Moral hazard

Using a bunch of local firefighters as props behind him, F stood outside a firehall near Ottawa and tried to quell the global angst this pathetic blog had created. “I would like to see the (housing) market correct itself,” the elfin deity said. Regarding calls by the banks to murder the 30-year mortgage, and by academics to dump the 5% down payment, the finance minister said this was ‘a bit much,’ since banks are the ones who determine risk.

“We have bank executives in Canada saying ’You know, really the rules on insured mortgages should be tightened up’. They must forget that they are actually the ones that issue the mortgages — it’s their market, it’s not my market.”

Ah, if only that were true.

By every measure, Canada’s exceeded the orgiastic housing excess that preceded the American real estate implosion, including the government’s key role in making shelter unaffordable for the average family.

A greater proportion of our economy’s now dependent on building, selling and financing real estate than was ever the case in the US…

And look at this. The amount of exposure Canadians have to houses has exploded…

…at the same time they actually have less equity than they did a decade ago.

This is what a bubble does. It drives prices up. It makes everyone horny for a house. People get into ridiculous bidding wars, pay too much and take on piles of debt. In fact, debt rises faster than equity when most people are using extreme leverage – which is now the norm. Thanks to the federal government. And as equity declines relative to valuations, homeowners become far more exposed to personal disaster if prices take a dive in a real estate correction.

This is where we are today. And undeniably, F made it so. Not only for the idiocy of bringing in 0%-down, 40-year amortizations just as the American housing market was crashing, or goosing housing by doubling the amount virgins can suck out of an RSP for a down payment, or creating a new tax credit to help pay closing costs, but mostly for birthing the greatest moral hazard in Canadian financial history, via CMHC.

When the GFC struck, you might recall that F moved quickly to have Ottawa buy $75 billion in toxic, high-ratio, virginal mortgages from the banks, transferring that swill from their balance sheets to yours. Shortly thereafter, F allowed CMHC to double its ceiling for insuring mortgages, to a stunning $600 billion (equal to the national debt). That money’s largely gone.

What did these moves mean?

Simply that the risk for making dumbass mortgages – loaning money to people who didn’t have any, so they could buy houses at the most inflated prices ever – would no longer rest with those who profit from doing so. Yes, the banks. This, as Dan Simon of Euro Pacific Canada rightly states, defines moral hazard. When “those who are creating risks to earn profits are not the ones who bear the consequences for those risks.”

In allowing this to happen, F is moving us down precisely the same path that creamed America. Only faster. The collapse of Fannie and Freddie cost Washington $1 trillion, gutted the middle class and eviscerated the economy. Yet those quasi-government agencies guaranteed only 25% of US mortgages. CMHC guarantees 90% of ours. Fannie disintegrated because it had barely a dollar to cover every $50 in mortgage guarantees. CMHC has only a buck to cover twice that – $100.

“If the Canadian housing market ever took a dive,” says Simon, “the CMHC would be bankrupt in the blink of an eye.” And how many tens, or hundreds of billions, would it cost the nation to prevent a full-on real estate meltdown?

Like it or not, the little pecker’s intimately thrust into the housing market. It was robust but balanced when he started stimulating it in 2007, and today’s evolved into an unstable, wobbly, speculative, emotional, unsustainable and unaffordable danger. He, not the banks, created the moral hazard. Now he has a moral responsibility to act.

Shall we bet?

 .

261 comments ↓

#1 Randy on 03.22.12 at 7:16 pm

I wouldn’t miss the CMHC…..Bubble Maker

#2 Cory on 03.22.12 at 7:17 pm

What a bunch of cowards. Stupid, utterly stupid and complete bullshit!!! Hopefully the regulator shows some smarts for once otherwise it only drags on and the landing gets worse.

Easy money when taxpayers support stupidity while you reap the profits.

#3 Alberta Ed on 03.22.12 at 7:17 pm

I’ll bet the F-man will continue to deny any responsibility whatsoever for the housing debacle.

#4 TurnerNation on 03.22.12 at 7:18 pm

First?

#5 Onemorething on 03.22.12 at 7:22 pm

Here’s a bloggers comment I read today. It is in line with my constant belief in the future of US RE contractictory to Garth’s view on buy US RE.

“I actually think you are understating the problem in the US.

Statistically, the big local or national housing bubbles have taken 6-8 years to hit bottom and we are only entering year 6. We may be near the bottom, but we aren’t quite there yet. I’m not one for market timing, so I would not discourage some souls with the time and money to look at buying but when I say people with money, I mean people with cash not creditworthiness.

Having said all that, I would probably still caution that group to think a little more. I would venture to say that nearly all US economic statistics since WWII have been tainted by a demographic bias that is almost always ignored – baby boomers (more aptly named the “ME” generation in the 70′s). To make a long post short, we may be near the “bottom” in housing, except that we are just beginning the retirement sell-off of houses which may mean we will be bouncing along the housing bottom for another 12-15 years until the number of living baby boomers no longer skews the statistics. If you consider a 67-year old’s house to be shadow inventory of 2017 (will they want to sell and move to a retirement community at age 72? will they die?), supply is probably still increasing for the next decade.”

#6 Chris L. on 03.22.12 at 7:22 pm

Could he really be cataloged as the guy who not only created the bubble, but also popped it too? Not on his watch! The guy invented 40 year ams, down to 35, 30 and then back to 25? That would tie him directly to the boom and bust. All his fault…nah, it’s the fault of greedy bankers! Of course…not greedy politicians.

#7 Buyright on 03.22.12 at 7:24 pm

This says it all

http://www.theglobeandmail.com/report-on-business/economy/housing/skyrocketing-house-prices-bound-to-come-down-bmo-head-says/article2375914/

#8 Smoking Man on 03.22.12 at 7:29 pm

Garth said

I would like to see the (housing) market correct itself,” the elfin deity said.

You’re trying kill me Garth. Have not laught so hard coughing up and choking on mukiss.

bahahahahahahha halarious

#9 Not Buying It on 03.22.12 at 7:29 pm

Idiots, the lot of them.

This will be known as the largest failed attempt at mass socialization of housing. Owning something is not a right, it is a privilege.

This is the biggest transfer of income from the middle class on up that we will see in our lifetimes.

Even if I could afford to buy a home (not saying I can’t), I wouldn’t, because why should someone else reap the benefits of my hard work and sacrifice? As well, why would I burden myself with so much debt and be the greater fool?

#10 pathcontrolmonk on 03.22.12 at 7:31 pm

100 units / hour!!!! That is 1.6 units / minute!!! Unadulterated awesomeness in the “Best Place on Earth”.

#11 Devore on 03.22.12 at 7:34 pm

Ah, moral hazard. It operates by subsidizing risk. A subsidy lowers the price (also increases the COST, but that’s another topic). And as any economics student will tell you, when you lower the price of something, more of it will be demanded. Supply. Demand. What does it mean when more risk is demanded? Well, people take more risks. Except now their consequences, instead of comprising a small portion relative to the population, are widespread, and borne by everyone, instead of having the losses largely localized to the risk-taking parties.

As for the Rennie advert… err, Global news piece. Classic. Location location location? No no, transportation transportation transportation. It’s a new paradigm! It’s different this time! Hallelujah!

#12 Ballingsford on 03.22.12 at 7:38 pm

Looks like we don’t have to worry about a housing bubble in the upcoming budget.

One highlight from the following link is below:
http://www.theglobeandmail.com/news/politics/ottawa-notebook/expect-modest-cuts-no-housing-market-moves-in-budget-flaherty/article2377866/

************************
On the issue of Canada’s housing market, Mr. Flaherty made comments Thursday that suggest he is not preparing new measures in the budget to cool prices.

Mr. Flaherty said he would like to see if the market will “correct itself,” and noted that there are some signs that this is currently taking place.

Some Canadian banks are calling on Ottawa to intervene – either by lowering the maximum amortization period for insured mortgages or by raising the minimum required down payment.

Mr. Flaherty said he finds those suggestions “a bit much” given that the banks ultimately decide whether to approve a mortgage.
*******************

Isn’t having CMHC guaranteeing these mortgages that takes out the risk to approve these mortgages!?!?!?!?

#13 Canadian Watchdog on 03.22.12 at 7:55 pm

Canada should establish a new exchange for developers. CHFEX – Canadian Housing Futures Exchange. You can buy options, go short, go long, butterfly spreads, ect. Perfect for speculators with lots of leverage.

#14 Jon on 03.22.12 at 7:57 pm

Go watch to the video of Bernanke in 2007 saying there is no housing bubble in the US and nothing to worry about. It still gives me chills.

#15 These pretzels are making me thirsty on 03.22.12 at 7:58 pm

Does that mean that at least some of what you said in your post yesterday is not going to happen? Did I waste my time reading it

That post was about OSFI proposals. This is about CHMC. Too many letters for you? — Garth

#16 Timbo on 03.22.12 at 7:59 pm

http://www.housepricecrash.co.uk/forum/index.php?showtopic=164708

interesting link to the housing bubble in the UK. Comments are eye-opening.

The higher-end London property market descended into chaos this week following the budget. — Garth

#17 John on 03.22.12 at 8:06 pm

Yes, it’s true. There is a moral responsibility to act. For this to be the case, there must be representational democracy. When a society is used as a consumption monster, such concepts are of little relevance.

Representation by government requires people to be involved in the actual power structure. This stopped decades ago. In the Trudeau years there was some sense of this, real or not. It’s long long gone now.

Nature will not accept a vacuum, and neither will power. The Central Bank of Canada’s most recent appointment is a silent coup. It’s all done now.

Social media is quite effective at getting a message out…such as this blog. But there are too many messages. A person ( the average Canadian) who has given up personal responsibility at all levels right now is much like a 200 car freight train fully stopped. The engines to move that train? Why? The reasons for hooking on to a train like that are done. What can these people offer? Continued debt slavery is nice…but that means the train won’t be moving anytime soon.

F is not a decision-maker, and morality only belongs to those who act out of choice. That’s what power is.

The power has been given away. Taking it back? As far as moral responsibility goes, there might be something there. Not sure how that one works.

#18 Joe on 03.22.12 at 8:10 pm

Don’t bet against Vancouver… It’s just not going down as you’d want.

I have never wished a decline on anyone or any place. But the Van market is unsustainable. — Garth

#19 Party on Garth on 03.22.12 at 8:13 pm

We know you have an axe to grind with F Garth, but let’s not get too carried away with blaming the big bad con government.

There is a component of personal restraint and responsibility here on the part of the reckless fools (Canadian public) who have bought these houses. Also the greed of the banks, builders, developers, realtwhores, and yes, foreigners.

Only the federal government is responsible for CMHC, which was the subject of this post. Mind your prejudices. — Garth

#20 These pretzels are making me thirsty on 03.22.12 at 8:19 pm

Does that mean that at least some of what you said in your post yesterday is not going to happen? Did I waste my time reading it

That post was about OSFI proposals. This is about CHMC. Too many letters for you? — Garth
——————————————–

Not to disrespect you or anything, but if the end results of all your efforts and opinions (which I agree with and is obvious to a rational mind) is status quo as proposed by F, then I do not think that you are succeeding.

In the end, people deserve what they get or who they elect

The OSFI proposals have nothing to do with what F spoke of today, nor with amortizations. They are vastly more impactful. It’s a mystery to me how this is overlooked, after being spelled out. Maybe I just just revert to babes, bikes and balanced portfolios. — Garth

#21 Keith in Calgary on 03.22.12 at 8:19 pm

Funny……I posted that Flaherty didn’t have the balls to do anything about this, two threads back. The groundwork for laying the blame has begun, as both parties know we’re doomed and there is no turning back.

The banks and regulators are saying the government must do something so they can be let off the hook, whereas the government is saying it’s the banks that made the calls, so they can’t have the blame laid at their feet…..

#22 Chaddywack on 03.22.12 at 8:19 pm

How does Global get away with putting a 4 min Rennie Ad in the middle of a new$cast?

#23 TaxHaven on 03.22.12 at 8:26 pm

“…for birthing the greatest moral hazard in Canadian financial history, via CMHC.”

It’s a truism that, if you want more of something, subsidize it; if you want less of it, tax it. They wanted higher house prices, so they’ve backstopped them.

But not many readers may realize that it doesn’t stop there.

If you want expensive (and uncompetitive) labour, set artificial minimum wages, driving wages UP for the few and killing off jobs for cheaper-priced labour…

If you want savers to pile into risky institutions and high-risk assets, subsidize bank accounts via CDIC “insurance”…

If you want more expensive health care, create a mandatory insurance scheme (with “safety nets” for the hundreds of thousands of us who are now “low income”) that pays out whatever costs may be…

If more debt is good, penalize capital accumulation and reward borrowing with fake, artificial interest rates. You’ll get more indebtedness.

If you want expensive post-secondary education, subsidize student loans. You’ll get higher prices, and more debt too…

If you want more unemployment, subsidize it! You’ll get more “workers” going onto UIC – or welfare – and fewer of them paying into it…

If you want more WEALTH, print more “money”…you’ll feel nominally richer.

And, of course, if you want higher house prices, subsidize home “ownership” and cheapen money.

This whole unproductive Potemkin Canadian gasbag of an economy is thoroughly socialist and thoroughly monkeyed with. Not just housing. Makes me wonder just how many “jobs” are REAL and how many will fold up and blow away when any of these subsidies are removed.

Even a hint austerity would deflate Canada FAST. Which is why interest rates will never be allowed to rise, much less be decided by investors.

Liberals, Conservatives, NDP…there’s not a shred of difference between them: all are deathly afraid of THE MARKET.

It won’t end well.

#24 Van guy on 03.22.12 at 8:28 pm

Rennin knows there a bubble. He doesn’t care. He’s 55 years old. He’s made his money. When the bubble pops, he retires. It’s that simple for him. He’s only marketing the condos, the developers are selling them. Tennis is smart and he will be laughing all the way while developers and owners get screwed.

#25 Party on Garth on 03.22.12 at 8:33 pm

Only the federal government is responsible for CMHC, which was the subject of this post. Mind your prejudices. — Garth

Ok, I get that and agree. I have no political bias or affiliation. Just getting a bit cranky with everyone looking to pin blame for their own irresponsible actions on the government. I guess I misinterpreted your entry a bit.

Whatever F comes up with, it had better not involve the fiscally disciplined who prudently lived within their means and saved, bailing out the herd who spent themselves silly on cheap debt.

No one ever forced me to buy a property, but several have certainly spoken condescendingly to me since I decided to sell my house one year ago and rent.

#26 Dave on 03.22.12 at 8:33 pm

Elfin deity. Hahahaha! The funniest thing I’ve read in a while, keep it up Garth!

#27 Observer on 03.22.12 at 8:33 pm

Spot on, Garth. Spot on.

#28 AprilNewwest on 03.22.12 at 8:38 pm

Global about to pump, “Demand chasing away Canadian buyers”. We know what that’s going to be about and who the source probably is……….

#29 Sebee on 03.22.12 at 8:43 pm

Garth, I really really wanted you to be right.
But deep inside I knew you would be wrong about F.

F ain’t gonna do F all about this until it’s way too late. It’s the new M.O. Do nothing, and see what happens. You think they get into government because they are capable forward thinking visionaries? If they were they would be rolling in it in the private sector. And they certainly aren’t morally balanced.

#30 GregW, Oakville on 03.22.12 at 8:45 pm

Hi Garth, I watched some of F’s talk at the fire station.
I didn’t see one smile on the guys standing behind him.
His hair seemed to be fluffed up too. Maybe hiding horns or halo?

#3 Alberta, seems to have it right with his speculation,
“I’ll bet the F-man will continue to deny any responsibility whatsoever for the housing debacle.”
And I’d bet he’ll tell us all that with a straight face too.

I wonder if F will be taking any question at this on the 30th? Maybe someone out there has something they want to say to him in person?
http://canadianclub.org/Events/EventDetails.aspx?id=3186

#31 Across the Pond on 03.22.12 at 8:46 pm

Loved the news report. The painful exchange about how can they sell them that quick at the end of the clip was just hilarious. I’d much rather listen to a joyful quip like that, or Rennie talking about ‘Transportation, Transportation, Transportation’ instead of an analysis of some of the clauses in the developer friendly contract the lucky buyers were accepting.

With each pre-sale like this, it really does intrigue me what their feelings are going to be by time they eventually have a home to move in to.

#32 Sebee on 03.22.12 at 8:46 pm

Also, do you really think OSFI will bite as hard as they bark?

