1. Million Dollar Journey gives us a handy summary of planned TFSA (Tax-Free Savings Account) offerings from the major Canadian banks and brokerages . 2. Have you ever heard of a carry trade, but didn’t know what it was? Preet explains carry trades and the possible ramifications of Yen carry trades . 3. Blunt Money has some useful suggestions for getting out of cell phone contracts .

This week I got my notice from the government about how much they think my house is worth. They clearly didn’t spend much time on my house because my assessment went up by exactly the average amount in my area, 13%. Fortunately, this doesn’t mean that my property taxes will go up by 13%. City governments don’t collect more taxes when property values rise and less when property values fall. What actually happens is the city decides on the total amount they will collect from homeowners, and then divides that amount among homeowners in proportion to assessed property values. For example, if the city needs $1 billion from us, and the total value of all houses is $80 billion, then the tax rate is set at 1/80=1.25%. A house worth $320,000 would pay $4000 in property taxes. If property values had plummeted to a total of $50 billion, then the tax rate would have been set at 1/50=2%. The house that was worth $320,000 in good times is probably worth only $200,000 in bad times, but would st...

Seniors who pay property taxes in Ontario can look forward to a tax break starting next year. The maximum amount of the tax break for 2009 is $250, and for subsequent years it is $500. The tax reduction won’t come off the city tax bill directly, though. This program is part of the Ontario Tax Credits. Seniors who qualify and submit form ON479 at income tax time will get a tax deduction or rebate on their income taxes. In 2009, a senior couple with a combined income under $45,000 will get the whole $250, and the amount of deduction drops off to zero for combined incomes over $60,000. Single seniors in 2009 whose income is under $35,000 will get the whole $250, and the amount of deduction drops off to zero for incomes over $50,000. It’s hard to disagree with a policy like this when you imagine an elderly widow living in near poverty being forced from her home because she can’t afford the property taxes. However, this does shift the tax burden slightly from seniors to younger people,...

A group of regulators of the Canadian mutual fund industry have come up with a proposed new set of rules for disclosing information to potential investors using mutual fund fact sheets. Don’t look for any big differences to help investors understand what is going on. These fact sheets don’t even have to include a fund’s trading costs. As explained in an Ontario Securities Commission article Understanding Mutual Fund Fees, “brokerage charges, which are the fund’s cost of buying and selling securities in its investment portfolio, are paid by the fund but are not included in the MER.” These costs are buried in other disclosure documents as a Trading Expense Ratio (TER). To those of us who have an interest in financial details, the disclosures about fees in the fact sheets seem clear enough. But, I doubt that the average investor could make a meaningful connection between this information and actual fees paid. When friends and family show me their account statements, they are usua...

Former Federal Reserve Chairman Alan Greenspan was grilled by a U.S. House oversight committee about his role in creating the rules for the banking system that failed. All the bickering about who is at fault was less interesting than Greenspan’s suggested fix: “I see no choice but to require that all securitizers retain a meaningful part of the securities they issue.” In case that didn’t make much sense to the average reader, let’s break it down. A securitizer is an organization that collects loans into a big pile and then sells fractions of this pile to others. This doesn’t mean that they sell off each loan individually. If someone buys 1% of the pile of loans, that person will own 1% of every loan in the pile. Greenspan is suggesting that the securitizer should not be allowed to sell the whole pile of loans, but should have to keep some fraction of it. This leaves the securitizer with some meaningful fraction of every loan. How would this help? Well, the assumption is tha...

1. Rogue Clients Falling stock prices mean that financial advisors need to beware of lawsuits from “rogue clients” according to Gowlings’ Ellen Bessner in her interview with the Wealthy Boomer (the web page with this article has disappeared since the time of writing). She defines a rogue client as an investor who claims to have a high capacity for risk but says something different when markets decline. I prefer “insurgent clients” or “terrorist clients” to really drive home the imagery. Perhaps the real reason these clients are angry is because various marketing efforts gave them unrealistic expectations about the advisor’s ability to beat the market and protect their portfolios from loss. Just a thought. 2. Bank Prime Rate The Big Cajun Man added his voice to the many others observing that reductions in the central bank rate are not being fully passed on to borrowers. On one level this makes sense because the banks are recovering from a period where they lent money to borro...

We’ve watched as credit markets have seized up and world governments have pumped trillions of dollars into the banking system. Many of us want to know whether these efforts are working, and when we’ll get back to normal. According to Business Week, bank-to-bank lending rates in the US have dropped eight straight days (the web page with this article has disappeared since the time of writing). This doesn’t mean that the problem is solved, but we are headed in the right direction. This is as close as I can get to answering the question of whether government intervention is working. As for the question of when we’ll get back to normal, I don’t think we will get back to normal. For many years, “normal” was to lend money to people who couldn’t pay it back. It was normal for investors to buy packaged loans for much more than they were worth. Until we have another bubble that leads once again to lending madness, we won’t go back to the way things were before. There is nothing susta...