Bank of Canada Hints of Possible Interest Rate Cut

Bank of Canada governor Mark Carney said in a speech recently that the Canadian economy has deteriorated more quickly than he had anticipated, hinting strongly he will cut interest rates at the next meeting on December 9.

This is also the first time that the Bank of Canada has conceded that the Canadian economy could be headed for a recession. "Starting from flat growth in the first quarter of 2009 and the second quarter of 2009 ... recession is a possibility for Canada," commented Carney.

The technical definition of a recession is two or more consecutive quarters of negative economic growth. The Canadian economy contracted in the third quarter ended and is expected to contract again in the current quarter ended Dec. 31.

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Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
http://www.ginaburgio.com/

Each VERICO Broker is an independent owner operator.

Japan Slips into Recession

New numbers released by the Japanese government indicate the country has entered a recession.

Japan's economy, the second largest in the world, contracted by 0.1 percent in the third quarter, after shrinking 0.9 percent in the second quarter of the year.

Japan has estimated that its Gross domestic product (GDP) contracted at an annualised rate of 0.4 percent.

The Bank of Japan has also cut its key interest rate for the first time in more than seven years, lowering it to 0.3 per cent, joining central banks around the world in trimming borrowing costs.

Japan joins Germany and Italy on the list of Group of Eight major economies that are officially in recession.

The technical definition of a recession is two or more consecutive quarters of negative economic growth.

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Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
http://www.ginaburgio.com/

Each VERICO Broker is an independent owner operator.

Many Canadian Banks Scheduled to Soon Report Q3 Results

Many Canadian banks are scheduled to begin reporting their 3rd quarter results, starting on Nov. 25 with Bank of Montreal.

Some analysts are expecting Canada's six big banks to report an average profit decline of 15 percent for Q3, the biggest drop in 6 years.

The Bank of Canada, the country's central bank, stated on Oct.23 that the Canadian economy, the world's 8th-largest economy, will slow to 0.6 percent this year, the lowest since 1991.

With the country suffering from weak demand in the US and lower prices for commodities, we will soon have the Q3 results from the Big Six Banks... and it will be interesting to see if they provide any indication of how they project their results will be like in the months to come. One thing can be expected however... if banks continue to report poor results, they may consider holding onto a portion of any future rate cuts in the near term from the Bank of Canada by not adjusting their prime lending rates by the same amount.

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Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
www.ginaburgio.com

Each VERICO Broker is an independent owner operator.

Europe's Top Central Banks set to Cut Rates

Europe's top central banks are expected to cut borrowing costs on Thursday as market focus shifts back to the economic crisis from the excitement of Barack Obama's historic election victory.

Both the European Central Bank and the Bank of England are expected to cut interest rates. Many economists are forecasting the ECB to cut rates by at least half a percentage point, while others are anticipating a cut by as much as 75 basis points.

For the ECB, it is facing the first euro zone-wide recession since its inception in 1999, and a rate cut by 75 basis points would be its largest ever.

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Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
www.ginaburgio.com

Each VERICO Broker is an independent owner operator.

What affects will Obama have on Canada?

It has been said in the past, that for Canada, being next to the United States, is like being in bed with an elephant. This statement was in specific reference to the close proximity between Canada and the United States... and the fact that the Canadian economy will most likely always eventually feel the impact of the effects felt by the US economy. Well the present economic crisis has become no exception to this analogy.

Now, with the election of a new President for the United States, and the shift from republican to democratic party policy in the Oval Office, how will this all come to affect not only the United States, but also Canada?

Well for starters, anything that boosts US consumer confidence is good for the US economy and in turn, good for the Canadian economy. Furthermore, anything that would help to shorten and mitigate the US recession, would be good for Canada.... and based on the out pour of people into the streets expressing cheers and joys following the election of Barack Obama as President-elect, many US consumers appear to be optimistic of what the future will hold with the new administration that will soon come into power.

That being all said, there is no quick fix for the current economic problems. However, it is nice to see a bit of optimism for a change.

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Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
www.ginaburgio.com

Each VERICO Broker is an independent owner operator.