Phil Wiper's (philw) Blog

Bank of Canada to focus on inflation.

Phil Wiper, #M08002967 (Dominion Lending Centres Advantage Mortgages #10756) — Tue, 27 Jan 2009 04:47:58 -0800

The Bank of Canada Governor Mark Carney annouced today that the Bank's main focus going forward is to closely monitor the inflation factors. In a speech to the Hailfax Chamber of Commerce he stated the following main points: 1- monetary policy focus on the inflation and the financial crisis is key2- inlfation targeting of 2%3-Our labour, product and capital markets are flexible and our bank system is sound4-Canada has the clearest most powerful monetary policy framework in the world5-Canada should accelerate to above-potential growth in 2010 The official Bank of Canada announcement is below: HALIFAX, Jan. 27 - Canadians can be confident that monetary policy will maintain a "relentless" focus on controlling inflation, whether it rises above or drops below the official target range, Bank of Canada Governor Mark Carney said today. Experience has shown that controlling inflation is the best contribution that monetary policy can make to Canadians' economic and financial well-being, an issue that is particularly crucial during this period of extraordinary global financial turmoil, the Governor said in a speech to the Halifax Chamber of Commerce. "In time, the global financial crisis will end, and the global economy will recover, although the speed with which this will happen is subject to a high degree of uncertainty," the Governor said. "The relentless focus of monetary policy on inflation control is essential in this time of financial crisis and global recession, and remains the best contribution that monetary policy can make to the economic and financial welfare of Canada." Governor Carney noted that the Bank's inflation-targeting framework, established jointly with the Government of Canada, takes a symmetrical approach to controlling inflation. This means that the Bank worries as much when inflation falls below the target of 2 per cent as when it rises above target, he said. Although the severe global financial crisis has raised concerns about deflation in some countries, the possibility of such a sustained fall in prices is remote in the Canadian economy for several reasons, said Governor Carney. Canada's labour, product, and capital markets are flexible; its banking system is one of the soundest in the world; and households, businesses, and the public sector have considerable financial flexibility. As well, Canada's floating exchange rate allows for an independent monetary policy which ensures that "we are in control of our own monetary destiny," he said. Moreover, Canada has the clearest, most powerful monetary policy framework in the world. "The advantages of that framework have been demonstrated, with inflation brought down and kept low and stable since the early 1990s, and they are equally relevant in times of disinflationary pressures," he said. The Governor reiterated the Bank's economic projection as outlined in its Monetary Policy Report Update published on 22 January. Although economic activity in Canada is projected to decline this year, it should accelerate to above-potential growth in 2010, supported by policy actions and the past depreciation of the Canadian dollar. On an annual average basis, real GDP is projected to decline by 1.2 per cent in 2009 and to rebound by 3.8 per cent in 2010.

Things to Consider When Searching for the Best Equipment Leasing Program

Phil Wiper, #M08002967 (Dominion Lending Centres Advantage Mortgages #10756) — Thu, 22 Jan 2009 23:35:39 -0800

Whenever you choose to enter into a leasing agreement with a company, you want to make sure the company that you choose can fulfill your expectations and needs sufficiently. It is important to consider certain things before signing a lease agreement. For example, if you are searching for an equipment leasing company, you will want to make sure that the company offers a wide range of equipment from which to choose from. This means that you can choose high end equipment, mid-range equipment or more basic equipment to meet your current needs. The best thing to do is to ask the equipment leasing company up front what types of brands of equipment they provide and what types of equipment can be leased. In addition, it is important for you to know if, under the lease agreement you secure with the company, you will have the ability to acquire new equipment as needed, or to replace outdated or non-functional equipment. This is important, and should be explained in the terms of your lease. While equipment leasing is not the only solution for businesses needing equipment, it can be a solution that works well due to the fact that it can keep your business capital available for other needs that may arise.

Bank of Canada Lowers Rate Again!

