In a surprise decision, central banks in the industrialized world announced a coordinated half percentage point easing in monetary policy this morning. The message from all of the central banks was loud and clear: the prospects of significantly slower global growth mean that global infaltions risks are dead.
The coordination and the rate change between regular meetings also infer the urgency of action and the need to restore confidence to the global financial system in the wake of unprecendented turmoil.
The common theme in the wording of the central banks statements was that "inflation expectations are diminishing ... the financial crisis has augmented the downside risks to growth and thus has diminished further upside risk to price stability." The Fed notes that 'economic activity has slowed markedly...the intensification of the financial market turmoil is likely to exert additional restraint on spending partly by reducing the abililty to obtain credit.
It's apparent that an easing in monetary policy was needed on a global basis. Expectation is that further rate cuts of a further 50 basis points are in the pipeline and will be announced at the Fed and the Bank of Canada upcoming rate announcements on October 29 and 21 respectively.
Warmly,
Mary Wozny
Wednesday, October 8, 2008
Thursday, October 2, 2008
Opportunities In An "Economic Pearl Harbor"
In Omaha, Neb. today, billionaire investor Warren Buffett said the nation has been hit with an “economic Pearl Harbor,” and the government must respond quickly.
Mr. Buffett talked about the nation's ongoing financial woes in an appearance on the The Charlie Rose Show that aired Wednesday night on PBS stations.
“This really is an economic Pearl Harbor,” Mr. Buffett said. “That sounds melodramatic, but I've never used that phrase before. And this really is one.”
He went on to state that in his opinion the nation's economic problems are already starting to be felt by furniture and jewellery stores such as the ones owned by his company, Berkshire Hathaway Inc.
The billionaire predicts that the rest of the Main Street economy will start to have problems if the government's financial bailout plan doesn't pass Congress soon.
“In my adult lifetime, I don't think I've ever seen people as fearful economically as they are now,” the 78-year-old Mr. Buffett said.
The fear in the marketplace has allowed Mr. Buffett to make several sizable investments over the past month in proven companies that needed cash quickly. And Berkshire, which had $31.2-billion (U.S.) cash on hand at the end of June, was ready to invest because, as Mr. Buffett says, he always tries to be greedy when others are fearful.
Following Berkshire's purchase last week of $5-billion in preferred Goldman Sachs shares, Berkshire announced it would be purchasing $3-billion of preferred share of General Electric Co.
Mr. Buffett said he was approached about the GE investment Wednesday morning by someone at Goldman. And Mr. Buffett quickly decided to invest in GE because he's familiar with the company and confident in its long-term prospects.
This goes to show us that capitalism is alive and well in the US. Prudent investors looking for long term real estate investments can capitalize on todays markets and build their portfolios for the future. As crazy as it may sound to some, now is the time to be purchasing discounted real estate using long term strategies for buy and hold.
Warmly,
Mary Wozny
Mr. Buffett talked about the nation's ongoing financial woes in an appearance on the The Charlie Rose Show that aired Wednesday night on PBS stations.
“This really is an economic Pearl Harbor,” Mr. Buffett said. “That sounds melodramatic, but I've never used that phrase before. And this really is one.”
He went on to state that in his opinion the nation's economic problems are already starting to be felt by furniture and jewellery stores such as the ones owned by his company, Berkshire Hathaway Inc.
The billionaire predicts that the rest of the Main Street economy will start to have problems if the government's financial bailout plan doesn't pass Congress soon.
“In my adult lifetime, I don't think I've ever seen people as fearful economically as they are now,” the 78-year-old Mr. Buffett said.
The fear in the marketplace has allowed Mr. Buffett to make several sizable investments over the past month in proven companies that needed cash quickly. And Berkshire, which had $31.2-billion (U.S.) cash on hand at the end of June, was ready to invest because, as Mr. Buffett says, he always tries to be greedy when others are fearful.
Following Berkshire's purchase last week of $5-billion in preferred Goldman Sachs shares, Berkshire announced it would be purchasing $3-billion of preferred share of General Electric Co.
Mr. Buffett said he was approached about the GE investment Wednesday morning by someone at Goldman. And Mr. Buffett quickly decided to invest in GE because he's familiar with the company and confident in its long-term prospects.
This goes to show us that capitalism is alive and well in the US. Prudent investors looking for long term real estate investments can capitalize on todays markets and build their portfolios for the future. As crazy as it may sound to some, now is the time to be purchasing discounted real estate using long term strategies for buy and hold.
Warmly,
Mary Wozny
Wednesday, October 1, 2008
Canadian Housing Market - Boom or Bust?
In a talk with the Ontario Economic Council, U.S. economist Robert Shiller states Canada's housing market has been following a similar boom-and-bust path as that seen in the United States, but fundamental differences between the two leave Canada less exposed to the U.S.-style fallout.
“There have been booms in some Canadian cities – Edmonton, Calgary, Vancouver – but maybe [prices] are weakening or actually falling, at least in those boom cities,” he said, noting that the pattern somewhat resembles that seen in many U.S. and foreign markets over the past few years.
He does suggest that the relatively small use of subprime mortgages in Canada should mean the damage in this country will be much less severe.
“There's a difference. We [in the United States] have had a subprime revolution that I don't think took place, to the same extent at least, in Canada.”