Regulators seldom bluff. — Garth

#33 JO on 03.22.12 at 8:47 pm

The role of CMHC is to in fact inflate housing costs as much as possible. It is one mechanism of financialization used by the prominent theory of economic management in force today – neo liberal (aka Junk Economics) to run the debt based quasi Ponzi scheme where subsidized debt is taken on by most people and helps to create the much coveted inflation your gov’t and their bank/RE execs want.

The rate of debt growth has far exceeded GDP – GDP that itself is inflated because of the artificial aggregate demand created by the sea of subsidized debt. This debt as income policy effectively acts as a massive tax and wealth transfer from the “middle” and poor classes to the RE/bank execs and related industries as well as you gov’t. The more debt issued the bigger their bonuses and the greater the increase in our costs of living as rents and mortgages get so large as to trap most people into an eventual lower standard of living.

Make no mistake, this system is not able to create sustainable wealth – it is designed to transfer it very methodically to the top 20-30 % of the 1 % and the public sector who is heavily influenced by the same people. Gov’t and the FIRE sector have interests that are aligned – that is to generate as much inflation as possible. Gov’t gains as massive debt issuance temporarily inflate their tax revenues as the debt is spent and creates a fake boom. It also inflates housing prices so that your property taxes rise far above incomes over time, etc.

We can face a world over the next 15-20 yrs where our real standard of living is falling gradually despite our houses being worth 1M and the dow at 25-30K. That is, gains will be mostly in nominal terms, barring of course an economic miracle that generates sustainable and healthy GDP growth generated from innovation and productivity gains, not debt driven housing speculation as has been the case.

Down with Junk Economics
JO

#34 Can it be? on 03.22.12 at 8:47 pm

Is anyone surprised… ??? Remax posts their marketing in the form of an article… Public relations at its best…might keep the market humming longer but will inevitably make the crash bigger… At what point will people realize that just because you an afford your monthly payment right now, doesn’t mean it wot change. Also… When are they ever going to pay their loans off??? Everyone speaks as of half a million or a million dollars is nothing…. How long do you have to work and put your after tax dollars after expenses towards the mortgage for the rest of your life. People will soon realize they are worse off then renters. Never paying off their property,money pit of a house type of expenses… And next to no equity for the long run… And for others negative equity… Madness I tell you. Crazy world.

#35 harden on 03.22.12 at 8:50 pm

That infomercial brought to you by Global News… and what a nice touch by the excitable reporter to slight the tiny vendors who ‘chose’ to move during construction of the Canada Line, construction which effectively shut down their business (did they have a choice?), thereby missing out on this endless gold rush. All just “suckers” i guess. But hey, as support for the arts slowly dries up in this city, playhouses/theatres close, one can see firsthand ‘growth’ is defined a little bit differently here in Vancouver.

#36 Can it be? on 03.22.12 at 8:51 pm

Garth, keep up the good work. Obviously our PR machine is not as powerful as Remax… But you get your message out Regrdless. You do it in an easy to understand and creative way. I hope the last laugh is yours… I hate watching this real estate madness… But I have faith that things will return to normalcy some day. :) I look forward to these posts every night when I put the kids to sleep… And it’s addictive during the day too :)

#37 Deepak Rai on 03.22.12 at 8:51 pm

Garth,I have been reading the blog since more than 2 years now.Even thought the correction is imminent.I sometimes cannot comprehend that you fail to imagine a huge under belly of corrupt mortgage brokers conducting their businees openly.

Walk in to any top 5 banks tomorrow and ask to speak to a Mobile Mortgage Specialist.You will be surprised to see how much of a corrupt system we run.

#38 zeeman on 03.22.12 at 8:57 pm

hi

i just dont understand F’s logic in not doing anything to the mortgage rules….when he says it is slowing down…where is he talking about Fling Flong….this is absurd….

#39 NFN_NLN on 03.22.12 at 8:57 pm

“Just getting a bit cranky with everyone looking to pin blame for their own irresponsible actions on the government. I guess I misinterpreted your entry a bit.”

Get ready to get cranky because I blame the government. They could have been hands-off and let market forces do their thing. Instead they take away moral hazard from banks by buying their loans backed by tax payers.

You can’t blame “idiots” with nothing to lose for buying a house with 0-down -> “don’t hate the player, hate the game”… and the government created the game. Of course, I won’t feel sorry for the homeless and broke 30 year-olds later in life.

#40 Van guy on 03.22.12 at 8:58 pm

#23 my post

Stupid iPhone auto correction. It’s Rennie not Tennis.

#41 Rhino on 03.22.12 at 9:00 pm

“he OSFI proposals have nothing to do with what F spoke of today, nor with amortizations.”

F and his associates have direction over the OSFI, no?

I know it is probably supposed to be an arms-length institution but when has that stopped the Harper government in the past?

#42 Sebee on 03.22.12 at 9:02 pm

Sorry about the third post. I think I know what the plan is. Apply the ‘new’ 25 year rule once the crash happens. That’s way it will look like they’re being proactive when someone will have to appear to do something in light of the U.S. like chaos.

#43 Jsan on 03.22.12 at 9:03 pm

The fact that Flaherty created the Canadian housing bubble at the exact time that the US housing bubble was imploding makes me wonder if this guy has ulterior motives.

This is a quote from the former Assistant Secretary of Housing under George Bush Senior Catherine Austin Fitts regarding the US housing bubble.

“Alan Greenspan is a liar. The Federal Reserve and its long standing partner, the US Treasury, engineered the housing bubble, including the fraudulent inducement of America as part of a financial coup d’etat. Our bankruptcy was not an accident. It was engineered at the highest levels.”

Nobody can tell me that Flaherty also did not purposely create our housing bubble. It was planned and he new full well what the outcome would be, I am convinced of this.

“They Did It On Purpose: The Housing Bubble & Its Crash were Engineered by the US Government, the Fed & Wall Street”

http://www.globalresearch.ca/index.php?context=va&aid=10654

.

#44 househornyhousewife on 03.22.12 at 9:05 pm

Garth,

I agree with your concerns about the CMHC and I also agree that it was extremely irresponsible of the government to trade short term gain (ie. a growing economy based on rising real estate sales) with risky debt.

However, aren’t people here more on the hook for their housing debt than our US brethren were during their crash ? This would mean that the CMHC may not be in as much risk as those subprime mortgages in the US were (although granted they, or should I say WE, are in deep doo doo for sure). Perhaps people will be held more accountable for their debt here than in the US due to our bankruptcy laws … no ?

I certainly hope so because those who signed on the dotted line have a responsibility to uphold their end of the contract if they possibly can. I have a feeling that in the US it was too easy to declare bankruptcy and walk away from their home and this made the collapse even bigger. Perhaps on that score we are a bit different … at least I hope so.

HHHW

#45 garth turner dinglehimersmit on 03.22.12 at 9:06 pm

oh this is wishfull thinking

#46 From Mississauga with Love on 03.22.12 at 9:07 pm

Garth,
Can you explain why changing CMHC parameters and changing the amortization period has to happen at the beginning of the new budget? How is that related to government spending or taxation? Why can’t he change things at any other time?

Because politicians believe people have the attention span of gnats. — Garth

#47 noodles 79 on 03.22.12 at 9:10 pm

The ‘I told you so’s’ are starting.It s about time the truth starts hitting the fan.I could feel the breeze, and its comforting.The smell of greed and obscene need is being replaced by common sense.
Thanks for venting and giving the average joeblow a chance to do the same.

#48 bsallergy on 03.22.12 at 9:10 pm

Beware of selfservatives in search of a strong, stable, majority, selfservative goverment bearing gifts.

#49 Ham-and-PEAS on 03.22.12 at 9:11 pm

Canadian Dollar vs Gold?

Which one will be safer.

F & C will not stop the bubble they will pull a greenspan and continue inflating the bubble until it pops and creates a Crater.

Cmon Garth you used to be a politian, you know the game. At the end of the day, this bubble will stop when we try to sell our treasuries and no one buy them.

Then you will see the bubble pop just like the 80′s except it would be 10 times worst, because at least people had savings back then. As for the canadian dollars, what will happen, will F&C print like hell devaluing the dollar , let hyper inflation crush the locals.

I feel it too late we are in way too deep thanks to the harper government. Lets just enjoy the ride down the highway to HELL.

#50 T.O. Bubble Boy on 03.22.12 at 9:22 pm

There are so many things wrong with this, I don’t even know where to start:

1) The obvious lies from Flaherty – saying that he doesn’t control the market, despite CREATING the market with his bubble policies (0/40, loose CMHC approval rules, buying toxic mortgages from banks, home reno tax credit, home buyer RRSP withdrawals, and the list goes on).

2) The absence of any blame for the homebuyers! Flaherty is placing 100% of the blame on the banks, and 0% on clowns who have 500% of their net worth and more betting on this housing ponzi scheme. Why the hell do Carney and Flaherty tell people to avoid debt in every press conference, and then expect the banks to enforce that message vs. the individuals?

3) Saying that the banks approve the loans, when it is actually “emili” the CMHC robo-signer that does.

4) Flaherty has shamelessly promoted the “stable” government and “prudent” banks to no end, hiding the dirty little (now not so little) secret that this whole economical miracle is a scam that is built on an unsustainable debt bubble… if you’re going to build your phony reputation on this mess, you sure as hell better take ownership when the bubble pops.

I still think this is essentially the same as a bartender serving drinks all night, getting the party-goers drunk, letting them all drive home, and blaming the car companies for the crashes.

#51 Thomas on 03.22.12 at 9:23 pm

They should not lock out first time buyers, but limit second mortgages, heloc’s and spec buying. So many houses are gobbled up with cheap money, only to rent them out at ludicrous rates. People think they are savvy real estate investors, but a rising tide lifts all boats. They are riding the wave, and haven’t a clue about net present value, cash flow analysis, ROI, real vs nominal return, etc. I love how they all think they are experts because they got in at the right time.

#52 Peter Pan on 03.22.12 at 9:26 pm

Do you think we’ll ever hear a Canadian politician say the following?

“We have to revisit the way CMHC does business to prevent Canadian taxpayers from being at risk.”

#53 Peter Pan on 03.22.12 at 9:32 pm

A few questions about CMHC…

1. Why is there no upper ceiling to the size of the mortgage CMHC is willing to insure? Even in the US, Fannie Mae and Freddie Mac were prevented from insuring Jumbo mortgages.
2. Does CMHC’s Board composition, including the President of Monarch Development Corporation, interfere with its implicit mandate to protect its shareholder, the Government of Canada, from undue risks?
3. Has any opposition politician ever questioned the inherent conflict of interests of the CMHC Board of Directors? Many of the board members are businesspeople and industry representatives who benefit directly and indirectly by the development and real estate industries.
4. Why are “cash-backs” allowed on CMHC insured mortgages? The effective “downpayment” is non-existent for these homeowners.

#54 Miko on 03.22.12 at 9:37 pm

Do you think Flaherty reads your blog?

i hope so, and the comments

Count on it. — Garth

#55 Grooby. on 03.22.12 at 9:39 pm

“Privatize profits, socialize losses”. Right out of the modern regressive conservative playbook.

Ranks up there with ‘Starve the Beast’, which is what will happen to Canadian social programs when we’re on the hook for bailing out CMHC.

btw, where’s Aussie Roy? I need my Aussie link fix!

#56 Hicksville Alberta on 03.22.12 at 9:41 pm

With the FIRE economy at 27% and Governments at all levels at 50% or more in this country (at least according to my taxes) we certainly ain’t elfed, more than likely we are effed (and that is in spades).

I have literally stopped spending and also have even cut charitable giving by at least 75% as that too has now become big business.

#57 Tim on 03.22.12 at 9:42 pm

Good post, calling it like it is. Too bad no one in Govt has the integrity to raise this issue. Flaherty is just like the other Conservatives- pissing away taxpayers money with stupid policies. Harper managed to squander the surplus the Liberals left him with, he substantially increased the deficit, and now he’s making massive cuts to the Govt, which will cost us taxpayers plenty, due to severances. Harper also wants to raise the qualifying age to OAS from 65 to 67, even though an analysis by the Parliamentary Budget Officer revealed that OAS is an affordable program. He also wants to gut the CBC and is moving on this by underfunding it and forcing it to compete for advertising by showing popular US programs.
I find it hilarious that, by all measures, housing has peaked, prices are in bubble territory, yet Flaherty says that he will act if he sees that it is a problem. lol. What will it take for it to make him “see that it is a problem?” I guess anyone working for Harper just has to toe the line and not think…

#58 Peter Green on 03.22.12 at 9:46 pm

F’s final, desperate ploy: Leave mortgage rules unchanged, let sheep sell to each other, and hope for a soft landing.

Sheer genius.

NOT.

#59 Tim on 03.22.12 at 9:51 pm

Re sellout of south Van condo development:
South central Van is a shithole. I wouldn’t walk around there at night. Condos are near commercial spaces, warehouses, and low income housing. You couldn’t pay me to live there

#60 The guy in the Orange Shorts on 03.22.12 at 9:51 pm

Y’know..maybe its just me, but I am getting this feeling Garth s not on F’s Xmas or Hannukah card List.

#61 Ron on 03.22.12 at 9:55 pm

I´m probably way of track here, but if the Feds are so opposed to foreign ownership of CAN companies, why the hell would they allow foreigners to speculate our realestate to a point where Canadians cant even afford a home in their own country?

#62 Jsan on 03.22.12 at 9:57 pm

Watch the following video of the US Federal Reserve Chairman Ben Bernanke, the man who is supposed to have the greatest grasp and understanding of the US economy. Listen to what he said during an interview back in 2005 just before the US housing market collapsed and than compare it to what Flaherty has been saying about our own housing bubble, especially at the 1:40 mark.

http://youtu.be/44C8dTcPSjI

#63 T.O. Bubble Boy on 03.22.12 at 9:58 pm

oh ya — and good to see that the Big Banks’ covered bonds (made up of packages of CMHC-insured mortgages) are still getting the AAA rating:

http://www.marketwatch.com/story/fitch-assigns-bank-of-nova-scotias-covered-bonds-an-aaa-rating-2012-03-22

Coming soon to a Money Market fund near you!

#64 Narrowgate on 03.22.12 at 10:01 pm

The pure greed out there in the G.T.A. housing market is just revolting.

#65 X on 03.22.12 at 10:04 pm

Didn’t Greenspan feel that the banks and lenders would be able to regulate themselves in regards to lending standards. Yeah that worked well.

http://tpmcafe.talkingpointsmemo.com/2010/04/06/greenspan_summers_and_why_the_economy_is_so_out_of/

#66 thinker on 03.22.12 at 10:11 pm

Garth, the CMHC was always around in Canada. It’s not new, so I would not get excited about or actually call it the enabler. Job losses or increase rates, that is the only way this sucker is going down.

In your first graph, the US Canada spread was huge in the 89-90. The market simply went stale and GDP spending from FIRE stayed approx the same. History will repeat itself Canadian style.

#67 truth hammer on 03.22.12 at 10:11 pm

You’re right to ficus the blame squarely on those directly responsible…for F to say…it’s not my fault….is balderdash…..he could have reformed the Liberals ZIRP as soon as he came into office….but that wouldn’t be to good for the pandering of votes would it? What did the Cons do…..they stepped up and made things even worse when they saw the gusher of unearned money pouring into the coffers for more pandering…..addicted to graft is our government.

Every idiot has watched as debt has spiralled out of control……three entire generations have been led off the cliff…………….the banks were certainly complicit….but they can only do what the government lets them do……and in the case of the real estate bubble they are all guilty of flaunting established law despite complaints from the fringe nutz like myself…..and Garth…..and millions of blog dawgzzzz.

what the hell were they thinking? and now he uses firemen as a backdrop because he thinks the image of these heroes will vicariously calm us? why doesn’t he go to Afghanistan and take up arms against the Taliban…..we’d crown him king if that was the logical extension of this non sensical parody.

speaking of bad actors…..look who we’ve invited to dinner

http://news.nationalpost.com/2012/03/22/photos-the-innocent-victims-of-chinas-massive-building-boom/

#68 Bogdan on 03.22.12 at 10:17 pm

Garth, I think F has something with you… he’s probably reading your blog and acting against your predictions. You became like a contrarian indicator now. First he went against you in ’06, then ’09, now… what’s next, 2015?

