post in the afternoon rather than the morning. I chalk it all up to timing. Another on a personal nature, on May 11th 1993 I switched shifts with a co-worker at the YMCA Halifax where I was working as personal fitness instructor at the time.  I had done it before and did not think anything of it, however this time the result was different as I ended up meeting my wife. Their loss is my gain. Also this time last year AIG (American International Group) was quickly on on the way of becoming a penny stock, then the government intervened and and today it closed at 48.56, if you bought this time last year, then you had great timing!

Now you may be wondering how this all is relevant to finance? Well in the world of finance, the prices of stocks are constantly changing, as well as the foreign exchange markets and the yield on bonds. It’s this last item that will be important to you, as the yield of bonds determine the rates on most mortgages. Normally I do not talk about mortgage rates on my site, however it is important at this time as they have fallen to a point that you should be paying attention. If you are a home owner or plan on being a homeowner, the timing is great for you. Current 5 year fixed rates are now below 4% and variable rates start at 2.5% *(for those who qualify). A homeowner with a mortgage, a car loan, credit card or other loans could save hundreds or more each month by taking advantage of the current rates. Please contact my office if you have any questions. I look forward to hearing from you.

Cheers,

Pat

p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.