Mr. Shiller said a bailout of the seized-up banking sector is an essential first step to cleaning up the mess left by the U.S. housing bubble, but it needs to be followed by financial innovations to support troubled home owners.
“Once we fix the leaky roof, we need to take a look at the foundations,” Mr. Shiller told the summit.
The professor – author of the book Irrational Exuberance and recognized expert on asset bubbles and the housing market – said U.S. legislators must act on the liquidity crunch that is gripping the banks in order to avoid a much longer-lasting economic stagnation. He believes Congress must reverse its decision to reject the proposed $700-billion (U.S.) troubled asset relief program (TARP), despite public anger over what many view as a handout to rich and reckless investors.
“The TARP program is really essential to enact,” he said. “The general public doesn't appreciate the severity of the crisis, and the threat it poses to their jobs and livelihood.”
He further noted that the research conducted on the Great Depression by none other than Ben Bernanke – now the head of the Federal Reserve Board and one of TARP's key architects – has found that a tied-up, illiquid banking system was a major contributor to the extraordinary depth and length of the Depression.
“When you don't have a banking system, you can't do business,” he said.
“We can't think that we want to teach people a lesson,” he said, suggesting that the blame for the housing bubble extends beyond bankers, lawmakers and regulators.
“It was erroneous thinking,” he said, blaming the bubble on a mass cultural shift in its mentality toward investing and housing.
“We've become more an investor culture – make a quick buck,” he said. “People got themselves convinced that home prices could only go up.”
Mr. Shiller's new book, Subprime Solution, came out Sept. 1 – just before a month of ground-shaking upheavals on Wall Street. The book's longer-term prescription for the U.S. housing market would involve help for distressed homeowners as well as major changes to the way the residential mortgage market functions.
“Financial innovation only comes in times of crisis,” he said. “We need to think of our financial institutions in a constructive and innovative way.”
His ideas include a permanent and ongoing system for automatically adjusting mortgage payment terms in times of economic shocks; government-subsidized independent financial advisory services; and new risk-management products that would allow homeowners to manage their long-term risk exposure to home prices, employment income and economic growth.
“In my book, I emphasize bailing out homeowners because they are the ones being hurt most,” he said. “But first, we have to deal with the banking system.”
Meanwhile, former Bank of Canada governor David Dodge joined the chorus of experts who believe U.S. legislators must solve their impasse over a rescue package for the troubled banking sector.
“The U.S. banking system needs to be recapitalized. Ben [Bernanke] understands that as well as anyone,” he said. “How that is going to be done is another question.” Mr. Dodge made the statement during a break at the summit, a three-day Ontario Chamber of Commerce event that he is co-chairing. He declined further comment.
Warmly,
Mary Wozny
“There have been booms in some Canadian cities – Edmonton, Calgary, Vancouver – but maybe [prices] are weakening or actually falling, at least in those boom cities,” he said, noting that the pattern somewhat resembles that seen in many U.S. and foreign markets over the past few years.
He does suggest that the relatively small use of subprime mortgages in Canada should mean the damage in this country will be much less severe.
“There's a difference. We [in the United States] have had a subprime revolution that I don't think took place, to the same extent at least, in Canada.”
Mr. Shiller said a bailout of the seized-up banking sector is an essential first step to cleaning up the mess left by the U.S. housing bubble, but it needs to be followed by financial innovations to support troubled home owners.
“Once we fix the leaky roof, we need to take a look at the foundations,” Mr. Shiller told the summit.
The professor – author of the book Irrational Exuberance and recognized expert on asset bubbles and the housing market – said U.S. legislators must act on the liquidity crunch that is gripping the banks in order to avoid a much longer-lasting economic stagnation. He believes Congress must reverse its decision to reject the proposed $700-billion (U.S.) troubled asset relief program (TARP), despite public anger over what many view as a handout to rich and reckless investors.
“The TARP program is really essential to enact,” he said. “The general public doesn't appreciate the severity of the crisis, and the threat it poses to their jobs and livelihood.”
He further noted that the research conducted on the Great Depression by none other than Ben Bernanke – now the head of the Federal Reserve Board and one of TARP's key architects – has found that a tied-up, illiquid banking system was a major contributor to the extraordinary depth and length of the Depression.
“When you don't have a banking system, you can't do business,” he said.
“We can't think that we want to teach people a lesson,” he said, suggesting that the blame for the housing bubble extends beyond bankers, lawmakers and regulators.
“It was erroneous thinking,” he said, blaming the bubble on a mass cultural shift in its mentality toward investing and housing.
“We've become more an investor culture – make a quick buck,” he said. “People got themselves convinced that home prices could only go up.”
Mr. Shiller's new book, Subprime Solution, came out Sept. 1 – just before a month of ground-shaking upheavals on Wall Street. The book's longer-term prescription for the U.S. housing market would involve help for distressed homeowners as well as major changes to the way the residential mortgage market functions.
“Financial innovation only comes in times of crisis,” he said. “We need to think of our financial institutions in a constructive and innovative way.”
His ideas include a permanent and ongoing system for automatically adjusting mortgage payment terms in times of economic shocks; government-subsidized independent financial advisory services; and new risk-management products that would allow homeowners to manage their long-term risk exposure to home prices, employment income and economic growth.
“In my book, I emphasize bailing out homeowners because they are the ones being hurt most,” he said. “But first, we have to deal with the banking system.”
