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Despite the rush to lock in at the historical low fixed rates, variable rate mortgages still may represent an attractive option for many borrowers. When the Bank of Canada last lowered the prime rate to 0.25%, Mark Carney took the unpresented step of stating that the prime rate would not increase until at least the 2nd quarter of 2010 unless inflation got out of control. What does that mean for the average client? Right now, the spread between the best fixed and floating rates is 0.80%. On a $200,000 mortgage this would represent $1600 in interest savings in one year. In early 2010, you could then review your situation and potentially lock in (at rates that would be at the same level as today +/-) or continue to float with the market. In most floating rate mortgages, if your broker/bank has looked out for your best interests, you can lock in to a fixed rate term at any time without penalty. Certainly food for thought.
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Those of you who have followed my blogs for some time will be aware that I am Canadian, and that I am very proud of my son, James, who has been serving for some time with the forces in Afghanistan. He is home now, and he took some time during one of his first days back to write to family and friends and tell them about his experiences over there.
With his permission, I am going to post some of his comments in this blog, because I find they give a much more comprehensive explanation of what is happening there than anything I have heard from CNN or Fox news.
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It is so good to be home. I just wanted to drop you one final note about my time overseas, and pass on a few of the things I learned along the way. The bottom line is that I am very glad I went as it was an amazing experience, and I have learned an incredible amount about the world at large, and Afghanistan in particular.
You hear a lot of commentary about Afghanistan, and many people complaining that we are not seeing any improvement over there, and how it is time to bring the troops home. The thinking is that we have not made a difference and that we should not be wasting our lives over there. They have a valid point, but my first-hand experience is that Afghanistan is one of the poorest countries on earth and they desperately need our help. I hope to explain a little about why it is not more stable, but please keep in mind that these are just my opinions and not necessarily fact based, and I hope to give you a different perspective on what is happening over there.
The city of Kabul has an estimated population of 3 million people, although it is impossible to truly tell how many live there. I know there are nice parts of the city, as I have seen pictures, but I have never seen them myself. I have seen the bulk of the city, north and east from where I lived, and it is poor as dirt. The shops line the road and are little more than thin concrete walls in a dirt parking lot. The majority of the homes are often in unfinished apartment buildings or rough buildings, with many people living there but little in the way of amenities. Power is off in the city frequently and running water is rare: there are hand pumps all over where the residents line up daily to pump out the water they need for the day. Indeed, water is such an issue that the airport has become a very interesting place for westerners because any Afghans using the airport take advantage of the running water and line all the sinks washing their faces, feet, and armpits (washing your hands after peeing is usually out of the question). You can imagine that so many people living within a city with so few services is very straining.
These stores that line the street will have raw meat hanging unrefrigerated, and fresh baked bread is carried from door to door by dirty hands, but really they are doing the best they can with what they have. It really is quite shocking to see the conditions that people live in because we have all seen poor areas, but nothing to the extent of this. Like I said, I travelled throughout the city, but never saw any nice sections. Even in the semi-protected zones where the embassies are located, the walls are high and always lined with constantino wire and guard towers. It looks like a city at siege, and indeed we treat it as such. Whenever we drive from one location to another we always travel in convoys, with weapons and armour, and in constant communication with help. We travel through the city at speed and with aggressive techniques to keep suicide bombers from being able to target us. This driving has made it hard to build rapport with the citizens though, because their typical encounter with us is our convoy's blocking them at intersections so we can get through quickly. They do not often see the good side of us.
My sadness with that city is that, for our safety and normal lifestyle, we have totally segregated ourselves from society and therein lies the problem: we are trying to help but kept very much at arm's length from those that need our help the most. For example, we tried to buy all of our bottled water from a local company, but they failed to keep the filters cleaned so the ecoli count got too high and we cancelled the contract. So now we get all our bottled water from Dubai instead of pouring money back into the city. This is a massive problem as there are no standards for even produce or meat, as evidenced by the hanging meat, so we cannot buy much from the local economy. Everything gets trucked in and that means, once again, that money being spent is not going back into the local economy. Obviously this is tough: we want to buy locally, but if the standards are not high enough for us, then we are stuck with buying from away and importing it. The scope of this problem cannot be overemphasized: we spend millions and almost none of it stays within the country!
