Forum

Broker news forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Notify me of new replies via email
Mortgage Broker News | 13 Mar 2015, 12:14 PM Agree 0
The move is having a positive impact on broker business, but one analyst believes Stephen Poloz’s decision to cut the overnight rate in late January will negatively affect the economy.
  • Robby Mac | 13 Mar 2015, 12:42 PM Agree 0
    Couldn't agree more! Lowering the rate and expanding the money supply in this over saturated market is just blowing air in the bubble!
  • Doug King | 13 Mar 2015, 03:31 PM Agree 0
    Many industry players cried foul over the move.
    Really? Why foul? Because your clients saved money? The Fab 5 'stole' 10 basis points off the top?
    Gardner, go back to sleep. People spend money because they want to, in ways they wish. Each spending decision has a consequence.
    Your sole responsibility is to provide for your client's financial well being as best you can once they contact you. Game over!
    As an afterthought, though, you sound like you believe your clients to be mindless, irresponsible spendthrifts. Encouraging point of view from a broker...
  • Layth Matthews | 13 Mar 2015, 03:57 PM Agree 0
    It is ridiculous to believe central bankers owe a duty to the market to be predictable and consistent all the time. Especially when there's a whole semester at central banker school devoted to courses like: "How to be a foxy git 101" and "How to bake a monetary surprise cake 102"!

    One of the main reasons central bankers preach nice predictable behavior is just so they will get some results if and when they do reverse themselves.

    Financial markets are lightning fast to adjust, so if you want bang for your buck, you have to surprise them, and I think the BOC got a lot of bang for just a .25% tap on the gas.

    It's way too early to tell whether this rate drop was over the top or too little too late. They say it takes 12-18 months before the effect of a monetary policy change is fully felt. Given that slow turn-a-round, and the potential labor displacement from the 50% drop in oil prices, it's also risky to cut just .25%, much less raise interest rates!

    I think one of the major policy obstacles is what you could call the transmigration of objectives, meaning, should policy makers manipulate the whole economy because homes look too pricey in certain markets? or should they be focused on stable employment? Personally, I prefer the latter and let the buyer beware in the home market. Otherwise, we could be torturing ourselves because foreigners like to buy homes here.

    Canada has had one of the most stable economies in the world so it is rational for home prices to be high especially given the long stretch of low rates of interest. What's scary is how little the economy has responded to such low rates. If we ever get to the boom phase of this business cycle, it is likely to be muted by demographic factors. So inflation is not as big a risk as it used to be.

    Alberta is holding up so well given the 50% oil price drop. Could it be that the soft Canadian Dollar has softened the blow and is creating manufacturing jobs back east? We can thank the easy monetary policy of the BOC for that too.

  • Doug King | 13 Mar 2015, 06:36 PM Agree 0
    Solid, cogent, points Layth!
  • Dominique Ollive | 14 Mar 2015, 08:51 AM Agree 0
    J'avais hate de lire un commentaire de la sorte! Layth! I can't say more, I totally agree! Solid YES!
Post a reply