Santa has come and gone - and we did in fact receive a gift of lower interest rates from Santa - as the 5 year mortgage rates drifted down to 3.79% range...while the variable rate was prime less .20-.25 (2.00%) - the spread being approximately 1.75%
the government of canada bonds have adjusted to provide a profit spread in the range of 1.3% which is at the lower end of most lenders spectrum -thus we can possibly expect a spike upwards in the rates - to approximately 3.99% in the new year if the spread holds.
Make no mistake -the bank of canada has warned consumers rates will increase in the new year - likely around June - i would expect the variable rates to increase by .50% and likely by a full 1% by the end of 2010 - the fixed rates will likely increase to 4.75%...(just my guess...) which means variable rates will be at 3% and fixed will be at 4.75% - THEN 2011 - i expect rates on the variable side to increase another 1% to 4%.....if you can lock in 5 years below 4%...now is the time to act...i may be wrong - but over 30 years of experience tells me rates will not stay low forever and when they move - they will move quickly.
back to the greygoose and olives...see you in the new year.
Monday, December 28, 2009
Sunday, October 18, 2009
rates move up slightly
this past few weeks we have seen the fixed interest rates spike by approximately 35 basis points (.35%)
Variable rate mortgages have dropped a bit as they are now available at prime less .10bp (2.25-.10)
the spread between a fixed 5 year and a 5 year variable is approximately 2%.
4.19 fixed versus 2.15%
The bank of Canada - has expressed concern with the rapid rise of the Canadian dollar - but what can they do ? - if the US raises rates - perhaps the Canadian dollar would drop as investors chase the higher yield - but for now it would appear we are deemed to be a gold and petro currency.
We definitely live in interesting times
greygoose out.
Variable rate mortgages have dropped a bit as they are now available at prime less .10bp (2.25-.10)
the spread between a fixed 5 year and a 5 year variable is approximately 2%.
4.19 fixed versus 2.15%
The bank of Canada - has expressed concern with the rapid rise of the Canadian dollar - but what can they do ? - if the US raises rates - perhaps the Canadian dollar would drop as investors chase the higher yield - but for now it would appear we are deemed to be a gold and petro currency.
We definitely live in interesting times
greygoose out.
Friday, September 18, 2009
the pot is simmering
Here is the latest on Gold which has spiked over $1000 per ounce - which should now form a base of support at the $1000 level.
Gold* (GOLDC : NYMEX : US$1013.50)
Net Change: -6.70, % Change: -0.66%
"We wants it, we needs it. Must have the precious." - Gollum (The Lord of
the Rings: The Two Towers). Advocating precious metals and speaking about
the gloom facing the U.S. dollar is nothing new for Eric Sprott, but this
time he has highlighted some eye-opening numbers (to say the least) that
would give even the most optimistic U.S. media bull the chills. Sprott
starts out by noting that over the last six months there has been a
substantial increase in anti-U.S. dollar rhetoric from China, Japan,
Russia, France, Brazil, and even the United Nations. Reading between the
lines, Sprott states that it appears as though the U.S. dollar hegemony has
finally broken, and what happens next will have major consequences for the
global economy. To fully understand the debt predicament currently faced by
the United States, Sprott says it's best to look at the numbers. U.S.
Government revenues for the 12 months ended August 31, 2009 were ~ US$2.2
trillion from all sources. According to the U.S. Department of the
Treasury, the current outstanding debt as of August 31, 2009 is ~ US$11.8
trillion. To this (Sprott says) we must add the unfunded promises that the
U.S. Government has made to its citizens. The National Center for Policy
Analysis (NCPA) estimates that the unfunded portion of the U.S. Social
Security program totalled US$17.5 trillion as of June 2009. The NCPA also
estimates that the aggregate unfunded promises for Medicare total a
whopping US$89.3 trillion. Sarcastically, Sprott states that you probably
don't need a calculator to realize that the U.S. can never cover the debt
costs on US$118 trillion. Even if the U.S. Government were to spend 100% of
their tax revenues on debt payments, the absolute maximum they could
rationally borrow today couldn't exceed US$64.2 trillion (US$2.157 trillion
divided by 3.36% (current weighted annual interest rate)). The numbers just
don't add up. Sprott highlights that the Chinese Government, which is by
far the largest foreign investor in U.S. Government debt, is fully aware of
the current situation. Recently, China has even gone so far as to promote
the purchase of gold and silver to its citizens. Silver bullion is now
being advertised on Chinese television as a prudent investment for the
general public. Chinese banks have even planned to sell gold and silver
bullion bars in four different sizes. This represents a fundamental change
in Chinese policy where the distribution of gold and silver was once
strictly controlled. In summary, Sprott believes the most likely outcome
will be a U.S. dollar crisis. It is for this reason that he has positioned
his hedge funds and mutual funds so heavily in precious metals. At the end
of the day, when the world finally realizes what the U.S. has done to the
world reserve currency, international investors will shift into an asset
that no government can print. In Sprott's opinion the U.S. dollar's status
as a 'port' in the financial storm has officially come to an end.
