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Haven’t You Changed Banks Yet?

Have you at least threatened your current bank that you might leave if they don’t give you a better deal? Remember I have always said Don’t be Afraid to Make a Change, especially when it comes to your bank.

I must admit that I have not changed banks for a good long time (and given how much I have bitched about TD, you would almost think they might have asked me to go somewhere else), but I also have done my part to get better deals or to complain to get better service.

Right now, you have to work harder to get better deals from your bank, in the area of interest rates, because they are being a little more tight-fisted with credit, but if you don’t ask for a better deal I can give you a 100% guarantee that you will not get a better deal (OK, 99.9% maybe there is a bank that actually treats their current customers better but it isn’t very likely).

I also stand by the statement that if you are going to bargain with your current bank, you had better be willing to vote with your feet and move on, or your bank may not take much notice of you.

Here is an even easier scenario:

  1. Find a new bank that is willing to give you a better deal on your: Mortgage, Debt, Investments, or Services (hopefully more than one of those)
  2. Get them to put it all in writing for you (say you want it for your records).
  3. Go to your old bank with the document and say, “I want this, can you give it to me?”

You shouldn’t do this very often, but if you are fed up with your current bank, it is a good tactic, and if they refuse, simply walk back to the bank that offered you a better deal and say, “Make it So!”.

Michael James also pointed out that most of the time when you do a change to a different bank or financial institution most of the time the new bank will be willing to do most of the work for you (i.e. do the transfer leg work), all you need to do is remember which bills come out of which account auto-magically and you are laughing.

Sometimes a change is what you need, keep that in mind.

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Money remains loose from Bank of Canada for June

Given all the gloom and doom, the Bank of Canada has decided it would be imprudent to raise their critical overnight rate (at least for this month). I think that for now, this is how things will have to remain, as the economies of the world (but especially here in Canada) are at best described as fragile, and a tightening of the loose money policies might be enough to do damage to any “recovery” that might be percolating right now.

Although economic growth in Canada was slightly slower than expected in the first quarter, underlying economic momentum appears largely consistent with expectations. However, the composition of growth is less balanced. In particular, housing activity has been stronger than expected, and households continue to add to their debt burden in an environment of modest income growth. Despite external events, business and household confidence has held up and domestic financial conditions remain very stimulative. The contribution of government spending to growth is expected to be quite modest over the projection horizon, in line with recent federal and provincial budgets. The recovery in net exports is likely to remain weak in light of modest external demand and ongoing competitiveness challenges, including the persistent strength of the Canadian dollar.

So that phrase in bold is the Bank saying, housing prices continue to climb and folks continue to build up debt, even though their pay is not increasing much. Does this sound like something I (and other financial folks) have been saying (we doom and gloomers do enjoy to gloat from time to time).

As usual their is an interesting caveat at the end of this article as well:

Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. To the extent that the economic expansion continues and the current excess supply in the economy is gradually absorbed, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate, consistent with achieving the 2 per cent inflation target over the medium term. The timing and degree of any such withdrawal will be weighed carefully against domestic and global economic developments.

If things go badly we will be upping our rates, but for now we don’t feel the economy can withstand this kind of shock, but expect rates to change in the next 4 to 6 months (is my interpretation of this statement).

Bank Rate Graph
Overnight Rate Graph 2000-2010

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Rates remain down (for now)

Our friends at the Bank of Canada Tuesday continued to keep interest rates down, but again the media is thinking that this may not last much longer.

I believe that the following paragraph would be the one that has the pundits buzzing:

Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. In light of the reduced slack in the economy and firmer underlying inflation, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate, consistent with achieving the 2 per cent inflation target over the medium term. The timing and degree of any such withdrawal will be weighed carefully against domestic and global economic developments.

Interesting bit of baffle-gab, but I would interpret “… withdrawal of the present considerable monetary policy stimulus…” as saying that low interest rates may not be sustainable in the near future, especially if they are starting to worry about inflation (and they think the economy can withstand higher interest rates).

The one thing that may cause inflation to explode (or moderate for that matter) will be gasoline prices. They have remained high here in Ottawa (in Montreal gas is hovering around $1.50 a litre), and if these continue to go up, this may be the trigger to bring interest rates up as well. Why are gas prices so high? Couldn’t be price-fixing, since we know that isn’t going on in the industry.