Meanwhile, former Bank of Canada governor David Dodge joined the chorus of experts who believe U.S. legislators must solve their impasse over a rescue package for the troubled banking sector.
“The U.S. banking system needs to be recapitalized. Ben [Bernanke] understands that as well as anyone,” he said. “How that is going to be done is another question.” Mr. Dodge made the statement during a break at the summit, a three-day Ontario Chamber of Commerce event that he is co-chairing. He declined further comment.
Warmly,
Mary Wozny
Friday, September 26, 2008
Credit Crunch Fallout Raises Mortgage Rates
As reported in today's Toronto Star, Canadians received more proof yesterday of the global credit crunch hitting home after this country's biggest banks began hiking their residential mortgage rates in an effort to recoup higher funding costs from their customers.
The interest rate increases follow days of forewarning by financial experts, who predicted Canadians would feel the pinch of the financial crisis through higher borrowing costs on consumer loans.
TD Canada Trust was the first of the big domestic lenders to increase mortgage rates both on its' fixed rate mortgage product and its' variable interest rate mortgage. TD Canada Trust claims that the increase now is reflective because the bank has been holding on, that all of the industry in fact has been holding on, trying not to pass the increased costs to the customers, but says that it can't do this anymore.
Banks are grappling with higher funding costs in the wake of last year's subprime mortgage market meltdown in the United States. With the ensuing global credit crunch now in its second year, banks remain wary of lending to each other. The bank says that all mortgages, variable rates mortgages in particular, have become money losers because of the cost of funds due to all the challenges that are going on in the world right now.
Another factor affecting rates is the bond market which has been in a flux ever since the United States announced a $700 billion US bailout plan for American banks. The interest rates on mortgages and other short-term borrowing are set based on the price of bonds. With lower demand for bonds, and fears of inflation, rates have to rise to lure investors.
Warmly,
Mary Wozny
The interest rate increases follow days of forewarning by financial experts, who predicted Canadians would feel the pinch of the financial crisis through higher borrowing costs on consumer loans.
TD Canada Trust was the first of the big domestic lenders to increase mortgage rates both on its' fixed rate mortgage product and its' variable interest rate mortgage. TD Canada Trust claims that the increase now is reflective because the bank has been holding on, that all of the industry in fact has been holding on, trying not to pass the increased costs to the customers, but says that it can't do this anymore.
Banks are grappling with higher funding costs in the wake of last year's subprime mortgage market meltdown in the United States. With the ensuing global credit crunch now in its second year, banks remain wary of lending to each other. The bank says that all mortgages, variable rates mortgages in particular, have become money losers because of the cost of funds due to all the challenges that are going on in the world right now.
Another factor affecting rates is the bond market which has been in a flux ever since the United States announced a $700 billion US bailout plan for American banks. The interest rates on mortgages and other short-term borrowing are set based on the price of bonds. With lower demand for bonds, and fears of inflation, rates have to rise to lure investors.
Warmly,
Mary Wozny
Tuesday, September 9, 2008
US Mortgage Market Bailout!
U.S. Treasury Secretary Henry Paulson is counting on the weekend seizure of mortgage lending giants Fannie Mae and Freddie Mac to help lower stubbornly high mortgage rates and lure more buyers back into real estate.
But the plan on its own is unlikely to spell the end of the deepest housing slump since the Depression. That's because the rescue is aimed largely at the supply side of the equation, by unfreezing the mortgage bond market that banks tap to make new home loans.
The plan could lower mortgage rates - now at roughly 6.4 per cent for a 30-year mortgage - by as much as a half to a full percentage point, analysts said. Unfortunately the demand side of the equation remains largely untouched.
Americans' appetite for buying homes is likely to remain weak as the U.S. economy slides nearer to recession, weighed down by the deteriorating job market and waning consumer spending.
Mortgage applications in the US have fallen steadily this year and now stand at a seven-year low.
The Feds move to rescue Fannie Mae and Freddie Mac, which together own or guarantee half of all U.S. mortgages, does nothing to address weakening employment or that banks are increasingly tightening underwriting standards. Many lenders, for example, are demanding higher credit scores and larger down payments. And that isn't likely to change with Fannie Mae and Freddie Mac in government hands.
Clearly, the housing market is in a deep rut. Home values have already tumbled 18 per cent across the U.S. Even then, homes are less affordable now than they were before the price bubble emerged in 2004. There is an expectation by analysts that prices will fall another 10 per cent, a lever that would make homes affordable again to most Americans.
There is still months worth of unsold homes on the market. And foreclosures, stuck at an all-time high, continue to glut the market.
In recent months, Wall Street has virtually abandoned the mortgage bond market, leaving troubled Fannie Mae and Freddie Mac as the only players. So while the two lenders controlled roughly half the market, they had become responsible for nearly three-quarters of all new credit.
But that wasn't enough to counter the incredible pressure in financial markets. Worried that Fannie Mae and Freddie Mac would collapse, investors have demanded an unusually large premium for the companies' bonds in recent weeks - nearly 2.5 percentage points higher than government Treasury bills. That's a full percentage-point higher than normal.
The result had a cascading effect through the mortgage market, keeping mortgage rates high in spite of efforts by the U.S. Federal Reserve Board to push them lower.
