Real Return Bonds in Canada are issued by the Federal government or a provincial government. Unlike traditional bonds that have a fixed rate of retun, Real Return Bonds provide a rate that adjusts quarterly with the Consumer Price Index (CPI). Therefore, if you believe that inflation rates are going to go up, these bonds are a good buy as they pay a rate that is currently about 1.6% above inflation.

They have low correlation to the stock market and can be considered a great way to reduce the volatility in a portfolio. Traditional bonds usually dont do well in an inflationary environment since the rate is fixed and they become less atttractive when rates go up.

As such, you may want to consider a 10% weighting in this area. There are several ways to buy Real Retun Bonds. You can buy an individual holding such as the Government of Canada Real Return Bonds maturing between 2021 and 2041. Alternatively, a low cost way to get diverisifcation is to look at the Ishares Canadian Real Retun Bond Index ETF (XRB). An easy way to get international exposure to this asset class is to look at the Standard & Poors International Government Inflation Protected Bond ETF that trades on the American Exchange (WIP-A). Lastly, the TD Real Return Bond Fund, will give you an actively managed portfolio which can have US, Canadian, and International exposure with the choice of interest income re-invested or paid out regularly.

Any questions on these types of investments or comments relating to inflation are more than welcome.

-Chaney

However, Assetz believes this is a temporary correction in the market rather than a crash, and prices will begin to level off in the autumn before starting to climb again in the second half of 2009.

The average house price in June 2008, taken from the average price provided by all five major UK indices, showed a decrease of £2,015, compared with the previous month's average figure and a fall of £4,375 in the 12 months from June 2007, when the average price of a home was £211,939.

Both Halifax and Nationwide have significantly raised their mortgage rates recently to boost their profits while transactions fall, which has resulted in purchasers haggling down property prices by a few per cent to compensate for their increased costs. Rates are still high, despite recent rate cuts and availability remains tightly restricted.

Assetz says this explains why Halifax and Nationwide house price data is noticeably lower than the other indices, which are based on the whole of market land registry data (FT and CLG) or asking prices (Rightmove).

It claims that evidence of the vast imbalance between supply and demand in the UK property market is “clear to see”, with the sharp rise in rents over the last few months demonstrating how excess housing demand has moved temporarily away from purchasing into rentals.

This imbalance is worse than ever, as housebuilders batten down the hatches and cease operation on thousands of new developments across the country. The NHBC reports this month that housing starts are down to just 20,973 in the three months from April to June 08, a 51% decrease on the same period last year. As staff are laid off and investment stalls, the potential knock on effect becomes more dramatic, as the potential recovery time for the industry grows.

There is now no chance of the Government meeting its already ambitious target of 200,000 new homes in the South East alone by 2016, which will lead to even greater house price rises in the long term.

The key factor which will drive the recovery of housebuilding starts is an injection of funds in one form or another from the Bank of England into the stagnant mortgage market. Once lenders begin offering mortgages again, there will be a surge of demand from first time buyers in particular, who are still keen to buy but can't raise the huge deposits currently required.

While the dangers of inflation are plain to see, they are externally driven through energy and food prices and not internally driven so far. The turmoil in the housebuilding industry and the long-lasting damage being done to the Government's housebuilding targets is potentially devastating. Inflationary pressures are likely to reduce significantly next year as the economy edges towards recession, so in the short term, the Bank of England should focus on boosting the economy and the ailing housing market at the centre of consumer confidence, with a cut in interest rates over the next 6 months to a 3.5% level.

Stuart Law, chief executive of Assetz, said: “The impact of excessive mortgage rate increases on the mortgage related market has been considerably more dramatic than the effect of the credit crunch on the wider market. Mortgage lenders such as Nationwide and Halifax did not pass April's interest rate cut on to consumers and have continued ever since to hike their mortgage costs to increase their own margins, while transactions are low. Only in the last week or two have we begun to see a slight reduction in rates again and that cannot be considered permanent as yet.

"This profiteering must stop to create a fairer deal for homebuyers, who are unfairly paying for the excesses and errors in the investment banking sector over the last few years. Rate cuts from lenders coupled with Bank of England Base Rate cuts and an injection of capital by one route or another from the Bank of England, would bring some liquidity and consumer confidence to the mortgage market.

"Dropping Bank of England base rates to 3.5% for a period should drive down mortgage rates payable even if banks retain high margins. Given consumer nervousness at present, the material saving in their mortgage bills could be perceived to offset the increase in energy and food bills, alleviating pay increase pressures that are building. Pay increases present the real danger, as they will drive genuine local inflation and in turn lead to interest rate increases in the future, rather than decreases.

"Many experienced buy to let investors, meanwhile, are benefiting from the current conditions. They are no longer competing with first time buyers at the lower end of the market, and so are benefiting from lower prices and an increased rental demand. Seasoned investors rely on rental income rather than capital growth alone, and do not need to sell in the short term. They are prepared to ride out the correction and allow the market to recover, whilst adding to their portfolios as new opportunities arise from forced sales.

