SmartHomeOwners

OTTAWA: The Bank of Canada has kept its trendsetting policy interest rate at one per cent until at least next year.

The central bank says economic conditions have worsened since its last comprehensive forecast in October and any further withdrawing of stimulus should be carefully considered.

The bank says household spending has been stronger than anticipated, but exports that support the manufacturing sector were weaker.

It blames disappointing productivity gains and the strong loonie, which makes Canadian goods more expensive in foreign markets, for the recent slowdown in economic recovery.

Carney hiked rates three times during the summer months but put a stop to his tightening policy in October after the recovery began exhibiting signs of stalling.

He was the only banker among the Group of Seven nations who had moved to raise rates since the recession.

OTTAWA : Bank of Canada governor Mark Carney likely has the easiest decision Tuesday since becoming the country's central banker, do no harm.

With economic and job growth stalled, and the loonie partying like it's 2007, Carney seriously risks undermining the recovery with yet another interest rate hike if he decides to boost borrowing costs at the central bank's next rate meeting.

There are already a growing number of critics who wonder if it was wise to hike the policy rate three times during the summer months to one per cent, which while super-low is still one per cent higher than the U.S. Federal Reserve setting.

A survey of economists last week found over 90 per cent agreeing that Carney has nothing but explaining to do on Tuesday, particularly explaining why despite numerous downward revisions, economic lreality keeps proving to be even worse.

But while Tuesday's decision is a no-brainer, the times become much more interesting for Carney after that, say analysts.

``There's a very active debate about when the bank should start raising again that ranges from as early as January next year to sometime in 2012,'' says Douglas Porter, deputy chief economist with BMO Capital Markets. ``That's a wide range.''

Those arguing for a January increase cite Canada's surprisingly sticky inflation rate, which rose to 2.4 per cent in October. Even underlying core inflation, at 1.8 per cent, is elevated in an economy two years removed from returning to full capacity.

The doves say one per cent is the appropriate number, reflecting stronger conditions than in the U.S., while remaining mildly stimulative.

The range of policy options may be even wider, however. Capital Economics analyst David Madani says Carney should not rule out reversing course altogether, and cut the policy rate if conditions don't improve.

There is clear evidence that the loonie, which is directly affected by the difference between U.S. and Canadian interest rates, is exerting serious damage, he says.

Despite the sharp downturn in Canada's economic growth to a meagre one per cent in the third quarter, the weakness has not translated into a softer currency as normally would be expected.

Instead, the loonie was again threatening to push through parity with the U.S. greenback Friday, as it has for much of the year.

Analysts, such as David Rosenberg of Gluskin Sheff , believe the loonie is at least five cents too rich for the fundamentals, and although many factors are at play, the interest rate differential with the U.S. is one of them.

A strong domestic currency encourages imports and discourages exports, the opposite of what countries want to achieve, and the evidence is mounting that is precisely what is happening in Canada, says Madani.

Last week's reported quarterly record $17.5 billion current account deficit, including the deteriorating trade balance with the United States, was one wake-up call.

So was Friday morning's November jobs data that saw another 29,000 jobs vanish in manufacturing, an industry that depends heavily on exports of cars, parts, lumber and machinery to the U.S.

``What's happening in net trade has got to get the Bank of Canada a little nervous,'' says Madani. ``They have to wonder if the summer rate increases were a mistake.''

Few, including Madani, expect Carney to reverse course, unless the floor gives way on the economy.

For one thing, says Porter, central bankers are human and hence reluctant to admit mistakes.

And it is far from certain the three small rate increases in recent months have had any appreciable impact on the economy, except the desirable outcome of reminding would-be home buyers that interest rates will someday rise and they should take care they can afford to take on additional debt.

Other factors, particularly the flight of money out of U.S. and Europe to relatively safe Canada, as well as firm commodity prices, are more important to the loonie's trading value than interest rates.

Lastly, although the bank's policy rate hikes has increased the short-term cost of borrowing, five years mortgages are just as low in Canada today as they were before the bank actions.

The most important factor, however, says Scotiabank's Derek Holt, is that a policy reversal may actually do more harm than good.

``The shock that would have in terms of consumer and business confidence would arguably be greater than any gain to household borrowing from a 50-basis point cut,'' Holt explained.

Porter says the economy is not there yet, in terms of needing another boost of monetary stimulus.

Economic and jobs growth is sluggish, but it is still on the positive side of the ledger, he points out. And the prospects in the U.S. appear to be improving, judging by the 2.5 per cent advance in the third quarter, and better manufacturing data.

But in this climate of high uncertainty, ``I wouldn't rule it out completely,'' he adds.