Also worrying economists is that the takeover is temporary, and the structure of the mortgage finance market in a year or two remains uncertain. Mr. Paulson has made it clear he and the Treasury don't intend to be in the business of being a market maker in mortgage bonds indefinitely.
In the end, the next U.S. president, his treasury secretary and the Congress will have to rethink what the two entities are all about, and what role government will play. The Bush administration is leaving that quandary to the two presidential hopefuls - Democrat Barack Obama and Republican John McCain.
This is a good time for investors to be building their portfolio of buy and hold rental properties.
Warmly,
Mary Wozny
But the plan on its own is unlikely to spell the end of the deepest housing slump since the Depression. That's because the rescue is aimed largely at the supply side of the equation, by unfreezing the mortgage bond market that banks tap to make new home loans.
The plan could lower mortgage rates - now at roughly 6.4 per cent for a 30-year mortgage - by as much as a half to a full percentage point, analysts said. Unfortunately the demand side of the equation remains largely untouched.
Americans' appetite for buying homes is likely to remain weak as the U.S. economy slides nearer to recession, weighed down by the deteriorating job market and waning consumer spending.
Mortgage applications in the US have fallen steadily this year and now stand at a seven-year low.
The Feds move to rescue Fannie Mae and Freddie Mac, which together own or guarantee half of all U.S. mortgages, does nothing to address weakening employment or that banks are increasingly tightening underwriting standards. Many lenders, for example, are demanding higher credit scores and larger down payments. And that isn't likely to change with Fannie Mae and Freddie Mac in government hands.
Clearly, the housing market is in a deep rut. Home values have already tumbled 18 per cent across the U.S. Even then, homes are less affordable now than they were before the price bubble emerged in 2004. There is an expectation by analysts that prices will fall another 10 per cent, a lever that would make homes affordable again to most Americans.
There is still months worth of unsold homes on the market. And foreclosures, stuck at an all-time high, continue to glut the market.
In recent months, Wall Street has virtually abandoned the mortgage bond market, leaving troubled Fannie Mae and Freddie Mac as the only players. So while the two lenders controlled roughly half the market, they had become responsible for nearly three-quarters of all new credit.
But that wasn't enough to counter the incredible pressure in financial markets. Worried that Fannie Mae and Freddie Mac would collapse, investors have demanded an unusually large premium for the companies' bonds in recent weeks - nearly 2.5 percentage points higher than government Treasury bills. That's a full percentage-point higher than normal.
The result had a cascading effect through the mortgage market, keeping mortgage rates high in spite of efforts by the U.S. Federal Reserve Board to push them lower.
Also worrying economists is that the takeover is temporary, and the structure of the mortgage finance market in a year or two remains uncertain. Mr. Paulson has made it clear he and the Treasury don't intend to be in the business of being a market maker in mortgage bonds indefinitely.
In the end, the next U.S. president, his treasury secretary and the Congress will have to rethink what the two entities are all about, and what role government will play. The Bush administration is leaving that quandary to the two presidential hopefuls - Democrat Barack Obama and Republican John McCain.
This is a good time for investors to be building their portfolio of buy and hold rental properties.
Warmly,
Mary Wozny
Monday, August 25, 2008
Urgent Plea for Your Help!
First, my apologies as it's been quite a while since I've written to you. It's always interesting the challenges that life tosses our way. As a result, I am coming to you with a plea and asking for your help.
Many of you know that the past few years have been a time of great challenge and change for me. They've also been years of exceptional personal and spiritual growth as well, and honestly, looking back, I wouldn't change any of it. (well ok, maybe a few!!!) I believe there are always lessons we need to learn from these challenges so that we can move to a higher spiritual level. I certainly have and am thankful for the experience.
I was very blessed to have a partner come into my life a year ago who brought me great joy and peace. We were joined together at a 'soulular' level with an incredibly strong and unbreakable connection and I loved him dearly.
Life had different plans for us though. In April he was diagnosed with cancer and after further testing and much consultation with oncologists, it was determined he should have surgery and then chemo. Arrangements were made and I took him in on July 10th for his surgery.
Well by now you may realize that I've been writing in the past tense here .... it didn't go well. Once opened up the cancer was found everywhere. The doctors did what they could but the prognosis was bad. The worst was yet to come when in the recovery room he 'bled out' and was rushed back into surgery to stop the bleeding and try and keep him alive.
Here's what I want you all to really recognize!
Suddenly he had lost his entire bodys' volume of blood. Bag after bag of blood was given to him. That night he had 14 units of whole blood alone, along with many bags of frozen plasma and platelets. By the end, he had 21 units of blood given to him. I watched it flow into him along with other fluids to try and bring his pressure up and replace what he was losing, to sustain him another minute, another hour, another day.
He fought valiantly and courageously for 3 1/2 weeks until his body gave up and nothing more could be done for him. I held him as he passed and closed his eyes when it was over. I was honoured to have been by his side and to help him through this incredibly difficult time. Who knows, I suspect this is the reason the universe brought us together. No one should be alone at times like this and had we not met, he would have been. I'm so very blessed and grateful to have shared this time with him although it was so short.
Our lives can change in a single instant. My plea to you is this - PLEASE GIVE BLOOD. Give the life saving blood that is in such critical demand all over the world. Your local communities will offer blood donor clinics. You can check these out by visiting the American Red Cross in the United States at http://www.redcross.org/donate/give/ or calling 1-800-GIVE-LIFE (1-800-448-3543). In Canada contact the Canadian Blood Services, http://www.bloodservices.ca/ or by calling 1-888-2-DONATE.
