F factor

Once a pumper, always a pumper. The man who dreamed up 40-year amortizations and implemented them just as the US real estate market was crashing, and who allowed government-backed 0%-down house financing and who’s overseen growth of the largest real estate bubble in history, has done it again.

In his much-hyped budget, F choked. As expected.

There will be no murdering of the 30-year mortgage and a return to a maximum of 25 years, as several big banks were pleading.

No suggestion that minimum down payments be raised from 5% to 7%, as experts had suggested, to protect property virgins from themselves, and massive debt.

No end to cash-back mortgages, meaning 100% financing continues, backed by taxpayers.

And no word on raising (or doing anything, for that matter) CMHC’s lending ceiling of $600 billion, which has been all but consumed in an orgy of recent borrowing.

Only this: Ottawa will bring in “enhancements to the governance and oversight framework” of the crown corp. Also (as far as I can tell at this moment), nothing immediate about reforming the system of ‘covered bonds’ which have helped create an ocean of borrowing (but indications that new laws are coming). In fact, in his budget speech Flaherty was strangely silent on what many economists (including Brother blog dog Carney) think is the biggest time bomb ready to take out economy growth – runaway household debt.

Here is all that the 498-budget says about the biggest social issue facing most Canadian families:

The Government continuously monitors housing finance risks and takes action when necessary. Adjustments to the rules for government-backed insured mortgages were announced in July 2008, February 2010 and January 2011. In addition, in June 2011 Parliament approved legislation to formalize arrangements with private mortgage insurers and Canada Mortgage and Housing Corporation (CMHC), enhancing the Government’s ability to manage risks arising from the mortgage insurance sector.

As part of the Government’s continuous efforts to strengthen the housing finance system, the Government will introduce enhancements to the governance and oversight framework for CMHC, contributing to the stability of the housing market and benefitting all Canadians. The Government will propose legislative amendments to strengthen oversight of CMHC and to ensure its commercial activities are managed in a manner that promotes the stability of the financial system.

The Government is moving forward with a legislative framework for covered bonds. A legislative framework will support financial stability by helping lenders find new sources of funding and by making the market for Canadian covered bonds more robust. CMHC will be the administrator of this covered bond program, which will be available to federally and provincially regulated mortgage lenders in Canada.

By the way, the budget does mention, cryptically, that CMHC’s budget will be cut by$102.4 million by 2015-5. Obviously an austerity kick in terms of post-it notes and mouse pads.

As you know, F nicked a few bucks off Parliament’s budget, cut overall government spending by a smidge, promised to eliminate 19,000 civil servants (over time), and exempted almost all Boomers from the move to chop OAS spending. That $6,000-per-year handout just because your knees won’t work will continue to be paid to everyone currently 54 or older, when they hit 65.

So, what does it mean?

For the housing market, nothing. The trap continues to be baited with cheap rates, free-flowing mortgages, no-money-down financing and nary a word of waning. In fact in the entire budget, for which at least one medium forest died, the words “mortgage debt” do not appear. No cautions about overborrowing or the dangerous amount of collective net worth now stuffed into a single asset.

So much for Mark Carney. His continuous warnings about overheated housing in Vancouver, condo madness in Toronto or the inevitable impact of higher interest rates – all gone in a poof of elfin pixie dust. This is what politics does to people who once owned principles. Or told you they did.

343 comments ↓

#1 Makaya on 03.29.12 at 4:32 pm

And you forgot that gem…

““The government says the changes are needed so the program – and Ottawa’s bottom line – are not overwhelmed by the large baby-boom generation of Canadians born between 1946 and 1964. Yet all but the tail end of this cohort will be protected from the higher eligibility age, which will be phased in between 2023 and 2029.”

A government run by the boomers for the boomers… at the expense of their children and grandchildren. Shameful and disgusting!

#2 Makaya on 03.29.12 at 4:33 pm

Forgot to add the previous sentence of the article:

“That means most of Canada’s baby boomers will be collecting OAS by the time eligibility age for the retirement benefit is raised to 67.”

http://www.theglobeandmail.com/news/politics/tory-budget-slashes-52-billion-in-spending-gives-boomers-a-pass-on-oas/article2386044/singlepage/#articlecontent

#3 Gypsy Kid on 03.29.12 at 4:33 pm

Goes to prove that the Cons dont really care about the ordinary Canadians. Having said that, maybe we’re too stupid also to govern ourselves from all this cheap credit. As you often say, this will not end well…

#4 Boy Named Su on 03.29.12 at 4:34 pm

Great Site Garth!