#69 Duckworth on 03.22.12 at 10:18 pm

It is obvious that many people do not believe RE gloom and doom news.
My dad (retired developer) told me today of another 12 building lots in Cloverdale area which were snapped up in days at over 350K each. They are not very big and will not be ready for about a year or so. He was working out the numbers and cant imagine how ridiculous prices have gotten. He was in the business for many years and has friends still working and they tell him that there is still a huge demand for building lots in the lower mainland. Apparently many believe that there will always be a limited supply of SFH???

#70 Sotiri on 03.22.12 at 10:18 pm

Garth don’t you see some interesting similarities between the USA and Canada.

1. Fannie Mae and Freddie Mac south of the border – CMHC in Canada

2 – “… former Federal Reserve Chairman Alan Greenspan trumpeted at the Council of Foreign Relations. The former chairman, who ran the Fed from 1987 to 2006, said government should basically get out of the way and let markets and businesses drive the recovery….We all know what happened in US right after.

3 – “Mr. Flaherty said … the market will “correct itself,” …We should know by now what will happen here very shortly.

I want to ask Mr Flaherty the same question that was asked to Alan Greenspan in the House of Representatives on October 28, 2008,

“You had the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis. You were advised to do so by many others. And now our whole economy is paying its price.
Do you feel that your ideology pushed you to make decisions that you wish you had not made?”

#71 Patz on 03.22.12 at 10:19 pm

And the Pompous A** of the Year Award goes to

(drum roll)

#9 Not Buying It
for saying:
“Owning something is not a right, it is a privilege.”

#72 obert on 03.22.12 at 10:19 pm

Canada’s AAA bond rating will be downgraded soon. Then our government will have somebody else to blame for the crash.

#73 Canadian Watchdog on 03.22.12 at 10:21 pm

The budget is all about protections for covered bond holders Garth, not tightening mortgage rules. If F doesn’t get private capital to fund our banks again, we’ve got serious problems.

Read about it here: PDF http://www.fin.gc.ca/activty/consult/cb-os-eng.pdf

From my understanding, changing legislation on covered bonds would require laws passed in several jurisdictions across Canada. This is a big hurdle for F.

#74 steev on 03.22.12 at 10:22 pm

Taps of easy credit shutting off….CMHC to start rationing mortgage insurance

http://www.theglobeandmail.com/report-on-business/economy/housing/canadas-mortgage-body-moves-to-slow-booming-housing-market/article2378722/

#75 Realistic on 03.22.12 at 10:25 pm

http://www.theglobeandmail.com/report-on-business/economy/housing/canadas-mortgage-body-moves-to-slow-booming-housing-market/article2378722/

#76 YVROptimist on 03.22.12 at 10:26 pm

@#54 (Miko) Flaherty would be a fool to not have someone checking up on this blog on a daily basis, even if there are a lot of superlatives being bandied about in the comments. (and, occasionally, in the posts themselves)

#77 BC Bring Cash on 03.22.12 at 10:27 pm

What the F is F talking about. Like you said Garth F created the mess and now he is saying the Banks have to fix it. He as Minister of Finance is the Regulator. He’s been bragging about our solid banking system due to our regulatory environment all over the world. That was all BS. Now he is washing his hands of the whole deal. The Bay st Bankers must be having a real good laugh. This guy should be put into a rubber room so he can’t hurt himself or anyone else. He is responsible for upcoming misery of hundreds of thousands of families. They were suckered by the cheap easy money. What disaster.

#78 Fool me once... on 03.22.12 at 10:27 pm

Finally. This is one of the biggest issues. When the American banking system (and global banks for that matter) was against the ropes, everyone was singing the praises of the Canadian banks and how safe they were. What they neglected to do was define “safe”. If I were to offer you a million dollars to lend for profit, and whispered in your ear “don’t worry about the risk, I’ll take the risk, you just collect the profits”. What a great, safe business is that? How careful would you scrutinize who you’re lending money to?

#79 Blue Monster Lover of Meats and Vegetables on 03.22.12 at 10:34 pm

#43 Jsan on 03.22.12 at 9:03 pm
I agree Jsan, somethings up with this mess.

Last week the Harvard Nurses study released a report stating that consumption of red meat is shown to shorten lifespan according to their interpretation.

The obesity epidemic is getting out of control and I don’t think it’s by accident. Consumption of sugar (half glucose, half fructose) and HFCS is poison. Fructose is metabolized in the liver the same as alcohol. It’s toxic.

Everyone should check out Gary Taubes website
http://garytaubes.com/
And get a copy of his books Why We Get Fat and Good Calories, Bad Calories especially, it’s amazing what he’s done, it’s a scientific critique of the abysmal quality of research in public health.

On sugar, check out this video from UC
http://www.youtube.com/watch?v=dBnniua6-oM

On May 26, 2009, Robert Lustig gave a lecture called “Sugar: The Bitter Truth,” which was posted on YouTube the following July.

Lustig is a specialist on pediatric hormone disorders and the leading expert in childhood obesity at the University of California, San Francisco, School of Medicine,

The two most important things in human life are health and economics. Our governments have hijacked both and are killing us.

Thank god they don’t feed us directly. Yet.

#80 Katz on 03.22.12 at 10:35 pm

This will be the end of the Conservative party.

#81 Victor on 03.22.12 at 10:35 pm

#14 Jon on 03.22.12 at 7:57 pm

Go watch to the video of Bernanke in 2007 saying there is no housing bubble in the US and nothing to worry about. It still gives me chills.

++++++++++++++++++++++++++++++++++++

It’s about to get even chillier. 5 years later, post-meltdown, Bernanke is still denying.

http://business.financialpost.com/2012/03/22/federal-reserves-policies-didnt-cause-housing-bubble-bernanke/

#82 This just in on 03.22.12 at 10:36 pm

Canada’s mortgage body moves to slow booming housing market

http://www.theglobeandmail.com/report-on-business/economy/housing/canadas-mortgage-body-moves-to-slow-booming-housing-market/article2378722/

#83 Ex-Cowtown on 03.22.12 at 10:41 pm

There’s a bit too much fixation on what happens if F, OSF, or CMHC change the rules. At best, they will be mere icing on the cake.

The long and the short of it is that people are in WAAYYY over their heads debt-wise and broke is broke. Interest rates could be 0% or 15%, amortization could be 10 years or 100 years. It just doesn’t matter.

Piss broke is piss broke and that’s the end of the story.

A good firend of mine and I were discussing the purchase of RE a few days ago and we discussed the issue of payments and the disconnect between the price of something and the payment.

Both of us could pay cash for houses if we wanted to, but the thought of writing a cheque for something so hopelessly over priced made both of us want to puke.

So there you have it. If you have the cash, there’s no way you want to buy; it’s too expensive. If you have to borrow, you don’t care because you have no concept of how much money it actually is, so you have no fear.

Now if you are dealing with HAM, price also means nothing as the $$ are hot and RE is a great way of laundering it. But you aren’t buyin RE for an investment or even a residence, you’re buying it to squirrel money out of the country. No differeent than the tax cheats who dump $$ into the Cayman Islands. It’s all fun and games until the authorities catch up with you.

#84 Victor on 03.22.12 at 10:43 pm

Canada’s mortgage body moves to slow booming housing market

Last updated Thursday, Mar. 22, 2012 10:15PM EDT

Canada Mortgage and Housing Corp. has signalled it will dramatically curtail its growth in the mortgage market in the coming years in an effort to cool Canada’s sizzling housing sector.

Documents released by the Crown corporation this week show CMHC expects to increase mortgage insurance over the next few years at only a fraction of the pace seen recently.

The change comes because the federal government has set $600-billion as the limit for the amount of mortgage insurance CMHC can have outstanding. The move is a sign Ottawa is trying to engineer a soft landing for Canada’s $1.1-trillion housing market by restraining the credit available for homebuyers to rack up mortgage debt.

Finance Minister Jim Flaherty has warned that too many consumers are getting in over their heads. And importantly, the government aims to shift more of the onus for bad mortgages away from taxpayers and back to the banks as tensions rise between Ottawa and Bay Street over mortgage rates.

http://www.theglobeandmail.com/report-on-business/economy/housing/canadas-mortgage-body-moves-to-slow-booming-housing-market/article2378722/

+++++++++++++++++++++++

Someone pass the popcorn.

#85 Don on 03.22.12 at 10:45 pm

#18 Joe on 03.22.12 at 8:10 pm Don’t bet against Vancouver… It’s just not going down as you’d want.

I have never wished a decline on anyone or any place. But the Van market is unsustainable. — Garth
+++++++++++++++++++++++++++++++++

I’ll bet against Vancouver – on my way to the delusional city tomorrow – going home so to speak. When I used to live there I was always amazed how Vancouveritus takes over and even those highly book learned folks cherry pick the facts as well as the past in an effort to make themselves feel better. Remember schooling gives you knowledge and being smart is what you do with that knowledge. Joe google Vancouver housing in the 1980′s. I would even bet against the Canucks at this point and every single realistic resident knows what I am saying. Don’t get me wrong I hope they win, but really don’t care. Vancouver is done..done..Done.

Sooner or later you will run out of stupid, which will bring the show to a halt.

#86 len on 03.22.12 at 10:47 pm

CMHC making moves to drastically curtail growth – just announced
so this is where F is intervening

http://www.theglobeandmail.com/report-on-business/economy/housing/canadas-mortgage-body-moves-to-slow-booming-housing-market/article2378722/

#87 earlymidlifecrisis on 03.22.12 at 10:51 pm

I’m moving to a great rental in cambie village. So, when will we know what if any changes the OSFI will be making? Is there a date set? Do they coordinate with the budget? I’m as interested in what happens with that then the budget, maybe more.

#88 TakingResponsibility on 03.22.12 at 10:57 pm

Hear! Hear!

Excellent and succinct post. Keep the focus on the conservative culprits who socially engineered this fiasco.

People should be up in arms about CMHC bailout(s). I am absolutely PO’d.

#89 Smoking Man on 03.22.12 at 10:58 pm

Sarkozy: says Visiting hate and terror websites will be punished

This blog is full of Real Estate haters and real estate terrorist.

If your from france watch out.

http://www.rt.com/news/merah-sarkozy-terrorism-toulouse-200/

#90 Canadian Watchdog on 03.22.12 at 10:59 pm

Maintenance fee price results for GTA condo sales listed in March at http://tosolds.ca/

Listings (Sold) 831
Median Price $413
Average Price $444

Price Distribution / # of Listings

$100 12
$200 45
$300 126
$400 205
$500 159
$750 248
$1,000 31
$1,500 4
$2,000 0
$2,500 0
$3,000 1

#91 Blue Monster Lover of Meats and Vegetables on 03.22.12 at 11:01 pm

#79 Blue Monster Lover of Meats and Vegetables on 03.22.12 at 10:34 pm

#43 Jsan on 03.22.12 at 9:03 pm
I agree Jsan, somethings up with this mess.

Last week the Harvard Nurses study released a report stating that consumption of red meat is shown to shorten lifespan according to their interpretation.
—–
Sorry, I didn’t finish that thought.

Harvard is a Marxist outfit, hence, controlling and detrimental. Bad economics and bad science.

High prestige idiots.

#92 Uh Oh Canada on 03.22.12 at 11:02 pm

Ah, just spoke with a neighbour about the doubling of our hydro bill- and this was the mildest winter ever. Some folks called Quebec Hydro to complain but what do they care? They have the monopoly.

With hydro/gas/property taxes/food- almost everything going up but our wages, how can anyone afford an expensive mortgage? Yes, the charts say it all. Debt and cheap money.

Yes, this bubble will be of epic porportions and make it’s mark jm history. I’m afraid that the Canadian middle class will be wiped out on this bubble.

#93 Smoking Man on 03.22.12 at 11:03 pm

More proof of Universal Shrinkage,

http://www.liveleak.com/view?i=044_1332354770

#94 kenken on 03.22.12 at 11:09 pm

Canada’s mortgage body moves to slow booming housing market

how will the rationing happen?
what are the likely impact of this?

Garth – maybe you can have a blog on this!!

#95 Lurking Lola on 03.22.12 at 11:09 pm

Garth,

The other day you confused people by citing research that showed which locations were googling “housing bubble”. I was wondering if you tracked the recent uptick in comments on this site? I think it, too, shows a surge in interest in the Canadian housing bubble. I would *love* to see the shape of that graph…..

#96 NotAGreaterFool on 03.22.12 at 11:10 pm

Canada’s mortgage body moves to slow booming housing market

http://www.theglobeandmail.com/report-on-business/economy/housing/canadas-mortgage-body-moves-to-slow-booming-housing-market/article2378722/

#97 Toon Town Boomer on 03.22.12 at 11:13 pm

F will do squat as usual.

#98 earlymidlifecrisis on 03.22.12 at 11:17 pm

@ogopogo- Definitely. That entire area shot up waaay too much and waaay too fast. Not to mention all the pretentious yuppies that 1/2 ruined the culture with their need to prove their superior wine knowledge. Hopefully the slowdown will be in time to prevent the entire OK from being either a condo or a winery. During that boom the OK lost 100′s of campsites to development. Most of the private ones are all condos now. I hope it comes down enough that i can afford to move back.

#99 City Slicker on 03.22.12 at 11:33 pm

This finger pointing now between F and banks is part of the conspiracy. This way the public can’t clearly decide whose at fault.
That commentator almost made me throw up when he said homes for 3 million way over their assessment. Sheer madness.

#100 Led on 03.22.12 at 11:34 pm

F knows he doesn’t have to do anything. everyone who was going to buy has done it already. too late. anything he could do would make it a disaster. he will let the market correct itself at a snails pace for the next 10 years, just in time for a boom.

#101 City Slicker on 03.22.12 at 11:36 pm

Those Vancouver condos that sold out in 4 hours, wonder how many are speculators buys.

#102 Not Buying It on 03.22.12 at 11:37 pm

@ #71 Patz

So if believing that ‘we don’t have a right to own a home and that it is a privilege’ is being pompous, then you’ve certainly hit the nail on the head as to the problem here in Canadian real estate.

Thank you for doing us all a service and highlighting it so neatly!

#103 T.O. Bubble Boy on 03.22.12 at 11:41 pm

@ #66 thinker

Garth, the CMHC was always around in Canada. It’s not new, so I would not get excited about or actually call it the enabler.

The CMHC of today is *NOT* the CMHC that was “always around”…

- caps on mortgage amount removed in 2003
- down payments and amortizations drastically changed by Flaherty: 0 down / 40 years in 2006, 5/35 for 2008-2011, still 5/30 today

AND: CMHC represented a very small fraction of the market until about 2005-2006 (i.e. when Flaherty took over)… now it is literally backing the ENTIRE market.

#104 45north on 03.22.12 at 11:43 pm

Jim Flaherty: I would like to see the (housing) market correct itself

speaking of Jim Flaherty: He, not the banks, created the moral hazard. Now he has a moral responsibility to act.

Flaherty has to act. 40 year mortgages, 0% down payments, yeah he made a mistake but now he has to act.

Peter Pan: Has any opposition politician ever questioned the inherent conflict of interests of the CMHC Board of Directors?

well no Peter Pan, they haven’t, nor have they called into question the moral hazard posed by CMHC. They are the “lost boys”.

#105 Van guy on 03.22.12 at 11:47 pm

F says,

“It’s their market. It’s not my market,” he said. “They decide what they want to charge in interest rates.”

But if the CMHC stops insuring these loans, then maybe the banks will stop lending to people with no money.

C’mon Garth, where does this clown live?

#106 Devore on 03.22.12 at 11:47 pm

#31 Across the Pond

There are lots of condos around train stations and transit hubs, so this is hardly a unique development, certainly nothing that will change the face of housing as we know it, regardless of what Rennie or Global say. However, all those other condos come with lots of parking, and usually have lots of other stuff around them. For reference, this development is in the middle of nowhere, a light industrial area (which in another 10 years might amount to something) and no one will be walking anywhere except to cross the street to the train station to go somewhere else. I don’t know who is buying all those units without parking, I doubt it’s for living in.

Sold out in 4 hours, that’s 100+ units per hour, 1.5 units per minute. Forget plans, no one had time to look at plans, they could have put up a picture of Escher’s infinite staircase and everyone would just nod their heads in a daze; oh yeah, I want that one, is that on the corner? Orgy doesn’t even begin to describe it.

#107 TRT on 03.22.12 at 11:52 pm

sigh…

There will be no correction as long as gov policy favours ever higher home prices.

The only ways are a spike in interest rates (7-8% range) or massive job losses. If the above happens, the gov still has ammo; initiate a huge stimulus program and devalue our currency.

Good Luck Everyone!!

