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.

TD Bank 1st to Move to Adjust Rates

Three times this month Toronto-Dominion Bank, Canada's second-largest bank, has been first to lower its prime rate following decisions by the Bank of Canada (the central bank) to lower its overnight rate. Toronto-Dominion's biggest rivals followed suit the same day.

For example, on Oct.8, TD Bank was the first to announce a cut that day with a statement at 1 p.m., followed by Canadian Imperial Bank of Commerce (CIBC) 43 minutes later. Royal Bank of Canada, the country's largest bank, was next at 2:32 p.m., followed by Bank of Nova Scotia and Bank of Montreal.

Two days later, the banks reduced their rates again following the federal government agreement to buy as much as C$25 billion of bank mortgages. TD was first, announcing a 15 basis-point cut at 12:31 p.m., followed by Scotiabank at 1:23 p.m.

The Canadian Banks broke with tradition on Oct. 8, lowering their prime rate by 0.25%, short of the Bank of Canada's 0.50% cut.

TD Bank led again on Oct. 21. following a 9 a.m. Bank of Canada announcement of a 25 basis-point cut. TD cut its prime rate 35 basis points at 4:15 p.m. Canada's five other largest banks followed over the next 48 minutes.

What does all this mean for the consumer? At the end of the day, none of these banks gain much advantage by cutting first because new rates don't go into effect until the next day.

Canada's six largest banks are now offering the same prime rate of 4 percent.

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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.

US Fed Lowers Rate to 1 percent

The US Federal Reserve has just matched a half-century low... they have lowered their interest rate by a half-point to 1.0%, in an effort to settle the current economic crisis. The funds rate has not been lower since 1958, when Dwight Eisenhower was president.

The Fed also stated that they would "monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability."

What does all of this mean for the real estate industry? Share your thoughts.

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.

Iceland Raises Interest Rates to a record 18 percent

Iceland raised interest rates to a record 18 per cent from 12 per cent yesterday as a condition of a proposed $2bn loan from the International Monetary Fund to help rescue the stricken country.

Iceland applied for the emergency loan after its banking system collapsed and is seeking another $4billion from other central banks.

Following the collapse of their banking system, some economists forecast that Iceland's economy unemployment to rise around 8 percent and inflation to hit 20 percent or more.

Despite the ongoing crisis in the US and Canada, things could be worst.... when you look at what's going on in Iceland!

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.

Bank of Canada Lowers Rate to 2.25 percent

The Canadian Central Bank cut rates today by a quarter point to 2.25%.

This rate cut today by the Bank of Canada was left than the half point cut expected by some economists. The reaction to this was also seen by the Canadian Dollar... falling to a three-year low following today's announcement.

It will be interesting to see how various Canadian financial institutions react today to the news... in terms of their prime rates and mortgage rates.

The Central Bank commented however that it would likely have to lower rates further to combat the effects of the global financial crisis. "In line with the new outlook, some further monetary stimulus will likely be required to achieve the 2 percent inflation target over the medium term," the central bank said in a statement announcing the lowest overnight lending rate since September 2004.

The Bank of Canada also commented on the US Recession, stating, "The global economy appears to be heading into a mild recession, led by a US economy already in recession."



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.

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