Currently mortgage rates are holding steady - 5 year is around 3.99% and the variable rates are at Prime+.20 (2.45%)
many people are taking the variable rate in the hopes of riding the wave until the prime rate increases - after all the prime has to increase by 1.5% in order to reach 4% (roughly the current 5 year rate)
I would not suggest this strategy for those who are highly leveraged ..ie 90% loan to value on their homes - keep your eyes open - rates will move up next year ...the million dollar question is when..and by how much
greygoose out...enjoy the remaining dog days of summer - ....
Gold* (GOLDC : NYMEX : US$1013.50)
Net Change: -6.70, % Change: -0.66%
"We wants it, we needs it. Must have the precious." - Gollum (The Lord of
the Rings: The Two Towers). Advocating precious metals and speaking about
the gloom facing the U.S. dollar is nothing new for Eric Sprott, but this
time he has highlighted some eye-opening numbers (to say the least) that
would give even the most optimistic U.S. media bull the chills. Sprott
starts out by noting that over the last six months there has been a
substantial increase in anti-U.S. dollar rhetoric from China, Japan,
Russia, France, Brazil, and even the United Nations. Reading between the
lines, Sprott states that it appears as though the U.S. dollar hegemony has
finally broken, and what happens next will have major consequences for the
global economy. To fully understand the debt predicament currently faced by
the United States, Sprott says it's best to look at the numbers. U.S.
Government revenues for the 12 months ended August 31, 2009 were ~ US$2.2
trillion from all sources. According to the U.S. Department of the
Treasury, the current outstanding debt as of August 31, 2009 is ~ US$11.8
trillion. To this (Sprott says) we must add the unfunded promises that the
U.S. Government has made to its citizens. The National Center for Policy
Analysis (NCPA) estimates that the unfunded portion of the U.S. Social
Security program totalled US$17.5 trillion as of June 2009. The NCPA also
estimates that the aggregate unfunded promises for Medicare total a
whopping US$89.3 trillion. Sarcastically, Sprott states that you probably
don't need a calculator to realize that the U.S. can never cover the debt
costs on US$118 trillion. Even if the U.S. Government were to spend 100% of
their tax revenues on debt payments, the absolute maximum they could
rationally borrow today couldn't exceed US$64.2 trillion (US$2.157 trillion
divided by 3.36% (current weighted annual interest rate)). The numbers just
don't add up. Sprott highlights that the Chinese Government, which is by
far the largest foreign investor in U.S. Government debt, is fully aware of
the current situation. Recently, China has even gone so far as to promote
the purchase of gold and silver to its citizens. Silver bullion is now
being advertised on Chinese television as a prudent investment for the
general public. Chinese banks have even planned to sell gold and silver
bullion bars in four different sizes. This represents a fundamental change
in Chinese policy where the distribution of gold and silver was once
strictly controlled. In summary, Sprott believes the most likely outcome
will be a U.S. dollar crisis. It is for this reason that he has positioned
his hedge funds and mutual funds so heavily in precious metals. At the end
of the day, when the world finally realizes what the U.S. has done to the
world reserve currency, international investors will shift into an asset
that no government can print. In Sprott's opinion the U.S. dollar's status
as a 'port' in the financial storm has officially come to an end.
Currently mortgage rates are holding steady - 5 year is around 3.99% and the variable rates are at Prime+.20 (2.45%)
many people are taking the variable rate in the hopes of riding the wave until the prime rate increases - after all the prime has to increase by 1.5% in order to reach 4% (roughly the current 5 year rate)
I would not suggest this strategy for those who are highly leveraged ..ie 90% loan to value on their homes - keep your eyes open - rates will move up next year ...the million dollar question is when..and by how much
greygoose out...enjoy the remaining dog days of summer - ....