#108 Aussie Roy on 03.22.12 at 11:52 pm

Aussie Update

You have Rennie we have many, here is Enzo, he runs the RE Institute of Victoria and is pleading with the govt to help new buyers, umm or is it to help his own interests. You decide. Be warned the comments section contains more logic than the article.

HELP for first home buyers and tax cuts are urgently needed to boost a sluggish autumn property market.

Real Estate Institute of Victoria chief executive officer Enzo Raimondo said reforming property taxes to improve equity, remove double taxation and promote investment was timely given waning stamp duty revenues in a slowing economy.

http://www.weeklytimesnow.com.au/article/2012/03/22/459831_property.html

Same book different chapter – The people should pay for land speculation through tax breaks, it’s only fair, right?.

Around budget time each year, and whenever tax reform is discussed, property investors shudder at the thought of the abolition of negative gearing.

At the Federal Government tax summit last year, Grattan Institute economist Saul Eslake called for changes to negative gearing arguing it provided $4.5 billion each year to affluent Australians and reduced the supply of affordable housing.

Again take the time to read the comments section, can you spot the speculators?.

http://au.pfinance.yahoo.com/our-experts/michael-yardney/article/-/13225487/is-negative-gearing-really-unfair/

UK
The British government has raised taxes on prestigious real estate announced the head of the Treasury, George Osborne, on Wednesday as he presented parliament the draft state budget for the next fiscal year.

http://english.ruvr.ru/2012_03_22/69193663/

#109 kyle on 03.23.12 at 12:02 am

Garth,
Can you paint a picture of how screwed all of us non-owners will be here in Vancouver when the bubble does burst and the government steps in to bail out all of the eager buyers and our 27% of the GDP.

Part of me thinks this thing is so tied to our economy the government’s going to do whatever it can to ease the pain and the rational non-buyers will get sucked into this too – so why not buy?

#110 Wes coast on 03.23.12 at 12:04 am

So if CMHC goes bankrupt in the blink of an eye that means the banks are exposed more than they think. likely they will bare the brunt of the collapse. Doesn’t that fly in the face of the ‘buy bank preferred advice?’. Perhaps now is the time to table legislation to firewall the taxpayer from the CMHC. If it goes down a bailout should be illegal. Just about then the US banks will be stable and set to move in to provide our financial needs. We can just ask them to move in..

Bank preferreds are not affected by corporate profitability. — Garth

#111 John on 03.23.12 at 12:09 am

Garth – Looks like someone copied part of your post and used it in feedback on a G&M online article about this story, word for word, oh well..I’m sure you’ve seen worse

#112 Devore on 03.23.12 at 12:15 am

#66 thinker

Garth, the CMHC was always around in Canada. It’s not new, so I would not get excited about or actually call it the enabler.

You don’t think CMHC role or the way it operates has changed in all that time? If something was good or useful at one time, does not mean same will hold true in the future or that it should exist forever.

#113 TRT on 03.23.12 at 12:19 am

#74 Steev

They will raise the limit…again, its just lip service….just like every other time.

#114 JesseJ12 on 03.23.12 at 12:21 am

Of the $150B+ of Scotia’s mortgage portfolio only .25% in default… the numbers show most Canadians know how to handle their mortgages.

Defaults are not the issue, especially with historically-cheap rates. — Garth

#115 TaxHaven on 03.23.12 at 12:22 am

It’s not just HOUSING that is subsidized in this economy…

If you want to discourage something, tax it – or eliminate the competition. If you want more of something, subsidize it with taxpayer money.

Debt is good! More debt is the Keynesian answer to overindebtedness. To encourage borrowing, subsidize it: manufacture fake interest rates. Punish capital accumulation by taxing it through inflation. Counterfeit money to keep the free market in credit at bay.

We have high & rising structural unemployment: governments subsidize NOT working with welfare and UIC.

Education costs and student debt loads are soaring because government subsidizes high education.

We have out-of-control health care costs because we have a mandatory public insurance system which pays them, however much they are…

Want soaring wages(for the shrinking number still in good jobs)? Tax marginal businesses: enact “minimum wage” laws to eliminate cheaper labour competition…

Want to keep fundamentally-shaky fractional reserve banks in business? Subsidize their depositors through CDIC…

Want to keep medical/dental/teacher earnings high, and costs to the public likewise? Subsidize those occupational groups by granting their “professional associations” self-regulating monopoly status!

Want to make a killing, keep away the demon alcohol AND maintain high liquor prices? Make it a government monopoly AND tax it!

It’s pervasive. We in Canada live in a flabby, unproductive and uncompetitive economy, one which would blow over backward at the first puff of cold market discipline.

This Potemkin gasbag of debt is only kept alive – and giving the appearance of solvency – by government central planning and money-printing.

Who knows how many individuals, jobs and businesses are dependent on cheap money? How many would be GONE if borrowing for consumption became expensive?

Which is why I know interest rates will never be permitted to rise. And you can forget about ending counterfeiting and allowing market-determined rates.

The first whiff of austerity would launch this country into a much-needed massive, but corrective, recession.

#116 Mr Buyer on 03.23.12 at 12:22 am

#33 JO on 03.22.12 at 8:47 pm…neo liberal (aka Junk Economics)
……………………………………………………………………
The conservatives inflated this bubble beyond all recognition. This is the responsibility of a conservative economist (by training) as prime minister. the buck starts and stops there. The banks are indeed culprits in this horror as are the buyers and especially the sellers, but the Conservative government headed by a trained economist holds the power to start and stop this madness. Their political future is over as is the conservative party in any form for a generation or two at least (good luck neo-reform or whatever is next but even your base will see you for the spirit of past corrupt land and water barons you truly represent). their opponents need to boil down the bubble to a few key sound bites and clear charts along with a few sad but true personal stories and repeat the message over and over and it will be all she wrote especially by the time the damage is evident and the free money is gone. The MSM should be called into account by the next government as the propagandists they have and are being (punishing fines, new and retroactive taxes, fees and regulations until all the offenders leave the market I would suggest). We can talk morality until the cows come home but these types fancy themselves tough individuals that can take on all comers. It is pie in the sky to think at this juncture that morality will flourish in the absence of accountability. Moral hazard sounds to much like a traffic violation. Criminal abuse of public office, Criminal incompetence, as well as criminal abuse of public trust have a more powerful ring to them and 20 years prison sentences would go nicely with the offenses. First things first. A detailed fine grained second by second accounting of the real estate bubble, then snaring some of the players and listen to them sing about their co-conspirators. All people have to do is vote for the politician that promises and delivers on these proposals. There will be more than enough suffering to greatly increase the chances of this happening by next election.BUYER BEWARE. THE BUBBLE HAS TOPPED. SALES ARE FALLING ACROSS CANADA. NOW IS NOT THE TIME TO BUY A HOUSE. BUYER BEWARE.

#117 Nostradamus Le Mad Vlad on 03.23.12 at 12:32 am

-
“And undeniably, F made it so. Ah, if only that were true. Now he has a moral responsibility to act. Shall we bet?” — U betcha! Three points or less, all bets are off. Evens for the rest.

“F moved quickly to have Ottawa buy $75 billion in toxic, high-ratio, virginal mortgages from the banks, transferring that swill from their balance sheets to yours. F is moving us down precisely the same path that creamed America. Only faster. If the Canadian housing market ever took a dive, the CMHC would be bankrupt in the blink of an eye.”

#37 Jsan — “They Did It On Purpose: The Housing Bubble & Its Crash were Engineered by the US Government, the Fed & Wall Street” — wrh.com and rense.com had a few links in ’08-’09, which said that there was going to be a financial bloodbath in the west. Seems they were right, ‘tho quite a number dissed them for saying so.

Harper’s plan to dismember Canada is almost complete. Fine job.

“Canada’s exceeded the orgiastic housing excess that preceded the American real estate implosion . . .” — The higher one flies (Icarus), the harder one falls. Self-explanatory — greed kills.
*
Silver The Achilles Heel to economic stability, and Silver “So in the case of JP Morgan…”Too Big Too Fail” means just that.”; Massive EU Weapons Sales to SArabia is causing a lot of problems; QE like GW Strange but true; US youth debt; Shoppers turn thrifty in London; Gold Coins; If China . . .; Renter;s Ten Mistakes.

Slowhand’s (Eric Clapton) new custom-built Ferrari; Gas Use way down; FedEx Have these geniuses just figured this out? Italy Inflation-linked bond; Debt Repudiation Link in. Interesting article; Gold Is Not Money? Turkey targets gold stashed away; Soros and TPTB Evidently, the are having a lotta fun in the MEast. Link in; Undersanding the Bond Market Too complex for me; 25:59 clip John Embry on global debt saturation, and other points; BoA Venturing forth into slumlord territory.
*
Iran Talks in mid-April will decide whether war happens or not; 1:19:08 video The Cancer Report. “This documentary explains the Rockefeller influence on the health care industry, and particularly how safe alternatives have been silenced in favor of chemotherapy, radiation and surgery. Going back to the early twentieth century, this movie explains how it all got started, and why we are in our current health care predicament. It then provides cures for those suffering with cancer.”; Water Shortages US privatizing supplies (rates increasing); Monsanto “New Chapter, a vitamin and supplement company offering worthy products since 1892, has recently been bought out by mega-corporation Proctor & Gamble.”; 1:01 clip Nuclear energy. America’s answer. Iran wants to do the same thing, except it is being demonized; Good reason for Obomba to bring back the draft, under a different heading; 2:50 clip Liberating The Bull. Violent angry protestors (not the bull); Just Say No to GMO’s in food.

#118 Mr Buyer on 03.23.12 at 12:36 am

#76 YVROptimist on 03.22.12 at 10:26 pm
@#54 (Miko) Flaherty would be a fool to not have someone checking up on this blog on a daily basis
………………………………………………………………………
Should he have CSIS track down the identities of all the commenters as well? Wait a minute, are you trying to scare us into not typing our comments and posting them? So intimidation and propaganda. Wow you conservatives do not play nice. Everybody watch, listen and come to truly understand the type of people presently in power in our institutions that we are dealing with. Dangerous on many levels. Not that that is an entirely bad thing but it must be clearly understood. Dangerous people can be very useful, it just depends what ends they are working towards.

#119 scib on 03.23.12 at 12:41 am

Dishonesty in Government is the only parameter that should be gauged now.
Vote against dishonest governments and they may someday get the message.
Sure the Conservatives are fairly good fiscal stewards compared to the liberals and NDP but they have no qualms about using our own money and saddling taxpayers with risk (CMHC) in order to get elected.
Its the same old story. Use our own money to buy our votes.
Vote them out!
Vote against all governments until they start to respect us.

#120 betamax on 03.23.12 at 12:41 am

#71 Patz: “And the Pompous A** of the Year Award goes to…”

Don’t feel bad; you just made runner up.

#121 John G. Young on 03.23.12 at 12:54 am

#71 Patz

Owning something is not a right, it is a privilege.

If that makes me a pompous a** in your books, so be it.

Personal attacks don’t change the facts.

#122 Oceanside on 03.23.12 at 12:56 am

I have always been non partisan and have no faith in any politicians, rented a house in Victoria with Stock Day when he went to UVic before he got “correct”. he was funny and very enterprising. Watching his political career change him was very disappointing. I can’t believe the stuff that comes out of Jim Flaherty’s mouth…Makes me very sad about the direction Canada is going and the people we have driving the bus…

#123 Skatch on 03.23.12 at 12:57 am

Awesome post………keep it comin’.

#124 Industrial Guy on 03.23.12 at 1:14 am

The ReMax Market Trends Report says we now have a low supply of detached homes in Toronto and Winnipeg. They also claim it’s starting to be an issue in London, St. Thomas, Hamilton and Burlington. Are they for real?
The London / St. Thomas area is ground zero for everything that’s going wrong with Ontario’s economy.
Hardly a hotbed of house buying. Hamilton is becoming the low wage capital of Canada.

#125 Doogs on 03.23.12 at 1:19 am

Now this is what a finance minister with a REAL set of balls does… Flats – you reading this stuff? not my job to regulate housing..HA! It sure was your job to F it up in the first place. Was 40 year zero down your job then?

http://www.bloomberg.com/news/2012-03-22/u-k-luxury-home-tax-increase-sparked-rush-to-finish-deals.html

http://www.estateagenttoday.co.uk/news_features/London-market-hits-meltdown-within-hours-of-Budget

Here are his email addresses in case anyone wants to give his handlers an e-earfull.

[email protected]’; ‘[email protected]

#126 newbien goat on 03.23.12 at 1:40 am

Why are” theese” RE agents so stupid? When they posts ads on CL they try to conceal the location of the property.Just like the carsalesman who does not give you the mileage of vehicle in his ads.Wasting my time.I never respond .” Tres Bien”

#127 John East side on 03.23.12 at 1:41 am

Bob Rennie is one smart guy if he can push 400 crappy condos in 4 hours. Love him or hate him, he’s clever.

#128 West Side Survivor on 03.23.12 at 1:54 am

But when does the HAM run out of steam on the west coast? It still seems like ALL the activity is from off shore investors here.

#129 ANONYMOUS on 03.23.12 at 2:22 am

Don’t worry everyone,
houses are going to be 20% more expensive next year, and 15% more expensive the year after that,
with a 10% to 12% rise each hear for 10 years after that.

Then, once all of this is thru, houses will rise at a more modest 5% per year for the next 40 to 50 years.

Wages: they will stay flat.

#130 DonDWest on 03.23.12 at 2:35 am

In a moment of drunken stupor – I’ve made a quick paint brush image representation of F:

http://imageshack.us/f/28/cowardlyjim.jpg/

#131 Devore on 03.23.12 at 2:56 am

HSBC, et tu?

http://business.financialpost.com/2012/03/21/was-hsbc-financial-a-victim-of-tougher-banking-rules/

So HSBC Bank Canada is getting out of the subprime lending business.

The Canadian subsidiary of the UK-based financial giant announced on Wednesday that it will shutter its consumer finance division

/…/

There are three lines of business: non-prime mortgages, unsecured consumer lending and private label credit cards.

The rats are leaving the ship. That’s alright, more business for the syndicate mortgage guys, right?

#132 GTA Girl on 03.23.12 at 4:16 am

With the daily scandals and corruption being revealed about the Conservative government, I can foresee that Flaherty would be reticent about saying anything that wasn’t pure happy spin.

Now even our military is complaining that top PMO/Advisors are leaking and plotting against them. http://www.thestar.com/news/canada/politics/article/1150612–exclusive-chief-of-defence-staff-gen-walter-natynczyk-suspected-conservative-government-leaked-information-about-using-challenger-jet?bn=1

But with the economy turning there is no way the Feds can spin much longer.

Robocalls aside…which is very difficult to ignore..we have a government that has grown so corrupt that Russia is looking stable in comparison.

I wish Canadians would raise their heads off their granite countertops and wake up.

#133 Ronald Jeremy, But You Can Call Ron on 03.23.12 at 5:42 am

Garth “Real Love starts when the lights go out” Turner, before I get to my Smoking Man jokes, let me first say that I’m no Economist and you’re not Clairvoyant. I’ve never read anything by Adam Smith or Milton Friedman and the closest thing you have to a crystal ball is a silver pair of truck nuts hanging off your Hummer. What I do know is that there’s some serious trouble brewing. We all know the housing situation is beginning degenerate, I don’t want to beat a dead horse. But what’s going to happen to all these boomers that start to die? I was talking to a friend and he’s worried that when his parents die, he may not be able to afford the capital gains tax on his inheritance. He will obviously have to sell the home and cottage and if prices are crumbling, he may be in a bit of a bind. Also, his kids have taken on some big student loans, the oldest one owes $41k and is working in a call centre. How is she going to service the debt if that call centre is closed like the one in Mississauga? What does she do? And if that same scenario happens to a majority of university graduates, what happens next? Those loans are guaranteed by the gov’t (if I’m correct) like mortgages are guaranteed by the CMHC. If old people start selling their homes en masse, while drawing on pensions and using the Health care system to the max,students default on loans, or their over leveraged homes, what’s going to happen next? Can you get a blog dawg to explain it to me, please?

Ok, now for my Smoking Man jokes.

Q. What’s the difference between and an orangutan?
A. The orangutan was cute as a baby.

Q. What’s the difference between Smoking Man and Dominic Strauss-Kahn?
A. Strauss-Kahn is from France.

Ok, one more, only because it’s the weekend.