Going back to Wednesday’s Stupid Mortgage commentary, wonder what happens to the housing industry with interest rates at double what they are now? Is that a bubble popping noise I hear, maybe not, but it would be a large bucket of cold water thrown on that hot topic.

Bank of Canada Rate This Month

Will interest rates explode? Well, it won’t take much for the Bank of Canada rate to double, to 2.0%, but how will the Big Banks reflect that change? All very interesting questions that will be replied to in the next few months.

 

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Bank Rates Hover, Daylight Savings and Sunday’s Best

Friday our friends at the Bank of Canada came out and made their standard announcement about how they aren’t going to raise their interest rates. Their view of the Canadian economy is a bit more optimistic:

Recent developments suggest that the outlook for the Canadian economy is marginally improved from the January MPR. Although the economy will likely grow faster than forecast in the first quarter due to temporary factors, underlying economic momentum remains around trend, balancing domestic strength and external weakness. Private demand is now expected to be slightly stronger than projected, owing to improved sentiment and highly-supportive financial conditions. Canadian household spending is expected to remain high relative to GDP as households add to their debt burden, which remains the biggest domestic risk. Net exports have been supported by stronger-than-anticipated U.S. activity but are expected to contribute little to growth, reflecting still-moderate foreign demand and ongoing competitiveness challenges, including the persistent strength of the Canadian dollar.

They also seem to think inflation will keep running around 2.0%, (but remember using their index, not the Stats Canada overall inflation rate). For now money continues to be loose, but the scuttle-butt on the streets is there will be rate increases early in 2013, but I also said that last year, so who knows?

Did you change your clocks last night? If not, you are now an hour late for whatever you were planning on doing today, with the clocks going forward this morning.  Hope I did, or I will be late for Church!

On the twitter feed (sorry nothing last week, I was busy coaching basketball (another one of my odd past times, but I am only an assistant (or comedic relief, if you actually watch me coach)), there were some interesting older posts from the Big Cajun Archives:

Preet has already posted this video, but I do find it quite funny, and it is still very topical.

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Random Thoughts: Loose Money Continues on in Canada

Given the Bank of Canada keeps repeating itself, I decided doing an actual post on the fact that the Bank of Canada kept it’s overnight rate at 1% was getting a bit redundant. Given the current state of the Canadian (and world) economy the Bank of Canada decided to keep with the loose money policy that they have had in place for the past long while. The reasons given for this were actually a little more interesting than normal, however:

The recession in Europe is now expected to be deeper and longer than the Bank had anticipated in October.

Well that is not really news, but the Bank of Canada admitting they made a mistake is a bit of news. Will Europe suck the whole globe into the great Economic Abyss? I don’t think so, but it may cause a much longer period of lower interest rates, which might be a good thing for some individual consumers, it all remains to be seen.

The Canadian Taxpayers Federation are now attempting to put the clamps on the Platinum Plated MP Pension Plan which seems to be a pretty sweet deal (makes me want to run for Federal Politics). Their report alleges that for every dollar put in by the MP, Taxpayers must cough up $23.30 and they also point out that this isn’t really a pension as much as a major portion of the National Debt. I love political rhubarb and finger-pointing, I wish them luck, however, they are also looking to go after the Public Service’s pension plan, which worries me a little.

Weekly Recap

With loose money continuing on, I didn’t really touch on the subject but did have an odd cornucopia of topics this week:

  • On the Frigid North and Sunday’s Best I included a great video by Vinnie Jones that points out that in the UK anyone can do CPR, if they want to help.
  • Pointing out why I am an insomniac with losing sleep and money still didn’t help me sleep any better.
  • I did my bit for Bloggers for Charity with the guest post 16 Going on 30, and hopefully next time someone will bid to post on my site.
  • My Quicken 2012 review was as much me saying thanks for giving me a copy to review, because I’d use this software no matter what.
  • I am not well pleased with Suze Orman’s decision to put out a debit card and I state that in Let’s all Sell Out

And thanks to those who added me on Twitter I am now over 980 folks who follow me, wow!. Check out my facebook page as well.

Links for the Week

With ship wrecks, and the European economy still faltering there is a lot to be discussed in the Financial Blogosphere:

 

Carnivals this Week

I did make it into a few carnivals this week too:

Other Bookkeeping

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Remember

“I’m spending a year dead for tax reasons.”

Author: Douglas Adams

 

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