It's always interesting to notice how serendipitous life can be. One and a half weeks after I lost my partner, I attended my weekly Rotary meeting. Amazingly, the speaker that day was from Canadian Blood Services with a plea for my Rotary Clubs' help in giving blood and passing the message along.
How timely! I stood up and shared with my fellow Rotarians how true in fact this plea was as I had just lived this. We never know when or how our lives may be touched by someone requiring this life saving fluid. It's established fact that we all will be touched by cancer in our lives, whether ourselves or someone in our family or close to us. Chemo patients often require blood and blood products to help them through their treatment.
Now, I can't give blood due to my own health challenges, but I realized after listening to this speaker that I could give time and I could ask you for your help. I immediately volunteered my time to assist in blood donation clinics or speaking on their behalf and I am spreading the word by asking you.
So there are no excuses and I ask you again, please give blood or give time for this very worthy cause. Who knows, one day you or a loved one could be the patient lying in a hospital bed receiving this precious gift of life. The life you save could be your own!
I thank you all for your support and for giving blood. And I thank everyone who donated the blood that was so vital in keeping my Brian alive for those few short weeks. I carry your kindness in my heart always.
I will be back in touch soon and ask for your patience as I move through the grieving process.
My best wishes and thanks to you all.
Mary Wozny
Many of you know that the past few years have been a time of great challenge and change for me. They've also been years of exceptional personal and spiritual growth as well, and honestly, looking back, I wouldn't change any of it. (well ok, maybe a few!!!) I believe there are always lessons we need to learn from these challenges so that we can move to a higher spiritual level. I certainly have and am thankful for the experience.
I was very blessed to have a partner come into my life a year ago who brought me great joy and peace. We were joined together at a 'soulular' level with an incredibly strong and unbreakable connection and I loved him dearly.
Life had different plans for us though. In April he was diagnosed with cancer and after further testing and much consultation with oncologists, it was determined he should have surgery and then chemo. Arrangements were made and I took him in on July 10th for his surgery.
Well by now you may realize that I've been writing in the past tense here .... it didn't go well. Once opened up the cancer was found everywhere. The doctors did what they could but the prognosis was bad. The worst was yet to come when in the recovery room he 'bled out' and was rushed back into surgery to stop the bleeding and try and keep him alive.
Here's what I want you all to really recognize!
Suddenly he had lost his entire bodys' volume of blood. Bag after bag of blood was given to him. That night he had 14 units of whole blood alone, along with many bags of frozen plasma and platelets. By the end, he had 21 units of blood given to him. I watched it flow into him along with other fluids to try and bring his pressure up and replace what he was losing, to sustain him another minute, another hour, another day.
He fought valiantly and courageously for 3 1/2 weeks until his body gave up and nothing more could be done for him. I held him as he passed and closed his eyes when it was over. I was honoured to have been by his side and to help him through this incredibly difficult time. Who knows, I suspect this is the reason the universe brought us together. No one should be alone at times like this and had we not met, he would have been. I'm so very blessed and grateful to have shared this time with him although it was so short.
Our lives can change in a single instant. My plea to you is this - PLEASE GIVE BLOOD. Give the life saving blood that is in such critical demand all over the world. Your local communities will offer blood donor clinics. You can check these out by visiting the American Red Cross in the United States at http://www.redcross.org/donate/give/ or calling 1-800-GIVE-LIFE (1-800-448-3543). In Canada contact the Canadian Blood Services, http://www.bloodservices.ca/ or by calling 1-888-2-DONATE.
It's always interesting to notice how serendipitous life can be. One and a half weeks after I lost my partner, I attended my weekly Rotary meeting. Amazingly, the speaker that day was from Canadian Blood Services with a plea for my Rotary Clubs' help in giving blood and passing the message along.
How timely! I stood up and shared with my fellow Rotarians how true in fact this plea was as I had just lived this. We never know when or how our lives may be touched by someone requiring this life saving fluid. It's established fact that we all will be touched by cancer in our lives, whether ourselves or someone in our family or close to us. Chemo patients often require blood and blood products to help them through their treatment.
Now, I can't give blood due to my own health challenges, but I realized after listening to this speaker that I could give time and I could ask you for your help. I immediately volunteered my time to assist in blood donation clinics or speaking on their behalf and I am spreading the word by asking you.
So there are no excuses and I ask you again, please give blood or give time for this very worthy cause. Who knows, one day you or a loved one could be the patient lying in a hospital bed receiving this precious gift of life. The life you save could be your own!
I thank you all for your support and for giving blood. And I thank everyone who donated the blood that was so vital in keeping my Brian alive for those few short weeks. I carry your kindness in my heart always.
I will be back in touch soon and ask for your patience as I move through the grieving process.
My best wishes and thanks to you all.
Mary Wozny
Wednesday, July 9, 2008
Canadian Government Revamps Mortgage Rules!
Important new rules from Ottawa today regarding mortgage regulations and guidelines!
In an effort to avoid the sort of housing meltdown that has damaged the U. S. economy, the Finance Department today said it was reducing the maximum amortization period for new government-backed mortgages to 35 years from the previously allowed 40 years.