Smoking Man and a duck walk into a bar in some small, country-bumpkin town in northern Ontario, say Barrie. The duck has a pink mohawk, a tattoo on its wing of Bob Rae playing a grand piano, and wearing a t-shirt with a picture of a rooster that says “I quack for …..” The bartender shouts “Get the hell out of here! We don’t serve your kind!” The duck replies “It’s ok. He’s with me.”

http://www.youtube.com/watch?v=12WMNjVR3SY

You’re welcome, Ladies.

#134 Aussie Roy on 03.23.12 at 6:04 am

Aussie Update

It’s property war?.

THEY are our two largest cities with a long-standing rivalry to match. But when it comes to property in 2012 the result is Sydney one, Melbourne nil.

But who really is winning?, and what does it mean?.

Melbourne

Biggest falls in median prices 2011

St Kilda West: (Houses) -41.8 per cent

Caulfield East (Units) -29.1 per cent

Burnley (Units) -35.5 per cent

South Yarra (Houses) -24.3 per cent

Windsor (Houses) -23.8 per cent

Essendon North (Units)-16.1 per cent

Source: RP Data

Don’t forget we were told prices could never fall 30%, that was just not possible, you would have needed to have a bubble for that to happen.

We don’t have one and never did, just ask the RE industry. Denial is very much still alive and well.

http://www.news.com.au/money/property/its-war-melbourne-vs-sydney-property/story-e6frfmd0-1226308118142

#135 House on 03.23.12 at 6:30 am

So our maximium loss on CMHC is $594 Billion. No wonder he is looking to someone else to blame.

#136 Ex-Cowtown on 03.23.12 at 6:57 am

#100 Led on 03.22.12 at 11:34 pm

F knows he doesn’t have to do anything. everyone who was going to buy has done it already. too late. anything he could do would make it a disaster. he will let the market correct itself at a snails pace for the next 10 years, just in time for a boom.

+++++++++++++++++++++++++++++++++++

I’m sure there are still a lot of people waiting for their Nortel to storm back to $125, Bre-X to go back to $230 and tulip bulbs to take off again.

Doesn’t mean it’ll happen.

#137 Taipan on 03.23.12 at 7:34 am

Vancouver condo Boom.

Im sorry this effectively an infomercial. Plain disgusting.

Shove interest rates up 2% and see how sustainable it is!

Actually make all these little changes – and then shove them up 2%.

After making all these changes – if they had a chance in the past they wont have one now! Maybe thats the game plan!

#138 Joe on 03.23.12 at 7:50 am

“I find it a bit off that some of the bank executives are taking the position that the Minister of Finance or the government somehow should tell them how to run their business,” Flaherty said at a news conference in Stittsville, in Ottawa’s west end, during an event to promote the government’s tax credit for volunteer fire fighters.

“They must forget that they are actually the ones who issue the mortgages,” Flaherty said.

“It’s their market. It’s not my market. They decide what they want to charge in interest rates. They’re the ones who make the profits out of this business, so I do find it a bit much when some of the bank executives turn to the government, the Minister of Finance and say, ‘”You ought to change the rules and make it tighter.”’

http://www.cbc.ca/news/business/story/2012/03/22/flaherty-banks-lending.html

#139 Al on 03.23.12 at 8:01 am

The little Pecker has no guts to take action – he knows that the competing Banks cannot do it on their own without regulations that apply to all of them.

#140 Victor on 03.23.12 at 8:03 am

Gasoline, food prices feed rise in February inflation

Last updated Friday, Mar. 23, 2012 7:41AM EDT

Following a two-tenths pop in January, the first two months of 2012 reverses what had been a generally downward trajectory in inflation that began last May.

While unlikely to be seen as permanent, the upward trend could cause some rethinking at the Bank of Canada, which had been expecting inflation to continue falling.

+++++++++++++++++++++++

F plays with mortgage rules. C plays with interest rates. Never a dull moment.

#141 Victor on 03.23.12 at 8:04 am

Here is the link to the G&M piece from my previous post:

http://www.theglobeandmail.com/report-on-business/economy/gasoline-food-prices-feed-rise-in-february-inflation/article2378925/

#142 Bigrider on 03.23.12 at 8:11 am

http://www.financialsense.com/contributors/james-j-puplava/the-story-nobody-wants-to-hear

Superb article .

Bottom line..buy stocks, they are cheap.

#143 Gta fun on 03.23.12 at 8:12 am

Did anyone catch that comment the other day where someone in the real estate association said that they recommend that their realtors sell their own homes every 3-4 years… So that they can sympathize with the process that their buyers/sellers go through. Comical to say the least. I’ve been saying for some time realtors that I know are looking to get out of their properties. They are finding various excuses to sell…. Now they are getting advice from their own to get out and keep the market hopping. Omg I don’t know if I should get the popcorn out or just stop obsessing about the housing market lol!

#144 disciple on 03.23.12 at 8:59 am

#43 Jsan… good find. Of course, it’s obvious what has happened. A cute new method of transferring wealth. In the US they’ve started this proven process again, but this time with auto sales and student loans.

We tend to think of our leaders as idiots but the opposite is true. Only uninformed sheeple would not understand how our leaders continue to betray us for the benefit of the parasite financial class. Banker puppets. Soul-less, robotic sub-human elitists without empathy. Some are actually robotoids. Ignore that last part if you’re not yet ready to receive it…

#145 HalifaxEd on 03.23.12 at 9:02 am

RE pumping continues to heat up in NS:

Cold season hot for Halifax housing
http://www.thechronicleherald.ca/business/76453-cold-season-hot-halifax-housing

“Halifax-Dartmouth had the hottest real estate market in Canada during what is normally the coldest months of the year for sales activity, Re/Max says.”

Adds Re/Max agent and mouthpiece, Al Demings:

“The consumer confidence level came up tremendously [after ships contract]…then they realized that prices were going to be rising, so the thoughts were, ‘We’d better buy now or we might not be able to afford later.’.”

Buy now or be priced out…forever!

Aside from an anticipated economic ripple from the ships contract (start now delayed to 2014), what else would attract buyers to Halifax? Our immigration is down, household debt is high, and our taxes (especially for businesses) are staggering.

We are actually losing more people than we are gaining. StatsCan says NS lost 3,530 people to other provinces in 2011, more than double the 2010 amount. Q4 saw the biggest quarterly exodus in five years. So there is confidence in housing, enough to create a few bidding wars, but no confidence to stay? Seems to be mixed messages.

So with population growth declining, a housing market that is “severely” oversupplied (according to the recent Pacifica Partners report), and with many boomers preparing to unload their suburban homes and downsize to the thousands of new apartments being built, where are all the fresh, horny buyers going to come from? And how will the housing costs to income gap not factor into the Halifax markets?

You forgot about the highest HST in Canada – 15%. — Garth

#146 terces on 03.23.12 at 9:22 am

I wanted to relate my experience with a securitized commercial mortgage. Someone made a comment that the government would not go ahead with the proposal to require borrowers to re-qualify for renewal at the end of the 5 year term.

I took out a mortgage on a commercial building in 2006 through the TD. Little did I know at the time that the TD was acting as an “originator” and that the loan would be packaged with others and sold as a CMBS – Commercial Mortgage Backed Security. TD no longer owner it. It was now a publicly traded security managed by First National.

Over the course of the loan, First National was a significant pain in the ass, especially after the GFC began. They were continually after me for proof of tax payment, engineering reports, environmental reports. I was supposed to tell them each time a tenant left and get their permission to lease to a new tenant etc.

But here is the kicker. About 6 months prior to the end of the term, they let me know in no uncertain terms that the mortgage was to be paid in full, and there was no chance of an extension.

So for those mortgages that have been securitized – virtually all of the mortgages taken out in the past 7 or 8 years, if you think the lender is going to automatically renew – beware – especially if the market has tanked and you have equity. They will likely demand payment!!

#147 Keith on 03.23.12 at 9:22 am

Garth,

I disagree a little. Yes, Flaherty is at fault for the CMHC mess. But you seem to let the banks have a free pass. So they don’t hold any responsbility for the loans they make?

In any event, any tips on how to short CMHC?

#148 jess on 03.23.12 at 9:22 am

=

Fair-market rent for a two-bedroom apartment across the nation as a whole is $949. A renter earning the federal minimum wage of $7.25 must work 101 hours to afford it.

What such a renter could actually afford to pay, working a regular 40-hour week, is $377 a month, the data show.
Out of Reach is a side-by-side comparison of wages and rents in every county, Metropolitan Area (MSAs/HMFAs), combined nonmetropolitan area and state in the United States. For each jurisdiction, the report calculates the amount of money a household must earn in order to afford a rental unit in a range of sizes (0, 1, 2, 3, and 4 bedrooms) at the area’s Fair Market Rent (FMR), based on the generally accepted affordability standard of paying no more than 30% of income for housing costs. From these calculations the hourly wage a worker must earn to afford the FMR for a two-bedroom home is derived. This figure is the Housing Wage.

Out of Reach 2012 demonstrates that a mismatch exists between the cost of living, the availability of rental assistance and the wages people earn day to day across the country. The Housing Wage consistently exceeds the actual wages earned by renters, in both urban and rural communities nationwide.
http://nlihc.org/sites/default/files/oor/2012-OOR-Housing-Wage-Map_0.pdf
Represents the hourly wage that a household must earn (working 40 hours a week, 52 weeks a year)
in order to aff ord the Fair Market Rent for a two-bedroom unit at 30% of income.

wages/hr needed state summary
http://nlihc.org/sites/default/files/oor/2012-OOR-State-Summary-Table_0.pdf
http://nlihc.org/oor/2012

===========
The hidden G fee to increase gradually

primary source of revenue for Fannie Mae and Freddie Mac. Fannie, for instance, made $5.6 billion in single-family guarantee-fee income in the first nine months of 2011, a 4.7 percent increase from the 2010 period, according to its quarterly financial statements.
http://www.nytimes.com/2012/03/04/realestate/mortgages-a-hidden-fee-is-set-to-rise.html?_r=1

#149 HalifaxEd on 03.23.12 at 9:37 am

You forgot about the highest HST in Canada – 15%. — Garth

Part of the “staggering taxes” mentioned.

How could I ever forget about our illustrious and oppressive HST, except those moments when the pain just makes things go numb? :)

#150 Steven Rowlandson on 03.23.12 at 9:42 am

Moral hazard?
What could societies and governments that promote real estate bubbles and sucking up to Israel and homosexuality possibly know about morals?
For too many political correctness , profit and power trumps all other considerations especially morals.
Hell of a world isn’t it?

I’ll bet you’re a Rick Santorum supporter. — Garth

#151 Daisy Mae on 03.23.12 at 9:59 am

#19 PARTY ON GARTH: “There is a component of personal restraint and responsibility here on the part of the reckless fools (Canadian public) who have bought these houses. Also the greed of the banks, builders, developers, realtwhores, and yes, foreigners.”

**********************************

The federal government — Flaherty, specifically — made this all possible. Yes, there’s plenty of greed and stupidity to go around…but FLAHERTY MADE IT ALL POSSIBLE. There is no one else to blame.

The banks are highly competitive. They had no choice but to take advantage of every avenue available to them…and are, in fact, now asking F to roll back the amortization period to 25 years.

But to do that, F has to admit he was wrong…and he doesn’t have the morals or the guts to do that. So for here on in, he’ll be shifting blame away from himself.

He doesn’t give a damn for the Canadian people.

#152 X on 03.23.12 at 10:03 am

http://www.theglobeandmail.com/report-on-business/economy/gasoline-food-prices-feed-rise-in-february-inflation/article2378925/

Inflation creeping up.

#153 Oceanside on 03.23.12 at 10:09 am

#106 Van guy on 03.22.12 at 11:47 pm
F says,

“It’s their market. It’s not my market,” he said. “They decide what they want to charge in interest rates.”

But if the CMHC stops insuring these loans, then maybe the banks will stop lending to people with no money.

C’mon Garth, where does this clown live?
——————————————————————-
Big lot in Whitby I think. Enough space around his house to do a big condo development.

#154 Industrial Guy on 03.23.12 at 10:13 am

I watch the daily electricty demand in Ontario. It’s a good barometer of economic activity in the provice since almost everyone uses electricty …. well, unless you’re living in a cave in some place isolated place like Port Dover (pd13.com).
We are back at the consumption levels of 2008. Prices have never been lower. Yes, the mild winter has been a big part of this but, look at the numbers … http://www.ieso.ca/imoweb/siteShared/monthly_prices.asp?sid=ic
More capacity is coming online everyday thanks to the Bruce Nuclear refit and the FIT program. The big dig in Niagara. On Monday Morning we paid utilities in the USA to take our excess power. It isn’t just the RE market in Ontario that has serious issuses.

#155 Daisy Mae on 03.23.12 at 10:14 am

#30 SEBEE: “You think they get into government because they are capable forward thinking visionaries?”

**********************

Beats me — with 38% ‘majority’?

#156 kenken on 03.23.12 at 10:15 am

let’s do some maths
CMHC will insure $30Bn over next 3 years
= roughly $10Bn each year

Average house price (crea website Feb12) ~$372,000
Assuming 10% down, this means only 30,000 houses (purchases) will benefit from CMHC insurance

Total number of sales in 2011 was ~457,000
(http://creanews.ca/)

If my calculations are correct, only 1 in 15 houses will get insurance then!!!!!

… this is only the trailer!!!

#157 Kilby on 03.23.12 at 10:24 am

#134 Ronald Jeremy, But You Can Call Ron on 03.23.12 at 5:42 am

I was talking to a friend and he’s worried that when his parents die, he may not be able to afford the capital gains tax on his inheritance.
_____________________________________________
I’m not sure about this but I don’t think there is capital gains on estate inherited from one’s parents…Are rules different in provinces other than BC?

#158 Daisy Mae on 03.23.12 at 10:24 am

#31 – GREGW: “And I’d bet he’ll tell us all that with a straight face too.”

**********************

And don’t forget that furrowed brow….feigning all this concern…..of which he has none. Except with regard to saving his own skin.

Harpers’ keeping a low profile? This is, predictably, turning into a real bad joke.

#159 Mike on 03.23.12 at 10:30 am

@jess “the hourly wage that a household must earn (working 40 hours a week, 52 weeks a year)
in order to afford the Fair Market Rent for a two-bedroom unit at 30% of income.”

What’s the point of this? that you can’t raise a family on a single income job with minimum wage? Anyone I know earning minimum wage has *roommates* or rents in a rooming house. Some even share basement bachelor apartments.

Life is tough on minimum wage, but people can still shop at value village, buy a case of Lakeport, have a pay-as-you-go cellphone, and get a bunch of friends together to play their x-Box. Just don’t eat out or smoke and you’ll be okay. Want more from life? Get a better job.

BTW, Minimum wage in Ontario is $10.25/hr

#160 jess on 03.23.12 at 10:46 am

ceteris paribus

“A big thing in derivatives is figuring out the value of these contracts. You don’t know what the price is going to be of a certain share in three months time. So what is the contract worth that allows or obliges you to buy that share in three months time? There are complicated simulations for determining the value. The problem lies with the assumptions underlying those simulations. For instance the assumption there will always be buyers and sellers. In times of crises, that is not the case…”

http://www.guardian.co.uk/commentisfree/2012/mar/23/voices-of-finance-structuring-equity-derivatives

=

#161 Daisy Mae on 03.23.12 at 10:46 am

#55 Miko on 03.22.12 at 9:37 pm
Do you think Flaherty reads your blog?

i hope so, and the comments.

Count on it. — Garth

*****************************

Oh, yeah….he’s reading it! LOL

Sleazy….

#162 Pr on 03.23.12 at 10:53 am

Now he (F) has a moral responsibility to act. He does not care about the people. Its clear how can a 100% finance morgage sustaine a 1 or 2 % higher rate or any change in anything ! Its a ticking time bomb! H

#163 City Slicker on 03.23.12 at 10:55 am

#106 Van guy on 03.22.12 at 11:47 pm F says,

“It’s their market. It’s not my market,” he said. “They decide what they want to charge in interest rates.”

But if the CMHC stops insuring these loans, then maybe the banks will stop lending to people with no money.

C’mon Garth, where does this clown live?
———————————————————-
Exactly. Proof of the globalists working together to screw the middle class.

#164 Canadian Watchdog on 03.23.12 at 10:57 am

Good interview at Canadian Mortgage Trends discussing the status quo on mortgage lending. http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2012/03/one-on-one-with-pacific-mortgage-groups-ron-swift.html#comments

This supports what I’ve stated that all lenders will have limited access to CMHC, in turn sending insurance premiums higher.

Consider the insurance premium as a rising interest rate.