Phil Wiper, #M08002967 (Dominion Lending Centres Advantage Mortgages #10756) — Tue, 20 Jan 2009 11:44:24 -0800

The Bank of Canada has lowered the overnight lending rate to a new record low as the warns that the economy will shrink in 2009. In an effort to boost the economy they have reduced the overnight rate by 0.5% to 1%. By lowering the rate to 1.0%, this now becomes the new low point since the rate was 1.12% back in 1958 There is a great possibility that the Bank of Canada may not been done yet and there is a strong possiblity that in March the rate could be lowered by another half point. The CBC has stated that “The Canadian economy is expected to contract by 1.2 per cent in 2009, but the bank sees a recovery in 2010, when the economy is projected to expand by 3.8 per cent. Back in October, the bank projected growth of 0.6 per cent in 2009, and 3.4 per cent in 2010.” The official Bank of Canada announcement is below. OTTAWA – The Bank of Canada today announced that it is lowering its target for the overnight rate by one-half of a percentage point to 1 per cent. The operating band for the overnight rate is correspondingly lowered, and the Bank Rate is now 1 1/4 per cent. The outlook for the global economy has deteriorated since the Bank’s December interest rate announcement, with the intensifying financial crisis spilling over into real economic activity. Heightened uncertainty is undermining business and household confidence worldwide and further eroding domestic demand. Major advanced economies, including Canada’s, are now in recession and emerging-market economies are increasingly affected. Energy prices have fallen as a result of substantially weaker global demand. Stabilization of the global financial system is a precondition for economic recovery. To that end, governments and central banks are taking bold and concerted policy actions. There are signs that these extraordinary measures are starting to gain traction, although it will take some time for financial conditions to normalize. In addition, considerable monetary and fiscal policy stimulus is being provided worldwide. Canadian exports are down sharply, and domestic demand is shrinking as a result of declines in real income, household wealth, and consumer and business confidence. Canada’s economy is projected to contract through mid-2009, with real GDP dropping by 1.2 per cent this year on an annual average basis. As policy actions begin to take hold in Canada and globally, and with support from the past depreciation of the Canadian dollar, real GDP is expected to rebound, growing by 3.8 per cent in 2010. A wider output gap through 2009 and modest decreases in housing prices should cause core CPI inflation to ease, bottoming at 1.1 per cent in the fourth quarter. Total CPI inflation is expected to dip below zero for two quarters in 2009, reflecting year-on-year drops in energy prices. With inflation expectations well-anchored, total and core inflation should return to the 2 per cent target in the first half of 2011 as the economy returns to potential. Against this background, the Bank today lowered its policy rate by 50 basis points, bringing the cumulative monetary policy easing to 350 basis points since December 2007. Guided by Canada’s inflation-targeting framework, the Bank will continue to monitor carefully economic and financial developments in judging to what extent further monetary stimulus will be required to achieve the 2 per cent target over the medium term. Low, stable, and predictable inflation is the best contribution monetary policy can make to long-term economic growth and financial stability. Information note: A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the Monetary Policy Report Update on 22 January 2009. The next scheduled date for announcing the overnight rate target is 3 March 2009.

Tips for Locating the Best Equipment Leasing Company

Phil Wiper, #M08002967 (Dominion Lending Centres Advantage Mortgages #10756) — Mon, 19 Jan 2009 00:32:53 -0800

When looking for a company from which to lease equipment, a person should choose carefully. There are many tips that one should adhere to when trying to select an equipment leasing company that will meet his or her needs. One important thing to ensure is that the leasing company will provide excellent customer service. This means the company employs knowledgeable sales people who can answer any questions you may have. You do not want to be in a situation where you cannot obtain the information that you need when you need it. In addition, the process of equipment leasing should be a virtually stress free process. The process should be made as stress free as possible by the representatives of the company you choose to deal with. Paperwork, financing and general leasing options should be explained to you in a manner in which you understand, and you should have the opportunity to ask any questions you may have. Also, you will want to ensure that the company you are dealing with has a flexible equipment leasing program. This means that as your business needs change, you can alter the type of plan that you have with the company. For example, you may need different terms or a different payment schedule.

