WOW - Emergency Bank of Canada Announcement - another 0.50% DROP

[JRSC00LUDE]

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Us fed rate now at 0%

Source? Not that .25 is much different.

[adam c]

In a time of world pandemic, why is low - 0% interest a bad thing? Can someone ELI5?

[dirtsniffer]

https://www.cnn.com/2020/03/15/econo...rve/index.html

[Disoblige]

Even with cut to 0%, futures are down. We are in a world of hurt.

Wonder how bad it gets until feds consider negative rate like Europe.

[The_Rural_Juror]

I booked it. Booked it hard because Killramos said record gains this week. There is still hope.

[The_Rural_Juror]

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In a time of world pandemic, why is low - 0% interest a bad thing? Can someone ELI5?

The pandemic causes a lot of issues from both the supply and demand perspective. Demand is down because buyers' incomes and desire to purchase is drastically down. Supply is also down because workers are sick and/or have difficulties getting to work due to movement restrictions, as well as restrictions to the logistics chain. Therefore, companies will begin to face liquidity and solvency issues.

The central bank tried to counteract that by reducing rates to decrease increase payments; by increasing money in circulation via quantitative easing; by reducing the reserve requirements (less money banks have to hold as "deposit"); and also by some stealthy overnight repo actions where the government loses money on purpose. This all helps to keep businesses afloat and encourage purchases. This is the "good" part.

The bad part is that a cut (much less two) between regularly scheduled meetings signals to the market how fucked the economy is going to be, despite the "it's only a flu" crowd. This creates panic. It also creates inflation (higher prices). Typically, a little bit of inflation isn't a bad thing. However, when people lose their purchasing power because they are losing their jobs (or the threat of losing their jobs), the increased prices will hit them hard. I believe this is called stagflation, it's berry berry bad, but ask someone that knows. I just clean floors around here and invest in whatever Killramos tells me to invest in.

[The_Rural_Juror]

...and the market's halted not even a minute in. There's still hope!

[ExtraSlow]

If they keep the market halted, then there's no losses.

[The_Rural_Juror]

No sell = no losses...I am still a BB millionaire on paper. Best advice ever!

[Misterman]

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In a time of world pandemic, why is low - 0% interest a bad thing? Can someone ELI5?

I don't see the low rates as a big deal. It does motivate people or make it easier to get them to take on more debt, which is a bad thing at a certain point.

The 700billion dollars they're printing is more concerning.

[rach]

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Which lender are you with?? PM me as rates did increase Friday with a few lenders.

What we have seen so far is the following:
- Scotia increase to fixed rates by 0.25%
- Scotia decrease in variable rate discounts from -0.70% to -0.10%
- Equitable Bank decrease in variable rate discounts from -1.00% to -0.25%

And a few other went from -1.00 to -0.80%.
And a couple other non-banks increase fixed by 0.10%

I would image we will see more announcements on Monday. If you are interested in securing some rates for the next 120-days... please PM me and I am working over the weekend to assist my fellow Beyond members. Or email [email protected].
-

if i have a fixedc rate of 2.5, should i reconisder to varialble? or refinanced to fixed

[kJUMP]

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The pandemic causes a lot of issues from both the supply and demand perspective. Demand is down because buyers' incomes and desire to purchase is drastically down. Supply is also down because workers are sick and/or have difficulties getting to work due to movement restrictions, as well as restrictions to the logistics chain. Therefore, companies will begin to face liquidity and solvency issues.

The central bank tried to counteract that by reducing rates to decrease increase payments; by increasing money in circulation via quantitative easing; by reducing the reserve requirements (less money banks have to hold as "deposit"); and also by some stealthy overnight repo actions where the government loses money on purpose. This all helps to keep businesses afloat and encourage purchases. This is the "good" part.

The bad part is that a cut (much less two) between regularly scheduled meetings signals to the market how fucked the economy is going to be, despite the "it's only a flu" crowd. This creates panic. It also creates inflation (higher prices). Typically, a little bit of inflation isn't a bad thing. However, when people lose their purchasing power because they are losing their jobs (or the threat of losing their jobs), the increased prices will hit them hard. I believe this is called stagflation, it's berry berry bad, but ask someone that knows. I just clean floors around here and invest in whatever Killramos tells me to invest in.

If you wrote a book, I would read it.

[The_Rural_Juror]

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If you wrote a book, I would read it.

Thank you. I do dabble in the odd novella, but I refuse to allow the publisher to release them unless they can get Fabio on the cover. I want only the best.

[Brent.ff]

So are banks just making bank off this? Doesn't seem like there's been any change to Mortgage prime?

[dirtsniffer]

haven't seen any reduction from MCAP yet.

[Disoblige]

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haven't seen any reduction from MCAP yet.

Yeah, I asked Tim and he said variable rates usually updated the following month?

[dirtsniffer]

last reduction my mcap profile was updated with the new rate right away. Payment adjustment was 1 or 2 out.

[Disoblige]

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last reduction my mcap profile was updated with the new rate right away. Payment adjustment was 1 or 2 out.

Those greedy bastards.

[Brent.ff]

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Yeah, I asked Tim and he said variable rates usually updated the following month?

The first rate drop a week and a bit ago, banks followed suit the next day

[Disoblige]

Hope Tim can comment on this once he has all the info available.