Saturday, September 5, 2009
as the beatles say...were on our way home
Well we are on our way back from Myrtle Beach South Carolina and the PGA Superstore World amatuer golf tournament. this is a four day event similar to the US Open where you compete against people from all over the world in your own category range...or so it should be (there appear to be a few sandbaggers in the mix)
In any event it is a great time - for fun and comeraderie. Joanne and I have participated in 14 of the 26 years of the tournament - this year she finished 9th in her division and i finished 12th. All in all a very satisfying showing.
While we were away interest rates have softened again to 3.99% for 5 year money - it cant stay low forever - it may be time to consider locking for the 5 years and as Mickey blue eyes says.... forget about it.
In any event it is a great time - for fun and comeraderie. Joanne and I have participated in 14 of the 26 years of the tournament - this year she finished 9th in her division and i finished 12th. All in all a very satisfying showing.
While we were away interest rates have softened again to 3.99% for 5 year money - it cant stay low forever - it may be time to consider locking for the 5 years and as Mickey blue eyes says.... forget about it.
Sunday, March 1, 2009
renovation tax credit #2
How does the Home Renovation Tax Credit work?
Canadian homeowners can claim a 15 percent, non-refundable tax credit for eligible expenditures of more
than $1,000, but not more than $10,000 – for a maximum credit of $1,350 ($9000 x 15%). Based on
information currently available, it appears the HRTC applies to ‘do it for me’ and ‘do it yourself’ projects,
and may be claimed in addition to support from the existing ecoENERGY retrofit program and the medical
expense tax credit.
Taxpayers can claim the HRTC when filing their 2009 tax return.
Examples:
• Sally and Ed are a couple who have recently purchased a house. In response to the temporary
HRTC, they decide to replace their old windows and improve
the insulation in their home in 2009, rather than waiting, incurring $10,000 in expenditures this
year. After taking into account the $1,000 minimum threshold, a 15-per-cent credit will be
available on $9,000 in eligible expenditures, providing tax relief of $1,350.
• Karen and Heather are sisters who share ownership of a condominium unit. They each incur
$7,500 in expenditures renovating the kitchen in the condo. Karen and Heather each claim a
$975 credit on eligible expenditures of $6,500 ($7,500 - $1,000).
Who is eligible to participate, and what are the conditions?
Family members (spouses or common-law partners and their children under 18) are subject to a single
limit based on their pooled expenditures. The credit is only available for a dwelling that is eligible to be the
family’s principal residence or that of one or more of their other family members.
Canadian homeowners can claim a 15 percent, non-refundable tax credit for eligible expenditures of more
than $1,000, but not more than $10,000 – for a maximum credit of $1,350 ($9000 x 15%). Based on
information currently available, it appears the HRTC applies to ‘do it for me’ and ‘do it yourself’ projects,
and may be claimed in addition to support from the existing ecoENERGY retrofit program and the medical
expense tax credit.
Taxpayers can claim the HRTC when filing their 2009 tax return.
Examples:
• Sally and Ed are a couple who have recently purchased a house. In response to the temporary
HRTC, they decide to replace their old windows and improve
the insulation in their home in 2009, rather than waiting, incurring $10,000 in expenditures this
year. After taking into account the $1,000 minimum threshold, a 15-per-cent credit will be
available on $9,000 in eligible expenditures, providing tax relief of $1,350.
• Karen and Heather are sisters who share ownership of a condominium unit. They each incur
$7,500 in expenditures renovating the kitchen in the condo. Karen and Heather each claim a
$975 credit on eligible expenditures of $6,500 ($7,500 - $1,000).
Who is eligible to participate, and what are the conditions?
Family members (spouses or common-law partners and their children under 18) are subject to a single
limit based on their pooled expenditures. The credit is only available for a dwelling that is eligible to be the
family’s principal residence or that of one or more of their other family members.
renovation tax credit - federal government
Here is the draft outline of the Federal Home Renovation tax credit - remember the first 1000 does not get a tax credit - the next 9000 gets 15% for a total of $1350 on a 10,000 investment
Information Bulletin: Federal Government HRTC –
The Home Renovation Tax Credit (Page 1 of 2)
The recently announced budget features a very useful tax credit for homeowners, The
Home Renovation Tax Credit (HRTC) . See below for the answer to some common
questions on how it will apply.