#5 Cory on 03.29.12 at 4:36 pm

I think I said this would happen but you asked me for my “sources”……some people do know things too Garth.

I should have bet and at least made some cash in these crap markets.

#6 Flash on 03.29.12 at 4:36 pm

Flaherty first!

#7 r on 03.29.12 at 4:36 pm

well that was anti-climactic…

#8 Flash on 03.29.12 at 4:36 pm

So, rates stay down for the next little while?

#9 FTP - First Time Poster on 03.29.12 at 4:37 pm

http://business.financialpost.com/2012/03/29/ottawa-to-toughen-cmhc-oversight/

#10 DodgedBullet on 03.29.12 at 4:39 pm

“And no word on raising (or doing anything, for that matter) CMHC’s lending ceiling of $600 billion, which has been all bust consumed in an orgy of recent borrowing.”

Freudian slip?

#11 Jay on 03.29.12 at 4:39 pm

First.

#12 Dylan on 03.29.12 at 4:40 pm

Everyone’s watching the budget, eh?

#13 Poorgoisie on 03.29.12 at 4:40 pm

Can you remove those first Sayers?!

#14 Willa on 03.29.12 at 4:44 pm

The last time the Conservative party balanced a budget in Canada was 1896. And it was entirely by accident.

Plus ca change…

#15 Victoria on 03.29.12 at 4:44 pm

I had a strong feeling this was going to happen. 27 percent of people are employed in some way in the housing industry (I might be wrong but this is what I read) and they will not do anything to tamper with this. They want to keep the bubble while they are in power and leave the problems to the next guy.

#16 you know it on 03.29.12 at 4:44 pm

first

#17 D-dawg on 03.29.12 at 4:49 pm

G. Did you really expect ‘that’ to be in the budget?

Tell me your blog rants over the days leading up to this momentus day was for entertainment purposes, tell me the citation budget ‘must-haves’ was to keep all the blawg dawgs here wanting more, tell me your are not suprised, at all, at what happened.

I’m not.

….and I am not as nearly as smart as you are.

Actually I said not to expect any such changes, since F was leaving the heavy listing to OSFI. Did you miss school that day? — Garth

#18 City Slicker on 03.29.12 at 4:50 pm

So what now, the party goes on. At what point will market forces take over to do their thing? Maybe this will keep inflating to infinity?
As James Sinclair says QE to infinity, ultimatley that’s what the Cons are doing, endless cheap credit expansion.

#19 Makavelli on 03.29.12 at 4:50 pm

#4 Boy Named Su on 03.29.12 at 4:34 pm

Su Ngo?

Garth,

F did shit all because if RE crashes, he’ll blame the banks. And he will say it ain’t his fault. He is trying to ignore the fact that there is a bubble that he help create, and pointing the finger. If he did make those changes, that means he is throwing in the towel and taking the blame. So, you must be disappointed eh?

#20 Jon B on 03.29.12 at 4:50 pm

Well clearly F views massive household debt as a good thing. Maybe it would be best if nobody ever retired. Unrepayable debt must have benefits for our political masters that go largely unnoticed by the rest of us. There must be a grand plan on all of this already figured out somewhere in the anals of center block.

#21 CHANGES on 03.29.12 at 4:52 pm

How can we get this site on global TV for supper tonight ?

#22 joe doe on 03.29.12 at 4:54 pm

Garth,

You did it again. F hates you so much that he does everything possible to make your predictions (about the budget) to turn into s..t!

#23 John on 03.29.12 at 4:57 pm

Who cares about mortgages at a time like this! They’ve MURDERED the penny!

http://www.globalnews.ca/penny+to+disappear+from+coinage+system+minting+to+end+by+fall+budget/6442610741/story.html

#24 Vincent HRD on 03.29.12 at 5:00 pm

OK, RE orgy seems to be a non-issue in this budget and layoffs in public service will satisfy our immediate taste for blood. RE crunch will loom soon enough. Bring it on.

#25 Aaron - Melbourne on 03.29.12 at 5:00 pm

Hey guys, look where all that Hot Asian Money is coming from….

http://imgur.com/a/RjInD

Say “Hi”, he could be your new neighbour!

#26 zeeman1 on 03.29.12 at 5:01 pm

Garth, one thing I’ve learned is that perception is 90% of everything.

