Canadian Personal Finance Blog

We most definitely live in very interesting times, and they are getting more and more interesting every day. With the U.S. government’s bail out plans going on hold and the markets not appreciating that (if you view a 700 point drop as “negative feedback”), I think we are most assuredly living in very interesting times.

Eerily Similar Commentaries

Now, I am not saying that this is time to panic, but I remember in 2000 when folks started wondering at Nortel whether the company could actually “collapse” from it’s $120 per share stock price I heard statements like:

• The government wouldn’t let it happen, it would kill the TSX and the Canadian Economy.
• If Nortel goes down, a lot of people are going to be hurting
• Nortel’s fundamentals are sound

Have you heard those same statements about the U.S. financial system? No, I am not saying this is in any way similar, I am merely pointing out that no one knows where this is going to go, and what the final fall out might be.

OMG I Almost PMP’ed

OK, that’s for my younger readers, for my reaction when I heard the Congress didn’t pass the “bail out” bill.  Speaking as someone with no income now, I am curious to see what happens, because if this causes an American recession or worse depression (anything is possible, I am not saying this is going to happen, simply I hope it doesn’t), finding a job in Canada is going to get a lot more interesting.

Is it time to buy in to equities? Don’t ask me! You should buy when you think the bottom has been hit, but I have no idea what “bottom” is any more.

By the Way Oil is Below $100 a Barrel

Remember two weeks ago when we were worried about Oil prices? Oil is below $100 a barrel, but I guess it’s kind of hard to notice that the hurricane is over if your house is on fire.

Now is the time to Panic?

No, but watching the financial pundits is more interesting than listening to the Election pundits, that is for sure.  In Canada Jack Layton is portraying the NDP as the official opposition to the Tories, if that happened, I would truly agree that we are living in interesting times, and the Devil is going to put in central heating, because it really is getting cold in hell.

Bank of Canada, today announced no changes in their overnight rates, which stands to reason. The exact reason given was:

OTTAWA - The Bank of Canada today announced that it is maintaining its target for the overnight rate at 3 per cent. The operating band for the overnight rate is unchanged, and the Bank Rate remains at 3 1/4 per cent.

The three global developments highlighted in the July Monetary Policy Report Update continue to have a major influence on the Canadian economy. Two of them - the course of the U.S. economy and the ongoing turbulence in global financial markets - have evolved broadly in line with the Bank’s expectations. However, there is an increased risk of a more pronounced interplay between weakness in the U.S. economy and tightness in credit conditions that could affect the U.S. outlook for 2009.

Good to know my debt payments aren’t going up in the near future.
 

Gas Prices

An analyst yesterday predicted Gasoline prices in Canada hovering near $1.00 per liter by Christmas, this would make for a very interesting change of events. Would other prices drop? Would deflation kick in? I doubt it, everyone will simply build that into their profit margins again, but still, not having to spend $160 to pick up my daughter from Waterloo would be nice.

Try Chrome

Yes, I am a google Chrome convert as well. I am writing this post using Chrome, it seems to work just fine and runs relatively quickly as well. Haven’t tried all of it’s bells or whistles, but I like it and it does not seem to be as big a PIG for memory as Firefox.

Carnivals

My article Sunday Thought: Debt is Bad in the Bible Too? posted at Canadian Personal Finance Blog was mentioned at Just Another Day of Catholic Pondering in the Catholic Carnival #188: Journey of Faith

Interest Rates Hover

The Bank of Canada kept one of it’s key rates (the overnight rate) the same yesterday in response to a shakier Canadian Economic view. This means interest rates have flattened for now, and may well be heading back up very soon.

To quote them directly:

Three major developments are affecting the Canadian economy: the protracted weakness in the U.S. economy; ongoing turbulence in global financial markets; and sharp increases in many commodity prices.

Turbulence is never a good thing and I think the bank is reflecting that in it’s monetary policies, by holding interest rates steady.

For someone like me, it suggests that now is the time to start paying down debt, because we may have hit the bottom of the interest rates market, and rates going up is going to mean more money that will have to be spent on Debt Reduction due to interest charges (all my debt is carried in variable interest rate debt vehicles).

Kindred Spirit

Larry MacDonald’s blog is one that I read every day, and I was heartened to see that he and I are not only friends in the N.C.F.B.A. but we are kindred spirits in terms of Nortel’s stock. Larry did an excellent Update on Where Nortel Stands currently.

I was particularly touched by the last paragraph in the post:

So where is the stock going? Despite recent price action, there seems to be an improvement in expert opinion and fundamentals. Still, the situation remains speculative. And add a grain of salt to my update – I’m a long-suffering Nortel investor whose holdings are down 70%.

Glad to know that I am not the only financial blogger with scars from this stock.

TD & BMO Banks Continue to Slide

Both TD and BMO stock have been sliding and as I have said I am not sure what the bottom is, but I am starting to think this is going to be a buying opportunity (for me) very soon. I buy these stocks for straight dividend value and the fact that banks treat their customers very badly, yet the customers keep coming back.

Please take the above paragraph is me meerly navel gazing and guessing, I have no real insight about these stocks, but am interested to hear if anyone else has any opinions on my statements and TD and BMO.