THE INFORMATION CONTAINED IN THIS SUMMARY HAS BEEN OBTAINED FROM THE BUDGET DOCUMENTS PUBLISHED
BY THE FEDERAL GOVERNMENT AND IS BEING PROVIDED FOR THE CONVENIENCE OF OUR CUSTOMERS. THE
FOLLOWING SETS OUT OUR UNDERSTANDING OF THE HRTC AND IS NOT MEANT TO BE RELIED ON OR TAKEN AS TAX
OR LEGAL ADVICE. TO ENSURE THE ACCURACY OF THIS INFORMATION AND ITS APPLICATION TO YOU, PLEASE
REVIEW THE DOCUMENTATION PUBLISHED BY THE GOVERNMENT AND, IF YOU REQUIRE FURTHER INFORMATION,
PLEASE OBTAIN FROM YOUR OWN FINANCIAL ADVISORS. ADDITIONALLY, ALL INFORMATION INCLUDED IS SUBJECT TO
ANY CHANGES THAT MAY BE MADE BY THE GOVERNMENT.
What types of products, services and expenses are eligible?
Eligible
• Renovating a kitchen, bathroom or
basement
• New carpet or hardwood floors
• Building an addition, deck, fence or
retaining wall
• A new furnace or water heater
• Painting the interior or exterior of a house
• Laying new sod
• Labour costs;
• Professional fees;
• Building materials;
• Fixtures;
• Equipment rentals; and
• Permits
Ineligible
• Furniture and appliances (refrigerator,
stove, couch);
• Purchase of tools;
• Carpet cleaning; and
• Maintenance contracts (furnace cleaning,
snow removal, lawn care, pool cleaning,
etc.)
When will the HRTC begin and end?
The HRTC will apply to eligible home renovation expenditures for work performed, or goods acquired,
after January 27, 2009 and before February 1, 2010, pursuant to agreements entered into after January
27, 2009.
Page
Information Bulletin: Federal Government HRTC –
The Home Renovation Tax Credit (Page 1 of 2)
The recently announced budget features a very useful tax credit for homeowners, The
Home Renovation Tax Credit (HRTC) . See below for the answer to some common
questions on how it will apply.
THE INFORMATION CONTAINED IN THIS SUMMARY HAS BEEN OBTAINED FROM THE BUDGET DOCUMENTS PUBLISHED
BY THE FEDERAL GOVERNMENT AND IS BEING PROVIDED FOR THE CONVENIENCE OF OUR CUSTOMERS. THE
FOLLOWING SETS OUT OUR UNDERSTANDING OF THE HRTC AND IS NOT MEANT TO BE RELIED ON OR TAKEN AS TAX
OR LEGAL ADVICE. TO ENSURE THE ACCURACY OF THIS INFORMATION AND ITS APPLICATION TO YOU, PLEASE
REVIEW THE DOCUMENTATION PUBLISHED BY THE GOVERNMENT AND, IF YOU REQUIRE FURTHER INFORMATION,
PLEASE OBTAIN FROM YOUR OWN FINANCIAL ADVISORS. ADDITIONALLY, ALL INFORMATION INCLUDED IS SUBJECT TO
ANY CHANGES THAT MAY BE MADE BY THE GOVERNMENT.
What types of products, services and expenses are eligible?
Eligible
• Renovating a kitchen, bathroom or
basement
• New carpet or hardwood floors
• Building an addition, deck, fence or
retaining wall
• A new furnace or water heater
• Painting the interior or exterior of a house
• Laying new sod
• Labour costs;
• Professional fees;
• Building materials;
• Fixtures;
• Equipment rentals; and
• Permits
Ineligible
• Furniture and appliances (refrigerator,
stove, couch);
• Purchase of tools;
• Carpet cleaning; and
• Maintenance contracts (furnace cleaning,
snow removal, lawn care, pool cleaning,
etc.)
When will the HRTC begin and end?
The HRTC will apply to eligible home renovation expenditures for work performed, or goods acquired,
after January 27, 2009 and before February 1, 2010, pursuant to agreements entered into after January
27, 2009.
Page
Sunday, February 22, 2009
and so the world continues....
Well - President Obama visited Ottawa this week - and did more to promote Canada in 5 short hours than Stephen Harper and the Conservatives have done in the past year. He said- i love this country - and bought a beavertail (for those of you who dont know - its not an actual tail...its a pastry deep fried and topped with toppings like butter and cinnamon sugar or garlic and cheese).