This explains modern attitudes towards debt and real estate, Flaherty ignoring the real estate problem and the general perception that North America emerged from a recession in’08 and isn’t undergoing structural long term economic changes. If he admits it’s a problem he takes the blame because he caused overall perception to change. By effectively ignoring it he is allowing the current perception to continue a little longer.

I’m burned and bummed that our tax dollars are largely responsible for keeping the bubble inflated and insuring the banks against risk in their most profitable business venture.

#27 F on 03.29.12 at 5:03 pm

Any plans to give a read or two concerning the “legislative framework” for covered bonds? Our Yank friends appear to have a *special* spot in their hearts for these things!

Thanks for the heads up concerning all the new developments oh wise one!

#28 arctodus on 03.29.12 at 5:04 pm

Garth, Garth, Garth……tsk tsk tsk…….

You expected a different result….

History lessons badly needed all round….

Governments are not there for the people…they exist for themselves….all politicians, beauracrats, functionaries etc etc etc…..they are all useless feeders on the pyramid….they will suck the host for as long as possible and then scurry like rats as the ship goes down…..

I am thrilled…as a confirmed (and never dissappointed) doomer things are proceeding exactly as one who has studied history would expect….

Perhaps you would like to regal us again with how the US housing market is in recovery? How the US dollar will be the reserve currency for the next 50 years? How the “correction in the canadian market will be “gasp” a full 25%…….

Get a grip on reality man…..the canadian housing market, the canadian economy and the future in general for the great white north is entering a depression that will make the 1870 debacle look like a christmas party (the 1930s were not even a hiccup by comparisson)…..

SAY IT….actually SAY IT…….

Greatest Depression EVER……driven by resource constraints (peak everything) and stupid monkeys social responses.

#29 D-dawg on 03.29.12 at 5:06 pm

#19 joe doe

Tsk, tsk….G didn’t make such predictions about the budget that didn’t come true. You missed the bell to end recess, as did I.

We were finishing our game of duck-duck-goose when class was in session and such predictions were not being made.

#30 bcpaul on 03.29.12 at 5:07 pm

According to all of those graphs in the budget nothing is wrong…bah

#31 Lorne Widger on 03.29.12 at 5:10 pm

So, if the government lowers CMHC’s budget, then they will have less money to lend out, so the standards for getting CMHC insurance will need to increase. Personally, I would love to see a reinstatement to the cap for the size of an insured mortgage, say about 400K!

#32 VICTORIA TEA PARTY on 03.29.12 at 5:13 pm

#12 Victoria

“…They want to keep the bubble while they are in power and leave the problems to the next guy.”

Yes, that’s true…and this reality, too:

CHINA

China is becoming a “problem” for the world’s economy including us.

WHY?

There’s a collapsing real estate bubble, there, much higher labour costs and a collapsing Euro zone that is China’s chief town dump for its crap.

WHAT CANADA NEEDS FROM CHINA AT THIS TIME

Trade certainty is what, in exchange for sales of our raw resources, particularly hydrocarbons and metals.

BUT WILL THAT HAPPEN?

It’s too soon to tell, so it’s back to our economic default line, real estate.

Mr. Flaherty will keep a “watching brief” on Canadian estate, namely: change if necessary but not necessarily change.

This industry is our last “good” economic lifeboat, inspite of the damage it causes to individual consumers and to underlying future national inflation.

Swept by contradictory economic technicals and fundamentals, who can blame MR. F.?

In otherwords, our economy is in less than magnificent shape and a word to the wise is sufficient: GET OUT OF PERSONAL DEBT…QUICKLY.

Our country also has a good supply of granite and iron ore pellets, endless supplies BTW, so what’s the rush to “buy” a tiny box in the sky? Oh yeah, we also have a lot of sky.

#33 From Mississauga With Love on 03.29.12 at 5:15 pm

oh well, I am a renter and I can tell you in retrospect, I am the one who is screwed.
Why should I not jump into the fray now? the government is behind this frenzy and whoever waited on the sidelines lost. THe correction to the point where we started waiting a couple of years ago will take multiple years, at which point inflation would have ate the difference anyway…
I am sad for myself….

#34 Paul on 03.29.12 at 5:20 pm

They really don’t care about over debited folks. I believe it was Mulroney who said “give them enough rope and they’ll hang themselves”. No different today.