"Once the housebuilding industry loses its capacity through job losses it will take years to rebuild, which will cause a crisis in supply levels that will strongly support property price growth in the next few years, once the remainder of new build stock is sold."

I will continue to say this - "Your identity is not safe anywhere....."

• Story link from thereporteronline.com, posted on July 23, 2008 - http://www.thereporteronline.com/site/news.cfm?newsid=19866360&BRD=2275&PAG=461&dept_id=466404&rfi=6

A former teller at the Lafayette Hill branch of the Wachovia Bank has admitted his involvement in an identity theft ring that stole $43,000 from bank customers accounts.

A total of $54,500 in fraudulent withdrawals were attempted, with $43,000 actually withdrawn from the accounts of the 13 victims. Four of the victims had accounts from which two illegal withdrawals were made.

Mortgage endowment claims continued to be the biggest driver of new claims with 7,410 claims during the year, although, these claims - and pension review claims - both major drivers of the Scheme's work in recent years, continued on a downward trend. This helped the FSCS end the year under budget by £6 million.

FSCS made over 9,450 payments for insurance claims and completed close to 22,000 other claims, reduced waiting times for consumers and paid more than £82 million in compensation. That brought the total amount of compensation paid by FSCS since it was set up to more than £1.04 billion.

Loretta Minghella, chief executive of FSCS, said: "2007/08 was a year of challenges and achievements for FSCS. Away from the spotlight on the banking sector, we were dealing with a diverse portfolio of compensation claims across the industry. Despite the demands of the turbulent environment, it was a year in which FSCS improved its service to consumers and contained costs for levy payers, reinforcing our commitment to being as efficient and effective as possible.

"We completed some of the most complex and longstanding claims on our books, while also processing new claims within our target times, all well under budget. That is good news for consumers and good news for the industry."

1. Newspapers have cited an internal World Bank document as having found that 75% of the price increase was due to biofuels
2. Several governments and commentators see speculation as a major driving force.
3. Widely held view has it that rapidly growing food demand in the emerging economies is pushing up global food prices.

Stefan Tangermann in an article at VoxEU.org asks What's causing global food price inflation? The column aims to ask the question What contributions have the above, or other factors, made to rising food prices?

YOU NEVER WORRY ABOUT MONEY.

"Do not be anxious then, saying, 'What shall we eat?' or 'What shall we drink?' or 'With what shall we clothe ourselves?' For all these things the Gentiles eagerly seek; for your heavenly Father knows that you need all these things" Matthew 6:31, 32

Freedom from worry is available to every child of God who trusts His heavenly Father to provide all his needs.

YOU ALWAYS HAVE ALL THE MONEY YOU NEED.

"And my God shall supply all your needs according to His riches in glory in Christ Jesus" (Philippians 4:19).

"And God is able to make all grace abound to you, that always having all sufficiency in everything…" (2 Corinthians 9:8).

God promises to keep you financially prosperous - if you are a generous giver.

YOU ALWAYS HAVE EXTRA MONEY TO GIVE TO GOD'S WORK.

"And God is able to make all grace abound to you, that always having all sufficiency in everything, you may have an abundance for every good deed" (2 Corinthians 9:8).

Financial prosperity includes having an excess amount of money to give towards the work of God.

Scripture teaches that God wants to bless His people with financial prosperity.

No, not driving a Lexus or taking Caribbean cruises every year.

But if we live and give according to biblical principles, we will never have to worry about money, we will always have all the money we need, and we will always have extra money to give away.
Grace and Peace

Originally there was indentured servitude where a family would agree to work for a certain period of time for passage to this country, and some cash at the end to get established. Not a great way of getting started in life here in the New World, but an understandable way to get here and get going. There were injustices and some people took advantage of the indentured servants, but at least there was - theoretically anyway - an end to the term of service.

Then there was the blight on the soul of the Americas - and I'm including here the islands of the Caribbean and some of Central and South America, though I'm not as familiar with their history so don't know how widespread it was. However, I believe that the indigenous peoples in the Central and South Americas were enslaved against their will. But I'm referring here primarily to the enslavement of many Africans, captured by their neighbors, brought to this hemisphere in oppressive conditions, and forced to work, marry, live at the discretion and to the benefit of another human. This situation has, fortunately, ended, though similar varieties of slavery continue to persist in the world in numbers exceeding that of the years just prior to the Civil War.

However, today we have a different type of slavery in America, one involving almost every family in the country, and this slavery is consentual - debt. Credit offers pour in through our mailboxes weekly if not daily, and we glom on to them as if they were life savers tossed to us in stormy seas. We are offered home equity loans and we slurp them up. Beyond our mortgages and our auto loans, we are amassing $10k, $20k, $50k of additional revolving debt, and thinking nothing about it. (And our governments are as enamored of debt as we are!)

