Re: The Elusive Canadian Housing Bubble
Signs of desperation tinged with hope setting in at the Bank of Canada:
July 15, 20158:06 am
Originally posted by Fiat Currency
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Signs of desperation tinged with hope setting in at the Bank of Canada:
July 15, 20158:06 am
The Bank of Canada cut its trend-setting interest rate to 0.5 per cent on Wednesday to help boost an economy that’s in retreat.
The central bank said it believes the economy entered a recession in the first half of the year.
“The Bank’s estimate of growth in Canada in 2015 has been marked down considerably from its April projection,” the central bank said in a statement.
The rate cut of another 25 basis points or 0.25 percentage points follows one made in January of a quarter of a point as sharply lower global oil prices were first denting growth in Canada.
A cut of 0.25 percentage points might not sound like much, but it will encourage more borrowing by businesses and consumers, the latter of which is already dealing with record debt loads.
The immediate recession seemingly outweighs consumer debt considerations, though, according to the bank’s commentary on Wednesday.
“While vulnerabilities associated with household imbalances remain elevated and could edge higher, Canada’s economy is undergoing a significant and complex adjustment,” the central bank said.
“Additional monetary stimulus is required.”...
The central bank said it believes the economy entered a recession in the first half of the year.
“The Bank’s estimate of growth in Canada in 2015 has been marked down considerably from its April projection,” the central bank said in a statement.
The rate cut of another 25 basis points or 0.25 percentage points follows one made in January of a quarter of a point as sharply lower global oil prices were first denting growth in Canada.
A cut of 0.25 percentage points might not sound like much, but it will encourage more borrowing by businesses and consumers, the latter of which is already dealing with record debt loads.
The immediate recession seemingly outweighs consumer debt considerations, though, according to the bank’s commentary on Wednesday.
“While vulnerabilities associated with household imbalances remain elevated and could edge higher, Canada’s economy is undergoing a significant and complex adjustment,” the central bank said.
“Additional monetary stimulus is required.”...
...“The downward revision reflects further downgrades of business investment plans in the energy sector, as well as weaker-than-expected exports of non-energy commodities and non-commodities. Real GDP is now projected to have contracted modestly in the first half of the year.”
The bank expects growth to pick up again this summer and through the balance of 2015...
And the Canuck Buck heads lower...soon to be once again renamed "The Northern Peso". But not to worry...I'm confident we'll make it up in house price increases The bank expects growth to pick up again this summer and through the balance of 2015...
The Globe and Mail
Published
Published
Loonie flops
The Canadian dollar tumbled by more than a penny from its open today after the Bank of Canada cut its key rate and painted a picture of a troubled, oil-shocked economy.
The loonie tumbled to about 77.5 cents U.S. in the wake of the rate cut, having opened at 78.57 cents.
“The perfect storm for the loonie has arrived - the Bank of Canada, weak oil, sluggish domestic growth, and an upcoming election,” Rahim Madhavji, president of currency exchange Knightsbridge Foreign Exchange, said in a report titled “Bank of Canada cuts rate, guts loonie.”
“The Canadian dollar has reacted violently to the news - a rate cut means flows of funds out of Canada as yields are now lower in Canada,” he added...
The loonie tumbled to about 77.5 cents U.S. in the wake of the rate cut, having opened at 78.57 cents.
“The perfect storm for the loonie has arrived - the Bank of Canada, weak oil, sluggish domestic growth, and an upcoming election,” Rahim Madhavji, president of currency exchange Knightsbridge Foreign Exchange, said in a report titled “Bank of Canada cuts rate, guts loonie.”
“The Canadian dollar has reacted violently to the news - a rate cut means flows of funds out of Canada as yields are now lower in Canada,” he added...
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