LONDON: Its founder is a wanted man, its systems are under attack, it is condemned from the capitals of the world.

But although the future is uncertain for WikiLeaks, the website dedicated to releasing classified information has opened a Pandora's Box of secret-spilling that will be difficult to reverse.

WikiLeaks, which has triggered global governmental alarm by releasing reams of classified U.S. diplomatic cables, is facing attacks in cyberspace and in the legal sphere. The site is assailed by hackers and has been booted from its U.S. server. Frontman Julian Assange is in hiding and faces allegations of sexual misconduct.

``Whatever happens to the domain name and the actual organization, the idea unleashed by WikLeaks is going to continue,'' said Joshua Benton, director of the Nieman Journalism Lab.

Ben Laurie, a data security expert who advised WikiLeaks before it launched in 2006, agreed.

``The concept is not going to die. It's really hard to keep things shut down if they want to stay up,'' he said. ``Look at everything else people would like not to happen online _ phishing, spam, porn. It's all still there.''

Little is known about the day-to-day functioning of WikiLeaks. It has no headquarters, few if any paid staff _ but a famous public face in Assange, a wiry 39-year-old Australian computer hacker with no permanent address.

He's on the cover of newspapers and magazines around the world, but he has not appeared in public for a month.

Assange, who is said to be somewhere in Britain, is the subject of a European arrest warrant issued by authorities in Sweden, where he is accused of rape, sexual molestation and unlawful coercion.

If British police arrest him, he will likely be caught up in a lengthy legal fight against extradition and could be jailed, his ability to operate as the face of WikiLeaks curtailed even further.

Assange denies the Swedish charges, which his British lawyer, Mark Stephens, has said stem from a ``dispute over consensual but unprotected sex.'' He said Assange was happy to speak to Swedish prosecutors and had provided his contact details to authorities there and in Britain.

Assange also has made powerful enemies in the United States, especially since WikiLeaks released thousands of secret logs from the wars in Iraq and Afghanistan earlier this year. With the latest leaks, U.S. politicians have called for him to be prosecuted for espionage _ or worse. Former Republican vice-presidential candidate Sarah Palin asked on Facebook: ``Why was he not pursued with the same urgency we pursue al-Qaida and Taliban leaders?''

Assange acknowledged Friday that ``I have become the lightning rod.''

``In the end, someone must be responsible to the public and only a leadership that is willing to be publicly courageous can genuinely suggest that sources take risks for the greater good,'' he said during a question-and-answer session on the Guardian newspaper's website.

``I get undue attacks on every aspect of my life, but then I also get undue credit as some kind of balancing force.''

It's not just governments and the law with whom Assange conflicts. He is a divisive figure who has been accused of overshadowing WikiLeaks' work and appears to have fallen out with several former colleagues.

They include WikiLeaks' former German spokesman Daniel Schmitt, who has written a soon-to-be-published book about his time at the website.

In September, German magazine Der Spiegel quoted Schmitt as saying that Assange ``reacted to any criticism with the allegation that I was disobedient to him and disloyal to the project.''

Yet those who have worked with Assange say his charisma and passion are evident.

``You kind of get the feeling that you are talking to a persona from the 'Matrix' movies,'' said Icelandic legislator Robert Marshall, who met Assange while preparing legislation that aims to turn the country into a haven of media freedom. ``But his enthusiasm toward freedom of expression and the rights of journalists was very real to me.''

Laurie recalled Assange as ``fairly geeky, very smart, extremely interesting to talk to.''

``I know a lot of geeks and I certainly know weirder people than him,'' Laurie said.

As WikiLeaks released the first few hundred of what it says are a quarter of a million secret diplomatic cables this week, pressure on the site grew.

Amazon.com Inc., which had provided WikiLeaks with use of its servers, evicted it on Wednesday saying the website had violated its terms of service. The site remains on the servers of its Swedish provider, Bahnhof AB.

The next day, WikiLeaks' American domain name system provider withdrew service to the wikileaks.org name after it came under concerted cyber-attack. Service provider everyDNS said the attacks threatened the rest of its network. WikiLeaks responded by moving to a Swiss domain name, wikileaks.ch. On Friday, the French government moved to ban WikiLeaks from servers in that country.

Chased from one country to the next, WikiLeaks also appears perennially cash-strapped, appealing on its website and Twitter for donations to ``keep us strong.''

Recently it seems to have taken steps to put itself on a firmer footing. Last month it set up a private limited company in Iceland as part of a move to restructure its global operations. The organization is also establishing legal entities in Sweden and France, spokesman Kristinn Hrafnsson said, as bases from which to carry out tasks such as opening **>bank<** accounts.