This article in the Consumerist leads to a New York Times article discussing consumer debt and what we can do to get ourselves out of this mess. (No help at this point for the government!)

Let Frazier Group Realty to assist you in any and all of your real estate needs. Call us today (714) 536-4820 or (951) 686-5261 to speak to your real estate navigator!
www.FrazierGroupRealty.com

As the fiction of the value of the dollar unwinds, the desert is strewn with detritus big and small.

Two days after I shot this discarded piece of a concrete mixer, scavengers were cutting it up, by hand, with hammers and crowbars, and hauling it off in old pickup trucks for it's scrap value.  All's relative, and nature abhors a vacuum.   It will be back on the shelves at Wal-Mart in another year for you to purchase in another form.

]]> http://onlinemortgagesuk.wordpress.com/?p=1266 Thu, 24 Jul 2008 15:05:45 +0000 onlinemortgagesuk http://onlinemortgagesuk.wordpress.com/?p=1266 Measures to ensure the FSA does not repeat its failures over Northern Rock will push the regulator over its budget this year and is likely to raise industry costs for the following year.

Speaking today at the FSA’s annual conference in London, chief executive Hector Sants told delegates he regretted the FSA’s “unacceptable” failure to properly regulate Northern Rock prior to the Summer of 2007.

He said the FSA has now put measures in place to try and ensure such mistakes are not repeated, but warned these would come at a cost.

He said: “The programme includes a commitment to have a minimum supervisory resource for all high impact firms. This will ensure the necessary focus and continuity with these key initiatives.

“It will lead to increased costs and that we are thus likely to exceed the levels of expenditure shown in the Business Plan for 2008/09 which will also have consequences for next year. I do, however, believe that this necessary investment is supported by the firms who will benefit from the resultant higher quality supervision.”

Sants added that firms are "likely to see a significant increase in fees in 2009/10" but says the regulator will try to absorb as much of the increase as possible.

Sants said the Northern Rock debacle had overshadowed a number of achievements the FSA had made in the past year in the implementation of Mifid and working towards Solvency II.

He said after the challenges of the liquidity crisis last summer and capital crisis in the Autumn, the FSA must now face the challenges associated with a downturn in the real economy.

He said after this the final act to deal with will be the “new normal” where firms will have to adapt business models and consumers their spending patterns.

He said: “I have already previously observed that the era of “easy money” is gone for some and all of us must take that into account, whether we are managers of financial institutions, borrowers or savers.”

Peter Bolton King, chief executive of the NAEA, says the housing market is the pillar of the UK economy and that it will require creative thinking to ease pressures and ensure the downturn does not worsen.

Bolton King says: “The first thing the government could do is introduce a tax break, such as abolishing Stamp Duty for first -time buyers and moving the thresholds up to ease pressure throughout the whole housing market giving people a reason and incentive to come back.

“In addition, the Bank of England needs to pump more liquidity into the mortgage markets to ensure people are able to find funding for mortgages, together with the government supporting more pro-active initiatives, such as the blueprint recently drawn up by The Council of Mortgage Lenders, to address the funding problems in the mortgage market.”

Bolton King says these are just a few of the measures that will help consumers and begin to restore confidence in the market.

He adds: “If the government really wants to help the housing market we need to see action now from the government to ease pressure and give consumers hope for the future.”

John Lewis (D)
John Barrow  (D)
Hank Johnson (D)
Jim Marshall (D)
David Scott (D)
 
NAY
Tom Price (R)
Lynn Westmoreland (R)
John Linder (R)
Jack Kingston (R)
Phil Gingrey (R)
Nathan Deal (R)
Paul Broun (R)
 
Not Voting
Sanford Bishop, Jr. (D)
 
Here's the link  http://clerk.house.gov/evs/2008/roll519.xml
Looks like the Republicans voted the right way on this.  I think I'll write them and say thanks for trying.

He says: “While the Which? Report was based on a very small sample, it is still a matter of concern that 41 out of 50 advisers failed to give the required information to customers. However, the way that the news item was reported may be conveying the wrong message to the public, as it gives the general impression that Independent Financial Advisers (IFAs) have access to the whole of the mortgage market – that is, the 3000 mortgage deals cited by the editor of Which?

“The reality is that both IFAs and mortgage advisers who use legacy sourcing systems (for example Mortgage Brain and Trigold) only have access to intermediary mortgage products which – as our research continues to show – are consistently less competitive than direct-to-lender products. As far as I am aware, Home Buyer System (and the stand-alone HBSLite version specifically designed to allow advisers to offer borrowers access to both intermediary and direct-to-lender products) is the only mortgage sourcing system that covers every mortgage product in the market, as it uses the same product information from Defaqto that the FSA uses for its own comparison tables.

“Mortgage advisers that are truly able to offer customers a whole of market choice have a unique selling point and need to emphasise this in their marketing and sales-generation efforts, as potential clients become much better informed about the choices open to them.”