#35 craziness on 03.29.12 at 5:22 pm

lol about the penny. sigh… another thing to worry about. So I have to agree… F hates Garth and therefore does the opposite of what Garth says. Garth…. this country is in trouble… my generation of 30 somethings give or take are up to their ears in debt. They work ridiculous hours and spend ridiculous amounts of money on stuff… and houses. Obviously the housing will continue… until people can’t afford anymore debt. It’s mind boggling really. I really wanted to upsize my house. But I’ve been thinking about it more and more… and realize my house is paid for, I bought in the low market… I can afford everything I want.. and we have a nice nest egg for retirement… just enjoy life :) Let the debtors enjoy their debt! I’ll be debt free thanks!

#36 Bill Gable on 03.29.12 at 5:26 pm

Well, you nailed it again, Mr. Turner.

The heavy lifting is to come.

Suckers are probably lining up to snap up those 20,000 new condos planned in the GTA.

Here in Vancouver, I am sure that the great unwashed are going to think they will see their home prices keep heading to the moon.

As if.

This was a cop out budget, and we were warned, by our Harley riding host.

It’s all coming a bit clearer to me now.
CON-servative, indeed.

Wonder how house prices are going to affected in Ottawa-Gatineau?

#37 craziness on 03.29.12 at 5:27 pm

Mississauga with Love…. it will correct…. just gotta wait a little longer…. the party will continue… but the house owners heavily in debt are renting out their basements etc…. but what happens when that’s not enough… property tax assessments are going up, their car payments, fixed expenses will only go up…. things will change. I’ll meet with some realtors that I know soon.. and will give you the update… but it really doesn’t look good for them.

#38 Paully on 03.29.12 at 5:36 pm

So is F really only as tall as a Dachshund?

#39 DJB on 03.29.12 at 5:37 pm

Another round on the house courtesy of the robust mortgage back bonds.

#40 Alex N Calgary on 03.29.12 at 5:41 pm

Those is sort of crap again, as a renter the houses are already more expensive then this time next year, so now I’m up to 1700 from 1500 a month, still at mega risk of them selling it out from under me and nothing has changed. Its just going to keep getting higher and higher, what is stopping it now? I heard we were going to run out of house virgins and speckers by now, but it just keeps going and going. These 2.99 interest is still around, how long are we sitting around, at landlords mercy, oh I have to move AGAIN, can’t buy a house, it’ll correct, maybe it’ll be a taxpayer controlled soft landing in like 5yrs, it should burst, yet nobody does anything, the banks aren’t making it happen, what the hell, harper Gov moron crap! I’m so sick of all this!

Are we the greaterfools? spec’ng is bad, but this has gone on so long, and keeps going, I’m so sick of moving, so frustrating.

#41 b on 03.29.12 at 5:44 pm

F’s message was clear the day he went on record and tossed the housing hot potato back to the banks.

As for the obvious demographic bias, well.. he’s a boomer and I’m sure he owns a home somewhere lol

#42 City Slicker on 03.29.12 at 5:46 pm

Garth does this mean we should all go out and get a condo, I mean we might as well keep flipping until year end by the sounds of it.

#43 Mitch on 03.29.12 at 5:50 pm

It’s amazing how the banks “pleaded” with the government to make this a law (forcing amortization to a max of 25 years).

Because the banks do not have the will power to control themselves or put reasonable rules in place (no doubt because competition will prevent it from happening).

#44 Eggy on 03.29.12 at 5:51 pm

The real fool’s game is trying to pick the top of a real estate market. I fear that you and your peculiar blog devotees will have mistimed the market by at least 5 years when this is over. That’s quite a long time actually…

#45 jess on 03.29.12 at 5:52 pm

legislative frameworks regarding covered bonds
http://www.fin.gc.ca/activty/consult/cb-os-eng.pdf

=============
Recruiters hired to sell the loans
And now the same people are the debt collectors

the government can seize Social Security benefits to pay off old student loans,
Lockhart v. U.S. (546 U.S.(04-881) 2005).

Pay Student Loans or Lose Social Security Pay
By Martin E. Segal, Miami Herald
March 6, 2006
==============
Debtor prison?
collectors (attorneys) have found a way to get the police to do their work.
Why should taxpayer dollars assist in the collection of small, private debt.

