Archive for September 2008

The House of Representatives met over the weekend to bail out the American financial industry but, despite the pleas of President George W. Bush, the vote failed.  As a result, the Financial markets nosedived and the US, Canada, and Overseas has felt the violent impact on their stock indexes.

The TSX was down 840.93 points or 6.9 percent which is the largest drop since Black Monday on October 19, 1987 and Toronto’s prices were down everywhere, including mining and energy stocks, oil, and sweet crude.  Overseas, London’s FTSE 100 was down 3.2 %, Germany’s DAX was fell 2.9%, and Tokyo and Hong Kong’s Indexes fell as well each dropping over 2.9%. These drops are being marked as some of the largest in history and will impact the US market considerably.

Had the bailout been approved, it would have provided the US government authorization to buy up to $350 billion in distressed debt.  The government would have held onto the debts for a few years until markets settled and house prices recovered, and it would then sell off the debt at a profit.

Economists are torn on the outcome though, some saying that “This legislation is giving us a choice between bankrupting our children and bankrupting a few of these big financial institutions on Wall Street that made bad decisions” thereby implying that the “big corporations” need to take responsibility for their poor financial choices because the taxpayers are not at fault and should not be burdened with the payback of the extremely large debt. 

On the other hand, some say that “the bill posed a choice between the loss of prosperity in the short term or economic freedom in the long term”, encouraging the government to step up to the plate and rescue the failing financial institutions that provide the US with so much of their economic stability and profit.

Undoubtedly, with the outcome of this failed vote, all financial stock markets will feel the burden.  We will see a noticeable increase in investor turning to safe bond investments and steering away from the volatile stock market.  This need for safer investments and more secure enterprises by the investors has triggered the creation of alternate funds and investment opportunities; the MBN Bond Fund being a prime example.

The MBN Domestic Bond Fund 7-1 is an RRSP eligible fund and it provides consumers with a 7% annual rate of return on their investment, without deductions, compounding over a 4 year term, and provides annual internal and dividend returns paid to each Bond Fund Shareholder. MBN Finance Ltd., a division of MBN Ltd. administers all of the capital within the fund to finance Building and Land Development Projects. In addition, these funds are used to provide Bridge and Interim Financing through MBN Mortgage, and to contribute to viable real estate projects across North America, with its primary focus in the stable Alberta market.

Due to the US housing crisis and inevitable fallout from this crisis, consumers are seeking local investments opportunities in the Canadian Market and are turning to safer, secured investments, such as the MBN 7-1 Bond Fund, which is managed by the Professional Services of Collins Barrow, Canada’s largest association of Chartered Accountancy Firms, and Scott Hall LLP – a full service law firm established since 1986 and is required to report to its qualified Board of Directors. This accurate management is paramount in the success of a fund such as this provides the safety that Canadian Investors are currently lacking in their US and Foreign Investments.

Speak to your MBN Specialist today to learn more about the Bond Fund and how you can earn a great return on your RSP eligible investment.  Contact us at 1-866-955-9662 to learn more.

MBN Mortgage

CBCNews.com

There will be no bail-out package paid to any of Canada’s Bank, Insurance Companies, or other Financial Institutions; Prime Minister Stephen Harper confirmed this on Friday while campaigning in Quebec.

Unlike the US who, in a last ditch attempt to save the country’s largest insurer AIG, offered a two year 85$ billion dollar loan to AIG in exchange for an 80% stake in the company, Canada is not considering any rescue efforts of its companies.

Despite this past week’s financial sector turbulence and the heightened concerns over the US economy, Harper said the Canadian Financial Institution remains in “very good shape.”  All information provided to Harper’s government has indicated that while there are banks that have had significant write-downs, none near the extremity of AIG, the balance sheets of the financial sector remain strong.

Harper is further supporting Economists’ suggestions that the troubles in the US should not “spill over into Canada.” Canada has strong economic fundamentals and a government that has been prudent and pro-active.  The Canadian government anticipated the US bubble would burst over a year ago and the crisis this week was not surprising, nor unexpected.  It is however, not expected to affect Canada to anywhere near the extent it has affected the US. 

There is no direct tie between the US housing market and the Canadian housing market and Canada’s strong economy and dearth of high-risk mortgage lending should help the real estate sector withstand the volatility that has been buffering the equity markets.   Ultimately, the Canadian market should be relatively unscathed by the turbulence experienced in the US.

MBN Mortgage

CBC News

September 19, 2008

Nervous Investors have hurried the decline in the North American stock market.   As a result of Lehman Brother’s bankruptcy declaration, the merger between Merrill Lynch and the Bank of America, and the bail out of AIG by the US Federal Reserve, investors are selling off their stocks and shares in US companies and as a result, the stock market is plunging.

Toronto’s TSX composite index closed down 349 points to its lowest level in two years and in New York the Dow Jones lost 449 points while the Nasdaq fell 109 points. 

