Friday, August 26, 2011

TD raises recession possibility if U.S. economy dips

OTTAWA — The Canadian economy ground to a halt in the second quarter and could slip into recession if the United States weakens more than expected, TD Bank said Wednesday.
TD chief economist Craig Alexander said the bank expects the U.S. economy to narrowly avoid a recession in the coming quarters, but if the forecast is wrong that could spell trouble for Canada.
"I'm sorry, but Canada is just along for the ride. If the U.S. economy slumps, then the Canadian economy will experience economic weakness," he said.
" Alexander noted that consumers held up remarkably well during the last recession, but that may not be the case a second time as many are saddled with debt.
In its economic update Wednesday, TD Bank estimated zero growth for Canada in the second quarter which ended June 30, but noted that there's a reasonable chance the economy actually shrank in the spring quarter.
Economists define a recession as two consecutive quarters in which real gross domestic product shrinks.
Last week, Bank of Canada governor Mark Carney acknowledged the Canadian economy was growing at a slower pace than the central bank had expected earlier this year, but noted that he did not expect a return to recession here or in the United States.
Canada last slipped into recession in 2008-2009 after the Wall Street financial crisis sparked a global credit crunch that battered economies around the world and led to a huge restructuring in the North American auto sector, with the loss of tens of thousands of jobs.
Statistics Canada has said that the recession in Canada lasted from the fourth quarter of 2008 to the second quarter of 2009, but was less severe and shorter than in other G7 countries.
Between the third quarter of 2008 and the third quarter of 2009, Canada's real GDP fell 3.3 per cent, compared with 3.7 per cent in the United States and bigger declines in Europe and Japan.
TD's new economic outlook calls for the Canadian economy to grow 2.3 per cent for 2011, down from a June forecast of 2.8 per cent. TD also cut its expectations for 2012 to growth of two per cent compared with an previous estimate of 2.5 per cent.
The report came as the Conference Board of Canada said consumer confidence slipped 6.6 points to 74.7 in August, its lowest level since July 2009.
"Negativity towards future job creation and an unwillingness to make a major purchase were the primary signs of this waning consumer confidence," Antunes said.
The survey found pessimism was higher on answers to questions about current and future household finances.
The survey was done between Aug. 4 and Aug. 14, a volatile period for financial markets that saw daily triple-digit swings and debt-rating agency Standard & Poor's downgrade the credit rating of the United States.

Wednesday, August 24, 2011

Variable Rate Discounts Are Not As Big Anymore

The days of getting a variable rate of prime minus .75 to .85 are going to be gone with in the next few weeks. All Lenders are going to only offer prime minus .50bps in the next few weeks as they are losing profit because consumers are buying too much of the variable rate product versus the 5 year closed mortgage. To Offset this, lenders are offering heftier discounts on the 5 year closed product and we have seen this start happening with some banks offering 3.39% for a 5 year closed.
Consumers should get informed and educated on the variable versus 5 year closed product because in actuality, if the variable rate climbs .50bps per year with a VRM at p-.75bps. you actually lose out versus taking the 5 year fixed rate even at 3.59%. You will save approx. $3000 with a 5 year fixed mortgage versus the variable rate and have less worries and stress.
The 5 year rate of 3.39% is the lowest I have seen in my 17 years in the Mortgage Industry and clients should really think about taking that over the variable rate.

Tuesday, August 23, 2011

5 Year Rate Special For Twitter and Facebook Friends

Renew, Refinance or buy a home and need a mortgage through me, you will receive a 5 year closed Special Rate of 3.39%!
This is a historical low rate!

Refer me to a friend or family memeber that funds their mortgage through me and receive a Gift certificate of $250 to a store of your preference.