Interest rates have dropped since i las posted -prime is at 3 per cent
5 year money is as low as 3.99 - the lowest i have seen in 30 years in the business.
The gloom and doom scenario continues to dominate the news - so lets think about this logically...if there is such a thing as logic.
If all property values drop - people will continue to pay their mortgages and their homes will be a place to live instead of a get rich quick opportunity. (It should have been treated as a place to live from day one).
The stock market values have plummeted and people see their RRSP values dropping by 50 per cent or more - especially the Canadian Banks (as i write this Bank of Montreal is paying an 11 per cent dividend). Are we in for doomsday ?
i dont think so...will it be a tough few years ?...absolutely
So why are the banks dropping - i would suggest its the American Investors selling shares to raise cash - and since there are 10 times the people in the USA they have more control over our stock market as their Mutual funds invest in Canadian Banks - albeit in small amounts - but when everyone is running from financials - the baby tends to get thrown out with the bath water.
I have been a huge proponent of gold and gold stockst moving up..and we are seeing that happen
and now i am buying Canadian banks in the belief that they will flourish over the next 3 years - and i will receive a great divident until it turns around
I also am of the mind- i dont care about the underlying share value as long as they keep paying me the dividends - i dont need the capital but i do like the cashflow from dividends
in any event - time to watch the oscars. ...let me know if you have questions
Refinance - to payoff debt and stay as liquid as possible - but dont forget the addage - buy when everyone else is selling
greygoose out.
Interest rates have dropped since i las posted -prime is at 3 per cent
5 year money is as low as 3.99 - the lowest i have seen in 30 years in the business.
The gloom and doom scenario continues to dominate the news - so lets think about this logically...if there is such a thing as logic.
If all property values drop - people will continue to pay their mortgages and their homes will be a place to live instead of a get rich quick opportunity. (It should have been treated as a place to live from day one).
The stock market values have plummeted and people see their RRSP values dropping by 50 per cent or more - especially the Canadian Banks (as i write this Bank of Montreal is paying an 11 per cent dividend). Are we in for doomsday ?
i dont think so...will it be a tough few years ?...absolutely
So why are the banks dropping - i would suggest its the American Investors selling shares to raise cash - and since there are 10 times the people in the USA they have more control over our stock market as their Mutual funds invest in Canadian Banks - albeit in small amounts - but when everyone is running from financials - the baby tends to get thrown out with the bath water.
I have been a huge proponent of gold and gold stockst moving up..and we are seeing that happen
and now i am buying Canadian banks in the belief that they will flourish over the next 3 years - and i will receive a great divident until it turns around
I also am of the mind- i dont care about the underlying share value as long as they keep paying me the dividends - i dont need the capital but i do like the cashflow from dividends
in any event - time to watch the oscars. ...let me know if you have questions
Refinance - to payoff debt and stay as liquid as possible - but dont forget the addage - buy when everyone else is selling
greygoose out.
Sunday, January 11, 2009
Happy New Year 2009
Hi All
rates are stable at the moment and it looks like we will see another drop in the prime rate on January 20th when the bank of canada sets their rate.
currently the prime is 3.5% and variable rates are available at prime plus .50 to prime plus 1%
5 year money is in the range of 4.65 - 4.99%
the market has slowed down and we are constantly being bombarded by news of job losses and doom and gloom.
Now is the time to prepare for 2009 - refinance - make sure you have good liquidity and can carry your debts througn 2009 and 2010.
we may see a bounce but i dont see a major bounce in the economy until late 2010---- but that is just my humble opinion - would love to hear what you have to say....
greygoose out
ps. on a 15 day cleanse program -damn i miss coffee / wine and my greygoose..........
rates are stable at the moment and it looks like we will see another drop in the prime rate on January 20th when the bank of canada sets their rate.
currently the prime is 3.5% and variable rates are available at prime plus .50 to prime plus 1%
5 year money is in the range of 4.65 - 4.99%
the market has slowed down and we are constantly being bombarded by news of job losses and doom and gloom.
Now is the time to prepare for 2009 - refinance - make sure you have good liquidity and can carry your debts througn 2009 and 2010.
we may see a bounce but i dont see a major bounce in the economy until late 2010---- but that is just my humble opinion - would love to hear what you have to say....
greygoose out
ps. on a 15 day cleanse program -damn i miss coffee / wine and my greygoose..........
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