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
