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Issue No. 9                       "Representing Your Best Interest!!" July 31, 2009
Interest Rates Head Downward - But Not for Long!!

Another Small Decrease in 5 Year Fixed and Variable Terms!

 Another round of drops in the 5 year Fixed money and 5 year Variable Money over the last week has surpised many, especially with articles circulating that the Bank of Canada Chief possible retracting his "keep the Variable rates where they are for a year" statement about 3 months ago! News out many sectors is that Carney is suggesting that with the increase in the Canadian Dollar he might have to hedge on that promise to shore things up in the inflation area! Stay tuned, and read the article below!!
Rod Minnes
Managing Broker

Rates as of July 31, 2009
Fixed Rate Mortgages    
6 month convertible            4.60%
1 year open                           6.55%
1 year closed                        2.75%
2 year closed                        3.05%
3 year closed                        3.65%
4 year closed                        4.09%
5 year closed                        4.29% 

Variable Rate Mortgages    
5 year closed - Prime* +.40%
5 year open   - Prime* + .80%

Home Equity Line Of Credit

Please call for product availability and rates.

Information from sources deemed to be reliable. Product availability and borrower qualification apply.
*Prime = 2.25%
Rod Minnes
Global West Mortgages
Recession coming to an end, BofC says
Paul Vieira, Financial Post  Published: Thursday, July 23, 2009

 OTTAWA -- What has been deemed the deepest Canadian recession since the Second World War - costing 369,000 Canadians their jobs, wiping away nearly $40-billion of wealth and forcing governments to spend tens of billions to mitigate the fallout - has come to a relatively quick end, the Bank of Canada indicated Thursday in its latest economic forecast.
Mark Carney, the Bank of Canada governor, said he expects Canada to generate economic growth for the July-September period. If so, that would mark an official end to the recession that started in October, following the near collapse of the U.S. financial system.
"We believe the economy will grow this quarter," Mr. Carney told reporters. "It is early days, and it is a long road. But things are unfolding as we broadly expected them to - [and] a little faster in terms of the recovery of confidence in financial conditions."
Analysts say the bank's outlook - should it pan out as envisaged - demonstrates how resilient the Canadian economy has proven to be in the midst of a global recession that saw Wall Street banking icons, such as Lehman Brothers, disappear, and forced governments from around the world to move in a co-ordinated fashion to inject trillions to keep the financial system afloat and prevent another depression from unfolding.
Canada benefited from a banking system that was much healthier than its industrialized peers, especially the United States and Britain, and its vast array of natural resources that the emerging economies of China and India covet.
"If you had dared to say in February or March that the economy would be recovering by mid-year you would have been laughed out of the room," said Douglas Porter, deputy chief economist at BMO Capital Markets. "I think it is astonishing how quickly the economy turned to the good in the last four or five months."
Craig Wright, chief economist at Royal Bank of Canada, said the improved outlook is an indication that the Bank of Canada's policy of taking its key policy rate to nearly zero, or 0.25%, and pledging to keep it there until June 2010 is working in driving down borrowing costs and encouraging consumers to take out loans to purchase goods. Plus, he added, the impact of federal and provincial government spending on infrastructure is likely to kick in next year.
"The Canadian economy, in many cases, is performing better than expected and in all cases better than feared," Mr. Wright said.
However, Mr. Carney cautioned the recovery would be modest, given how steep a drop the economy sustained. Analysts say when all is said and done, Canada's economic output will have dropped 3% from its peak prior to the recession's onset, pulling out the equivalent of roughly $40-billion in wealth. That is less than the recessions of the early 1980s and 1990s (4.9% and 3.5%, respectively), but concentrated in a shorter time frame.
"We are not going to be back at the level of activity that we were when the recession started ... until the middle of 2010," Mr. Carney said. "And unfortunately, the labour market is slowest to adjust and we can expect further rises in unemployment even though the economy has started to grow."
Canada's GDP contracted 3.7% on an annualized basis in the final three months of last year, and a whopping 5.4% in the first quarter of 2009, which was the worst quarterly performance since 1991. Official data for the three-month period that ended June 30 are not yet available, but the central bank expects the economy shrank 3.5% - indicating a three-quarter recession. In comparison, the recession of the early 1980s lasted six quarters, while the 1990-1992 downturn lasted eight quarters.
The central bank's official outlook envisages economic growth of 1.3% for the current quarter, ending Sept. 30, followed by a healthy 3% gain for the final three months of 2009.
Earlier this week, in its fixed-date rate announcement, the central bank had revised upward its forecast, saying the economy would contract this year less than expected, by 2.3%, and grow 3% in 2010 - the latter of which is above the Bay Street consensus and double the anticipated growth of the United States, Canada's biggest trading partner.

First-time buyers seek 'well-being'
Marty Hope, Calgary Herald
Putting aside the cold, matter-of-fact aspects of home ownership, there are warmer, more emotional reasons why first-time buyers in Canada want their own place.
Michael Haan, a professor of social policy at the University of Alberta, says home ownership carries with it a "much stronger feeling of personal fulfilment" than does renting.
 Environics Research Group (on behalf of Genworth Financial Canada) surveyed just over 2,500 Canadians, including 251 from Calgary, asking them how they feel about getting their first homes.
It's a given that ownership is a good investment and a healthy hedge against inflation--but other than that, what motivates people to buy a home?
Michael Haan, a professor of social policy at the University of Alberta, says home ownership carries with it a "much stronger feeling of personal fulfilment" than does renting. "There is a greater sense of emotional wellbeing, even though most homeowners recognize more work is required versus renting."
Of course, there is a stronger sense of financial security in owning, as well as pride of ownership.
But the survey makes it clear that most believe the value of ownership goes beyond the money angle.
It doesn't seem to matter where in this country you live--Canadians are all pretty much on the same page when it comes to feelings about home ownership, says Haan.
Just six simple questions were asked by the survey. In each case, when it came to ownership, first time buyers from Calgary ranked either first or second in terms of their emotions:
- Ninety per cent felt more financially secure owning rather than renting. The national average was 88.
- About 86 per cent believed that even though home ownership may mean more work and effort, they'd still rather buy. Nationally, it was 85 per cent.
- Eighty-four per cent of Calgarians and other Canadians agreed with the statement: Owning a home provides a greater sense of emotional well-being and security.
- About 87 per cent of Calgarians, along with 84 per cent of all Canadians, felt the value of owning a home goes beyond the financial value. 
- Fully 85 per cent of Calgarians surveyed consider the house or condo they own as being more of a home than a rental house or apartment. Across Canada, 80 per cent agreed.
- In terms of personal fulfilment, 84 per cent of respondents from Calgary said they had a greater sense of fulfilment with home ownership. It was 80 per cent nationally.
In five of six of the categories, survey respondents in Montreal had the lowest percentage of strongly agree or agree responses.
Overall, though, the survey and its responses made for a very interesting exercise, says Haan,
What Genworth found is that Canadians continue to hold the dream of home ownership in spite of the recent downturn in the economy, he says.
"Not only does feeling about financial security remain strong, but owning one's home also provides a strong sense of emotional well-being and attachment-- very encouraging news about the vitality of the housing market," says Haan.
People have a vested interest in their homes and are willing to overlook the impact of the temporary economic downturn.
In the longer term, they know their property will appreciate in value, as did their parents' homes.
There is also pride of ownership, but Haan says homeowners are more likely to care about their neighbours and their neighbourhoods.
Quoting Thomas Jefferson, Haan says: "A nation of homeowners cannot be beaten."