#165 Coraline on 03.23.12 at 10:58 am

This was an excellent post, with just the right amount of anger. I am furious at what has been done to the Canadian economy and as a consequence, the larger society. We will all pay for this for years.

I want to believe that the CMHC limit and the OSFI guidelines will have an impact. Garth is correct that the OSFI is a serious regulator. However, who knows what has been going on behind closed doors? Why has the OSFI taken so long to step in? They have the legal authority to take all sorts of actions, and they appear to have sat on their hands until now.

#166 Arshes on 03.23.12 at 11:01 am

#134 Ronald Jeremy, But You Can Call Ron

I was talking to a friend and he’s worried that when his parents die, he may not be able to afford the capital gains tax on his inheritance.
———————————————————-
THere is no inheritance tax in Canada. If he receives his parents principal residence, the parents estate would pay no tax and he would pay no tax to receive it. He would only pay cap gains tax when he sells it above the value it would be assessed at at the time he inherited it. The cottage would be same, except the estate would have pay cap gains tax on the parents gain and the proerty, and he would inherit it tax free, only pays cap gains if he sells it above the value it was assessed at when he inherited it.

#167 Fred on 03.23.12 at 11:04 am

I am not sure about this:

When the GFC struck, you might recall that F moved quickly to have Ottawa buy $75 billion in toxic, high-ratio, virginal mortgages from the banks, transferring that swill from their balance sheets to yours.

1. Wasn’t the asset transfer made for mortgages that were already insured by CMHC? So Ottawa (i.e. the taxpayer) was not taking on more mortgage risk.

2. how do you know they were “toxic, high-ratio, virginal”? Wouldn’t the banks just as likely have transferred the ones that make the least profit, keeping the ones that make most profit? Surely “toxic” ones are not toxic to the bank, since they are insured by CMHC.

I would like to know how the $75b was actually used by the banks. Was it used to solve short-term liquidity problems? Was it used to power more lending to anyone with a pulse (while passing on the risk to CMHC)?

I also wonder what Ottawa has been doing with the assets they traded. If I understand correctly, banks are passing on money to CMHC for these mortgages (see link below). Where does that money go? As I understand it, the $75b was manufactured using some computer keystrokes. But the money Ottawa gets for mortgage repayments is real. Where does it go?

http://www.cmhc-schl.gc.ca/en/corp/nero/nere/2008/2008-10-10-1700.cfm

#168 jess on 03.23.12 at 11:06 am

usa choice for world bank
Jim Yong Kim An expert in tuberculosis

XDR-TB raises concerns of a future TB epidemic with restricted treatment options, and jeopardizes the major gains made in TB control and progress on reducing TB deaths among people living with HIV/AIDS. It is therefore vital that TB control be managed properly and new tools developed to prevent, treat and diagnose the disease.

The true scale of XDR-TB is unknown as many countries lack the necessary equipment and capacity to accurately diagnose it. ]wiki

#169 Van guy on 03.23.12 at 11:12 am

#107 Devore on 03.22.12 at 11:47 pm

You know a lot for a person living out east.

#170 Sticky on 03.23.12 at 11:23 am

If the conservative hard working ant has to suffer (by suffering reduced gov’t services and a broken economy) to back stop the reckless grasshoppers who couldn’t wait and save…ant revolution.

#171 John G. Young on 03.23.12 at 11:26 am

#151 Steven Rowlandson

“What could societies and governments that promote real estate bubbles and sucking up to Israel and homosexuality possibly know about morals?”

See what I mean Van Guy?

#172 Can it be? on 03.23.12 at 11:32 am

#147 that commercial experience happene to my dad. Just before expiry yet said no renewal and pay up the mortgage in full. Not a huge dollar amount $30000 but left them scrambling at the last minute. Fortunately had some money in a fOrgotten account and paid it off… Crap experience non the less.

#173 Jimmy on 03.23.12 at 11:33 am

This part of yesterdays globe article tells you how screwed these last bunch of buyers will be. I’m gonna enjoy watching them get smoked when the market tanks.

http://www.theglobeandmail.com/life/home-and-garden/real-estate/buying-and-selling/in-toronto-buying-homes-at-break-neck-speed/article2377803/

“People say ‘I can’t believe that house went for that’. But you go up to the people who beat nine other people to get it and they’re ecstatic. They say, ‘I can’t believe we got the house’.”

#174 Kris on 03.23.12 at 11:36 am

Someone (Garth?) please explain -

We know Cdn banks palmed-off their risk to CMHC.

Then why should banks urge F to tighten rules at all? Isn’t it more (risk-free) money for banks, the longer this acid-trip of borrowing continues?

#175 zeeman1 on 03.23.12 at 11:39 am

#23 Tax Haven.

Great post.

I’m beginning to see why you bailed on Canada for sunny shores, polite neighbors and real purchasing power that hasn’t been seen here since the early 80′s.

I’m considering a move myself as opposed to remaining and allowing half my energy to be sucked off me by an slimy government apparatus.

has anyone been paying attention to all the Ontario government scandals being uncovered? Not a single criminal charge and the losses and theft are now in the BILLIONS. What does it take?

#176 Daisy Mae on 03.23.12 at 11:42 am

#63 JSAN: “…then compare it to what Flaherty has been saying about our own housing bubble, especially at the 1:40 mark.”

http://youtu.be/44C8dTcPSjI

******************

None of the politicians appear to have full-functioning brains…

#177 Daisy Mae on 03.23.12 at 11:46 am

#68 TRUE HAMMER: “….why doesn’t he go to Afghanistan and take up arms against the Taliban…..we’d crown him king if that was the logical extension of this non sensical parody.”

************************

Can we leave him there, forever?

#178 saanichtonian on 03.23.12 at 12:01 pm

Garth said:
“When the GFC struck, you might recall that F moved quickly to have Ottawa buy $75 billion in toxic, high-ratio, virginal mortgages from the banks, transferring that swill from their balance sheets to yours. ”

As pointed out in the government’s own documents :

“…Committing an additional $50 billion to the Insured Mortgage Purchase Program, increasing the overall size of this program to $125 billion… ”

( http://www.sec.gov/Archives/edgar/data/230098/000120621209000008/m53341a1exv99wcv5.htm )

What I find more interesting is that this information is a corporate update on the U.S. registered Corporation of Canada, posted on the U.S. SEC. This corporation has it’s “Business Address” at the Canadian Consulate in Washington DC, whereas the Country of Canada has a head office in Ottawa (last I heard).

( http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000230098&owner=include&count=40 )

And here I thought we were a sovereign country.

Aren’t you curious?

#179 Canadian Watchdog on 03.23.12 at 12:01 pm

#166 Coraline

As Bill Gross would put it, OSFI is the cleanest dirty shirt we have.

#180 Ozy - Conservants are scared like shiiit on 03.23.12 at 12:06 pm

Conservants Flatteddy and Herpers, which abandoned conservant principles the moment we voted them, and act like Paul Martin inpired profit-liberals, are now scared like SHIIIIT because the GTA/Toronto market have descented more than 50% in new buldings sold (condo and freehold combined) in FEB 2012.

This is a HUGE HUGE drop (WORSE than Florida 2008-2009 combined) and they are trying to prop the market for the builders not to bankrupt en mass.

Here are the OFFICIAL numbers that market has crashed:
http://www.bildgta.ca/media_releases_2012_detail.asp?id=872

#181 HarperCaust is coming - run for your lives!!! on 03.23.12 at 12:08 pm

I am in this WPOE – “worst place on earth” city, houses still selling for over asking in Vancouver. I hate Global TV, I turn if off but the wife can’t see past the “Shill TV”. Deb Hope shilling in the first minute of Garth’s Vid “the skytrain gravy train”. Poco mayor who fought for the Northeast Skytrain connection for his consituants – was actually investigated for Conflict of Interest – as he owns property along the Poco Skytrain Gravy train. But they stopped reporting on this….. Why not be mayor, be in on council meetings, then buy property based on the city plan that you yourself are creating.
Winning….

#182 Ozy - For Keith - how to short CMHC? on 03.23.12 at 12:16 pm

#148 Keith on 03.23.12 at 9:22 am
In any event, any tips on how to short CMHC?

All canadian bond mutual funds must have a high load of Housing Trust on them, mornignstar will show you the breskdown, for example this one:
http://quote.morningstar.com/fund/f.aspx?Country=USA&Symbol=F0CAN05M27

The problme is where ytou put your $ after selling them, to Corporate or Emerging market bonds, or to cash, metal, stocks, etc?

#183 Cow Man on 03.23.12 at 12:16 pm

# 168 Fred:

I understand that the mortgages transferred from the banks were non CMHC mortgages. They were the highest risk non insured mortgages.

#184 Daisy Mae on 03.23.12 at 12:21 pm

#119 MY BUYER: “Should he have CSIS track down the identities of all the commenters as well? Wait a minute, are you trying to scare us into not typing our comments and posting them?”

***************

LOL We DO still have ‘freedom of speech’ in this country?

#185 Daisy Mae on 03.23.12 at 12:27 pm

#120 SCIB: “Vote against all governments until they start to respect us.”

************************

That’s precisely what I did in the last federal election. There WERE no viable choices to my mind…so I simply spoiled my ballet. No one could then say I didn’t ‘vote’. I expressed my opinion at the polling station.

Quite tired of voting for the lesser of 2-3 evils.

#186 bill on 03.23.12 at 12:30 pm

hey rowlandson is this you? I bet it is.
what a little nazi …..plainly gays and jews are some what more moral than you.

Steven Rowlandson | January 20, 2012 at 1:37 pm

posted by: Steven Rowlandson | October 2, 2011, 10:57 am 10:57 am

Tell you what. I always carry concealed, AND drink in bars. The government doesn’t tell me what I can and can’t do.

Steven Rowlandson | January 20, 2012 at 1:37 pm

Since fiat is either nothing or next to nothing $500 an ounce for silver is not good enough! At a minimum I want the wealth of the world 200 trillion divided by a billion ounces of silver or $200,000 an ounce. Any thing less is not enough.

#187 Kilby on 03.23.12 at 12:31 pm

#182 HarperCaust is coming – run for your lives!!! on 03.23.12 at 12:08 pm
I am in this WPOE – “worst place on earth” city, houses still selling for over asking in Vancouver. I hate Global TV, I turn if off but the wife can’t see past the “Shill TV”.
______________________________________________
After 20 years of Global morning news we have finally switched to CBC NewsWorld, far easier to take. Try it.

#188 Mister Obvious on 03.23.12 at 12:36 pm

Finance Minister Jan 17, 2012:

“”In 2008 and again in 2010, our government acted to protect and strengthen the Canadian housing market,” Flaherty told a news conference in Ottawa. “We continue to do so today.”

Finance Minister Mar 22, 2012:

“I find it a bit off that some of the bank executives are taking the position that the Minister of Finance or the government somehow should tell them how to run their business,” Flaherty said at a news conference in Stittsville…”

————————–

Come on Jim… what’s up, eh?

#189 Anotherlowlyrenter on 03.23.12 at 12:39 pm

For those hoping Chinese buying will come to the rescue. More Evidence of a China Hard Landing…

http://www.wallstreetexaminer.com/blogs/winter/?p=4721#more-4721

#190 jess on 03.23.12 at 12:40 pm

22 Chaddywack
“news” seems to be captured by public relations firms with hacking schemes

anything for a sale eh?

#191 Casey on 03.23.12 at 12:42 pm

Hey, Garth;

You just may be interested in this. This is – word for word – what my Key West bud sent me the other day:

“Here it is the all important Spring Selling Season in the Keys. And housing prices continue to drop at an amazing rate. Photographic proof with price reductions for just the past 7 days:

http://keywestmls.com/hotsheet/justreduced/

p.s. The local mullet wrapper had a big front page story about “the bottom is here” in Real Estate. I wrote a letter to the editor which was never printed criticizing the paper for taking the local NAR spin hook, line and sinker.

What no one down here is taking into account are the following trends in Key West, the Keys, and many other places in Florida:

1. Insurance rates for wind/storm damage continue to outpace everything else we buy, including gasoline and food. This puts pressure on first time buyers who do their homework to buy much cheaper housing. And for sellers? It puts big pressure on prices to continue dropping.

2. There is a giant pool of unlisted “shadow inventory” waiting to be released onto the market as soon as the bottom is here. Thus far, entire housing developments are still releasing one unsold house at a time to the MLS. More than one of these projects has yet to sell its first home at drastically reduced prcies. Some of these developments now owned by banks are rented out at prices that are 1/4 of what a mortgage payment would be were the house to sell. That right there tells you the real “value” of these homes built during the beginning of the meltdown of the Housing Crash are still too high. This puts big pressure on prices to continue dropping.

3. County and city revenue have dried up to the point that ad valorem taxes are rising almost as quickly as insurance rates. If you aren’t granfathered in, tough. Ad valorem taxes are higher for new home buyers. They are even higher for out of towners not claiming the homestead exemption. This puts big pressure on prices to continue dropping.

4. Broke baby boomers are now moving from Key West. The price their homes to sell quickly by dropping their asking prices every 15 days. As they drop prices, this puts big pressure on prices of other homes in their neighborhood to continue dropping.

Takeaway: It’s a great time to rent in the Florida Keys. Buying a home down here today is still like buying a ball and chain for each ankle and throwing away the keys to the locks. Although the economy is improving in tourism, housing is still way overpriced. ”

Cheers!

C.

#192 jess on 03.23.12 at 12:59 pm

160 Mike

Read the whole report and then clarity will arrive. Also you mentioned one age demographic and portrayed this young group with rather a narrow view.

#193 Bottoms_Up on 03.23.12 at 1:01 pm

#167 Arshes on 03.23.12 at 11:01 am
————————————–
There is an estate administration tax which is minimal, $5 for every $1000 inherited, up to $50,000, and then $15 thereafter.

#194 panhead on 03.23.12 at 1:14 pm

#167 Arshes

No inheritance tax agreed, but what about probate fees? Percentage of estate. Seem like another form of tax to me. Am I missing something?

#195 Steven Rowlandson on 03.23.12 at 1:21 pm

I’ll bet you’re a Rick Santorum supporter. — Garth

Wrong again Garth. No political leader out side of myself except God has found grace in my eyes…
Even Hitler is too liberal/radical and falls short of being a true conservative nation builder…. Just another fake right winger.
Democracy, Oligarchy, Communism and the Neanderthal World Order is long over due for the dust bin of history.

#196 Debtfree on 03.23.12 at 1:22 pm

@182 how about deb hopes incessant and retarded laughter . It makes her seem brain dead . Like peter kent . what the hell has he got against fish anyway? Oh I forgot he’s reading a script .
I’m still amazed with you f laughing right in Ontarios face . You guys make mulroney look like a warm and fuzzy guy . You petroservatives are going to be the most hated government in canadian history . You just keep feeding the 1% and ignore the 99% .

#197 Blacksheep on 03.23.12 at 1:45 pm

Daisy Mae # 185,

“LOL We DO still have ‘freedom of speech’ in this country?”
——————————————
Since you attached a question mark, to your statement.
Unfortunately all you can do is laugh, as our country aligns
it self with U. S. policy. Speech seems free as long as it doesn’t challenge corporate/governmental interests. Toronto G-20, 2010 and Vancouver Olympics 2010 were both obvious examples, that we truly DON’T always have free speech. Am I still thankful I’m Canadian? You bet, just don’t like the direction things are heading.

take care,
Blacksheep

#198 disciple on 03.23.12 at 1:47 pm

Mr. Honourable Flaherty,
This is what you have to do: Cancel the CMHC insurance on all mortgages effective immediately. Then cancel the CMHC. It is a prehistoric 1950′s dinosaur we don’t need anymore. The banks are allowed to give out funds they don’t have with insurance that they don’t even pay for? How is that fair? How is that even capitalism? It’s not even socialism. It’s legal fraud and legal criminality. (I know these are oxymorons but there is no other way to describe it). Absurd.

You’re very lucky, Mr. Flaherty, that the majority of Canadians don’t even understand what the CMHC insurance is when they pay for it at closing…

#199 gladiator on 03.23.12 at 1:48 pm

Canada needs to be cured of acute harperitis flahertosum, alas the elections are far, far away…

#200 Bill Gable on 03.23.12 at 1:51 pm

Damning evidence of complicity and a lack of a moral compass.
Did you see what Mr. Turner said about the true pain that the CHMC mess will cause the prudent?
Us “live within your means” and try be good citizens will wind up bailing out the cretins, like those folks sucked in by a Vampire like Rennie.
I complained about Global’s coverage to the Broadcast watchdog in Ottawa, and they responded that they are demanding an explanation of the obvious conflict of interest displayed by this supposed News organization.
Makes me want to get out Canada.
It’s come to that.
Vancouver has become a trap, that will leave many of the trout reeled in by ZIRP, lying on the banks of the Fraser, soon.
Flaherty wins the Helicopter Ben award.
To think we have just about three more years of these cretins in Ottawa.
If you can read big words, Flaherty, look up disengaged.
You’ve got your Million buck pension, and let the rest of the morons eat cake.
Shame.
You nailed it, Mr. Turner.

