It’s a bad time to have Canadian dollars

The Bank of Canada took another strike at driving down the Canadian dollar and cut the key interest rate by .25% to a slender .50%.

Canada’s central banker isn’t using the R-word – recession — but Stephen Poloz is cutting the Bank of Canada’s key interest rate by 25 basis points to 0.5 percent as he forecasts two back-to-back quarters of economic decline amid the crash in crude prices.

With Canadians carrying record-high debt loads and cheap money fuelling hot housing markets in Toronto and Vancouver, the 25 basis point rate cut will be seen as a risky play in some quarters, adding more fuel to the debt fire.

Read the full article over at BNN.

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Jimmy
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Jimmy

I predict it’s a great time to have CAD. At least I plan on buying a boatload next two weeks predicting we’re near bottom. Time will tell.

#Bradian
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#Bradian
Bradian, BC 50-acre ghost town sold to Chinese investors 7 months ago for C$995,000, is back on the market, and will be listed on the MLS eventually. At that time – “Michael Mills, spokesman for the project on behalf of China Zhong Ya Group, said everything is still in the early stages but that the company plans to revitalize the town. “They do intend to rebuild it,” he told The Huffington Post.” “Realtor John Lovelace (he) sees the purchase as the extension of an ongoing shift by Asian investors from traditional residential homes to recreational properties.” CZYG’s original plan was to robe in two scores of Chinese investors with each injecting an average C$500k (or minimum C$200k) to rebuild Bradian Ghost Town, with the promise to apply BC-PNP for them. In March this year, BC Government suddenly paused the BC-PNP.… Read more »
@Jimmy
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@Jimmy

Are you crazy buying Loonies?

The USA is going to raise rates by a quarter point. They have committed to it. Then pause. Canada will cut again (already priced in). Poloz even mentioned QE.

The real winners are homeowners and recent immigrants who can now bring funds from their homelands now. Canada is on sale.

As to converting to US$, the smart money did it over the past year. THAT WAS HOW YOU SHORT CANADA!!!

My net worth went up substantially today.

VanRant
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VanRant

“Not only does property appreciation hurt our competitiveness, it also suppresses export driven industries.”
Robert Shiller on high home prices.

paulb
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Active Member

New Listings 259
Price Changes 71
Sold Listings 155
TI:12934

http://www.paulboenisch.com

Jimmy
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Jimmy

@3

We’re on the same page. I just began buying CAD late today, very slowly. My plan is to keep buying over the next few weeks. CAD often performs well against USD from Aug to Nov. I’m expecting the last half of this year and much of the next for the CAD to outperform for various reasons, but we’ll see.

loonie
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loonie

Alberta bailout.
Third world currency.

Shut It Down Already
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Shut It Down Already

I have my US$ dividends automatically converted to CAD when they hit the brokerage account.

things-Garth-got-wrong
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things-Garth-got-wrong

1) Interest rates were going up. They went down you dolt. Didn’t see that one did you?
2) RE prices would drop. Oh yeah they have gone down in Calgary, so you must be right then.
3) Off-shore buyers are not a factor because there is no data, except for RE board data which is bull-shit like I said, except when it says there are no off-shore buyers.

Obviously he has not been to a single open house in West Vancouver, Van West, Burnaby Richmond etc to see that there are almost no locals and convoys of off-shore buyers. However he is the ‘expert’ even on Vancouver RE and locals are self-entitled ass-holes and just need to move like nomads from one flippers house to the next.

fanaticallybroke
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fanaticallybroke
The_Shit_Garth_Says
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The_Shit_Garth_Says

Actually, more HAM will take advantage of this weakening loonie and probably some Europeans as the uncertainty is building up to critical mass.

So we’ll have HAM for the next few decades cause our gov’t wants that.
Then we’ll get more Euro money pouring in if their dominos start to fall.
Then we may, and that is still a big if, Japanese (20 million in Tokyo residents) that would need to be evacuated if Fukushima goes China Syndrome.

See what’s up against CDNs?

#Ching aka Cheng
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#Ching aka Cheng

Michael Ching aka Moyeung Ching aka Cheng
has won a Federal Court judicial review to overturn an IRB 2014 decision to deny him refugee status. His refugee claim will be sent back to IRB for reconsideration. A judge of the Winnipeg Court informed the media today.

The_Shit_Garth_Says
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The_Shit_Garth_Says

Crikey…

you’ve got to post the knock-knock jokes to see if you get banned!

hahaha…loved them.

The_Shit_Garth_Says
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The_Shit_Garth_Says

I was laughing so hard I forgot to mention the site – greaterfool.

M
Guest
M

LOL buying CAD? we are in a long term down trend (just look at a chart) any bounce should be used as an opportunity to buy USD.
Funny how many people try to pick bottoms in Oil or CAD… both are going lower the commodity boom ended just move on…. usually takes a long time before you see new boom maybe 5-10 years from now.

As the joke goes only proctologist should be picking bottoms 😉

Egg Hunt
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Egg Hunt

In last thread, FFFA
>#222: “Because there is a huge wealth disparity between renters and owners in Vancouver.”

It sounds true only to to people in Vancouver.

Homeowners have hundreads of thousand, or millions more in real estate assets than reanters.
But they are not necessarily have better jobs, better income, or larger invetsment portfolio.
Besides, many live in same house as decades ago.
Not cashed in yet.