Morgan Stanley – one of the last two big independent investment banks remaining on Wall Street saw its shares fall 24 percent.  Manulife Financial was down 6 percent and shares in Sun Life Financial slid 8 percent.

While the US Market is being hit hard by these sharp declines in stock values, Finance Minister Jim Flaherty said yesterday that “Canadians have nothing to fear as the chaos in financial markets continues south of the border.”

He continued to say that “we get a lot of American news in Canada and I think sometimes Canadians understandably get very concerned about problems that are actually primarily taking place outside of our country”.*

Canada has strong economic fundamentals and a government that has been prudent and pro-active.  The Canadian government anticipated the US bubble would burst over a year ago and the crisis this week was not surprising, nor unexpected.  It is however, not expected to affect Canada to anywhere near the extent it has affected the US. 

There is no direct tie between the US housing market and the Canadian housing market and Canada’s strong economy and dearth of high-risk mortgage lending should help the real estate sector withstand the volatility that has been buffering the equity markets.   Ultimately, the Canadian market should be relatively unscathed by the turbulence experienced in the US*.

The need for safer investments and more secure enterprises by the investors has triggered the creation of alternate funds and investment opportunities; the MBN Bond Fund being a prime example.

The MBN Domestic Bond Fund 7-1 is an RRSP eligible fund and it provides consumers with a 7% annual rate of return on their investment, without deductions, compounding over a 4 year term, and provides annual internal and dividend returns paid to each Bond Fund Shareholder. MBN Finance Ltd., a division of MBN Ltd. administers all of the capital within the fund to finance Building and Land Development Projects. In addition, these funds are used to provide Bridge and Interim Financing through MBN Mortgage, and to contribute to viable real estate projects across North America, with its primary focus in the stable Alberta market.

Due to the US housing crisis and inevitable fallout from this crisis, Canadian consumers are seeking local investments opportunities in the Canadian Market and are turning to safer, secured investments, such as the MBN 7-1 Bond Fund, which is managed by the Professional Services of Collins Barrow, Canada’s largest association of Chartered Accountancy Firms, and Scott Hall LLP – a full service law firm established since 1986 and is required to report to its qualified Board of Directors. This accurate management is paramount in the success of a fund such as this provides the safety that Canadian Investors are currently lacking in their US and Foreign Investments.

The near bankruptcy and ultimate merger between the Bank of America and Merrill Lynch and the bailout of AIG by the US Federal Reserve, further solidifies the need for strong Canadian Investments and the importance of domestic securities and funds. Consumers are feeling the fallout of their foreign and US investments and in turn, are searching for local investment opportunities. These local and secure investments are what continue to support the Canadian economy, increase its growth and strengthen the local market.

For information on a strong Canadian Investment that is Hard Asset Backed and insured with a Performance Bond, contact your MBN Bond Fund Specialists at 1-866-955-9662 and they can teach you more about the Fund that provides a fixed 7.0% rate of of return, compounded annually over a 4 year term.

For additional information on your Calgary and Southern Alberta Mortgage Market Forecast, contact your MBN Mortgage Specialist at www.mbnmortgage.com or by calling 1-866-955-9662. 

MBN Mortgage

Globe and Mail*

September 18, 2008

Shares in AIG tumbled more than 60% on Monday morning and investors feared that AIG would face billions in additional losses because it had effectively guaranteed complex financial instruments which were tied to home loans whose values have now plummeted. 

AIG had absorbed write-downs in its mortgage securities due to the failing US housing and real estate market.  This, combined with the bankruptcy filing made by Lehman Brothers on Monday and the merger between Merrill Lynch and the Bank of America this past week, has left investors across North America wondering who is next to succumb to the Housing Crisis.

In a last ditch attempt to save the company, AIG sought help from the US Federal Reserve, asking for a 40$ billion dollar bridge loan.  As a result, rating agencies had threatened to decrease AIG’s credit rating allowing counterparties to withdraw the capital from their contracts with the company.  Economists said that should this have happened, AIG would have survived for 48-72 hours at most.

In response to this, and other leading investor’s outcries, US Presidential Candidate John McCain softened his stance and agreed to help out the flailing American International Group.  The Federal Reserve rescued the company and offered a two year 85$ billion dollar loan to AIG, the country’s largest insurer, in exchange for an 80% stake in the company.

This bail-out, while expected to help AIG in the interim, is not a long-term solution and has left investors and economists alike, wondering how long AIG will survive.  Unlike Americans, Canadian investors have the confidence in knowing that there are two other government regulated Insurance Companies, CMHC and Genworth, who ultimately provide Canadian investors with insurance options and additional security.

At MBN Mortgage we have the ability to access all three insurers and offer our customers and investors the ability to receive financing through over 40 lenders, and the ability to have their financing insured through alternate companies, outside of AIG.

CMHC, and Genworth, two of Canada’s largest insurers have paired up with the Canadian Government, and have tightened the rules on their government backed mortgages in the hopes that they avoid the housing meltdown that has damaged the US economy.  In doing so they are effectively ensuring their stake and security in the Investment and Housing Market.  This change marks a responsible and measured approach by both the Insurers and the Government to ensure Canada’s housing market remains strong and to reduce the risk of a US style housing bubble developing in Canada.