#201 Fred on 03.23.12 at 1:53 pm

#184 Cow Man on 03.23.12 at 12:16 pm

# 168 Fred:

I understand that the mortgages transferred from the banks were non CMHC mortgages. They were the highest risk non insured mortgages.

—————

I don’t think so. See http://www.parl.gc.ca/Content/LOP/ResearchPublications/prb0856-e.htm

“Under the IMPP, the government proposes to purchase these mortgages from financial institutions. More specifically, through CMHC, the government intends to buy National Housing Act Mortgage-Backed Securities (NHA MBS), a kind of bond for which the underlying asset is a pool of mortgage loans guaranteed by CMHC.”

So, the swapped assets were already insured by CMHC. If there was risk, it would be the risk that by giving banks more money they were giving them the opportunity to lend more mortgages to Canadian, and to stick CMHC with the risk of insuring them.

On my question about where the proceeds go, I am supposing now they go into national revenue. Probably a former Minister of National Revenue would know …

#202 Alex N Calgary on 03.23.12 at 1:58 pm

Its coming, its really coming! terrifying, my 27yr old friend on the third property the 800k acreage figures they’re safe as they have 1/4 of the value in equity and her husband works construction. shes the one who handles foreclosures, told me 50% of the cases are bankruptcies that come across her desk, all of them from 2007-2008 homes, the peak!

Its going to be really unpleasant, perhaps it’ll be easier to find a nice inner city rental house then, as it sure is a tough time right now.

#203 JIM on 03.23.12 at 1:59 pm

Here’s a thought. The posters on this blog are predicting Canadian house prices will go down, or in the case of realters, will continue to go up. What if, due to well , whatever, the prices remain stagnent for years?

#204 EdmontonJim on 03.23.12 at 2:02 pm

I had a conversation with my BIL yesterday. He is more of a doomer than I am, but then again he grew up in Czechoslovakia, so some pessimism is justified I suppose.

His general attitude is that politicians, always behave the same way, whether they are sociallists, libertarians, or whatever, all act the same way, and send the same message.

The incumbant will try to make everyone think that everything is fine (even if it isn’t) until after the election. The opposition will try to make everyone afraid of tommorrow, but promise that they can fix it.

But reality doesn’t actually care who is ‘In Charge’, the solutions are always the same.

One thing that all people must remember is the One Eternal Principle, that ought to be the basis Science, Economics, Religion, Politics, and Life itself:

“There is no such thing as a free lunch”

#205 steev on 03.23.12 at 2:02 pm

Re #74 TRT

That is a distinct possibility, but I’ll postulate one that’s more likely.

The guys in power (Flarety, Harper, Carney) are smart, they see this coming just as much as Garth. Unlike Garth, they are staring at the end of their careers when the sh*t hits the fan. Engineering a soft landing is an impossibility, bubbles don’t deflate, ever. Don’t believe me?, go here:

http://www.youtube.com/watch?v=0F7SCbrU5sQ

I don’t happen to agree with the premise of the series that this video is a part of, but the author does a good job of explaining what happens after a bubble…it always pops.

So let’s assume the smart guys in charge see the writing on the wall, which means their focus shifts to blame, and how to avoid it. Their first attempt was to get people in over their head to blame themselves…cue Carney bringing the fire and brimstone about taking on more consumer debt every time he makes the decision to keep the BOC rate at emergency levels. Next, try and blame the banks: evident is Flarety’s latest speech. Last would to be to take a hands off approach and blame the economy in general…which is what Bernake is doing now.

Hands off approach at this point would mean the CMHC rationing will begin on schedule.

Garth, have I got it, or am I way off?

#206 EdmontonJim on 03.23.12 at 2:16 pm

Commenting on the video – do people not realize that densification reduces the value of places that cannot be further densified?

For example. If I live a 20 year old condo building in a great location, and someone builds an identical brand-new condo across the street, it cuts the potential demand for my condo in half? At least?

#207 John G. Young on 03.23.12 at 2:19 pm

#151 Steven Rowlandson

“…What could societies and governments that promote real estate bubbles and sucking up to Israel and homosexuality possibly know about morals?…

I’ll bet you’re a Rick Santorum supporter. — Garth”

Thanks Garth. I’m sure he’s a Rob Ford supporter too.

Is this an anti-Israel/gay-bashing blog?

#208 Linda on 03.23.12 at 2:22 pm

This article is more than a year old, but this is the first time I’ve read it. Thought I’d share:

http://www.torontolife.com/daily/informer/from-print-edition-informer/2011/02/02/the-unaffordable-city-how-did-toronto-get-so-expenisve%E2%80%94and-is-it-worth-it/

#209 John G. Young on 03.23.12 at 2:41 pm

#196 Steven Rowlandson on 03.23.12 at 1:21 pm

“No political leader out side [sic] of myself except God has found grace in my eyes…”

So you’re saying that God gets your stamp of approval?

Thanking God right now that you don’t have any power over me.

That

#210 daystar on 03.23.12 at 2:44 pm

http://999-rose.ca/wp/canada-stands-ready-to-tighten-mortgage-rules-flaherty-from-rosalie-999-rose-ca/

http://www.vancouversun.com/business/economy/Finance+Minister+Flaherty+says+Canadian+bank+executives+desire/6344068/story.html

F is pretty loose lipped with his opinions yesterday and it gives us a peek into the mind of our minister of finance over the last 6+ years now. A clip from yesterday from Jim is quite revealing:

“I find it a bit odd that some of the bank executives are taking the position that the minister of finance or the government somehow should tell them how to run their business,” Flaherty said during an appearance in Stittsville, Ont., just west of Ottawa.

“We have bank executives in Canada going and saying ‘really, the rules on insured mortgages should be tightened up.’ They must forget that they are actually the ones that issue the mortgages. It’s their market. It’s not my market. They decide what they want to charge in interest rates.

“They’re the ones that make the profits out of this business, so I do find it a bit much when some of the bank executives turn to the government . . . and say ‘you ought to change the rules and make it tighter.’ It’s very interesting commentary from them.” – Flarhety

So what is our 6+ year finance minister saying? He’s saying he can’t understand why banking executives would want tighter mortgage regulations that would hurt RE valuations, i.e. hurt banking profit. I used to think F was smart. Dishonest, a liar, an all out opportunist but I thought he was smart. I thought he at least understood what drives market sentiment which is greed and fear. He’s great at recognizing greed but can’t recognize banker fear when he sees it? Maybe F really is a total idiot, fearless to the very real possibility that he just might go down in history as the worst finance minister Canada’s ever had.

Banker fear, in case F really is that dumb, is justified. My best guess is that houses are sold say, once every 35 years and as such, 2% of the homeowner population is going to buy a new or used home this year just like any other year. We’ve had 3 years of “emergency” “record low” interest rates. (we are now into the 13th quarterly) Never has the ability to borrow money ever been so low partly due to record low interest rates and partly due to loose CMHC regulations coupled with such low rates. We have now had 3 years of home buyer/borrowers of large mortgages that are at high risk to higher interest rates. Another year of record low rates leaves roughly 8% of the population hanging if rates rise thereafter near these zenith valuations. Add the equity drain, lost jobs, income and bankrupcies that rate hikes would spawn in real estate alone and this 8% figure of high risk borrowers doubles.

Readers, that equates to banker fear. Enter tighter banking regulations for a reason:

http://business.financialpost.com/2012/03/23/banks-tighten-condo-lending-amid-bubble-fears/

Lets recap. F wanted a RE bubble and did everything he could to create one knowing a wealth effect, however temporary, would help them to win a majority government. He had help. Greedy bankers, developers, speculators and realtors applauded his early efforts and supported the Harper party politically to create the RE valuations we see today (Bay St. played a huge role in the last 3 elections). The effect is a majority conservative government, sky high RE valuations and huge amounts of debt both public and private. Its all set to explode in everyone’s faces with a U.S. economic recovery that spawns higher interest rates with the end of their QE and then there is nothing the government can do at that point but bailout CMHC and potentially banks while Canadians watch their public debt, taxes and inflation climb and possibly skyrocket while their equity falls and its all set to play out sometime within the next 5 years triggered by higher interest rates. Balanced budgets? Impossible once bailouts begin and the nation enters into a real estate led recession. Canadians should write off the notion of this Harper government ever balancing a budget in its lifetime.

Oh, and what will F have to say about it when it happens? “Banks decide interest rates, its their market.” i.e. F is not to blame.

Read more: http://www.canada.com/business/mortgages/Finance+Minister+Flaherty+says+Canadian+bank+executives+desire+government/6344068/story.html#ixzz1pxLzyF6B

#211 Form Man on 03.23.12 at 3:00 pm

#204 JIM

Housing prices do sometimes ‘move sideways’ for years. This happens when supply, demand, interest rates, etc, remain in an equilibrium. All available reliable data indicates a significant oversupply ( and growing ) in Canada’s housing market today. There will be no need for an ‘external shock’ to trigger the bubble. Market forces will impose ‘equilibrium’. It is already beginning to pop on its own, but it seems unlikely we can avoid a ‘ hard landing’.

#212 bill on 03.23.12 at 3:03 pm

Stevie Rowlandson is long over due for the dust bin of history thats a safe bet.
in the dystopian world you envision,you would be the type of person that would be carted off right away,never to be seen again……
but you are too ignorant to realize that i reckon….
fortunately saner people prevail eh?

#213 Hell in a Handbasket on 03.23.12 at 3:05 pm

Bankers are asking for the government to tighten regulations because the Bankers have to make a profit for the shareholders. The Bankers cannot reign themselves in, they are not allowed.

#214 Lianne on 03.23.12 at 3:05 pm

The Whispers From the Edge of the Rainforest blog has an excellent post on the possible shenanigans of the Bob Rennie marketing team, in “selling out” the 415 condos in Vancouver in four hours.

http://whispersfromtheedgeoftherainforest.blogspot.ca/2012/03/whats-wrong-with-this-picture.html

#215 Timbo on 03.23.12 at 3:18 pm

#204 JIM ,

if price go flat for years you are losing to inflation.

http://www.bankofcanada.ca/rates/related/inflation-calculator/

Punch in any number. Lets say for example 300k and look back to 2007. You now are going to need 329k to have the same purchasing power. 9.98% in just 5 years.

#216 City Slicker on 03.23.12 at 3:20 pm

#234 City Slicker on 03.22.12 at 2:22 pm Garth, if someone filed for bankrupcy, do they keep their home?

It depends on the creditor arrangement. — Garth
———————————————————-
Would you say 50% would lose their home in the arrangement? I mean how can they keep paying off the house in the case they didn’t lose it?

#217 Timbo on 03.23.12 at 3:27 pm

http://www.economonitor.com/wp-content/uploads/2012/03/Glassman-3-23-12-1.jpg

bubbles, bubbles, toil and troubles….

http://www.economonitor.com/blog/2012/03/we-have-an-economic-recovery-it-costs-1-1-trillion-per-year-and-might-still-fail/?utm_source=rss&utm_medium=rss&utm_campaign=we-have-an-economic-recovery-it-costs-1-1-trillion-per-year-and-might-still-fail

“The recovery is real. Government spending sustains the economy while households pay down (or default) on their excess debt. The recovery is real, just like the recovery of a patient in a hospital’s intensive care ward. Wired and tubed, fluids flowing and machines humming, the patient feels fine.

What happens when we disconnect the patient? Code Blue! Immediate medical attention needed!
What happens if the US cuts spending to reduce the deficit? Code Blue! Instant recession.

turn off the tap’s too early and it will get ugly…..

#218 Victor on 03.23.12 at 3:28 pm

Banks tighten condo lending amid bubble fears

Bloomberg News Mar 23, 2012

Canada’s biggest banks are tightening lending standards for condominium builders at the urging of regulators, requesting higher pre-sales and deposits as policy makers warn the Toronto and Vancouver markets are overheating.

Some banks have been asking construction firms to put more equity into new projects in recent weeks, according to developers. Lenders have also been raising the percentage of condo units that must be pre-sold and are demanding higher deposits as conditions for financing, they said.

“Several of the banks have tightened up” after the Office of the Superintendent of Financial Institutions “told the banks to be a little bit more careful on who they are lending to and how they are lending,” said Barry Fenton, chief executive officer of Toronto-based Lanterra Developments, whose condos include WaterParkCity and Ice Condominiums at York Centre.

http://business.financialpost.com/2012/03/23/banks-tighten-condo-lending-amid-bubble-fears/

#219 Dan in Victoria on 03.23.12 at 3:58 pm

Zeeman1 @176

Has anyone been paying attention to the Ontario government scandals?

From what i see out here in BC you guys are mere amateurs.
http://en.wikipedia.org/wiki/List_of_Canadian_political_scandals

#220 triplenet on 03.23.12 at 4:04 pm

I think Flaherty has a look at this site everyday because he needs a good laugh.
What a collection of goofs.
Most of the comments on this site qualify as intellectual humour.
Alot of people did take the little yellow bus to school.

That was deep. — Garth

#221 Dan in Victoria on 03.23.12 at 4:08 pm

Bill Gable @ 201
Hi Bill never mentioned it but I enjoy your posts.
I don’t watch the msm anymore its an outright joke.
Was involved in the SFAB meeting the other night in Victoria watched it on Chek, bye bye Chek, not even close to what happened….
I mainly Read Garths blog
Rafe Mairs blog
Harvey Oberfelds blog
Alex G Tsakumis blog
Between those I get a real good sense of whats going on here in BC.
While I read them I listen to AM 1710 Antioch old time radio.
Blood pressure is way down.
Superman is on right now……..

#222 John G. Young on 03.23.12 at 4:23 pm

#187 bill

per Steven Rowlandson:

“I always carry concealed…the government doesn’t tell me what I can and can’t do.”

Beyond scary.

#223 Cato on 03.23.12 at 4:33 pm

The various political interests are now being careful to script the message and absolve themselves of any responsibility. All the political parties are guilty of running the country off the rails. Don’t think for a moment it was just the conservatives driving the “stimulus” bus.

The gamble was to do everything possible to juice domestic consumer spending while our largest trading partner was in the doldrums. The conservatives benefited most (it won them a majority) but every party had friends benefiting in some way. Like elsewhere in the world the middle class was only to happy to take the bait, the middle class will suffer the greatest sacrifice.

Once the country starts sobering up and realizes the mess this drunken debt orgy created the hangover is going to be equally severe. Its not going to matter what political stripe is in power the end result is the same. Massive cuts to spending across the board, large deficits and lack of opportunity for many regions of the country. Those tied to resource trade will be the lucky ones, everyone else will get to take a big step back economically. This country is about to be split into haves and have nots.

I’m sure the current crop of bad actors will slink away rather quickly to avoid the repercussions. Sparking a credit bubble is something any idiot can do, its easy to take on debt. Paying off this level of debt could take a generation or more. Don’t be surprised if the next generation looks for a little political payback after being screwed so badly by the current crop of political animals.

#224 Van guy on 03.23.12 at 4:44 pm

Looking back to 2001, Vancouver prices were considered unaffordable. According to this chart, it shows that 2001 had a ratio of 5.4 x median income for a average home. So 11 years later, what should it really be? Here’s the chart I found. Any comments in this would be appreciated.

http://vreaa.files.wordpress.com/2012/03/screen-shot-2012-03-22-at-8-35-21-pm.jpg

#225 peter on 03.23.12 at 4:49 pm

It Wont be any buble burst because there are plenty, plenty of idiots out there.

#226 Canadian Watchdog on 03.23.12 at 4:50 pm

#216 Timbo

Careful with those government calculators. They’re getting tweaked. http://strategis.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca01817.html

#227 Ogopogo on 03.23.12 at 4:54 pm

#148 Keith on 03.23.12 at 9:22 am
Garth,

I disagree a little. Yes, Flaherty is at fault for the CMHC mess. But you seem to let the banks have a free pass. So they don’t hold any responsbility for the loans they make?

In any event, any tips on how to short CMHC?