Hounded: Minnesotans in Debt
In jail for being in debt
Article by: CHRIS SERRES and GLENN HOWATT , Star Tribune staff writers Updated: March 17, 2011 – 4:40 PM
This series examines the aftermath of a credit boom that left many people in financial trouble, facing a collections industry that uses aggressive methods to obtain payments.

#46 JIM on 03.29.12 at 5:54 pm

Like I said before, house prices will neither rise nor fall, they will stay suspended at near present levels, like that nasty piece of flotsom in the bowl that just won’t flush, until F or the banks show a little back bone.

#47 $$$BPOE#1 on 03.29.12 at 6:05 pm

Fantastic news and unfloding like I said it would
*************************************
For the housing market, nothing. The trap continues to be bated with cheap rates, free-flowing mortgages, no-money-down financing and nary a word of waning. In fact in the entire budget, for which at least one medium forest died, the words “mortgage debt” do not appear. No cautions about overborrowing or the dangerous amount of collective net worth now stuffed into a single asset.

#48 Shane on 03.29.12 at 6:07 pm

Garth, will there still be a housing corrections?

Shane

#49 Vancouver Mt Pleasant Renter on 03.29.12 at 6:08 pm

I had hoped this budget was really going to have some significance, but its totally anti-climatic. Canada is being crippled economically with the biggest ponzi scheme this country has ever seen. The country’s future has been highjacked by greed and corruption of a magnitude I never knew could be possible. People, they are changing when we get our pensions. You know what’s coming next, the inheritance tax, just wait and see.

#50 Deb on 03.29.12 at 6:10 pm

I can barely contain the anger I feel right now towards Finance Minister Jim Flaherty. I am absolutely livid at the complete lack of foresight and fairness regarding the changes to Old Age Security. In addition, his decision to continue to bless the 30-year amortization on mortgages displays nothing less than appalling incompetance.

If changes are necessary in order to guarantee the future funding of OAS, for goodness sakes be fair about it! The Conservatives have attacked lower-income Canadians who are younger than 54 years of age (by this weekend), in terms of full, partial and lower eligibility, which will be phased in between 2023 and 2029. Instead of looking at a reformulation of the current clawback of OAS benefits, based on income, he has targeted an entire demographic, no matter what their income, to pay the price. In other words, if you are a hard-working, low-income Canadian who happens to have been born at a certain point in Conservative history: It’s Your Fault! I am so mad at this man, I will leave now to have a second cup of tea, or perhaps something stronger, and plan for what I will do in preparation for the next federal election in 2015.

#51 Steven Rowlandson on 03.29.12 at 6:10 pm

More shameless pandering to voters rather than slashing spending to pay down the debt….
Politicians , your fired!

Next!

#52 Cash is King on 03.29.12 at 6:12 pm

So when does brother blog dog Carney pull a Snagglepuss?

you know…..exit stage left, stage right even!!!

#53 Blacksheep on 03.29.12 at 6:15 pm

The country holds it’s collective breath as little f
reads the scary austerity story to the masses.

“Our country, like any household, must live within
it’s means” bla-bla-bla.

Come on folks, are you really buying this sh*t?

Of course you are. So we are told we have an
estimated 2011-2012 Deficit @ 25 billion.

No problem, I got this. Someone hand me that
Bank O Canada Keyboard. This will only take a
sec, two-five-zero-zero-zero-zero-zero-zero-
zero-zero-zero, enter and done.

There… problem solved, no service cuts, no
layoffs, no tax increases and no waiting till
your 67, to not collect your Pesos.

This is an illusion people, a ruse played on me,
you and any one else that toils away in the pursuit
of, happiness based consumption, via the mighty
fiat tax dollar.

Google: MMT

Oh..every one’s in dither cause little f did
nothing to correct RE? I think he realizes that
snowballs already in motion, cause he’s pre-
emptively passed the buck to the banks, nothing
for him to do now, but get the h*ll out of the
way.

take care,
Blacksheep

#54 ralph tieleman on 03.29.12 at 6:15 pm

I don’t understand the problem.The deeper in debt you are when you die,the bigger you win !

#55 C. Kientz on 03.29.12 at 6:17 pm

So the ride continues. As the investment owner of a number of condo units in the Vancouver area (all purchased prior to 2003) I’d like to thank the Canadian government for continuing to subsidize me and my family in securing our future. Canada please continue to undermine the value of your currency while I buy gold. Please keep interest rates artificially low. Please ensure families cannot possibly buy homes, but rent from me. Please ignore all the flashing warning lights and just jam the pedal home. Give me five more years to pay off the last of my mortgage debt and call in all my bets before you raise interest rates to normative levels and bring it all crashing down. Great budget. Idiots.

