Canada Cuts Rate To 0.5% As Recession Enters

[Economy 52,844]

http://www.cbc.ca/news/business/banks-cut-prime-lending-rates-after-bank-of-canada-slashes-benchmark-rate-to-0-5-1.3152673

 

Though not yet 100% confirmed, data collected so far suggests in 2nd quarter Canada contracted again after already contracting in 1st quarter. 2 quarters of contraction would put Canada into a technical recession

 

The main reason for this is low oil prices, and a struggling manufacturing sector thats failing to compensate for the weakness in the energy sector

 

As such the Bank of Canada decided to lower interest rates from 0.75% to 0.5% to "stimulate domestic consumption" despite an already bloated housing market and record high consumer debt

[Luc 4,776]

 all countries lowering recession. I think in 20 years from now when I read a wikipedia article about the big crisis of the 2020's or something it'll say 'because of all countries lowering interest rates during the previous crisis, a huge bubble was created which eventually led to a big burst'.

[Tumblr 1,846]

Poor ha

 

[Economy 52,844]

 all countries lowering recession. I think in 20 years from now when I read a wikipedia article about the big crisis of the 2020's or something it'll say 'because of all countries lowering interest rates during the previous crisis, a huge bubble was created which eventually led to a big burst'.

well... the US did lower interest rates after 2001 recession and fought hard to stimulate real-estate as well with mortgage default insurance policies etc. That helped create the bubble that burst in 2008... so yeah i can see that happen again

 

Here in Canada the bubble is especially housing with prices rising every year since 2000 when the 15 year housing boom began (only in 2009 it fell slightly) and they keep rising some years at double digits

 

Also construction is too high. Housing starts after finally cooling a bit are back up again at 200,000+ units annualized each month...

 

some economists say it makes no sense despite low rates for real estate in Canada to have gotten as red hot as it has especially with so-so economy. They think after so many years of housing boom, people worry if they dont buy their first house ASAP they will never be able to afford one so they jump into market as soon as they can afford it creating a vicious cycle of demand... so in essence the bubble is feeding on itself

[Computer 10,980]

Last time we had a news about this there was hope it was only going to remain a technical recession due to the oil prices and, no jobs lost.  Is there more concern now?  Or still predicted to be just temporary?

[Tumblr 1,846]

Poor ha

 

I was warned for this because? I'm sympathising for the poor sis Canada

[Economy 52,844]

Last time we had a news about this there was hope it was only going to remain a technical recession due to the oil prices and, no jobs lost.  Is there more concern now?  Or still predicted to be just temporary?

we lost jobs last month... But full-times were up only part-times fell a lot...

 

month to month data is very volatile. The month before last month we gained a huge 59,000 jobs... If u average jobs since January of this year the trend suggests stagnation in job creation not actual outright job losses

 

GDP contracted in Q1 from lower oil prices, then in Q2 lower oil volumes from reduced oil exports as a result of temporary shutdowns from wild fires reduced GDP even more...

 

over-all GDP was down (and only slightly) because of energy sector but if you strip out that sector, the economies health as a whole appears to be stagnant and weak but not literally deteriorating for now.

 

they do fear in tome the weakness in energy will spread to other sectors. In Alberta manufacturers that service oil companies are already feeling sqeeze from lower investment in oil sands

 

For the moment the recession is only technical but not felt much outside Alberta... But in time the economy as a whole could suffer as the negative impacts of low energy prices ripple through...

 

Also manufacturif still struggling and housing market so over-heated and consumer debt so high... Which sector of the economy can hope to possibly create growth???

 

So there is real concern about where Canada is headed yes.

I was warned for this because? I'm sympathising for the poor sis Canada

u replied to urself????

[Tumblr 1,846]

 

u replied to urself????

I was quoting it because I want to know why it was warned sis, is that okay with you?

 

 

 

 

Now if a mod could respond to me..

[Luc 4,776]

well... the US did lower interest rates after 2001 recession and fought hard to stimulate real-estate as well with mortgage default insurance policies etc. That helped create the bubble that burst in 2008... so yeah i can see that happen again

 

Here in Canada the bubble is especially housing with prices rising every year since 2000 when the 15 year housing boom began (only in 2009 it fell slightly) and they keep rising some years at double digits

 

Also construction is too high. Housing starts after finally cooling a bit are back up again at 200,000+ units annualized each month...

 

some economists say it makes no sense despite low rates for real estate in Canada to have gotten as red hot as it has especially with so-so economy. They think after so many years of housing boom, people worry if they dont buy their first house ASAP they will never be able to afford one so they jump into market as soon as they can afford it creating a vicious cycle of demand... so in essence the bubble is feeding on itself

In my country only the big cities (especially student cities) have a bubble. The small cities in ageing parts of the country and parts with gas (causes earthquakes) have a really quickly declining price.

[Economy 52,844]

In my country only the big cities (especially student cities) have a bubble. The small cities in ageing parts of the country and parts with gas (causes earthquakes) have a really quickly declining price.

how much does your population grow?

 

Here in Canada they are considering raising yearly immigrant grants from 250,000 a year to 400,000 a year so if there is an oversupply of homes from too much construction, faster population growth could quickly fix that!

 

earthquakes by gas????