The Montreal-based bank released its economic outlook on Tuesday, saying the Canadian economy will be hampered by both the global economic slowdown and the recession in the United States.

The bank notes a troubled U.S. economy will weaken trade with Canada’s largest partner.

Laurentian says imports, exports, home construction and business investment will all be hit by the slowdown and bank interest rates will remain low.

It also predicts unemployment will rise next year to 7%, but says the extent of job losses won’t be known until the fate of the financially-troubled big three automakers is resolved.

Total employment fell by a hefty 70,600 jobs in November, and the unemployment rate edged up to 6.3% from 6.2%.

Laurentian says the Canadian dollar will likely trade on average between US80¢ and US85¢ in 2009, and that interest rates in Canada should remain very low.

“The Canadian economy in 2009 will face challenges far more demanding than those in previous years,” said the statement, written by Laurentian Bank economists Carlos Leitao and Sebastien Lavoie.

“The financial crisis impeding economies worldwide since the last quarter of 2008, coupled with a major economic slowdown, will have a growing impact over the year on Canada’s economic environment.”

Source: Investment Executive
Information provided by;
Tara Borle
TD Canada Trust Mortgage Specialist
tara.borle@td.com

For the first time in history, the US reduced the fed funds rate from 1% to basically zero and instead of targeting a specific rate, they’re now targeting a range: 0%- 0.25%. The details are outlined in the link below. The markets reacted positively to this. The US dollar didn’t.

http://www.federalreserve.gov/newsevents/press/monetary/20081216b.htm

Many are wondering if the US is heading into a similar situation that Japan ended up in in the 90s; “a lost decade”. Only time will tell, but here’s a link to an article that does a good job explaining the differences and similarities of the current US situation to that of Japan’s. Japan reduced rates to zero without being successful in stimulating inflation in Japan, but what they were successful in doing was creating the carry trade where investors borrowed at zero percent in Japan and invested in commodities, emerging markets, etc, so in a way, Japan monetary policy was successful in creating growth, just not in Japan. I don’t know how the 0% rate in the US will play out, but hopefully it will spur growth somewhere that in turn spurs demand for commodities, which Canada has a lot of.

http://www.rgemonitor.com/us-monitor/254618/quantitative_easing_printing_money_like_mad_to_ward_off_deflation

Source: Riad Assaf, B.Sc., CFP, CIM
Investment Advisor
TD Waterhouse Canada Inc.

Information provided by;
Tara Borle
Mortgage Specialist TD Canada Trust
tara.borle@td.com

Market Price

Investor PriceThe most common mistakes sellers make when choosing a price:1. Not choosing the right price when a property is first listed.  In other words, thinking “We can always come down.”

2. Putting the property on the market at an unrealistic price.  A property must be priced on a comparative basis to the other properties which are similar.

3. Not relating marketing time to price.  Generally, the quicker you want to sell, the less you should be willing to take.

4. Calculating brokerage fees on top of the sales price.  A home is worth what it’s worth, with or without a commission.

5. Thinking that buyers aren’t comparing your home, on a dollar-for-dollar basis, with every other home on the market.

OTTAWA – The Bank of Canada today announced that it is lowering its target for the overnight rate by three-quarters of a percentage point to 1 1/2 per cent. The operating band for the overnight rate is correspondingly lowered, and the Bank Rate is now 1 3/4 per cent. Read the rest of this entry »

Highlights

• The apartment vacancy rate in Alberta’s urban centres with a population of at least 10,000 people was 2.5 per cent in October 2008, up from 1.6 percent in October 2007.
• Across the province, apartment vacancy rates ranged from 0.5 per cent in the Wood Buffalo region to 9.1 per cent in the Brooks area.
• Apartment vacancy rates in October 2008 in Calgary and Edmonton increased to 2.1 and 2.4 per cent, respectively.
• The total average rent in Alberta was $975 in October 2008, up from $913 reported in the October 2007 survey.

http://www.cmhc.ca/housingmarketinformation/

The Bank of Canada cut rates by 75 bps today to leave the overnight rate at 1.50%. This was a larger than expected cut by forecasters.

The Bank cited further deterioration in the economic outlook and weakened outlook for inflation as driving the rate cut.

They also noted that the Canadian is entering a recession, but the forward looking verbiage was toned down a bit.

The Bank of Canada surprised markets today by delivering a bigger than expected 75bps rate cut, leaving the overnight rate at 1.50%. This is lower than the previous cyclical low earlier in the decade and matches a low last seen in the post-war era. The decision to lop off more from the overnight rate was largely driven by the deteriorating outlook for the global economy.

Previously, the Bank had cited three key concerns, all of which have deteriorated. In today’s communiqué, the Bank cited that “the global recession will be broader and deeper than previously anticipated.” Moreover, they characterized financial markets as being “severely strained”. Finally, they also painted the inflation outlook as weaker. However, there is a bit of a silver lining in that they mention that the depreciating Canadian dollar “will continue to provide an important offset to the effects of weaker global demand and lower commodity prices.”

The statement regarding future rate cuts seems pared back. They say that they “will continue to monitor carefully economic and financial developments in judging to what extent further monetary stimulus will be required to achieve the 2 per cent inflation target over the medium term.” But given the admission that the global recession is worse than expected, we think that the Bank will be willing to cut further in early 2009.

Source: TD Securites Dataflash
Information provided by;
Tara Borle
Mortgage Specialist TD Canada Trust
tara.borle@td.com

This out of the ordinary, yet amazing Alberta property is a 2350 Sq Ft, 7 bdrm home situated on almost .6 of an Acre. It is located in the quiet community of Vimy. It is country living at its finest; a quiet location, a grand yard to enjoy, municipal water, & pavement all the way to the city. This property would be ideal for a bed and breakfast. It is rich with history! The original stone grottofrom 1947 still stands untouched in the side yard. The current owners bought in the mid 70′s from the church. Prior to it becoming a gorgeous family home it was a Convent. It’s a solidly built home, and is rich with craftsmanship. The original hardwood floors, casings and staircase with solid fir banisters are in mint shape. The kitchen is huge and complete with large windows, ribbon mahogany cabinets & easy access to the diningroom, the home has 2 large livingrooms & enough storage space to leave you standing in awe. This property must be seen to be fully appreciated.Take a piece of Alberta’s History & make it yours!?! Call Kimberly Bedry at 780-702-9996 or email her at kim@propertyfusion.ca for more information.

RBC Economics – Risk of a U.S. – style meltdown is remote

Canada no longer appears to be immune to a generalized housing downturn though housing affordability conditions across all segments have started to improve, according to a report released Monday by RBC Economics.

“While the Canadian housing sector is entering a cyclical downturn, the risk of experiencing a U.S.-style meltdown is remote,” said Robert Hogue, senior economist, RBC. “Many of the factors that triggered the collapse in the United States are either absent or of much lower significance on this side of the border.” Read the rest of this entry »

12 oz. milk chocolate or semi-sweet chocolate chips
1 cup heavy whipping cream
1 tsp. vanilla extract
Make a platter of fruits and fun dippers before melting
chocolate.
Here are some ideas:
• banana slices 
• pineapple chunks
• whole strawberries
• apple slices
• kiwi fruit   
• pear slices
• pretzel rods
• pound cake pieces
• marshmallows 
• shortbread fingers 

Carefully begin melting chocolate chips in a heavy-bottomed saucepan over low heat. As chocolate melts, slowly add cream, stirring constantly until mixture is smooth. Add vanilla, and transfer to a fondue pot. Use fondue forks to spear and dip your special treats. Yum!