Sales Tip- Tone of Voice- A Hinderance or A Help to Your Success

Sales Tip……….It's time to visit a topic that may be uncomfortable for some, but something that must be discussed. Are you losing people with your voice? In a time where face-to-face meetings seem to be rare and more business is conducted via the telephone your voice could be hindering your success. On the telephone we do not have visual cues or body language to strengthen our position and message, all we have is our voice.
I realize that we are all born with our voices, but they can in fact be trained. If you spend a lot of time on the phone conducting business perhaps it's time to assess your own voice skills. Your voice is in fact a tool. It's a tool that can gain you business or lose you that next business deal.
Five key factors when it comes to having a voice of success include:
·         Your Tone
What does the tone of your voice sound like? Does it reflect confidence? Strength? Assurance? Perhaps your tone reflects fear? Boredom? Immaturity?
Be honest with yourself, do you need to work on your tone? Grab a close friend or co-worker - ask their honest opinion. It's important to find someone who will give you just that. Listen to what they have to say and take their criticism as constructive to help you develop a voice that will get you where you want to be in life.
·         Voice Inflection
When speaking and thinking about the key points you want to emphasis, make sure the inflections of your voice does just that. Inflection alone can change the meaning of a sentence.
·         Delivery
Practice, practice, practice. The delivery of your message when training your voice is key. Don't be afraid to rehearse a pitch a proposal or even just a phone call. You won't always have to do this, just long enough to where a good delivery is natural and you can do it with confidence.
·         Sound
What do you sound like? Have you ever really just listened to your own voice? For example, when you record your outgoing voicemail message what do others hear? A smile? Joy? Authority? Don't be afraid to use a tape record as you train your voice. A tape recorder will allow you to hear exactly what others hear.
·         Energy
Similar to tone, but different. The energy in your voice allows people to feel like they are in the room with you. Does your energy make them want to be in a room with you? Put it in check. One thing that I have to watch is the speed at which I speak. I can rattle things off faster than most people can keep. I always know when I'm doing this because I often get asked to repeat myself. Breathe, think about what you are going to say and fill it with the right energy for the moment.
Most the time voice can be trained by just becoming aware, sometimes it may take a voice coach or someone to help you with the things you struggle the most with. It's not uncommon for people to seek out the help of a voice trainer or coach. If you assess that your voice may be hindering your success, it may just be time for you to take that next step

Wednesday, August 17, 2011

Canadian banks shifting rate hike views into 2012

By Ka Yan Ng
TORONTO, Aug 12 (Reuters) - Canadian banks, which only last month expected the Bank of Canada to resume tightening this fall, are pushing rate hike forecasts into next year following some of the worst financial market turmoil since 2008.
RBC Capital Markets and BMO Capital Markets, both Canadian primary dealers, confirmed on Friday that they now see interest rates on hold until the second quarter next year.
They join TD Securities and Scotia Capital, who were early movers on seeing rate hikes in 2012 based on the deteriorating global economic and fiscal conditions. Other forecasters have also indicated their economic outlooks are under review.
"We just think that given the fact that inflation has receded, and the disappointing U.S. recovery and the fact that this financial market turmoil will likely hit growth temporarily, we just don't see the bank moving this year," said Doug Porter, deputy chief economist at BMO Capital Markets.
Just three weeks ago, traders were pricing in higher odds of a rate increase this year, following unexpectedly hawkish language from the Bank of Canada.
A July 20 survey of primary dealers, institutions that deal directly with the central bank as it carries out monetary policy, showed most saw a rate hike in September or October. [ID:nN1E76I045] [CA/POLL]
The swings in the market, mixed economic data, and the twin debt crises in Europe and the United States were all factors behind changing forecasts.
Some forecasters were already leaning towards delayed rate hikes, but cemented their views after the U.S. Federal Reserve pledged on Tuesday to keep interest rates low for at least another two years.
Traders of Canadian overnight index swaps, which are based on expectations for the Bank of Canada's main policy rate, have been more aggressive in their view of where the economy might be headed.
The swaps market has largely priced in odds of a 25 basis point rate cut later this year on mounting fears of a global slowdown. However, the odds have been pared back in recent sessions as stock markets rebounded. BOCWATCH
While more economists now expect Canadian interest rates to stay lower for longer, few expect an outright cut. They warn this would send all the wrong signals for an economy that is growing, albeit slowly, and could hurt the central bank's credibility. "I don't think the market pricing is wildly unreasonable. There is a far outside risk that the bank could cut in a real emergency whereas it's very tough to see them raising rates," said Porter, who expects interest rates to rise three times next year, once per quarter starting in the second.
RBC Capital Markets said late on Thursday in a report that based on current conditions, the priced-in rate cuts appear "wholly unjustified."
"While the underlying domestic growth picture is little changed since the BoC initiated (and strengthened) its tightening bias -- the prospective growth path has changed dramatically," RBC said in the report.
"The bank also laid out a pretty clear criteria for acting upon this bias -- a containment of the sovereign debt crisis, continued strong business investment and supportive net exports -- these pre-conditions are far from being met at present and are unlikely to be in place before mid-2012."

