Rolling the dice is perfectly acceptable when you’re in a casino in Las Vegas. I know from first-hand experience that playing “craps” in Vegas can be a rush. For those of you who may not be familiar with the rules or finer points of “craps”, and would like to give it a try next time you’re in Vegas, DO NOT ATTEMPT TO PLAY UNLESS YOU UNDERSTAND ALL RULES!  Now that you’ve rolled your eyes and are thinking thanks for enlightening me Bozic, the fact is many do play without understanding all the rules. Why? Because that’s where the action is and where all the noise is coming from. The noise draws you to the table, and when you get there you think I want some of this. You find yourself placing bets, not even understanding what your odd’s are. You might even start mimicking the bets being placed by other gamblers at the “craps” table. You look down at the table and you’ve got all your bets covered. Come on shooter, make this a magical role. Then you hear the most dreaded words at a “craps” table, seven out…seven out. For those uninitiated that means all your chips are gone! That’s when you start thinking if you only had played blackjack instead you could have played for much longer. But that’s gambling and it’s a part of the experience. That’s okay for Vegas but maybe not so much so when choosing between a fixed rate mortgage and an ARM.

The reality is that many borrowers are rolling the dice today. I’m setting aside those borrowers that can withstand the rate variances, and have the stomach to ride out an ARM for 60 months. I just wonder about borrowers who truly don’t understand the rules of the game. I wonder if some borrowers are placing mortgage bets based on what their neighbor or co-worker did with respect to their mortgages. Maybe borrowers are being influenced today by advertising. The 50/50 mortgage is getting a lot of airplay today, and that product was designed for those that wanted to play it safe or safer. Maybe it’s all about today and they’ll worry about tomorrow, whenever tomorrow comes. Maybe all of the above plays a part in the decision-making process but the biggest influence is the brokers personal bias.

All I know is that at some point in the not too distant future rates are going up. The warnings and predictions have been there for all to see for some time now. For example, Bank of Canada Governor Mark Carney recently said the following, “Low interest rates today do not necessarily mean low rates tomorrow,” warned Carney. “Risk reversals, when they happen, can be fierce; the greater the complacency, the more brutal the reckoning.” There’s no ambiguity there, and I’m thinking he might be one of those people “in the know”. The way I look at it any five year mortgage, under 4%, is free money. It’s also 60 months of peace of mind for the borrower. I can’t help but think if borrower’s get squeezed by a rate hike, and then they ask you how did this happen, irrespective of the facts all they will hear is, seven out…seven out.

Until next time

Cheers

For those of you who reside outside of Ontario, you may not know this but we here in Ontario get to exercise our democratic right one more time.  Then again some of you who live in Ontario may have forgotten that we have a provincial election coming up this October.  Who could blame you for wanting to suppress the idea of yet another election.  In the last 12 months, the good residents of Toronto endured a municipal election, and the voters in Ontario cast their ballots for a needless federal election. Could voter fatigue be setting in? I suspect the incumbents, the provincial liberals, hope so.

During our municipal election, candidate Rob Ford ran on a very simple campaign. The message was clear and to the point, “the gravy train stops here”. I’m not kidding, that was his campaign slogan.  His message was that days of wasteful spending was over.  It was time to be fiscally responsible, and do what was right for the citizens of Toronto.  I know what you’re thinking, sheer lunacy.  Being fiscally responsible was the complete opposite of what everyone in Toronto had became accustomed to under the previous regime. The spend first and think later cabal that used to run city hall were flabbergasted that Rob Ford’s message resonated with the electorate. So much so that the incumbent mayor, David Miller,decided he wouldn’t run for re-election because he wanted to spend more time with his family.  When a politician says he’s not running because he wants to spend more time with his family, it really means that we just did a poll and the results say if I run again I’m going to get my ass kicked. I digress.  Rob Ford won overwhelming majority, and the citizens of Toronto have spoken.

The federal election is still fresh in everyone’s mind.  The conservative party finally got their majority.  Why? Ontario put them over the top. The only way the torries could gain a majority was to do well in the 416 and 905 are code, and that’s exactly what happened. What was the message that resonated with the voters in Ontario? Fiscal responsibility, cutting wasteful spending and lowering the deficit. I’m not a Rhodes Scholar by any stretch of the imagination but I think I see a pattern here.

This brings me to the upcoming provincial election. I’m going to let you take a wild guess what Tim Hudak, leader of the Ontario PC Party, platform is for the upcoming election. You’re so smart, you’re not just another pretty face.  Tim, you had me at lowering taxes.

The fact that you want to bring back chain gangs makes me school girl giddy. That’s not a joke. The issue has been getting a lot of air time in Ontario, and it appears the idea is gaining a lot of support. As a voter I’m a buyer of a politicians vision. Every four years I buy what a politician is selling by casting my vote. Political parties share similarities with private enterprise. If you don’t give consumers/voters what they want, if you think you’re smarter than the consumer/voter, if you suffer from hubris, you do so at your own peril.  But you don’t have to take my word for it. Just ask David Miller and Michael Ignatieff

Until next time.

Cheers,

Image Source: McLeans Magazine, July 27, 2001 

I’m sure that right now you’re saying to yourself thank goodness we have another blogger in the world because there’s not nearly enough of them out there today. I can’t say I could blame you if you thought that way, and so the question is why would I do this?Firstly, all the so called experts say you should blog. By doing so it enhances your company and personal brand, or so they say. Secondly, it’s a creative outlet. I work in a world of numbers, process, execution, risk mitigation and all kinds of other sexy stuff. To share my thoughts, opinions and personal tidbits does have some creative appeal for me. It will also push me to do something that I am not totally comfortable with, writing. Get me in front of a room full of people to do a presentation and I’m on. Writing a story that others may actually be interested in reading sounds like a challenge to me. The reality is that I enjoy a good challenge and if it ends up that mom is the only reader of my blog so be it. I know she’ll love it because she loves everything I do, and I’m her favorite. My poor brother is so delusional.

I hope it’s clear by now that my blog will have a lighter side to it. At times I’ll comment on serious issues relating to the mortgage industry.
But I have every intention to comment on my other passions, family, politics and sports. Hey, it’s my blog. Remember, there’s one person out there that will love it. Hi mom!

I’m off to dig through newspapers, the net and other information sources to come up with great ideas for a blog. You see I have plenty of time to do that right now because I’m in the the Air Canada Maple Leaf Lounge, waiting for my flight which has been delayed by three hours, and counting. Me thinks there will be a blog in the future about Air Canada, oh, most definitely.

Until next time.

Cheers.