The Bank of Canada’s key overnight rate stayed at 0.50% this week, so nothing much will be changing in terms of interest rates for a while longer (it seems). The statements made are:
In Canada, the economy’s structural adjustment to the oil price shock continues, but is proving to be uneven. Growth in the first quarter of 2016 appears to be in line with the Bank’s April projection, although business investment and intentions remain disappointing. The second quarter will be much weaker than predicted because of the devastating Alberta wildfires. … The economy is expected to rebound in the third quarter, as oil production resumes and reconstruction begins. … Inflation is roughly in line with the Bank’s expectations… Canada’s housing market continues to display strong regional divergences, reinforced by the complex adjustment underway in the economy. In this context, household vulnerabilities have moved higher. Meanwhile, the risks to the Bank’s inflation projection remain roughly balanced. Therefore, the Bank’s Governing Council judges that the current stance of monetary policy is still appropriate, and the target for the overnight rate remains at 1/2 per cent.
Things seem to be OK for now, and maybe the economy will pick up in the 3rd quarter, although I am intrigued about the statement of a “… complex adjustment underway in the economy…”. Is that a lowering of house prices? Wildly vacillating gas prices? Ludicrously expensive broccoli ? I doubt it, but it is a thought provoking statement.
My Writings for Week Ending May 27th
I did have a Happy Victoria Day, as I usually do. Did you realize that nothing is closed in Quebec on Victoria Day? We in Ottawa know this as we usually speed across the river to get beer on Victoria Day.
Our friends at Stats Canada pointed out we have Expensive Food and Shelter in April in Canada. Nothing really that new and exciting here, except that fresh food is getting darn expensive.
On the technology front I picked up a new computer (desktop) for my son and I learned about Bloatware and Cheap PCs. Assuming this is just harmless stuff can get you in trouble, make sure you clean your computers out and run anti-virus software.
A Money Thought
I always like useful financial sayings from movie characters.
“The most valuable commodity I know of is information.” —Gordon Gekko (Wallstreet)
More Fun Financial Articles
I have heard about Ethical Investing, but Mark from the Blunt Bean Counter brings us another interesting topic, Ethical Wills . Will your will reflect your values? Given I am leaving my kids not much, it will reflect that part of my values (spend it all and leave a nice corpse). Are you thinking that a snazzy hybrid car might be a good thing to get? If so, you should really read Budgeting in the Fun Stuff’s The Pros and Cons of a Prius – From an Owner’s Mouth .
Tangerine had a good one in their monthly newsletter Free Online Money Management Tools For Canadians , some tools there I didn’t know about. This would be useful for the Young Adults down south that can’t move out, as QZ points out in Young adults in the US are now more likely to be roommates with their parents than with partners. As I have said before move out of your parents house! Criminal activity in the real-estate world? The Financial Post points out 15 years later, 85 Canadian real estate firms not compliant with anti-money laundering rules, wonder why not? I am going to see my GP next week, but FrugalTrader suggests Give Yourself a Financial Checkup, as well (and it is a good idea). After that checkup maybe check out Robb E’s post on Boomer and Echo about Personal Finance Lessons: What To Avoid, see if you are avoiding some personal finance pitfalls.
The CBC wins the most obvious statement of the week award with “Fact: Per capita, Canada has more doughnut shops than any other country in the world“. They do realize that Starbucks does not count (in my book) as a doughnut shop. I am glad I don’t make bets like this one hockey fan did (NSFW (sort of)). If I got a tattoo like that I would go on a long trip, but Barry from Money We Have has some advice on How to Survive an Airport Layover Without Spending Money .
What are your retirement plans? Canadian Financial DIY takes the Fraser Institute to task on their analysis of CPP (the cornerstone of most retirement plans in Canada) with Fraser Institute Trying to Damn the CPP with Faint Praise. Did you realize it was Towel Day this week (for those who love Douglas Adams’ work), and the Blessed Potato brings us a chance to try an investing course for a low, low introductory price with Towel Day and Course Pre-Order. Mark from My Own Advisor continues to proudly tell us of his investing story with April 2016 Dividend Income Update.
Do you dream of buying that one stock and making your fortune that way? As long as all you are doing is dreaming, that is OK (hopefully that is not your overall investing strategy) and Michael James addresses that this week with Dangers of Using the Rich as Role Models .
Controversial Preet Video
It seems Preet hit a nerve, or captured folks attention with the following video. It has been around a while, but still an interesting topic, almost as good as asking a Civil Servant about parking. There was visceral tweet that I include as well (not sure if Gordon really grasps his statement, but as Preet points out I wouldn’t want to be in a bidding war for a house with him).
— ⚡️Preet Banerjee (@preetbanerjee) May 26, 2016
2016 Random Thoughts
- January 7th, Market Meltdown, TFSA, WildCard Weekend and #MoneyStories
- January 14th, Cheap Oil, Cheap Dollar, Dead Folk, and #MoneyStories
- January 21st, Loose Money, High Household Debt, Weak Loons and #MoneyStories
- January 29th, Doomsday Clocks, Rogue RRSP Receipts, Cash Crops and #MoneyStories
- February 4th Bouncing Loonies, RRSP Season, Superb Owls and #MoneyStories
- February 12th Lent is Here, Bricked iPhones, Love Day and #MoneyStories
- February 19th Digging Out, Ransomware, RRSP Time and #MoneyStories
- February 26th RRSP Time and #MoneyStories
- March 4th Welcome Americans and #MoneyStories
- March 11th Bank Rate Stays Put, Spring Forward and #MoneyStories
- March 18th Financial March Madness, Budgets and #MoneyStories
- March 25th, Easter is Here and some #MoneyStories
- April 1, Money Fools, Ronnie, and #MoneyStories
- April 8, Tax Time, Spring Delayed, Panama Papers and #MoneyStories
- April 15,Loose Money, Free Stuff, Hockey and #MoneyStories
- April 22,Disabilities, Tax Time, The Queen and #MoneyStories
- April 29,Pitter Patter Tax Time, RESPs are For Rich Folk and #MoneyStories
- May 6, Fort Mac, Mothers and #MoneyTalk
- May 13, Panama Papers, Google & PayDay Loans, Full Moons and #MoneyTalk
- May 20, Victoria Day, The People’s Elbow, Haircuts and #MoneyTalk
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