The government states that Canada's housing and mortgage markets are performing better than the United States and the new ruling which will come in effect October 15th, 2008 will assure the continuation of this. They state that the historically prudent and cautious approach taken by the Canadian financial institutions to morgage lending, combined with a sound supervisory regime, has allowed Canada to maintain strong and secure housing and mortgage markets.
New regulations will require a consistent credit score for mortgages the government backs along with a minimum level of loan documentation standards to evidence property values and borrowers' income. The final change will be a capping at 45% on a borrower's debt-service ratio.
These changes will take force on October 15th, 2008 and means that people looking to purchase or refinance their home with a high ratio mortgage need to act quickly!
Contact Mary Wozny, 877-446-9791 or email mwozny@mortgagealliance.com today to secure your financing before these new rules come into effect.
Warmly,
Mary Wozny
In an effort to avoid the sort of housing meltdown that has damaged the U. S. economy, the Finance Department today said it was reducing the maximum amortization period for new government-backed mortgages to 35 years from the previously allowed 40 years.
The government states that Canada's housing and mortgage markets are performing better than the United States and the new ruling which will come in effect October 15th, 2008 will assure the continuation of this. They state that the historically prudent and cautious approach taken by the Canadian financial institutions to morgage lending, combined with a sound supervisory regime, has allowed Canada to maintain strong and secure housing and mortgage markets.
New regulations will require a consistent credit score for mortgages the government backs along with a minimum level of loan documentation standards to evidence property values and borrowers' income. The final change will be a capping at 45% on a borrower's debt-service ratio.
These changes will take force on October 15th, 2008 and means that people looking to purchase or refinance their home with a high ratio mortgage need to act quickly!
Contact Mary Wozny, 877-446-9791 or email mwozny@mortgagealliance.com today to secure your financing before these new rules come into effect.
Warmly,
Mary Wozny
Thursday, June 26, 2008
Canadian Housing Market is Cooling
According to Toronto Dominions recent economic report, after a long run of rapidly-rising prices, the Canadian housing market has cooled to the point that it is no longer a sellers' market. “The long-awaited end of the Canadian housing boom has occurred, reflecting more moderate demand and increased supply of properties for sale.”
“The year-over-year price growth for existing homes in Canada's major markets fell to only 1.1 per cent in May, down from 8.6 per cent just four months earlier,” the TD economists wrote.
“The trend has been broadly based, but is has been particularly sharp in some of the markets that had experienced the most dramatic price growth. Calgary and Edmonton home prices in April and May fell to below year-earlier levels.”
The TD economists said they had expected the slowdown to occur before now, but “housing remained stronger for longer than we had anticipated, largely due to increased affordability through new financing options, such as no money down or extended amortization.”
Regional economic strength related to the commodity boom also helped to fuel “unsustainably elevated home price growth in the west,” they wrote.
Last month, the Canadian Real Estate Association reported that resale home listings across Canada rose by 17.7 per cent in April from a year earlier – pushing the number of home listings to the highest level on record.
“Most of Canada's major housing markets have moved out of sellers' territory to more balanced markets.”
However, the Canadian housing market remains fundamentally strong, unlike the U.S. market, where the National Association of Realtors reported Thursday that median home prices continued to fall. The median price of an existing U.S. home sold in May was $208,600 (U.S), down 6.3 per cent from a year earlier – fallout from the subprime mortgage crisis.
In Canada, the TD economists forecast an average existing home price of $313,300 (Canadian) in 2008, up 2 per cent from last year's average.
Canadians, the TD economists said, are “cashing in, not foreclosing.
“... It should be stressed that the rise in listings does not reflect homeowners of principal dwellings desperate to sell, and this is the dominant difference between the Canadian and U.S. experience,” they wrote in their report, Canada's Housing Boom Comes to an End.
“Indeed, the U.S. has been characterized by an abnormal rise in delinquencies and foreclosures or large negative equity positions. In Canada, speculators may be quickly dumping properties on the market to get out while the times are good, but individuals that have a principal dwelling are not under financial duress.
“Canadian consumers are nowhere nearly as leveraged through their home equity as American consumers are.”
Throughout the rest of this year and 2009, most regional housing markets in Canada “will see low to mid single-digit gains, but Saskatchewan and Manitoba will continue to post double-digit gains in the near term, followed by a significant cooling in 2009 – with the risk of a mild price correction in the major cities that have recently experienced extraordinary price growth,” the TD economists said.
“Alberta will have further weakness in the near term, as Calgary and Edmonton will likely see prices continue to fall for another three or four quarters, dropping 8 per cent to 10 per cent from their peak, after which prices should stabilize and start rising at a low single-digit pace.”
Warmly,
Mary Wozny
“The year-over-year price growth for existing homes in Canada's major markets fell to only 1.1 per cent in May, down from 8.6 per cent just four months earlier,” the TD economists wrote.
“The trend has been broadly based, but is has been particularly sharp in some of the markets that had experienced the most dramatic price growth. Calgary and Edmonton home prices in April and May fell to below year-earlier levels.”
The TD economists said they had expected the slowdown to occur before now, but “housing remained stronger for longer than we had anticipated, largely due to increased affordability through new financing options, such as no money down or extended amortization.”
Regional economic strength related to the commodity boom also helped to fuel “unsustainably elevated home price growth in the west,” they wrote.
