Canada's central bank cuts rate by three-quarters of a point to 1.50%

[LargoWinch]

The CAD currency is down more than 36% yoy vs USD. This should help a lot:


http://finance.yahoo.com/news/Canadas-central-bank-cuts-apf-13782418.html

"It is the largest cut in the overnight rate since October 2001 in the aftermath of the Sept. 11 attacks and brings the key rate to the lowest level since 1958."

[GRG55]

Re: Canada's central bank cuts rate by three-quarters of a point to 1.50%

The CAD currency is down more than 36% yoy vs USD. This should help a lot:


http://finance.yahoo.com/news/Canadas-central-bank-cuts-apf-13782418.html

"It is the largest cut in the overnight rate since October 2001 in the aftermath of the Sept. 11 attacks and brings the key rate to the lowest level since 1958."

Mark Carney, an alumnus of Goldman [of course], is learning fast...

...The Bank of Canada said the outlook for the world economy has deteriorated significantly, and the global recession will be broader and deeper than previously anticipated.

"Global financial markets remain severely strained," the bank said in a statement...

And...

The lower interest rates, if passed on by Canada's big commercial banks, encourage businesses and households to borrow and spend, thereby stimulating economic activity.

Canada's private banks initially declined to pass on to consumers the full half percentage-point cut in interest rates announced by central banks around the world on Oct. 8 -- a troubling move that affected Canadians' ability to get or afford loans for mortgages and businesses.

But most of the banks cut the interest rates by a full half point after the Canadian government announced a $25 billion Canadian ($19 billion) bailout that would see the government buy mortgages from the banks.

These would be the same banks that said Canadian government and Central Banker announced, with great fanfare and mutual back-patting, were "the strongest" and "best capitalized" in the world just a few short weeks ago...:rolleyes:

[Nicolasd]

Re: Canada's central bank cuts rate by three-quarters of a point to 1.50%

By helping a lot , you mean weak currency helps exports ?

[LargoWinch]

Re: Canada's central bank cuts rate by three-quarters of a point to 1.50%

By helping a lot , you mean weak currency helps exports ?

Nicolasd, it was a feeble attempt at sarcasm from my part.

I meant, it will help "alot" for the currency [which lost 36%+ of its value vs the USD in one year].

[LargoWinch]

Re: Canada's central bank cuts rate by three-quarters of a point to 1.50%

But most of the banks cut the interest rates by a full half point after the Canadian government announced a $25 billion Canadian ($19 billion) bailout that would see the government buy mortgages from the banks.

Amazing that this "little" bailout, barely made the news. Meanwhile I remember the gun registry debacle being in the news for months and valued at "only" $1B or so.

I guess since we had the Bills vs Miami in Toronto, they could bury that; Bread and circuses allright.

These would be the same banks that said Canadian government and Central Banker announced, with great fanfare and mutual back-patting, were "the strongest" and "best capitalized" in the world just a few short weeks ago...:rolleyes:

Royal Bank of Canada's stock seems to agree with you:
ROYAL BANK OF CANADA

(NYSE: RY)
NEW Real-time: 28.07 2.05 (6.81%) 11:22AM ET

[Nicolasd]

Re: Canada's central bank cuts rate by three-quarters of a point to 1.50%

Was trying to be a smart a** too

That being said , our customers (capital intensive heavy industry) having plants both sides of the border and having their products priced in USD are investing in small improvement projects since September and announced plant closures in the US.

The weak currency is helping the canadian side temporarly while demand is expected to fall further next year.

[GRG55]

Re: Canada's central bank cuts rate by three-quarters of a point to 1.50%

Amazing that this "little" bailout, barely made the news. Meanwhile I remember the gun registry debacle being in the news for months and valued at "only" $1B or so.

I guess since we had the Bills vs Miami in Toronto, they could bury that; Bread and circuses allright.



Royal Bank of Canada's stock seems to agree with you:
ROYAL BANK OF CANADA

(NYSE: RY)
NEW Real-time: 28.07 2.05 (6.81%) 11:22AM ET

Apparently Royal Bank's management wouldn't agree with the "well capitalized" part of that...

From today's Financial Post:

Royal Bank to offer $2.3B in stock to boost capital

Lynne Olver, Reuters
Published: Tuesday, December 09, 2008
TORONTO - Royal Bank of Canada said yesterday it plans to issue up to $2.3 billion in common shares to beef up its regulatory capital ratio, in what would be the second-largest stock sale by a Canadian bank this year...

Neither did TD:

Friday Nov 28
TD to raise $1.2-billion

TD has signed a deal with a syndicate of underwriters to issue 30.4 million common shares at a price of $39.50 each.
Read full story from The Globe and Mail

or Scotia:

Scotiabank to issue shares in CI deal

Eoin Callan, Financial Post Published: Wednesday, December 03, 2008
Scotiabank is issuing new shares as part of a deal that will help Canada's third-largest bank maintain its capital reserves at a time of market turmoil and economic uncertainty.