One assets strategy, most one’s dollars in illiquid assets – Real Estate – is not called “wealth”.

w
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w

Wow… rate cut. Did anyone here predict it?

wow
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wow

So we have been bidding on the odd worthy house and of course been getting way outbid as we only bid just above asking. The last place wassold several hundred thousand over. Guess what ….they had to back out and we are the runner-up bid yup more than 200000 less just goes to show the herd is paying way too much.

Shlomo
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Shlomo
From http://wolfstreet.com/2015/07/15/bank-of-canada-looks-at-global-economy-freaks-out-cuts-rate-warns-of-financial-stability-risks-loonie-plunges/ “It’s a majestic housing bubble. Even the IMF is fretting about it. When housing bubbles implode they do enormous damage to the real economy and to the financial system. But rather than trying to tamp down on it, the Bank of Canada is going to feed it with even cheaper money, while openly fretting about it… Governor Poloz warned that the rate cut “could exacerbate these vulnerabilities.”” “A collapse of the housing bubble would be one of the “triggers” to financial stability risks. Hence the need to keep it inflated. Hence the rate cut. But the cut will in turn “exacerbate these vulnerabilities,” as Poloz admitted. That’s the Catch-22 a loosey-goosey monetary policy finds itself in sooner or later: no matter which direction policy goes – rate cuts, no change, or rate hikes – it simply exacerbates one… Read more »
patriotz
Member

@16:

There is no need to go into details. The argument is ridiculous on its face.

People who own hotels (e.g. Hiltons) are way richer than almost all people who stay in them, right? Is that a reason for them to rent out hotel rooms for less than the cost of buying the hotel?

Look at anything else that’s rented out and it’s just as ridiculous.

People only make that argument for residential RE because it’s a common-sense free zone.

patriotz
Member
Ottawa eyes tougher new mortgage rules, larger down payments, to curb Canada’s red hot housing market The federal government may be ready to take direct aim at Canada’s red-hot housing market, and is actively consulting on a move to increase the minimum down payment required to buy a house, the Financial Post has learned. Sources say that Ottawa has been studying proposals to increase the minimum down payment from five per cent and said the government is looking at adding restrictions for high-priced housing, which would hit hardest in Canada’s two most expensive cities — Toronto and Vancouver. They are definitely looking into this but it doesn’t mean that they will do it, said one source close to the department, who asked not to be identified. Another source confirmed Ottawa is continuing to look at possibilities for increasing the down… Read more »
fanaticallybroke
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fanaticallybroke
@21 Before an election? You must be joking! Do you think Harper would do anything to risk a housing oorrection. This is a just a ploy so they can say we are looking at it every time they are asked about the housing bubble. How about 15% DP. Hard money. not borrowed from another borrower or money back . Qualify for the current rate but must be able to support a 2% rise in rates if it is variable. No non residents to be able to buy property, unless specially designated trophy properties – like many other countries like Singapore, Switzerland and China! Close down the BS CMHC which just moves risk to future generations. All property transactions to be reported by the Provincial government to the CRA to ensure it is not laundered money and there is an income… Read more »
George
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George

From CTV news, yesterday (what a load of propaganda to be coming out in the news the same day as the interest rate cut!!!):

“Canada is the “most admired” country with the “best reputation” in the world, according to an annual survey ranking the reputations of developed nations across the globe.

The 2015 report from the Reputation Institute ranked Canada as the most reputable country in the world, based on a variety of environmental, political, and economic factors.

The Reputation Institute’s Fernando Prado says Canada offers “something good” in many different categories evaluated in the survey.

We all love Canada because of several things,” Prado told CTV’s Canada AM on Wednesday. In particular, he praised Canada for its “effective government,” “absence of corruption,” “friendly and welcoming people” and welfare support system.”

http://www.ctvnews.ca/canada/canada-ranked-as-most-admired-country-in-the-world-report-1.2470040

southseacompany
Member
southseacompany

“BoC interest rate cut ‘a big mistake’: Kevin O’Leary”, CTV News

http://www.ctvnews.ca/business/boc-interest-rate-cut-a-big-mistake-kevin-o-leary-1.2471874

“Kevin O’Leary, chairman of O’Leary Financial Group and host of the CTV2 program Shark Tank, says it was a “mistake of the highest measure” for the Bank of Canada to cut its key interest rate to 0.5 per cent,”

““There’s more damage done by this rate decline than there is good.””

southseacompany
Member
southseacompany
“Ben Rabidoux: Canada’s housing boom has no demographic legs to stand on”, Globe & Mail http://www.theglobeandmail.com/report-on-business/economy/housing/canadas-housing-boom-has-no-demographic-legs-to-stand-on/article25523999/ “If you read the headlines, you’d be inclined to believe that Canada’s population is booming. And, as the story goes, it’s this strong population growth that is providing much of the fuel propelling Canadian house prices to new all-time highs virtually every month. “Supply and demand”, as they say.” “In reality, Canada’s working-age population (15-64 year-olds) is growing at the slowest pace on record” “In 2010, Canada added 240,000 people to the working-age population. Today that number has dwindled to just 90,000” “An outside observer might note that against a backdrop of an unprecedented decline in population growth, the level of residential construction activity should slow sharply. Curiously, that hasn’t happened.” “The current level of housing construction in Canada is absolutely unprecedented relative to… Read more »
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