#56 JSS on 03.29.12 at 6:20 pm

We’re gonna keep partying like it’s 2007!

#57 anon on 03.29.12 at 6:29 pm

*sigh* was hoping for some changes to kick start a real estate downfall. Would love to own a home at some point before I hit 50, but refuse to at these prices. I know renting makes more financial sense, but the pickings are slim where we are. When will people see the light and stop the insanity????

#58 Ballingsford on 03.29.12 at 6:31 pm

Crap, I took some vacation time to leave work early to watch the speech and the actual budget speech was not being shown because of technical or other difficulties. CBC had to resort to commentaries to fill the gaps.

Did some group hack the feed or was it the commotion by students in the gallery that they chose not to show it live?

Should be interesting in the coming days to see where the 19,200 public service jobs cuts are coming from.

I understand it’s in the 500 page document. Does anyone have the breakdown?

#59 Flash on 03.29.12 at 6:33 pm

Well I can’t argue with you today. The good news for me is that I’m in the process of preparing my house for sale this summer, in the GTA. Guess I can expect a higher than expected amount of money. Thanks F.

#60 Paul on 03.29.12 at 6:35 pm

Get ready for a general strike in the very near future.

#61 Arshes76 on 03.29.12 at 6:37 pm

Just means the housing market will correct itself, instead of the gov’t popping it’s bubble.

#62 Moremilk on 03.29.12 at 6:37 pm

It is staggering when the TD Bank CEO says CMHC needs it leash tightened. Maybe Canadian banks are different.

#63 Living in AB on 03.29.12 at 6:39 pm

Garth, isnt the Govt stepping in a good thing (into the housing market), will the market not fix itself? I know many house addicts might suffer but this way they will have no one to blame but themselves.

#64 Marcello D'Onofrio on 03.29.12 at 6:41 pm

Great post Garth. I beleive that were going to see a correction happen shortly. Im in new home construction and i can already see the wheels starting to come off the indusrty.

#65 TRT on 03.29.12 at 6:42 pm

TOLD YOU SO; regarding housing/mortgages

What I can tell you for the future:

1) Mortgage insurance limits will be raised when needed.

2) The housing Industry (banks/gov/developers) is starting to restrict supply in multifamily by restricting construction loans. With high immigration levels, there will be a shortage within 2-3 years as many as 1 million more people move here.

3) Immigration backlog of applications reduced from 1 million (about 3 million people) to 700,000 (2.1 million waiting to get in). 300,000 applications being refunded.

And with changes coming to this program, watch smaller centres RE rise…guess the smart money is already there.

#66 blatherer on 03.29.12 at 6:45 pm

The wife and I, late 20s, have stable in-demand jobs, make a decently middle-class 120K combined before tax. Just paid off the student loans. Plunked down 400 large on a 2.99% beautiful brand new townhouse within a stone’s throw of a beautiful park up on Burke Mountain in North Coquitlam. I have parks, shopping, a private backyard backing onto a riparian zone. We can cover the entire carrying cost with 1/4 of our take-home, which leaves lots of extra money for TFSAs/RRSPs to top off my public service pension plan.

And of course I put 5% down, because why would I use more of my own money for a d/p? I’m not an idiot! The extra money I could have put into the d/p I instead plunked into soon-to-be productive small business that will generate a tidy 3rd family income.

I sure don’t miss renting, though It served its purpose while I was still paying off my student loans.
In case you missed the memo, the world is flat now, and my neighbors are predominantly immigrants. Good luck everyone!

#67 ronthecivil on 03.29.12 at 6:46 pm

#26 arcturus

How can the greatest depression ever due to peak everything be a problem for a country that is a net exporter of peak everything.

High prices for resources is the main reason we’ve been able to pretend it’s different here finance wise for as long as we have!

#68 TRT on 03.29.12 at 6:47 pm

The Boomers continue to cannibalize the young! Why not share the pain you greedy B&^^%^*$?

If you’re going to change the age for OAS, make it effective immediately!!

New hires to public service can’t get pension until age 65. presently 60. Why not make it effective immediately?

Total BS.

Boomers, expect a meaner society in your senior years. Looking forward to it?