Housing prices expected to show dip in July

The Canadian Real Estate Association reports monthly housing sales numbers for July on Tuesday, but it’s the national association’s long-term forecast that may provide greater clues into the state of the Canadian housing market.
The housing market has been climbing steadily since the end of the recession, with market watchers constantly worried about a crash. CREA has said that sales and prices may ease slightly in the coming year, but past forecasts have maintained that, over all, the market is healthy.
While July’s housing numbers are expected to show a minor decline in sales, observers who have seen early reports from regional markets are trying to figure out whether a dip in prices reflects a seasonal weakness or will prove to be a signal the market is cooling.
Several factors could see CREA lowering its sales projections for the rest of the year. Fears about the debt crisis in Europe and a possible double-dip recession in the United States could keep Canadians from buying new homes until things settle. That may be what happened in Vancouver and Toronto in July, where sales fell more than 20 per cent compared with June, despite record low interest rates.
The association, representing some 100,000 real estate agents across Canada, updates its sales forecast quarterly. The May forecast predicted a decline of 1.3 per cent to 441,100 units in 2011 compared with last year.
Despite the pressures, most bank economists expect Canadian house prices to hold steady for the next year, even as sales moderate.
“One of the more surprising aspects of the Canadian economy right now is just how well the housing market has been doing,” said Robert Kavcic, economist at BMO Nesbitt Burns Inc. “Interest rates are still extremely low and the job market has held up well in Canada, contributing to the relatively strong housing market.”

From Monday's Globe and Mail

Tuesday, August 9, 2011

OMG! have fun

Go to this link to get your mind blown.

32 " Flat Screen TV Referral Program

This is a reminder of my 32" Flat Screen TV Referral Program. How does it work? It is a very Program, all you do is refer me a client that funds their Mortgage with me (min $150,000 mtg) and upon closing, you will get delivered a 32" Flat Screen TV with a 1 year warranty. 
I believe in "You Get by Giving" and that you should show appreciation when someone puts their trust in you with their biggest investment of their lives! This is something that your current lender will not give you! I am a Relationship business builder and will continue to educate and update all my past clients with current mortgage trends, specials, strategies, tips on home improvements and ways to pay down their mortgage quicker.
So please keep me in mind for your next transaction if it is a  renewal, purchase, debt consolidation or if you have a friend or family seeking a Mortgage Broker who Truly Cares about them and along with that get great rates and the best service that should be expected.
5 yr special rate - 3.59%
Variable rate - p-.80

Please contact me at 416.888.4934 or visit my website at I can also be followed by you via Twitter @victorpeca and by blog at


Victor Peca
Mortgage Broker

US rating downgrade

Late Friday rating agency S&P downgraded the U.S.’s long-term credit rating a notch to AA+, ending a 70-year tradition. It also retained a negative outlook on the debt rating, suggesting a possibility of a further downgrade “within the next two years” unless more progress is made on deficit reduction. S&P gave a thumbs-down to both the recent deficit-reduction plan and the increasingly unpredictable and ineffective political process. As a result the equity markets are poised to open lower following last week's decline.

US Treasuries have risen reflecting safe-haven buying and the fact that the chance of a rating cut was priced in following S&P’s elevated warning in mid-July and rumours of an announcement on Friday afternoon. As well, two other rating agencies - Moody’s and Fitch - have recently affirmed the U.S.’s triple-A rating, for now. I should point out that the S&P’s credibility was dented when its initial report to the White House (on Friday) contained a $2 trillion error in deficit projections.

 Despite losing its mint rating, the U.S. is extremely unlikely to default, given its enormous wealth and substantial tax base.  Optimistically, the downgrade could spur the two warring political parties to work more cooperatively for the good of the nation. The new Congressional “supercommittee” will now be pressured to find more than $1.5 trillion in savings to preclude the possibility of further downgrades and help the U.S. earn back its pristine rating.  That said, in the longer-term the move could put mild upward pressure on the government’s borrowing costs, though Japan’s and Canada’s experience with downgrades suggests any increase would be minimal.

Downgrade impact on Canada… Our Sherry Cooper noted the following over the weekend: In this environment, commodity prices likely remain soft and the Canadian dollar is vulnerable and extremely volatile.  That, in itself, is not bad for the Canadian economy.  However, our stock market, like all others, will feel the short term affects due to its close ties to the US economy. Messieurs Harper, Flaherty and Carney can only counsel Canadians to remain calm, reassert that the domestic fundamentals of our economy are good.

Thursday, August 4, 2011

Bond yields - future for Rates

Hello Everyone,

Canada bond yields have dropped substantially this week as investors have been moving money from stocks into safer investments like bonds. If these yields hold we could see mortgage rate reductions on most of the fixed terms over the next week or two.

ARM Rate – 2.25%
5 yr closed- 3.69%
5 yr 30 day quick close – 3.59%


Victor Peca