Canadian Personal Finance Blog

As usual on the day that the Bank of Canada is about to announce an interest rate change, I typically wait until that is announced, but today, I’ll simply “flash” that information when it is available at 9:00 AM ET. 

The prognosticators are saying this is most likely another 1/2 point drop, however, whether the large banks follow suit or reflect the entire 1/2 point drop, is another story completely, as we have seen, some banks are attempting to help their margins by expanding the working area for their borrowed moneys (Toronto Dominion for one).

Bank Rate Since 2000?

Here is an interesting graph, using the data from the Bank of Canada’s web site. It shows the key overnight rates over the past 8 years, interesting to see how low rates have been and yet still there is problems with high interest rates causing folks to have problems with their debt loads?

The graph is missing the last 1/2 point drop that happened earlier this month (apologies for the inaccuracy, I am just figuring out how to do this stuff on the web).

Bank of Canada Overnight Rates since 2000

Deflation?

Now that Gasoline prices have dropped by about 30% in Ottawa, here is an interesting question, are we now in a deflationary period? Will all the surtaxes and rate increases levied because of high gasoline prices be lowered now? Will I ever answer these rhetorical questions? Anyone care to comment?

What else should I be writing about right now? Every news outlet is telling of the end of the U.S. Financial system and the collapse of the economy. Speaking as someone who is unemployed, and looking for a job, this worries me. As the wise International Analyst said of Canada, “When the U.S. sneezes, Canada gets a cold”, so any kind of economic turbulence in the U.S. does not bode well for Canada, in the services area at least. I believe Canada’s economy may weather this storm better, simply due to our heavily resource laden economy, but again, only a guess on my part.

Bush’s Own Words

The scary thing is, President Bush seems to inadvertently hit the nail on the head with the following statement:

“… It will help American consumers and businesses get credit to meet their daily needs and create jobs. And it will help send a signal to markets around the world that America’s financial system is back on track…”

American consumers need credit to meet their daily needs? If that is the case, the U.S. economy is in dire trouble. Americans are living on credit and now the whole system is collapsing under the weight of this credit load? Not sure that is completely accurate, but given the President mentioned this, it’s an interesting point to consider.

Fraudulent Securities?

President Bush also mentioned:

“… Many investors assumed these securities were trustworthy and asked few questions about their actual value. Two of the leading purchasers of mortgage-backed securities were Fannie Mae and Freddie Mac. Because these companies were chartered by Congress, many believed they were guaranteed by the federal government. This allowed them to borrow enormous sums of money, fuel the market for questionable investments, and put our financial system at risk…”

So you are implying that there was a fraud on investors, or you are saying there are some very stupid investors out there. I think both of those statements have a ring of truth to them as well.

Blame Canada?

No, but it’s a funny headline. Will this affect (effect?) Canada? Yes, but how much remains to be seen. There is now panic statements about how the Canadian housing industry “bubble may burst”.  Given I am living in a house, that I bought a while ago, I am not that worried about this, but for new home buyers this could be a big issue. Being saddled with an enormous mortgage, with possibly much higher interest rates (to deal with that 3.5% Inflation I mentioned yesterday), could slow spending from these folks, causing yet another interesting economic ripple in the pool.

Now is the Time To Panic?

I would suggest going out and buying some Eagles or maybe some Jackson Browne, slam it into your Impala’s 8-track tape player and drive ’til the music stops. Sorry, I waxed poetic, no it is not time to panic, but it is time to watch and see what might actually be going on here. I suspect we are living in very interesting times, to quote a Chinese proverb.

Past little while I have been ranting about the poor service I get from the Toronto Dominion bank and their various parts, but if I feel it is my right to write that kind of article, I must also point out when they do an excellent job as well.

Victim of Debit Card Fraud

Yup, Mrs. Big Cajun Man’s debit card was compromised some time in the past 3 months, and on Tuesday my bank account was almost cleaned out before the TD security tap turned off the fraudulent withdrawals.