6 Important Tips to obtaining the right lease on equipment

Phil Wiper, #M08002967 (Dominion Lending Centres Advantage Mortgages #10756) — Fri, 16 Jan 2009 03:53:30 -0800

If getting equipment through a lease instead of buying it out right is the way to go for you here are some tips that you can follow to make sure you get the right type of lease for your situation. The following are six tips to make it go a bit smoother for equipment leasing, leasing, leasing company.Tip 1: Find the right lease partner.Try to find a equipment leasing company that you will be able to use on a long term basis. Doing this correctly will ensure the safety of you businesses assets. Be sure to research the leasing firm before you pick it. Doing this process correctly will also save a lot of time and avoid a lot of problems in the future with the standard lease. Be sure that the firm you decide to go with is very experienced, have a great reputation, and most important be sure they have good financial status.Tip 2: Choose the right equipment lease for you.Make sure that when you are going through this process of choosing a lease that you pay close attention to the lease pricing. Talk to the firm about their lease flexibility, balance sheet considerations, and the time allotted on the equipment itself. The types of leases that you can choose from are a capital lease, a finance lease, and an operating lease.Tip 3: Opt for short End-of-lease notice and renewal periods.In most instances leasing companies go by lease lengths of a one month to a six month period. In most cases if you let the company know in time they will automatically renew the lease. You can even opt for that to happen automatically after a period of time.Tip 4: Minimize Interim rent.Interim rent is what is paid between the equipment lease signing and the lease starting date for the already delivered equipment. If you have the equipment delivered on the end of the month before the lease is due to start you will not have to pay for time not used. This allows you to start using the equipment on the starting date of the lease.Tip 5: Make sure that the lease term and the projected equipment use match,You must pay very close attention to this one so that the time does not run out on your lease before the project is in its completion state. The opposite may also happen. You could have the project finished and still be paying for the equipment that you are not using.Tip 6: Pay attention to all fees.If you do your research and discuss your terms you will locate any potential fees and avoid doing things that get them. It will guarantee a good relationship with a reputable company.

Preparation is Crucial When Applying for Commercial Mortgages

Phil Wiper, #M08002967 (Dominion Lending Centres Advantage Mortgages #10756) — Fri, 02 Jan 2009 03:41:27 -0800

Starting a business requires a lot of time and money. If you are currently in the market for a commercial mortgage, there are many factors to consider before you even begin the application process. To ensure that you will qualify for the amount of money that you need, you should prepare as much as possible before visiting with a potential lender. Spending a bit of extra time preparing will increase your chances of walking out the door with the mortgage you need. Before you even begin the commercial mortgage application process, you need to know and understand your credit rating. Send off for copies of your credit report from the major credit bureaus to determine your chances of qualifying for a loan. Your credit score will directly affect the amount of money your lender is willing to offer, and obtaining your credit scores before the bank does will enable you to correct any mistakes on your credit report before they can be used against you. If you are applying for financing for a new business, the most important thing you can do is to create a business plan. A business plan will demonstrate to your lender that you are serious about your business objectives, and will provide them with needed information about how your business will operate, grow, and make money. Your plan must include as much information as possible about your goals, market audience, competition, advertising, and any other applicable financial data. Avoid making any major changes to your ongoing business accounts or structure before applying for your loan. Stability is a key factor when it comes to qualifying for a business loan, and lenders will want to be certain that your business, clients, and accounts are all stable before agreeing to finance your business. Additionally, you will need to take an inventory of your assets to use as collateral before applying for your loan. Providing your lender with sufficient collateral to protect them in the event that you default on your loan will substantially increase your chances of qualifying for a loan. When applying for your commercial mortgage, you should fully disclose to your potential lender exactly how you intend to use the money you wish to borrow. Lenders are typically more willing to lend money when they feel confident that you are aware of your business needs and have a detailed plan outlining the best financial way to meet those needs. It is essential to read all the terms and fine print of your loan carefully before signing. Do not make the common mistake of skimming over the terms in order to receive your money a few minutes earlier. If you have any questions or concerns, you should immediately bring them up with your lender. They are required to explain the details of your loan fully, and to make certain you understand all the terms and conditions of the contract. While it is never a good idea to take the first loan offered, playing the waiting game when it comes to interest rates could backfire. If you have found a good interest rate, you should seriously consider locking it in. Waiting for rates to fall even more may be a huge mistake, as they may rise instead of dropping.

Equipment Leasing Will it be a Major Source of Business Financing for Your Company in 2009?