Garth addressed this in a past comment with one word:

Rent.

On a separate note, Steven Rowlandson’s homophobia is a dead-giveaway of a closeted, self-loathing man. Tiresome and predictable, much like a televangelist’s protestations of piety.

#228 Ogopogo on 03.23.12 at 5:00 pm

#221 triplenet on 03.23.12 at 4:04 pm
I think Flaherty has a look at this site everyday because he needs a good laugh.
What a collection of goofs.
Most of the comments on this site qualify as intellectual humour.
Alot of people did take the little yellow bus to school.

That was deep. — Garth

triplenet, I think you’re mistaking this blog for a realtors’ convention.

Now, take your meds, lather yourself up with Old Spice and go flog a house to the dwindling herd of greater fools.

#229 Let's Party! on 03.23.12 at 5:04 pm

http://www.huffingtonpost.com/2012/03/23/chinese-gangsters-stolen-cell-phone-pictures_n_1376034.html

#230 AprilNewwest on 03.23.12 at 5:04 pm

Dan #222 – I’m with you. I too don’t watch msn anywhere near as much as I used and some of my friends say they do not watch msn anymore. As you said “… outright joke”.
They disgust me. Global is going to do a series soon on “Demand chasing locals out of the housing market”. It sounds like it will be swayed in favour of the developers/RE….I would be very surprised if they present a balanced view of what’s really going on in the housing market. Considering all the warnings about Canadians over their heads in debt the media continues to encourage more of the same. Shame on them!!

#231 jess on 03.23.12 at 5:12 pm

Friday, March 23, 2012
Bank of America Launches Test “Mortgage to Lease” Program – Should We Be Impressed?

http://www.nakedcapitalism.com/2012/03/bank-of-america-launches-test-mortgage-to-lease-program-%e2%80%93%c2%a0should-we-be-impressed.html

German cities were privatizing housing, and Fortress-controlled Gagfah bought 45,000 rental units from Dresden. Gagfah agreed to give existing tenants the right of first refusal on any sale. It was also criticized in local media for neglecting repairs. Gagfah was sued for €1 billion by Dresden and settled for €40 million.
========

Beware the Locusts: Public Housing Sell-Offs on the Rise in Germany

SPIEGEL Online International – 14.11.2006
Selling off public housing to foreign investors has become all the rage in Germany and the next big sale is just over the horizon. But many in the country are skeptical of giving in to the “locusts.”

05/23/2011

REAL ESTATE
Collapsing buildings
By Klawitter, Nils and Aquarius, Andreas
http://www.spiegel.de/spiegel/print/d-78602566.html

#232 Pr on 03.23.12 at 5:16 pm

When its all over , and, this time will come, some people in 3000$ suit will be persecute and trow to jail. Its not the year 1900, a lot of people now know,what time it is!

#233 KingBubbles on 03.23.12 at 5:24 pm

Soft Landing ?

http://business.financialpost.com/2012/03/23/moodys-puts-odds-on-soft-landing-for-canadian-housing-market/

Nobody (not me, anyway) said house prices would ‘plummet.’ A meaningless report. — Garth

#234 Lookoutbelow on 03.23.12 at 5:58 pm

Canadian GDP has been looking better than it actually is, because of the artificial reflation of the housing industry. China has been pulling this trick for the last decade and has recently been forced to cut its growth outlooks.

Second point, the title of this post is so fitting. Canadian public carries all of the risk while the banks carry none. They make the profits and in case of housing correction, the Canadian Taxpayer bails them out. Haven’t we seen this movie before?

What F has been doing is almost unconscionable, they should have been tightening regulations two years ago, now everyone is running around long after the horse has fled. CMHC, OSFI, F and C will not succeed in avoiding the impending downturn, starting in Kelowna, Victoria, Vancouver and on to Ontario.

In Vancouver RTM ( reversion to the mean) would suggest a price drop of around 40 – 50% to get back to the fundamentals. Save your money, there will be a 50% Off Sale soon.

#235 md on 03.23.12 at 6:01 pm

should you require any further clarification on why we are where we are now….and what is to come
http://whatreallyhappened.com/WRHARTICLES/wildbankers.php

Congressman Charles A. Lindbergh, Sr. revealed the Bankers Manifesto of 1892 to the U.S. Congress somewhere between 1907 and 1917. The source was an article written by Louis Even and published in United States Bankers Magazine 1892.

“We (the bankers) must proceed with caution and guard every move made, for the lower order of people are already showing signs of restless commotion. Prudence will therefore show a policy of apparently yielding to the popular will until our plans are so far consummated that we can declare our designs without fear of any organized resistance.

Organizations in the United States should be carefully watched by our trusted men, and we must take immediate steps to control these organizations in our interest or disrupt them.

At the coming Omaha convention to be held July 4, 1892, our men must attend and direct its movement or else there will be set on foot such antagonism to our designs as may require force to overcome.

This at the present time would be premature. We are not yet ready for such a crisis. Capital must protect itself in every possible manner through combination (conspiracy) and legislation.

The courts must be called to our aid, debts must be collected, bonds and mortgages foreclosed as rapidly as possible.

When, through the process of law, the common people have lost their homes, they will be more tractable and easily governed through the influence of the strong arm of the government applied to a central power of imperial wealth under the control of the leading financiers.

People without homes will not quarrel with their leaders. History repeats itself in regular cycles. This truth is well known among our principal men who are engaged in forming an imperialism of the world. While they are doing this, the people must be kept in a state of political antagonism.

The question of tariff reform must be urged through the organization known as the Democratic Party, and the question of protection with the reciprocity must be forced to view through the Republican Party.

By thus dividing voters, we can get them to expend their energies in fighting over questions of no importance to us, except as teachers to the common herd. Thus, by discrete actions, we can secure all that has been so generously planned and successfully accomplished. “

#236 Mister Obvious on 03.23.12 at 6:02 pm

#226 peter

“It Wont be any buble burst because there are plenty, plenty of idiots out there.

—————————

In 1637 there was a multitude of idiots in Europe who would buy a single tulip bulb for the same price as a year’s supply of food… until there wasn’t.

We have evolved little since then.

#237 Can it be? on 03.23.12 at 6:27 pm

#221 triple net… Why are you here? There are many blogs, I could never understand why some people troll blogs just to contradict the author or the people commenting. Make your own blog… Find your own followers and write about what you feel like writing. Keep up the good work Garth :)

#238 Victoria on 03.23.12 at 6:29 pm

Well I would love to know what is really happening in Victoria. Our house is way down in price by about $100,000.

Is still can’t figure this out. Is Victoria special that it is going down faster than other places or is it just our house.

It’s the blog curse. — Garth

#239 this is wonerland on 03.23.12 at 6:37 pm

The Office of the Superintendent of Financial Institutions has invited public comment on the draft rules until May 1. Brock Kruger, a spokesman for OSFI, said the completed guidelines will likely be issued before year-end. The announcement comes amid growing worry around the country’s housing market and escalating household debt.

Read more: http://www.windsorstar.com/business/fp/money/Bank+regulator+targets+mortgage+disclosure/6327780/story.html#ixzz1pyxeUn1m

#240 Canadian Watchdog on 03.23.12 at 6:39 pm

Investment lending about-face hurts brokers

“Other mortgage brokers also report difficulties, many stemming from CMHC insurance changes, meaning some investors have to come up with a 20 per cent deposit, and from changes to what percentage of rental income lenders will allow clients to use as an offset.”

If F doesn’t get legislation passed for covered bond holders next week, developers, builders and owners of mult-unit/rental properties are going to get a plethora of DCs (Deposit Calls, you heard it here first).

#241 woo hoo on 03.23.12 at 6:40 pm

Party on , people. Just a matter of thyme till the fat lady sings.

#242 Expat on 03.23.12 at 6:42 pm

#225Van guy

I think your referenced chart is the best illustration of why the current Vancouver market is out of whack because it focuses on affordability.

Vanvouver will always cost more than the average for the rest of Canada – very short supply of accessible West Coast land with a passable climate in this country – so the 2001 Vancouver premium on the multipliers make sense, I guess. Multiplier premium of 2.4.

Fast forward to 2011, the multipliers are way beyond any sane west coast premium and into casino territory – premium of 6.6 (!!!). Ten years ago these multipliers would not have been possible with the interest rates, downpayment requirements, and income qualifications for mortgages of the day. Oh yeah, and the new post-olympic brew of West Coast Kool-aid.

#243 Can it be? on 03.23.12 at 6:46 pm

#181 very good link… Didn’t catch that before!

#244 Nostradamus Le Mad Vlad on 03.23.12 at 6:47 pm

-
Skunk Juice

One day a lady from the church had come over and had given a gift for all the wonderful sermons that her husband has given.

Mrs. Johnson had said, “Thank you very much but what is it?”

The lady said, “It is a Damn ham.”

Mrs. Johnson looked shocked and said, “Don’t speak that way to me, don’t you know that I am the preachers wife!”

The lady said, “Yes, yes I know, but that is the brand name of the ham!”

Mrs. Johnson said, “Ooh I see well thank you” and the lady left.

Later that night when Mrs. Johnson was cooking dinner the preacher came into the kitchen and said,

“Mmmm! That smells really good! What is it?”

Mrs. Johnson said,” Well thats your dinner tonight, some Damn Ham”

The preacher was shocked and said, “Don’t speak to me that way! Don’t you know who I am?”

Mrs. Johnson said, “Yes, yes! I know who you are! It is just the brand name!”

The preacher said, “Oh! I see! Well it smells great!”

That night when dinner was ready she had set it out on the table. The corn, mashed potatoes, rolls, and ham!

When the family sat down they said their prayers and began to eat. The preacher said to his wife, “Could you please pass me some of that Damn ham?”

The wife said “sure”.

Then little Johnny said,

“Alright dad! While you’re at it can you pass me the fucking mashed potatoes!”
*
What a gorgeous day today! Has anything of any consequence happened so far, or is it a down tools day?

#245 bill on 03.23.12 at 7:01 pm

#223 John G. Young on 03.23.12 at 4:23 pm
beyond scary

well his mind [?] is scary but he is a lightweight for sure.
people that carry a weapon never talk about it.
what is more far likely is that he sits in a nursing home somewhere and is bossed around by a gay nurse named feinstein and is subsequently embittered with his lot…..
my sympathies are with the health professionals on this one

#246 $$$BPOE#1 on 03.23.12 at 7:05 pm

Rennie and Tsur are the smartest guys to ever set foot on this planet. Another great week folks. 1st quarter coming to a close and it is rock solid. Ever development going up along the Canada Line is going for dirt cheap. Hurry it’s all going fast

#247 mac on 03.23.12 at 7:09 pm

Wow. All the 20,000,000+ property speckers have left is Canada as England has just grown some balls. Unlike F, Garth, who you thought would act against speculation and increasing the bubble. He won’t as per his words today.

#248 The American on 03.23.12 at 7:13 pm

Coming soon to Canada…

http://news.yahoo.com/elections/remake-america/

#249 Westernman on 03.23.12 at 7:19 pm

Pr@#233,
Nobody is going to be prosecuted… they will walk with billions in their back pockets like always … paid for by your taxes.
This is the way it works, kid…

#250 Timbo on 03.23.12 at 7:42 pm

http://www.reuters.com/article/2012/03/21/portugal-deficit-idUSL6E8EL2JI20120321

Portugal’s core public deficit nearly tripled in the first two months of 2012.

oh my, and to think things were actually turning…

http://theautomaticearth.org/Finance/the-extraenvironmentalist-interviews-nicole-foss.html

Nicole tells us about the Canadian housing bubble and why the initial collapse might just be faster than the one America experienced in 2005. Seth and I ask about what life was like in the Great Depression and how the process of labor exploitation may continue into the near future.

interesting audio, red link……

#251 Daisy Mae on 03.23.12 at 8:00 pm

gladiator on 03.23.12 at 1:48 pm
“Canada needs to be cured of acute harperitis flahertosum, alas the elections are far, far away…”

*********************

Whatever happened to a ‘lack of confidence’ vote…?

#252 Ballingsford on 03.23.12 at 8:08 pm

Buckle your seatbelts! Ontario and Federal budgets coming this upcoming week.

How many in these jobs about to be cut will be people be able to afford their mortgages.

I hope that they all will, but I’m an atomistic!

#253 Van guy on 03.23.12 at 8:11 pm

#247 $$$BPOE#1 on 03.23.12 at 7:05 pm
Rennie and Tsur are the smartest guys to ever set foot on this planet. Another great week folks. 1st quarter coming to a close and it is rock solid. Ever development going up along the Canada Line is going for dirt cheap. Hurry it’s all going fast

Where does this leave you?

#254 Nostradamus Le Mad Vlad on 03.23.12 at 8:26 pm

-
Homeowners in US “Say goodbye to your mortgage interest deduction, not to mention your equity.” wrh.com; US is Oil Exporter, but gas prices haven’t dropped, 2:37 clip WW3 and the ‘konomee and SArabia and China Building a new refinery; Sarkracy, Cameron and Obama Following their master’s orders (TPTB), such as here; MF Global “MF GLOBAL’S CORZINE ORDERED FUNDS MOVED TO JPMORGAN, MEMO SAYS CORZINE’S `DIRECT INSTRUCTIONS’ “; Free Ride! Companies who don’t pay income tax; Conversation between a gold bug and a banker; 6:42 clip VW’s transparent factory; 2:53 clip WA State could rake in just over half a bln. if dope is legalized and taxed; Super Ships Titanic, Eneterprise and America; 60 hour work week Work till you drop; China encroaching? Try the west.
*
Mysterious Booms continuing in Wisconsin; Iran – Israel If true, good on the people. Another reason to get rid of politicos and lobbyists; Fourth Largest gun maker is outta guns (can’t keep up with the demand); The Militarization of the Far East; Fukushima Everybody’s involved in covering up the real numbers; Prisoners More in jail than anyone else; Anonymous :They’re back. The FBI’s Lulzsec promises hijinks on April Fool’s Day.”; Poland’s Monsanto “Bees are critical to the survival of plant species; when bees die off, entire plant species may well go with them.” wrh.com; Eight Hour Sleep is a possible myth.

#255 Can it be? on 03.23.12 at 8:38 pm

People just hate hearing the real estate is not indefinitely going up… The truth hurts I guess.

#256 a prairie dawg on 03.23.12 at 8:54 pm

#248 mac

F … who you thought would act against speculation and increasing the bubble. He won’t as per his words today.

- — -

And I’ll bet you a “Big Mac” that F would have dropped the max amortization to 25yrs, if the OSFI announcement hadn’t popped up in the news to derail the banks little gravy train. (CMHC Express)
For all we know the gov leaned on the regulator and told them to step in instead.

The problem now is that they are all pointing their fingers at each other for the bubble.

-banks say gov should have raised rates
-gov says banks set their own rates
-OSFI says banks have been idiots and better shape up and toughen standards

It’s going to be an ‘interesting’ few years…

#257 a prairie dawg on 03.23.12 at 8:58 pm

#252 Daisy Mae
Whatever happened to a ‘lack of confidence’ vote…?

- — -

Hard to bring down a majority gov with a confidence motion/vote. (unless enough insiders rebel, lol)

#258 John G. Young on 03.23.12 at 9:10 pm

#228 Ogopogo

“On a separate note, Steven Rowlandson’s homophobia is a dead-giveaway of a closeted, self-loathing man…”

I don’t believe that all men who hate gay men are necessarily closeted, although that’s certainly true for some — I think sometimes it’s that they were molested by men (usually heterosexual) when they were younger, and grow up confused about the difference between sexual orientation and sexual abuse.

#259 TurnerNation on 03.23.12 at 10:03 pm

#55Miko on 03.22.12 at 9:37 pm

F hangs out here? Ewwww. I’ve always thought of this weblog being as a respiteful enclave.

#260 guy from toronto on 03.23.12 at 10:22 pm

hey there Steven Rowlandson…dude you sound like a real jackass. I feel bad for you, in one way, but also kind of creeped out at the same time.

Let me guess; you like Harper okay and Rob Ford is pretty cool from your pov, right?

Urgh.

that is all

#261 Free Market on 03.24.12 at 3:35 am

Realtor’s doing an about face?

“Rental housing now starts to make sense — where it hasn’t in the past,” said Al Didur, chair of the government affairs committee of the Association of Saskatchewan Realtors, who called the program “exciting” and said developers can “stack” it onto other incentive plans.

http://teamfisher.com/saskatchewan-government-delivers-on-affordable-housing-in-2012-13-budget/