Tag Archive for: Economy

Rate cuts everywhere!

From today’s issue of the Globe & Mail.

Major central banks slash rates in extraordinary move to ease crisis

Globe and Mail Update

 

Wednesday, October 08, 2008

OTTAWA — Major central banks took the extraordinary step of deeply cutting interest rates in a coordinated move on Wednesday, a development that serves to underline the deterioration of the world’s banking system and the threatened global recession.

Central banks in Canada, the United States, Britain, the European Union, Switzerland and Norway cut their key lending rates by half a percentage point. Only Japan, among the major central banks, opted out given that its rates are already at rock bottom.

The move came after a sharp overnight drop in Asian markets and U.S. stock futures that threatened to spark another North American selloff on Wednesday. The Dow Jones Industrial Average lost 508 points Tuesday, bringing down markets globally. Britain also was rattled by a deepening banking crisis yesterday, forcing the government to announce a $80-billion bailout package.

The move gave some comfort to worried economists, but they warned the extraordinary action is not enough to end the deepening financial crisis.

“Today’s co-ordinated half-point cuts from all the major central banks … will provide at least a temporary boost to confidence, but we fear there is still a lot more work to do,” said economists at London-based Capital Economics. “For a start, the fact that the central banks have had to take such extreme measures underlines how bad market conditions have become.”

The Bank of Canada lowered its key rate to 2.5 per cent, from 3 per cent, but tried to assure the public that Canada’s banks were still solid.

“The intensification of the global financial crisis is having a marked impact on all countries. In recent weeks conditions in global financial markets have deteriorated sharply, the U.S. economy has weakened further, and commodity prices have fallen abruptly,” the Bank of Canada said in a statement it issued alongside the joint statement with other countries.

“As a result of these developments, credit conditions in Canada have tightened significantly, despite the relative health of our financial institutions.”

The central bank warned that a U.S. recession and weakness in key trading partners is hurting Canada’s exports. Plus, the domestic side of the economy is no longer on fire as commodity prices drop and the Canadian dollar slides, the bank noted.

More to come

© The Globe and Mail

Whose Fertilizer are you buying?

I have to admit that I bought into it as well over the last 2 weeks, I watched countless hours of CNBC, CNN and read the latest horror story on the many financial websites that I visit. However thanks to an e-mail subscription that I received from Matt Furey, I realized that there is more to it than meets the eye. 

You see we can not play the blame game about our own personal finances. No one else is responsible for where we are at financially but ourselves. Regardless of outside economic conditions people have always found ways to survive and even thrive. 

If you want some examples then I would highly suggest that you pick up a copy of Napoleon Hill’s “Think and Grow Rich“. Even though it was first published in 1937, there are still valuable lessons that can still be applied today, and that is probably why it is still in print and has been a best seller for many years. While you are at it, another gem that I would recommend to help get your mind on the right track is James Allen’s “As a man thinketh” first published in 1918, a short book but not one that you should read quickly. 

The whole point that I am trying to make here is this “Invest in your own economy”. Do not believe everyone who says that the sky is falling. You make the choices that determine your current reality, make better choices, pay off your debts ( ask me how if you need to), look for ways to grow you income (start your own business, sell on line, there are countless ways), and last but not least train your brain and focus on where you want to go. 

Make this a great week.

Cheers,

Pat

 

It's not me, it's the economy!

According to an article in the Globe and Mail this morning it says we are carrying too much debt in comparison to our assets. However don’t worry CIBC conomist Benjamin Tal said that it is because of the economy! So let me get this straight, we are spending more than we make, putting ourselves deeper in debt and it is not really our fault it is the economy. He is right about one thing, the economy is not as rosy as it was just few short years ago. That should not be an excuse to over do it! What people fail to realize is that we make this economy go round, and if we are forced to cut back our spending to keep up with our debt service needs, what will happen then?

The point that I am trying to make is this, we are responsible for our own situation. We are where we are because of the choices that we have made, good or bad. Some thing that I have just read recently sums this all up ” We are not our circumstances, our circumstances are us! When we change, then our circumstances change”. If we want things to change, then we must first change!

Cheers,

Pat