Phil Wiper, #M08002967 (Dominion Lending Centres Advantage Mortgages #10756) — Tue, 30 Dec 2008 01:55:14 -0800

Equipment Leasing Will it be a Major Source of Business Financing for Your Company in 2009? Equipment leasing is by far the largest type of asset based lending available for the small business owner and current is on the rise with the recent credit crunch. If you are thinking that leasing is expenses and the rates are out of control you need to rethink this valuable tool that is available for your business. in today’s economy you can lease almost any type of hard asset that can be utilized in your business. Everything from trucks and vehicles used in the business to office furniture, to heavy duty equipment and computers can be eligible for lease financing. A lease works this way, the leasing company (Lessor) purchases an asset and provides the asset to the business owner (Lessee) in exchange for lease payments. The National Business Institute reports a recent survey indicates the Top Five Reasons for Choosing Leasing : 1 . Cash flow-capital outlay-far and away the number one reason confirmed by business owners. 2 . Rapid technological changes cause product obsolescence. 3 . Financial requirements are not as stringent. 4 . Leasing companies are more accommodating than banks. 5 . Tax implications. It’s not who owns the equipment, but the use of the equipment that makes the profit. Are you a new business and have been turned down by your friendly bank manager?New leasing programs are available for the new business owners with terms up to 60 months and will allow you to lease equipment valued from $2,000 and up. for leasing programs up to $20,000 we have a program which will allow you to provide us with in most cases a one or two page leasing application is required. These new business leasing programs help you preserve your valuable cash by financing upi to 100% of the cost of your equipment. When you are comparing that to you local bank loan that may require up to a 30% down payment, you can see that equipment leasing can be a very viable financing alternative to your bank or other types of financing. Typical Equipment leasing will have end of term options that will either provide a $10 buy out or fair market value buyout. Most small business owners today are not aware of the excellent opportunities that are available from a leasing company, which can offer flexible, equipment leasing terms. Most companies have been misled into using unsecured credit lines as their primary financing vehicle. As many find out, this is a dwindling spiral and a trap for business owners. Does it ever make sense to buy? With the number of benefits and cash flow savings leasing equipment is definitely on the rise among small business owners. Assets you purchase, equipment you lease!

5 year Rates Drop Again. Should You Lock In?

Phil Wiper, #M08002967 (Dominion Lending Centres Advantage Mortgages #10756) — Mon, 22 Dec 2008 12:20:08 -0800

With many lenders and banks lowering their 5 Fixed rate to 4.99%, the question more and more consumers are asking is, “Variable or Fixed Rate what should I do?”With variable rates at prime plus 1.0% (or 4.50%) and an expected rate decrease in January what is the consumer to do.If you lock in for a longer-term fixed rate mortgage, you will have the stability of knowing exactly what your payment will be month after month. This mortgage fits the bill for most first-time home buyers.If you choose a variable rate mortgage, you can benefit from an expect rate drop in January 2009 but are also risk having your mortgage rate go up if the Bank of Canada rate should rise.In the long run it has been proven that you will be better off with a variable rate mortgage, short term rates are almost always lower than long term rates. If you can handle you mortgage payment sometimes being higher and also lower then this is the mortgage for you.For those consumers that either want the certainty of a fixed payment month after month or would be worrying what the rate are every day I would choose that fixed rate. No stress, just regular payment. If you want to save some interest payments without the possible movement of the variable mortgage, choose a weekly or bi-weekly payment.Need more of your questions answered, find yourself a good mortgage agent who will explain all of your options to you at no cost. Some brokers depending on your credit also have some unpublished rate specials. For instance our current variable rate is 3.95% or prime plus .45% and our 5 year rate is 4.79% with a 90 day rate hold, 30 day rate hold is 4.59%.

US annouces 17.4 billion while Canada/Ontario pledge $4 billion for struggling automakers.

