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Economy on edge of recession: Bank of Canada (pg. 2)
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| soupastah |
| quote: | Originally posted by slingshot
Everyone loses their marbles when the banks fail to match the BOC cut....but in terms of where we stand and what we have to deal with, this is probably the most insignificant of aspects. :rolleyes: |
Maybe I misread your point, but I dissagree w/ it the way I understand it. Maybe as a group (nation) it's insignificant but to the individual it's paramount. Take a fictional case of someone going to the bank to get a loan they require in order to fill a new job. For example say she needs $10,000 to buy a car and then receive her new employment, or promotion, and the paygrade she would receive is say $40k more than she's currently making. By the big five not passing fiscal policies on she's now going to pay at least as much as she did before the BOC reduced rates, when it was trying to get her that money EASIER and stimulate the economy. Providing she likes to spend her extra income and doesn't offshore it in some private account ofcourse. And seeing as how the nation benefits from the multitude of individuals, then this really isn't so insignificant at all. It's a considerable piss off. |
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| Skipper |
| quote: | Originally posted by soupastah
Maybe I misread your point, but I dissagree w/ it the way I understand it. Maybe as a group (nation) it's insignificant but to the individual it's paramount. Take a fictional case of someone going to the bank to get a loan they require in order to fill a new job. For example say she needs $10,000 to buy a car and then receive her new employment, or promotion, and the paygrade she would receive is say $40k more than she's currently making. By the big five not passing fiscal policies on she's now going to pay at least as much as she did before the BOC reduced rates, when it was trying to get her that money EASIER and stimulate the economy. Providing she likes to spend her extra income and doesn't offshore it in some private account ofcourse. And seeing as how the nation benefits from the multitude of individuals, then this really isn't so insignificant at all. It's a considerable piss off. |
Word.
The BOC has already taken numerous other measures, such as buying mortgages and backstopping interbank lending, that the banks don't have a right to interfere with fiscal policy. In essence, not passing along rate cuts transfers fiscal policy from the BOC to banks, which don't necessarily have the Canadian citizen and Canadian economy as a priority. |
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| SniFFleS |
| Monetary is what you mean. |
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| The Ear |
| quote: | Originally posted by SniFFleS
Monetary is what you mean. |
^5. Thanks... I didn't want to have to start explaining it to everyone. |
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| Skipper |
| Yeah, sorry. It was 6am when I was typing that. |
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| malek |
| I'll save 160$+ a month on my house payments :D |
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| slingshot |
| quote: | Originally posted by soupastah
Maybe I misread your point, but I dissagree w/ it the way I understand it. Maybe as a group (nation) it's insignificant but to the individual it's paramount. Take a fictional case of someone going to the bank to get a loan they require in order to fill a new job. For example say she needs $10,000 to buy a car and then receive her new employment, or promotion, and the paygrade she would receive is say $40k more than she's currently making. By the big five not passing fiscal policies on she's now going to pay at least as much as she did before the BOC reduced rates, when it was trying to get her that money EASIER and stimulate the economy. Providing she likes to spend her extra income and doesn't offshore it in some private account ofcourse. And seeing as how the nation benefits from the multitude of individuals, then this really isn't so insignificant at all. It's a considerable piss off. |
Ok, so say all of the banks match the BOC cut. If this were the case are you implying that everyone and their mother are going to go to the shopping malls and we're going to buy our way out of a recession? Regardless of whether or not the rate cuts are matched, you are still NOT paying anymore on your payments than you already were. Your life and spending habits should not change one bit from how they were when Canada was well into the green. In fact, because some of the cut was transfered to you, you're spending habits should improve marginally. This is not significant in the sense that it's effect on aggregate growth is minimal at best. We are not a consumer driven nation.
Look up the term "Dutch Disease" and maybe that will help you understand my point better. Who's to say we don't fall into a liquidity trap (ala Japan) if the BOC keeps lowering rates. Given the state of the world economy, although an extreme scenario, the possibility still exists. I think we're in a stage right now where fiscal policy will be paramount in guiding us through this storm. Monetary policy can only do so much in the short run. Lol, if only Keynes was still alive..... |
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| jchung52 |
| i wish i paid more attention in economics lectures. stupid sudoku |
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| Chris Allen |
| I've heard a few analysts expecting up to a 1000 point drop on the DOW today. ... |
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| exstasie |
| quote: | Originally posted by Chris Allen
I've heard a few analysts expecting up to a 1000 point drop on the DOW today. ... |
It opened pretty bad for us too as was somewhat expected based on how the Asian and European markets did last night.
We opened down almost 700 points! But thankfully we have slowly started to come back a bit.
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| Yohan |
Kinda funny how many economists are running around screaming doom like they've never seen a recession before
Oh well. Thank goodness I have a govt job lol |
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| Skipper |
| quote: | Originally posted by Chris Allen
I've heard a few analysts expecting up to a 1000 point drop on the DOW today. ... |
I dunno how you can predict anything in these markets.
There's been quite a few days of panicked selling in the last hour of trading, and I expect if there's another big drop today, that's where we're going to see it.
I can't really recall more than a couple of days in the last several months where the major North American exchanges haven't swung several hundred points. It's crazy. |
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