While many consumers are leery of investing in the US, in both their securities and housing sectors, investors are increasingly realizing that their investments are much more secure and stable in the Canadian sectors.  Government regulations combined with the increased restrictions on home loans, have provided Canada with the ability to respond to the US housing crisis in a proactive manner.

The affects the US meltdown is having on Canada, and the increased interest from investors in the Canadian Marketplace is an important discussion to be had with your MBN Investment Consultant.  Your Consultant can be reached at 1-866-955-9662.

MBN Mortgage

September 18, 2008

Monday, September 15, 2008 is a date that goes down in history as one of the largest acquisitions in the United States. Bank of America agreed to a $50 billion dollar merger with Merrill Lynch, the world’s largest and most widely recognized investment brokerage, thereby creating a bank offering a vast array of services; everything from fixed-income trading to credit card lending.

This buyout is expected to close in the first quarter of 2009 but is receiving mixed reviews. While some feel that this merger brings risks, others feel it brings opportunity.

Over a year ago the Bank of America appeared to have given up on investment banking and mortgage brokering due to the losses it suffered in an area of business it had no expertise in. This has left economists wondering how Bank of America intends on turning Merrill Lynch and its interest in the housing market around.

Optimists on the other hand, view the Merrill takeover as an opportunity for Mr. Lewis, chief executive of Bank of America Corporation, to transform the Bank of America into a market leader – one of the country’s largest players in wealth management and now, one of the nation’s biggest mortgage lenders. This deal expands Bank of America’s reach into equities and emerging markets and strategically, if the deal goes according to plan, Bank of America will be able to offer Merrill Lynch’s retail brokerage services to its already extensive customer base.

Bank of America, while once again expanding into the investment market, is keeping a tight rein on it loans and is enforcing strict lending guidelines in an effort to ensure what happened in the US housing market late last year, does not happen again.

The Bank of America and Merrill Lynch merger comes after a fall in US house prices of over 20% last year which resulted in an unprecedented number of default mortgages and loans. This steep fall is not expected to hit Canada near as hard or at the rapid pace it hit the US. In fact, Canadian economists are saying that the housing market in Canada is leveling off and in many cities house price appreciation is expected to stall, but not decline.

The major difference between the US and Canada housing markets is credit. Looser credit conditions south of the border fuelled easy lending which in turn created excessive demand – demand that the country could not sustain. In addition, the lack of lending guidelines led to the high number of mortgage defaults and ultimately contributed to the demise of Merrill. By having reinforced guidelines and by not creating risky loans, Canada has maintained its strong real estate market and is not expected to be greatly impacted by the merger.

This solidifies the certainty in Canadian Investments and the Canadian Housing Industry. Consumers will continue to turn to local Canadian markets for investment purposes as our economy remains steady and strong. It is expected that foreign investors will also take advantage of the stable Canadian Housing market and turn their investing from the popular US States, to the rapidly growing Canadian Provinces. As a result, many more Canadians will consider investing in the housing market and in alternate funds, such as Bond Funds where the money acquired by these funds is invested into the Real Estate Market to gain a greater rate of return, meanwhile maintaining its security.

The need for safer investments and more secure enterprises by the Canadian consumer has triggered the creation of these alternate funds; the MBN Bond Fund being a prime example.

The MBN Domestic Bond Fund 7-1 is an RRSP eligible fund and it provides consumers with a 7% annual rate of return on their investment, without deductions, compounding over a 4 year term, and provides annual internal and dividend returns paid to each Bond Fund Shareholder. MBN Finance Ltd., a division of MBN Ltd. administers all of the capital within the fund to finance Building and Land Development Projects. In addition, these funds are used to provide Bridge and Interim Financing through MBN Mortgage, and to contribute to viable real estate projects across North America, with its primary focus in the stable Alberta market.

Due to the US housing crisis and inevitable fallout from this crisis, Canadian consumers are seeking local investments opportunities in the Canadian Market and are turning to safer, secured investments, such as the MBN 7-1 Bond Fund, which is managed by the Professional Services of Collins Barrow, Canada’s largest association of Chartered Accountancy Firms, and Scott Hall LLP – a full service law firm established since 1986 and is required to report to its qualified Board of Directors. This accurate management is paramount in the success of a fund such as this provides the safety that Canadian Investors are currently lacking in their US and Foreign Investments.

The near bankruptcy and ultimate merger between the Bank of America and Merrill Lynch further solidifies the need for strong Canadian Investments and the importance of domestic securities and funds. Consumers are feeling the fallout of their foreign and US investments and in turn, are searching for local investment opportunities. These local and secure investments are what continue to support the Canadian economy, increase its growth and strengthen the local market.

To learn more about the MBN Bond Fund and how to invest in it, please call 1-866-955-9662.