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Issue No. 13                   "Representing Your Best Interest!!" October  9, 2009
Variable Rate Products at Prime Again!

After Months of Variable Rates Above Prime, We level out again!!!

 The Variable Rate Closed Mortgages have come back to a Prime  + .0%, as markets for this money stabilize and the banks see an end to the tough times of the past year! Many lenders have eliminated any additional costs to obtaining the Variable Rate products, which may signal a return to speculation that rates are heading up in the New Year!
Call us today!! 
Rod Minnes
Managing Broker

Rates as of Oct 9, 2009
Fixed Rate Mortgages    
6 month convertible            4.60%
1 year open                           6.55%
1 year closed                        2.75%
2 year closed                        2.90%
3 year closed                        3.45%
4 year closed                        3.79%
5 year closed                        3.84% 

Variable Rate Mortgages    
5 year closed - Prime* +.00%  ****
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
The "Rate Hike" heard round the world!!!
Dang Aussies!!  

Paul Vieira, Financial Post  Published: Tuesday, October 06, 2009
The Reserve Bank of Australia has become the first major central bank to raise interest rates since the financial crisis, citing rising home and stock prices along with the traditional focus on growth and inflation - factors other central bankers are expected to make more prominent as they seek to prevent a repeat of debilitating asset bubbles.
As most of you know, I spend my winters there, and their economy has rebounded nicely! The surprise move by Australian central banker Glenn Stevens was greeted with enthusiasm by markets, as it was interpreted as a sign a global economic recovery was on track. Equities, commodity prices and the Canadian dollar surged on the move, although giving up some gains in later trading.
The Australian rate increase now puts the spotlight on other central banks, such as Canada's, which has been steadfast in setting rates to ensure a 2% inflation target. But inflation in Canada is expected to remain benign until 2011, forecasters say, due to excess manufacturing capacity in the economy and a strong Canadian dollar that will keep a lid on import prices.
The loonie reached a one-year high Tuesday of US94.82, before closing at US94.38, up 0.93 from Monday's close.
"Inflation is not going to be a problem. Consumer spending, and the consumer response to cheap money, however, may be a problem," said Stewart Hall, economist with HSBC Securities Canada.
The consumer response is what might push the Bank of Canada, just like its Australian counterpart. In its decision, Australia's central bank cited solid gains in housing prices and a "significant" recovery in equity markets for raising its benchmark rate 25 basis points, to 3.25%.
"I do get the sense asset prices are going to be play a greater role in the formation of monetary policy," said Michael Gregory, senior economist at BMO Capital Markets. "Because the amount of stimulus is unprecedented, and at emergency levels, removing it won't follow the same rules of thumb."
As a result, he said, central bankers might be looking at new measures to determine when to raise rates. As opposed to looking strictly at inflation and growth, Mr. Gregory said central banks might be forced to pay as much attention to asset prices and credit spreads.
In Australia, the central bank has always paid close attention to housing prices - which are a national obsession and have been on a tear over the past decade - and view them as a guage of the overall strength of the economy.
One of the main debates in the aftermath of the financial crisis is the role central banks should play in averting future meltdowns, and what powers they should be granted to execute this task. By taking on a beefed-up role as overseeing the financial system, central banks would be expected to identify asset bubbles and pop them before they burst. The collapse of the U.S. real estate market, fuelled by low lending rates that attracted less-creditworthy buyers, sparked a credit crisis and global recession.
"The general view before the calamity was that monetary policy was not an effective tool in dealing with asset bubbles," said Craig Alexander, deputy chief economist at Toronto-Dominion Bank.
"But given how much damage was caused by the U.S. housing bubble, the view now is that cleaning up the mess afterward can be far too costly and that monetary policy may need to be responsive to asset prices."
Mr. Alexander was a co-author of a TD report released Tuesday, suggesting the Bank of Canada might be forced to raise rates before it expected should Canada's housing market continue its stellar performance.
Mr. Hall said the Bank of Canada has put itself in a "tiny bit" of a box by indicating it was prepared to keep its key interest rate at 0.25% until June 2010, on the condition that inflation would hit the 2% target in early 2011.
But Mr. Hall said the central bank "would do what it wants to do" should circumstances arise. "It won't get trapped by anything."
The Bank of Canada is set to deliver its next interest-rate on Oct. 20, followed by an updated economic outlook two days later. Analysts will be eyeing the documents closely for any change in tone regarding rates. In the meantime, the Bank of Canada's senior deputy governor, Paul Jenkins, is scheduled to speak in Vancouver Thursday regarding the future "challenges" facing central banking.
Canadian banks top Moody's global ranking
By John Greenwood, Financial PostOctober 8, 2009 5:02 PMBe the first to post a comment
For the second year running Canadian banks have scored the top spot in Moody's annual ranking of banks around the world, ahead of Singapore and Hong Kong.
If there was ever any lingering doubt about the place of Canada's banks in the global financial system, Moody's Investors Service would like to put that to rest.
For the second year running Canadian banks have scored the top spot in Moody's annual ranking of banks around the world, ahead of Singapore and Hong Kong.
The report, which looks at banking systems in 95 countries, takes into consideration the same elements as a debt rating with the exception of government support. In other words, it looks at the industry as if taxpayer bailouts were not a possibility.
"Canada performed well relative to our global peers," said Peter Routledge, a senior vice president at the ratings giant, who added that part of the reason can be traced to "our consolidated and profitable system."
Unlike their U.S. and European peers, Canadian banks mostly steered clear of subprime mortgages and the kind of toxic credit investments that led to the demise of Lehman Brothers and so many other global giants. As a result, while their global rivals were negotiating government bailouts Canadian banks were scouting for foreign acquisitions.
The main reason banks Canadian banks didn't get tangled up in the subprime mess is because of a tougher regulatory environment and a more cautious business culture. Some analysts say banks here also enjoy a protected, less competitive environment that leaves them less inclined to take risks.
Canadian banks suffered the same credit-market dislocations as their global competitors, but less than a year after the crisis was at its worst, they have largely recovered, with profitability closing in on normal levels and their share prices back to where they were last summer.
Sitting well below Canada are former behemoths such as the United States at number 24 and Britain at 30. At the bottom is Kyrgyzstan, just below Iceland.
Published in September, the Moody's report ranks the once-powerful U.S. banking system in 24th spot, between Italy and Mexico.
Think tanks and experts of just about every stripe been expounding on Canadian banks, most notably the World Economic Forum, which declared last October they are the world's soundest.
The Canadian financial system did not suffer a direct hit from the credit crunch but the economy has nevertheless been hurt by the global recession that it triggered, with rising bankruptcies and growing uncertainty.
The good news is that despite the troubles Canadian consumers and business have relatively good access to credit thanks the healthy banking system.
This is not the case in countries such as Britain where Moody's warns of "continued pressure" on credit despite massive liquidity injections by the government.