Groups are smaller communities within the larger ActiveRain. Join groups created by others. or start your own and
get others to join
This is the place to view the past and present contests put on by ActiveRain and its members. Everyone can join the
group and help encourage each other. Current contest will be highlighted posts so it's easy for you all to see. Let it
Curious as to what others in your profession think about a certain product or tool?
AR's community takes the time to leave honest and transparent reviews of their experiences
so you can be a bit wiser about your purchase.
Broken down by categories and subcategories for easy finds
Get an unfiltered look at what real users are saying
Leave a review yourself for others to benefit from
Add new products as you use them and gain points for doing so
ActiveRain University (ARU) provides free on-line training. We coach, consult and support real estate professionals about real estate trends, technology and social media.
ARU Calendar provides class types and registration links
Watch short tutorials on updating your photo, inserting a hyperlink and much more
Sign up for the Daily Drop so you don't miss out on AR's daily happenings
Find answers to most FAQ's
Whatever it is you're into and wherever you are, AR surely has a group for you to join.
Brand, off the wall, specific subject matters…whatever it is you're looking for.
Each time you write a post you can syndicate your post to 5 groups.
And if by chance you don't find what you're looking for, start a new group today!
Get your content in front of more eyes
Search by location or type
Feel free to start your own group
Find some that are close to home and close to heart
Each month AR runs numerous contests as a way for our members to engage in activities
that will boost their business and increase their visibility in the community and beyond.
Earn points by partaking in these contest and climb the leaderboard
Do what's good for you and your business by participating
If you have an idea for a contest, just let us know
Stay motivated and on track with new contests popping up each month
Ask a Real Estate Question
Here's another avenue for you to build relationships with others. Share your expertise with someone searching for answers.
Play the teacher role and help someone out today
Your Homepage will alert you of new questions in your state
A wonderful way to open a door to a possible new client
Ask a question yourself to get help
These state pages or hyper-local pages provide content directly related to a specific geographical location.
State, County, City and Neighborhood pages make it easy for consumers to find what they're looking for.
Post your listings, school information, local events, market reports and more
Consumers peruse these pages for information
Farm your niche market and cover all the happenings in your neighborhood
Don't count on it. For the Bank of Canada to raise rates before the middle part of 2011 would be totally inconsistent with its current forecast
Canadian market watchers will get some good news this week. The predictions for a "blowout" reading on fourth-quarter GDP are already out there and it is likely to be an abnormally strong number. But for anyone who thinks a big number is likely to help lock in a rate hike this summer, I would suggest that is not going to happen. In fact, my view is that the Bank of Canada will not be raising rates until mid-2011 - at the earliest.
This is critical to the outlook for Canadian money market and bond yields since futures have priced in nearly 100 per cent odds of a 25 basis point rate hike this June, and another 25 basis points by September. (A basis point is 1/100th of a percentage point.) The central bank has already told us that its base case is for 2.9 per cent real GDP growth this year and 3.5 per cent next year, with the starting point on the "output gap" being 3.7 per cent ("output gap" is the gap between the actual level of real GDP and where real GDP would be if the economy were at full capacity). Remember that an output gap that big in any given quarter classifies as a 1-in-20 event. Moreover, baselining these expected growth rates against the latest estimates of potential growth puts the output gap at a smaller level of 1.55 per cent this year, narrowing further to 0.25 per cent in 2011.
The history of the Bank of Canada is such that - outside of when it had to defend the Canadian dollar - it typically does not embark on its tightening phase until the output gap is close to closing. Even during the aggressive John Crow era, the bank's modus operandi was to time the first rate hike just as spare capacity was being eliminated, and not much before. On average, the first central bank rate hike following a recession takes place one quarter before the output gap closes (there is still a gap, but it is small at 20 basis points). If such a strategy is replicated this time around - and the cause for being on pause longer in the context of a historic deleveraging cycle is certainly quite strong - then the very earliest the bank will move is the second quarter of 2011.
Under this scenario, based on some back-of-the envelope calculations I just did, the unemployment rate at no time declines below 7.5 per cent through to the end of 2011. The peak in the jobless rate was 8.7 per cent in August, 2009. Going back to prior recessions, the central bank does not begin to tighten rates until the jobless rate is down an average of 150 basis points with a range of 130 basis points to 170 basis points.
Unless the bank wants to be pre-emptive - highly unlikely when it acknowledges in its economic outlook last week that "the recovery continues to depend on exceptional monetary and fiscal stimulus" and that "the overall risks to its inflation projection are tilted slightly to the downside" - then to raise rates before the middle part of 2011 would be totally inconsistent with its current forecast. More to the point, while bored Bay Street economists analyze every word to see if the bank is more or less "hawkish" than in its previous outlook, what is important for investors is to assess the bank forecast and decide what it means for the degree of excess capacity in the economy and what that implies for the future inflation rate.
The bottom line is that even with the fragile recovery, the bank sees more downside than upside risk to its inflation projection, and, to reiterate, for it to start tightening policy until the jobless rate falls below 7.5 per cent would be a break from past post-recession actions.
And whatever future "policy tightening" is needed could also come via the overextended loonie, limiting any need for an interest rate adjustment in the time horizon that the markets have discounted. This is a source of debate on Bay Street, but the bank is still sensitive to the growth-dampening impact of an exchange rate too firm for its own good. To wit: "The persistent strength of the Canadian dollar and the low absolute level of U.S. demand continue to act as significant drags on economic activity in Canada," the bank says.
In a nutshell, the Canadian market is already braced for 50 basis points of tightening from the Bank of Canada by September. With that in mind, it is difficult to believe that there is any significant rate risk here; if anything, the surprise will be that the bank is on hold for longer. If that proves to be true, then there is actually more downside than upside potential to Canadian bond yields, particularly at the front end of the coupon curve.
The reason the markets think the bank may pull the trigger is because of this one sentence that shows up in every press statement: "Conditional on the outlook for inflation, the target overnight rate can be expected to remain at its current level until the end of the second quarter of 2010 in order to achieve the inflation target."
So the central bank has really only given a pledge to keep rates where they are until mid-year. But June is only five months away and so one would have to think that at one of the next three meetings, the Bank is going to have to update this particular sentence or cut it entirely and leave the market without a de facto time commitment. Either way, the moment the bank changes this sentence is the moment the market will put on hold its expectations of a new rate-hiking cycle coming our way.
Until then, homeowners opting for variable rate mortgage financing will likely not have to face the interest rate music.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.