Phil Wiper, #M08002967 (Dominion Lending Centres Advantage Mortgages #10756) — Sun, 21 Dec 2008 12:48:41 -0800

U.S. President George W. Bush dipped into the financial bailout package on Friday to offer $17.4 billion US in short-term loans to automakers. GM and Chrysler are expected to participate while Ford has stated that they are not in need of the money at the present time, but would be badly damaged if one or both of the other two companies were to go under. Ford has said the bailout will help stabilize the industry. According to CNN George Bush stated that, “If we were to allow the free market to take its course now, it would almost certainly lead to disorderly bankruptcy and liquidation for the automakers.” Prime Minister Stephen Harper along with Ontario Premier Dalton McGuinty announced a $4-billion bailout package for Canadian subsidiaries of the Big Three Detroit-based automakers. The pair announced that the Canadian plan will provide GM Canada with loans of up to $3 billion and Chrysler Canada will receive up to $1 billion. The first payment will be issued December 29th and the next and final payment will be paid out within the next two months. CBC news reported “that under the deal, GM and Chrysler are required to fulfill the following conditions: * accept limits on executive compensation. * pay money owed to Canadian parts suppliers. * provide weekly reports on their finances. * report any business transaction worth more than $125 million.” The Canadian government will also extend additional accounts receivable insurance coverage for automotive suppliers. They will also set up a new facility to support access to credit for consumers. In Ontario it is estimated that over 400,000 people and their families rely on the auto industry to maintain their family households. Moving forward this should help out struggling economies in Windsor and Oshawa, where recent statistics show unemployment insurance claims are up 45% and 100% in the month of November alone. I for one am glad that the both governments have stepped up to help out. There is just too much at stake for both countries. Putting conditions in place is wise, as we have seen with the AIG business party, oh I mean plan.

Commercial Rates to Decline as Fed Cuts Interest Rate

Phil Wiper, #M08002967 (Dominion Lending Centres Advantage Mortgages #10756) — Sun, 21 Dec 2008 02:05:15 -0800

Markets Jump After Fed Cuts Rate - Could this be Good News For Commercial Rates?The U.S. Federal Reserve has cut the rate by three-quarters of a percentage point to a target rate of zero to 0.25 percent.U.S. Commercial banks are now expected to lower the prime rate, this is the key rate for many loans to consumers. The current rate is 4%. That is the lowest level on record in the United States for the target rate.The cut sparked jumps in the stock markets and a drop in the U.S. dollar against other currencies.The Fed said U.S. labour markets conditions. consumer spending, business investments and industrial production are all falling.CBC news reports, ” Financial markets conditions remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.”The central bank commented that the economy is so bad that the rock-bottom rate is likely to continue for some time. They will continue to purchase large quantities of debt and mortgage-backed securities to support the mortgage and housing market.Stocks Make Move UpwardThe move provided a surge in the stock markets. In New York, the Dow Jones Industrial average gained 359 points to 8924. At the time of the announcement it had been up less than 100 points before the annoucement.The S&P/TSX composite index rose to 8,724.The U.S. Dollar fell against other currencies, including the Canadian dollar, which closed up 2.02 cents to 83.21 cents US.The U.S. Labour Department reported that inflation in November fell a record 1.7 percent, the biggest drop since seasonally adjusted statistics were introduced in 1947. The drop in oil prices drove the decline.The Fed cut was announced after a two-day meeting to consider its response to what some are calling the worst U.S. economic conditions since the 1930s.

Canada’s Big Banks - Loosen Purse Strings

Phil Wiper, #M08002967 (Dominion Lending Centres Advantage Mortgages #10756) — Fri, 19 Dec 2008 07:47:57 -0800

Finance Minister Jim Flaherty said Thursday he and Bank of Canada Governor Mark Carney will meet with the heads of Canada biggest banks next month to discuss why credit remains tight in Cannada even though the federal government continues to pump cash into the financial sector. This has been more and more evident as companies have been looking for alternative financing solutions such as equipment leasing and accounts receivable financing. A businesses inability to secure loans is one of the biggest concerns for Mr. Flaherty and Mr Carney. Mr. Carney has stated to the The Globe and Mail’s editorial board in Toronto that “banks were being too cautious with their lending, further choking an economy that is entering a recession.” CBC News reports that “The federal government is buying $75-billion of mortgage securities from banks to help them expand their balance sheets and pledged to backstop their sales of wholesale debt. The central bank is offering billions more through short-term loans to financial institutions hurt by the credit crisis.” There is an ongoing perception that there is less capital available due to there being less second-tier U.S. financiers. The Bank of Canada has recognized this when Mr. Carney stated that he has no issue with the conduct of the Canadian banks.