Last month, the Canadian Real Estate Association reported that resale home listings across Canada rose by 17.7 per cent in April from a year earlier – pushing the number of home listings to the highest level on record.
“Most of Canada's major housing markets have moved out of sellers' territory to more balanced markets.”
However, the Canadian housing market remains fundamentally strong, unlike the U.S. market, where the National Association of Realtors reported Thursday that median home prices continued to fall. The median price of an existing U.S. home sold in May was $208,600 (U.S), down 6.3 per cent from a year earlier – fallout from the subprime mortgage crisis.
In Canada, the TD economists forecast an average existing home price of $313,300 (Canadian) in 2008, up 2 per cent from last year's average.
Canadians, the TD economists said, are “cashing in, not foreclosing.
“... It should be stressed that the rise in listings does not reflect homeowners of principal dwellings desperate to sell, and this is the dominant difference between the Canadian and U.S. experience,” they wrote in their report, Canada's Housing Boom Comes to an End.
“Indeed, the U.S. has been characterized by an abnormal rise in delinquencies and foreclosures or large negative equity positions. In Canada, speculators may be quickly dumping properties on the market to get out while the times are good, but individuals that have a principal dwelling are not under financial duress.
“Canadian consumers are nowhere nearly as leveraged through their home equity as American consumers are.”
Throughout the rest of this year and 2009, most regional housing markets in Canada “will see low to mid single-digit gains, but Saskatchewan and Manitoba will continue to post double-digit gains in the near term, followed by a significant cooling in 2009 – with the risk of a mild price correction in the major cities that have recently experienced extraordinary price growth,” the TD economists said.
“Alberta will have further weakness in the near term, as Calgary and Edmonton will likely see prices continue to fall for another three or four quarters, dropping 8 per cent to 10 per cent from their peak, after which prices should stabilize and start rising at a low single-digit pace.”
Warmly,
Mary Wozny
Wednesday, June 25, 2008
US Federal Reserve Holds Rates Steady
The Federal Reserve, navigating treacherous economic waters, decided on Wednesday to leave a key interest rate unchanged, bringing an end to a string of consecutive rate cuts. The decision to leave rates unchanged had been widely expected by financial markets.The central bank announced that it was keeping the federal funds rate, the interest rate that banks charge each other, at 2 per cent, marking the first time in 10 months that the central bank has failed to reduce interest rates at one of its regular meetings.
The Fed is confronted with the twin perils of a possible recession and rising inflation pressures, stemming from this year's surge in oil and food prices.
In a brief statement explaining the decision, Fed Chairman Ben Bernanke and his colleagues cited both the threats to growth and rising inflation pressures as problems confronting the economy at the moment. The statement said that the downside risks to growth “appear to have diminished somewhat” while adding that “the upside risks to inflation and inflation expectations have increased.
Because of the Fed's decision, short-term borrowing costs on millions of consumer and business loans tied to banks' prime lending rate will remain unchanged. The prime rate is currently at 5 per cent, its lowest level since late 2004.
Investors are split about the Fed's actions for the rest of the year. Some analysts believe the Fed could start raising rates, possibly as soon as the next meeting in August because of concerns about inflation. Other economists argue that the weak economy and rising unemployment will keep the Fed on the sidelines until at least after the November elections.
While saying that the upside risks to inflation have increased, the central bank repeated its forecast that it expected “inflation to moderate later this year and next year.”
The opposing forces of weak growth and recession put the central bank in a bind. Its main policy tool — changes in interest rates — can only address one of those problems at a time. The Fed can cut interest rates to spur consumer and business spending and economic growth or it can raise interest rates to slow spending and growth and ease inflation pressures.
The Bush administration is hoping that the government's $168-billion (U.S.) economic stimulus program, which is sending rebate payments to 130 million households, will help dissolve some of the gloom and bolster consumer spending in the months ahead.
Other analysts, however, said they believed Mr.Bernanke wanted to send out a strong anti-inflation warning, especially since it was coupled with a comment in an earlier speech about the Fed chief's concerns that the weak U.S. dollar was adding to U.S. inflation problems. The remarks taken together had the impact of bolstering the dollar, which had been tumbling.
The Fed is making an effort to convince the markets that the central bank is serious about fighting inflation without having to start raising interest rates at a time when the economy remains very weak.
The last thing the central bank wants is a repeat of the 1970s, when successive oil price shocks did trigger a wage-price spiral that sent inflation soaring and was only subdued when the Fed under Paul Volcker pushed interest rates to levels not seen since the Civil War.
Rocky times are ahead and investors must use prudence and care to successfully navigate through them.
Warmly,
Mary Wozny
The Fed is confronted with the twin perils of a possible recession and rising inflation pressures, stemming from this year's surge in oil and food prices.
In a brief statement explaining the decision, Fed Chairman Ben Bernanke and his colleagues cited both the threats to growth and rising inflation pressures as problems confronting the economy at the moment. The statement said that the downside risks to growth “appear to have diminished somewhat” while adding that “the upside risks to inflation and inflation expectations have increased.
Because of the Fed's decision, short-term borrowing costs on millions of consumer and business loans tied to banks' prime lending rate will remain unchanged. The prime rate is currently at 5 per cent, its lowest level since late 2004.