#69 TaxHaven on 03.29.12 at 6:49 pm

Either they’re not worried about debt levels or they applaud them…

Strong debt uptake means “economic growth” to Keynesians, right?

Why would a government – or their central bank! – do anything to deflate that?

#70 spaceman on 03.29.12 at 6:50 pm

The bubble will collapse on its own, it didn’t need any help. Water will find its own level.

Interest rates are sparking inflation, which will means interest rates are on the rise, bonds yields went up today, (prices dropped) borrowing will get more expensive. Screwed is screwed.

I’m kind of glad, if there was a big push to change things, you would see a rush to the exits again just like a year ago. Now it won’t happen. Just a nice disorderly meltdown.

#71 Mr Buyer on 03.29.12 at 6:51 pm

None of this changes the outcome as predicted by bubble mechanics. BUYER BEWARE. THE BUBBLE HAS TOPPED. SALES ARE FALLING ACROSS CANADA. NOW IS NOT THE TIME TO BUY A HOUSE.

#72 Smoking Man on 03.29.12 at 6:59 pm

Dwarf-o-nomics

#73 Calgaryboomer on 03.29.12 at 7:02 pm

It’s like the only real estate market in Canada is GTA and Van! I guess that’s where the fear is, farthest to fall. In Calgary, I see lot’s houses for sale but nothing moving except really small ones, lot’s of sold signs from the last 2.99% scare. Maybe we’ll see lot’s of action across Canada in the coming weeks with everyone pre-approved and 90 days to use up their 2.99% rates that are no longer available.

With all the talk of “boom” again in Calgary and lot’s of out-of-town plates, you would think that houses would be flying off the shelves. There is certainly lot’s of hiring going on. Business friends tell me they are losing people leaving for higher paying jobs, usually oil related. So maybe it’ll take a year before we see the effects in housing (ie, rising prices, more sold signs). I’m a believer in the demographics that our friend Garth writes about, but like TO and Van, I think it might go on for longer than we think. (i thought the dot com boom would end years before it did!) Should help out the rental market in the mean time.

#74 Herb on 03.29.12 at 7:12 pm

If you do nothing and things turn out well, you claim the credit. If you do nothing and things come unstuck, you evade the blame. A government like that makes a feller proud to be Canajun, eh!

BTW, Garth, does the Government Whip cue the *facial expression of distaste* and *mutter, mutter* of the bobbleheads seen on TV when the member speaking mentions something counter to the ideals of the CPC?

#75 Randy on 03.29.12 at 7:20 pm

No relief for seniors who invest in Bonds or GIC’s for a long time….

Seniors should have no GICs, and only a bond portfolio when in conjunction with growth assets. — Garth

#76 Will on 03.29.12 at 7:20 pm

Check out this infographic:
http://urbantoronto.ca/sites/default/files/imagecache/display-default/images/articles/2012/03/5259/urbantoronto-5259-16331.jpg
Curious to know Garth’s (or anyone’s) thoughts.

I commented on that when it was linked yesterday. It’s realtor rubbish. — Garth

#77 Axehead on 03.29.12 at 7:21 pm

“elfin pixie dust”…. hey – where does the common man get some of that stuff. Garth, maybe F is really a Leprechaun pretending to be an elf… ‘cept I’m not sure if you’ll get a pot of gold once you catch him.

#78 Arse on 03.29.12 at 7:24 pm

#59Arshes76 on 03.29.12 at 6:37 pm
Just means the housing market will correct itself, instead of the gov’t popping it’s bubble.
———————————————————

Agree.

#79 Smoking Man on 03.29.12 at 7:28 pm

Titanium Tv is producing a new TV show and is looking for colorful, camera friendly pet owners.
If selected, a world renowned animal communicator will come to their home to talk with their beloved pet for free.
… guaranteed to be a mind blowing experience … priority will be given to eccentric characters owning a pet loaded with problems… …………………………………….

Now if only they where looking for normal pets with owners that had big problems

#80 Nostradamus Le Mad Vlad on 03.29.12 at 7:32 pm

-
“F factor. F choked. As expected. So, what does it mean? Only this: Flaherty was strangely silent on what many economists (including Brother blog dog Carney) think is the biggest time bomb ready to take out economy growth – runaway household debt.”

Indeed. To wit — Now That’s A Knife! No doubt taxpayers will foot the bill once these household debts come due.

Someone will have to pay them, but I’m not about to catch a falling knife. There are far more intelligent (and indebted) people who can handle that side of it.