The Icelandic government recently passed a resolution in favour of a bill that aims to turn the tiny country into a journalistic haven by granting high-level protection to investigative journalists and their sources. Backers hope the initiative, partly driven by Assange, will become law next year. Such a law could provide protection to a site like WikiLeaks.

Assange said in Friday's online chat that WikiLeaks had taken steps to make sure it was not silenced, sending the ``Cablegate'' material and other secret documents in encrypted form ``to over 100,000 people.''

``If something happens to us, the key parts will be released automatically,'' he said. ``History will win.''

Whatever happens to Wikileaks, the anti-secrecy cat may be out of the bag. Schmitt, the former WikiLeaks spokesman, has said he wants to set up a rival secret-spilling site, and others may follow.

``I think the basic concept has a future,'' said Steven Aftergood, who works on government secrecy policy for the Federation of American Scientists. ``Anonymous disclosure of restricted records is easier than it has ever been. The virtues of transparency and government accountability are more widely recognized than they have ever been. Those two factors together provide a foundation for this kind of activity.

``Whether it will be Julian Assange's WikiLeaks or the new German spinoff or another initiative remains to be seen,'' he said.

Benton, director of the Nieman Lab, said that means governments will have to develop a response beyond condemnation and legal threats. He compared it to music file-sharing, which was greeted with hostility by a music industry that soon realized it had to develop ways to make money from downloads.

``They can't think, 'This is an opponent we need to defeat,''' he said. ``They have to think about how they are going to deal with it.''

OTTAWA: Canada's largest bank is predicting a period of stability in the housing market next year as rising mortgage rates are offset by improvements in the job market and household income.

``We don't see any kind of imbalances out there that need to be corrected or rectified over the next year or so, so we think that probably will translate into modest everything,'' RBC senior economist Robert Hogue said.

``Given the roller-coaster we have been on over the last two years, a little bit of stability is probably going to be welcome,'' Hogue said.

He explained that in the near term there may be some downward pressure on prices, but that will stabilize and house price will begin moving up again, albeit modestly, next year.

Canadian fixed-rate mortgages spiked upward in the spring, but have since seen a steady decline, helping increase affordability for homebuyers this year. Even the Bank of Canada, which raised its key rate and with it variable rate mortgages and lines of credit, has put additional rate hikes on hold for now.

But rates _ both variable and fixed _ are expected to resume their march higher next year from near-record lows. That would increase the cost of borrowing money to buy, renovate or furnish a home.

However, Hogue said there are still some unknowns for the economy, including uncertainty about the economic recovery in the United States.

``If it turns out the U.S. economy is weaker than we expect then maybe the kinds of increases in interest rates that we're expecting could be delayed even more,'' he said.

Jason Scott, regional manager for Urban Mortgage Edmonton, said the number of listings for homes for sale is up, but the economy remains strong in Alberta.

``The market has slowed in terms of sales, there are a tonne of listings, but you try to get into a restaurant in Edmonton on a weekday night and you're waiting in line,'' Scott said.

He is recommending his clients go for a variable rate mortgage because, even though the Bank of Canada is expected to rate rates, the spread between a variable-rate and fixed-rate mortgage remains significant.

``If clients can make payments based on a five-year fixed rate, but take the variable rate, they come out ahead,'' he said.

In the third quarter, the Royal Bank said the cost of home ownership was lower, thanks to lower mortgage rates and softer house prices since earlier in the year.

The bank's affordability measure shows how much pre-tax income is required to pay a mortgage, property taxes and utilities for the home.

The bank said all the provinces saw improvements in housing affordability during the quarter, especially British Columbia.

The report suggested that housing affordability improved at the national level by between 1.4 and 2.5 percentage points from the second quarter, depending on the type of property, but remained above the long-term average.

However, the cost of home ownership in British Columbia remained high following increases that began in the first quarter of 2009.

A detached bungalow in B.C. ate up 59 per cent of pre-tax income, while two-storey homes ate up 67.5 per cent of income and condos required 32.9 per cent of pre-tax income, all above the national average.

LETHBRIDGE, Alta.: Police have accused a 43-year-old woman in southern Alberta of defrauding several people out of more than $2.8 million.

Lethbridge police say the charges resulted from a three-year investigation into local mortgage frauds.

The investigation culminated with a search warrant at a home in Lethbridge.

Adina Harms is charged with eight counts of fraud over $5,000, eight counts of using a forged document and one count of possession of stolen property over $5,000.

Harms is currently in custody and a court date has not yet been set.

Police say they are not releasing any further details.