Combine that problem with the biggest problem affecting the country: jobs. There is little expertise, so little contracting can be done on the economy. So, we bring in western contractors and the downward cycle continues. We do hire locals for many services, but none of them are high paying so building good will is difficult. With so many of us in the country, but so little money going into the local economy, you can imagine the frustration of the average Afghan. Indeed, the millions we are spending often end up back in the pockets of western companies who are contracted for providing the services we need to live and work there. What a difficult cycle to break.
And that leads to why there are still Taliban and bad guys. A lot of the money the country uses to survive on is based on the opium trade but we are trying to lead them away from opium production. So, the drug lords are able to maintain public support if they share some of their wealth and are able to recruit young men who do not have jobs otherwise. This is why we are still fighting, and why the situation has not improved. However, all this time we are providing enough security for the government to build the police and the army, build infrastructure, and develop policies and procedures. So, the basics are on the mend even though we do not see that through our media, and the overall population does support our presence even despite all of our problems because the alternative is one they have already faced: when the international community last turned away the country imploded.
But when it comes to fighting, what we do not hear about is the losses the Afghans are taking. They are unbelievable! The Afghan army and police is fighting hard for their country and they are taking the brunt of all losses. We cannot complain that they are letting us fight their war for them, au contraire, they are so keen to take the fight to the enemy that we often have to hold them back. They have sheer determination to turn this situation around and the military personnel see this and are proud to help them because they try so hard.
So, this is a long haul, and we have many issues to address to fix the problems, but the good news is that the full scope of the various problems is coming to light and the goverment is working with the international community to start solving the problems. I think it is going to be a generation before they are able to fully contribute to the international community, but it is underway thanks to the security that is present especially in the city. Should we stay? Good question. I hope we can find a way to get out of the thick of the fight, but still help rebuild and be a part of this incredible project of bringing this country back into the fold of nations. I feel proud to have done my small part and wish the Afghans all the best as they travel down this difficult road.
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There's always time for a bit of humor, so I hope you enjoy this story:
When the last of their three children was about to leave home, my parents decided to buy a smaller house. The Real Estate sign went up.
A week later, a second "For Sale" sign appeared two doors away.
"Soon you'll have new families on either side of you," my mother remarked to the neighbor whose house was in the middle. "We're thinking of putting up our own sign," she replied wistfully. "It would read: 'Was it something we said?' "
Story credit: http://www.myrealtyguide.net/real-estate-jokes/Buyers-and-Sellers.html
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It always takes time for the statistics regarding home sales and average prices to be processed so, as I have said before, trying to predict what will happen next by looking at sales statistics is a lot like driving by looking in the rear view mirror.
For a more immediate reading on what is happening, I would like to offer you my personal experience.
At the beginning of April I had five properties listed for sale. Of those, two have sold firm (removal or fulfillment of all conditions) in the past 10 days. I have also picked up one new listing in that same time (but I could still use more if you are thinking of selling your property!)
This level of activity means that people have grown tired of waiting to see what is happening with the economy and they are resuming normal life, including buying and selling real estate. It's great to see the market come alive again.
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It's been busy lately, so my wife and I decided to catch some time away from the phone and computer and head out for an hour today to have a picnic at the beach in nearby Tweed, Ontario. Sure, April 2nd is a bit early for that sort of thing up here in Ontario, Canada, but we had the whole place to ourselves, except, of course, for the seagulls who stared at us as we ate our sandwiches and quietly thought about the more generous people who would follow us in the summer season.
We managed to find a table that was high and dry, but some of the others were in places that will be wonderful in a month or two, but were a bit damp right now -
As I took this picture and thought about the areas where flooding is causing suffering and loss, it was nice to see an example where it didn't really matter.
There will be lots of time for more picnics soon.
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