How did this happen? I have no idea, because my wife has her debit card (which is now void and unusable) still in her wallet, so my guess is she was a victim of one of the many “bogus debit machine” frauds that have been happening lately. My limited understanding is that the machine or the connection to the machine is compromised in some way, so that the ID number from the debit card and the PIN number can be taken, and then this information is used to create a fraudulent version of the card complete with PIN, which the criminals then use at debit machines to remove money from the unsuspecting folks bank accounts.

The TD security bureau called my wife to ask if she was in fact in Montreal, taking money out at an alarming rate? Since my wife answered the phone, the answer was “No”, and thus the TD security group leaped into action and has shut off the access point and has referred this to the authorities for their action.

This does leave me with a massive whole in my finances, as the culprits got the money out before they could be stopped, and TD will only reimburse me (once it is proven to be a fraud) in 7-10 business days, so I am now living on my credit until I get my money back.

This disturbs me, because I kept thinking this only happened when you weren’t diligent with your card security, but I know my wife is diligent and this still happened, so now I am going to have to rethink security for my finances, because if this can happen once, it can easily happen again.

Financial Security Measures

A few ideas have come to mind, however, any other ideas from my intelligent and diligent readers would be appreciated as well:

1. Make sure that only necessary accounts are available from my bank card.
2. Set up daily limits on withdrawals which is much lower so when this happens again (and it will) the damage will not be as bad.
3. Be more diligent watching my bank balances on line
4. Be more diligent with my on line banking passwords as well.
5. Use CASH more often! That was a suggestion from Michael James on Money as well.

Thanks Toronto Dominion, good job catching this and hopefully good job refunding me the defrauded funds.

I would ask, “What else could go wrong?”, but I have asked that question once too often and, far too often, I found out the answer is, “Much more and worse things!”.

As my regular readers know, I complain about TD very often, since they are my bank of choice (for now), and I am also a shareholder, and I must again pull out this topic.

Today I received confirmation from TD Waterhouse that my new RRSP account had in fact been created (I actually did this last week in a TD Branch). The documentation included with the confirmation package said, I needed to send in proof of identification, if I hadn’t already  to activate the account (I had to re-read that to figure it out), which annoyed me, but I let that one slide (I had my license copied enough times in the branch). So I am assuming my account has been set up (this might bite me later).

I then had an epipheny that I had not seen the account appear on my TD Web Access page, but figured, maybe I hadn’t noticed, so I logged in, but NO the account was not on my account list, and that is when the bottom dropped out of my patience.

I had spent over an hour setting up accounts and now they don’t show up on the web access page? I had actually asked to ensure I had access to the E-Funds (that the Canadian Capitalist uses in his Sleepy Portfolio) that are ONLY available through the web, yet no sign of the account, on the Web Portal.

I then had to call into TD Waterhouse and spend another 25 minutes getting this 1 account added to my web access. At the end of it I was livid that I had to spend that much more time to get access to an account that was obviously set up to be web viewable.

The problem seems to be that TD’s “computer systems” for building accounts between their various “parts” (TD, TD Waterhouse, TD Mutual Funds, TD Credit, TD Visa, etc.,) don’t seem to talk much, and they all use their own darn forms and ways to build new vehicles for their clients. In this day and age, this is ludicrous, but I have heard that TD is looking at revamping this in the next 10 years. 

If anyone from TD is reading this, please feel free to pass on to your leaders that as a Shareholder I am appauled at this cavalier attitude toward your account holders and worse still it is bad business, so as a shareholder I am even more sickened.

A more streamlined system that allows for customers with all of the various TD vehicles integrated create new vehicles and services, needs LESS human help to do things and the more automated it is, the less you have employees that must interface with IRATE customers like me! Less employees, means more profits. Ease of use is simply good business practices.

TD please clean up this mess, soon!

No wonder I don’t like paying bank fees.