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EliG

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    Garth Turner - Real Estate in Canada

    in General Discussion

    Posted

    Questions to Canadians:

     

    Are any of you still buying USD at the current level?

     

    I have about 15% of portfolio sitting in cash (CAD). CAD is trading below purchasing power parity (~82c). It's annoying to buy USD here. On the other hand, it may be not too late if the worst predictions about Canadian economy come true.

     

     

    Bank of Canada cuts interest rate

    in General Discussion

    Posted

    Crazy to see the CAN$ go from parity to the US$ to below $0.82 in less than 2 years; and should the U.S. economy strengthen and Can economy weaken further in the near term (likely) the CAN$ will likely drift lower still.

     

    $0.80 - $0.82 is close to the long-term average. One can argue that move *to* parity was a crazy aberration, and that we are just now returning back to the normal rate.

    Buffett Says ‘No-Brainer’ to Get Mortgage to Short Rates

    in Berkshire Hathaway

    Posted

    Is this common in Canada?  Mortgages in the US isn't like buying a car where the sticker price is 6% but if you're good you can talk them down to 3.5%.  From my experience rates tend to reflect credit worthiness.  If you have perfect credit you can get the best rates, if you have bad credit, or things the bank doesn't like then they won't offer the best rate.

     

    I have a friend who was a mortgage broker about 10 years ago, I should ask him if he was haggling for the best rates for his clients.  This is fascinating.

     

    I think it's very common in Canada. Posted bank rates are exactly like car MSRPs. No one pays them, except maybe a few financially illiterate suckers. You can easily get a much better rate through a mortgage broker. The brokers don't actually haggle on your behalf. They have prearranged deals with the lenders. Lenders pay them a commission on each mortgage sale.

     

    Mortgage broker rates depend on the credit score, of course. The advertised rates assume a good score.

    Canadian oil patch for sale!

    in General Discussion

    Posted

    https://en-maktoob.news.yahoo.com/u-brent-crude-fall-more-1-kuwait-saudi-234728574--business.html

     

    Top oil exporter Saudi Arabia is ... quietly telling oil market participants that Riyadh is comfortable with markedly lower oil prices for an extended period, a sharp shift in policy that may be aimed at slowing the expansion of rival producers including those in the U.S. shale patch.

     

    In private meetings with oil market investors and analysts Saudi official have telegraphed that the kingdom, OPEC's largest producer, is ready to accept oil prices below $90 per barrel, and perhaps down to $80, for as long as a year or two, according to people who have been briefed on the recent conversations.

     

    In a monthly report issued on Friday, OPEC said Saudi Arabia reported September production of 9.704 million barrels per day (bpd), up from 9.597 million in August, adding to signs it has yet to respond to a drop in prices well below $100 a barrel by trimming output.

     

    The lack of a Saudi cut could add to perceptions of traders and analysts that the kingdom is looking to defend market share, not prices.

    Early retirement

    in General Discussion

    Posted

    Back of the napkin retirement planning:

     

    1. Estimate your normalized annual spending, after tax.

     

    2. Add your expected average tax rate. 20-30% or whatever. This is how much you need to draw from your portfolio before tax.

     

    3. Multiply #2 by 20x (5% withdrawal rate), 25x (4% withdrawal rate) or 33x (3% withdrawal rate). This is the magic number you need to save before you retire.

     

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