Investors are split about the Fed's actions for the rest of the year. Some analysts believe the Fed could start raising rates, possibly as soon as the next meeting in August because of concerns about inflation. Other economists argue that the weak economy and rising unemployment will keep the Fed on the sidelines until at least after the November elections.
While saying that the upside risks to inflation have increased, the central bank repeated its forecast that it expected “inflation to moderate later this year and next year.”
The opposing forces of weak growth and recession put the central bank in a bind. Its main policy tool — changes in interest rates — can only address one of those problems at a time. The Fed can cut interest rates to spur consumer and business spending and economic growth or it can raise interest rates to slow spending and growth and ease inflation pressures.
The Bush administration is hoping that the government's $168-billion (U.S.) economic stimulus program, which is sending rebate payments to 130 million households, will help dissolve some of the gloom and bolster consumer spending in the months ahead.
Other analysts, however, said they believed Mr.Bernanke wanted to send out a strong anti-inflation warning, especially since it was coupled with a comment in an earlier speech about the Fed chief's concerns that the weak U.S. dollar was adding to U.S. inflation problems. The remarks taken together had the impact of bolstering the dollar, which had been tumbling.
The Fed is making an effort to convince the markets that the central bank is serious about fighting inflation without having to start raising interest rates at a time when the economy remains very weak.
The last thing the central bank wants is a repeat of the 1970s, when successive oil price shocks did trigger a wage-price spiral that sent inflation soaring and was only subdued when the Fed under Paul Volcker pushed interest rates to levels not seen since the Civil War.
Rocky times are ahead and investors must use prudence and care to successfully navigate through them.
Warmly,
Mary Wozny
Wednesday, June 18, 2008
Modest Increase Foreseen for Mortgage Rates
As reported in the Globe and Mail, Canadians should be prepared for a modest hike in mortgage rates as the Bank of Canada turns its attention away from stimulating the economy and toward curbing inflation.
This prospect, combined with other rising costs, will likely cause more homeowners to opt for the security of locking in their mortgages.
That will be the case even though, for now, variable rates are still at least a percentage point cheaper.
The surprise decision last week by the central bank to freeze rather than cut its key lending rate hasn't hit mortgage rates yet.
However, fixed-rate mortgages, which move in tandem with long-term bond yields, should creep up in the next six months as the bond market is hit by concerns about the rising cost of living, said Benjamin Tal, senior economist at CIBC World Markets Inc.
“The No. 1 enemy of the bond market and long-term rates is inflation,” Mr. Tal said. Variable-rate mortgages are tied to the prime rate set by the banks for their best customers. It fluctuates with the Bank of Canada's key lending rate, and Mr. Tal said he expects the central bank will raise rates next year as it moves to curb inflation.
Mortgage rates will likely start heading up in the near term, although the increase should be a moderate quarter to half a percentage point, said Gerald Soloway, chief executive officer of Home Capital Group Inc., which provides alternative mortgages through its principal subsidiary, Home Trust Co.
“I don't think it will be dramatic. I think there will be a modest increase,” Mr. Soloway said. The current volatility in the economy reinforces his view that the bulk of his company's clients, including people on fixed incomes or on a tight budget, should lock in for the longer term, Mr. Soloway said.
“I really don't think that the average homeowner is equipped to speculate on interest rates. I think fixed is a much better option for people getting a mortgage today. Why not have the certainty and protect the investment in your house?”
With both fixed and floating rates expected to rise, CIBC's Mr. Tal, a long-term proponent of variable mortgages, said he now sees a window of opportunity for homeowners to lock in for the next five years.
For all your mortgage needs go to www.MaryWozny.com today and apply online now!
Warmly,
Mary Wozny
This prospect, combined with other rising costs, will likely cause more homeowners to opt for the security of locking in their mortgages.
That will be the case even though, for now, variable rates are still at least a percentage point cheaper.
The surprise decision last week by the central bank to freeze rather than cut its key lending rate hasn't hit mortgage rates yet.
However, fixed-rate mortgages, which move in tandem with long-term bond yields, should creep up in the next six months as the bond market is hit by concerns about the rising cost of living, said Benjamin Tal, senior economist at CIBC World Markets Inc.
“The No. 1 enemy of the bond market and long-term rates is inflation,” Mr. Tal said. Variable-rate mortgages are tied to the prime rate set by the banks for their best customers. It fluctuates with the Bank of Canada's key lending rate, and Mr. Tal said he expects the central bank will raise rates next year as it moves to curb inflation.
Mortgage rates will likely start heading up in the near term, although the increase should be a moderate quarter to half a percentage point, said Gerald Soloway, chief executive officer of Home Capital Group Inc., which provides alternative mortgages through its principal subsidiary, Home Trust Co.
“I don't think it will be dramatic. I think there will be a modest increase,” Mr. Soloway said. The current volatility in the economy reinforces his view that the bulk of his company's clients, including people on fixed incomes or on a tight budget, should lock in for the longer term, Mr. Soloway said.
“I really don't think that the average homeowner is equipped to speculate on interest rates. I think fixed is a much better option for people getting a mortgage today. Why not have the certainty and protect the investment in your house?”
With both fixed and floating rates expected to rise, CIBC's Mr. Tal, a long-term proponent of variable mortgages, said he now sees a window of opportunity for homeowners to lock in for the next five years.
For all your mortgage needs go to www.MaryWozny.com today and apply online now!
Warmly,
Mary Wozny
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