Oakvillian

'scuse my ignorance, but why should BOC have been more agressive than a 25bp cut? Their primary role is surely to manage the balance between economic growth/stability and inflationary pressures, although equities and forex traders would like to think it's all done for their benefit. Canada's underlying economy is not hurting to anything like the extent that the US's is - sure, manufacturing is bleeding a little due to the high C$ and the uncertainty in the primary export market, but natural resources/mining/minerals/oil are riding high and sustaining the national balance of trade.

While the TSX is taking a bit of a pasting, it's still above where it was in October last year; it only broke through the 12,000 barrier in about March 2006.

Have I misunderstood something fundamental, or is a lot of the current activity media-fuelled and speculator-driven?

cneldred

the US, Canada's biggest trading partner by far, just cut rate by 0.75% and some are calling for them to cut a further 0.50% next week. This dramatically weakens the US$, thereby affecting trade with its partners, ie Canada. Sooner or later the BOC have to be more aggressive, in order to protect jobs in Canada. Better to take measures now to avoid it the than to be scrambling around trying to pick up the pieces when the economy is in trouble further down the line. It is this sort of pre-emptive action that would keep people in jobs and help the economy maintain its strength.

Chris

cneldred

They did catch a lot of people out, however the central banks usually communicate with each other. Price action this morning hinted that something was happening. All i know is a lot of people lost their shirts in the last 3 trading days. Fortunately i did well this morning having got up for the Euorpean open and was back in bed when the S**t hit the fan.

Chris

dakota44

Not sure rate cuts will do sweet dick all. Fact is..low interest rates and easy credit are what brought on the problem ie: mortgaged to the hilt on homes, the values of which are now in free fall. Make no mistake, the housing market failure brought on this beginning recession. Credit has been tightened, so lower rates, while they will help businesses, won't do much for the average consumer already over his head in debt and facing possible foreclosure. It may, if the planets align, allow that individual to refinance the mortgage and keep the home (assuming the lender agrees, and the penalty is not too large) , but be sure the financial belt will be tightened.


G.W.'s massive tax cuts to the seriously wealthy were supposed to stimulate the economy, which I said from the start was crap because fatcats buying Bentley's, diamonds and adding too the mansion don't stimulate the overall economy, and now anyone can see the ridiculous folly of old Reagan trickle down economics. Nor do 4 or 5 hundred dollar checks to the average Joe. Doesn't take long to spend that money, and likely it will be used to pay existing bills. Long term tax cuts to the middle class would be the proper stimulus allowing people to actually plan long term and feel secure enough to spend...problem is, the cuts given to the wealthy have pretty much screwed the budget.

cneldred

What doesn't help is they exported all that manual labour to the developing nations...something that is now coming home to bite them very hard in the arse.

You are right interest rates cuts only postpone the inevitable, but with trade balance and government deficit spiraling out of control they don't have many hands they can play.

Chris

rach_woz99

Gawd, this is so stressful!

Watching the news it sounds like the country is going down the pan, my question is should we go for it and change our £15,000 when we can get 2 dollars, or hold our nerve another month or so?

Million dollar question I know, but some of you seem a hell of a lot more clued up than I am!!

Rachel

cneldred

on 15 grand the rate is going to do nothing to you really. If it were 200k then it might be different. The markets have been carnage, feel i just spent the day sparring with Mike Tyson. Better the devil you know than the devil you don't. However, in my opinion the Bank of England cut at least 0.25% start of Feb and Bank of Canada cut again next month, therefore rate will be here or thereabouts.

Chris

rach_woz99

Erm, Chris, £15k might be a mere blink to you, but we have spent a few years saving that up.

the difference between 10 cents is a piece of furniture to us, please don't be so flippant

Andthen

10 cents on 15k.... You must buy expensive furniture!!

bazzz

If you've spent that long saving it, do you really want to gamble with it? Change it now.

cneldred

What i meant was in the timeframe you mentioned you are unlikely to see any dramatic moves. Therefore it will have little effect on you. The focus of the markets has for the time being moved away from currencies and onto stocks and bonds. A couple of weeks ago with the interest rate moves of today we would have seen 5 or 6 cent moves, it didn't happen today. The market has got bigger fish to fry at the moment than CAD$. I don't see a move beyond 2.10 until April/May at the very earliest.

No offence intended

Chris

Danny B

Is this someone you know Chris
http://www.break.com/index/stock-fut...s-slammed.html

cneldred

that ain't a loss he is only down US$25,000

i lost loads more than that numerous times. Can't believe he didn't punch anything, i have broken fingers numerous times from punching walls and fridges. The comment at the top is correct, each huge loss takes a lot out of you but it makes you a much better trader in the long run. I lost massively because of stupidity in the space of about 2 minutes on 2nd Jan, my wifes birthday, created a great atmosphere in the house with me walking round in a sulk. It will take time to recover but you learn so many lessons everytime something like that happens.

Also Nick Leeson was made a scapegoat.

Chris

lauder99

Oh Dear, its taking a dive again

bazzz

This is good news for me because I still think in pounds. So my 44% pay cut on moving here is now only a 26% pay cut (I have had a pay rise too).