So it’s all much ado about nothing. Typical of a coward politico.
*
Re- re- re- restructuring Greece’s debts again (maybe); Four min. clip BRICS may / may not dumping US$; 4:25 clip Want gas? Stop the wars! Who is orchestrating the wars? Guesses, but no prizes; 4closure Whistleblower “This is an interesting example of large financial institutions’ executives who believe that there never will, or should be, any repercussions from their having indulged in unethical business practices.” wrh.com; Jon Corzine Interesting headline.
*
GW caused this calf to be born with six legs; Southern States Any surplus war gear? Plus China – Russia naval war games; 13:21 clip If Obombacare is nixed, ordinary folk may rise up against him. With Santorum, Romney and Gingrich self destructing, it leaves the door wide open for Jeb Bush; Gaza Not a great place to visit; ‘Net Security Software Becoming illegal for distribution? Bees Pesticides (kudos to Monsanto) knock bees off their sox; Yemen US provoking a new war.

#81 ottawa gal on 03.29.12 at 7:34 pm

Well ! am disappointed! The meaning of Conservative seems to have changed over the years. When I was young, it seemed to mean careful with your money, someone who you could trust with managing the countries finances. Today it means careful to help your rich business friends. (Read as “banking friends”) Ottawa DID bail out the banks and just google “canada bailed out banks” to see the many ways they did! Here is one of them.
The biggest government initiative was the “Insured Mortgage Purchase Program,” which was part of a $200 billion “Extraordinary Financing Framework” announced in response to the financial crisis. The Insured Mortgage Purchase Program enabled a crown corporation, the Canadian Mortgage and Housing Corporation (CMHC), to buy a certain type of financial asset (securities composed of CMHC-insured mortgages). In return for the sale of these securities, banks got the cash they needed to withstand the financial crisis. At a time when liquid funds were disappearing from financial markets, banks’ ability to convert mortgage securities into liquid cash was a pretty sweet deal.
The above is from http://rabble.ca/columnists/2011/11/bailed-out-any-other-name-canadian-banks-got-plenty-help

This spring there are far fewer listings in my Ottawa neighbourhood, but the prices are a good $30,000 to $50,000 higher. Maybe a few are picked off by the lack of listings. The local realtor is offering $500 to anyone who helps create a deal for him. Even the 80 year old lady across the street, couldn’t wait to tell me that her house was a great investment. (We are renters)
All I can say to the rest of you renters is watch the stats every month. This site is excellent: http://www.chpc.biz/plunge-o-meter.html.

#82 Daisy Mae on 03.29.12 at 7:34 pm

But, but…hey! We’re getting rid of the PENNY!

#83 Canadian Watchdog on 03.29.12 at 7:36 pm

The punchline Garth.

—The Supreme Court indicated that “[t]he common ground that emerges is that each level of government has jurisdiction over some aspects of the regulation of securities and each can work in collaboration with the other to carry out its responsibilities.”

Translation: Legislative framework for covered bonds, not happening.

And reminder to all at what lies ahead: Moody’s says Ontario downgrade still possible: http://ca.reuters.com/article/businessNews/idCABRE82R17G20120328

Print away Carney…

#84 Canadian Watchdog on 03.29.12 at 7:46 pm

2012 Budget Word Cloud http://i40.tinypic.com/1t106s.png

#85 Furst on 03.29.12 at 7:46 pm

FURST!!! YEEE HAWWW

#86 Daisy Mae on 03.29.12 at 7:48 pm

#17 MAKAVELLI: “F did shit all because if RE crashes, he’ll blame the banks…”

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

He DID that last week.

What a coward….

#87 Kip on 03.29.12 at 7:50 pm

“So much for Mark Carney. His continuous warnings about overheated housing in Vancouver, condo madness in Toronto or the inevitable impact of higher interest rates – all gone in a poof of elfin pixie dust.”

What are you going to use for thunder now?

No elfin pixie dust. Trust me on that. — Garth

#88 Daisy Mae on 03.29.12 at 7:54 pm

20joe doe on 03.29.12 at 4:54 pm
“Garth, you did it again. F hates you so much that he does everything possible to make your predictions (about the budget) to turn into s..t!”

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

Well, Pixie Legs was unsuccessful.

#89 Can it be? on 03.29.12 at 7:56 pm

Let people go into debt… Nothing we can do except for for changed, although clearly there is a herd mentality… Obviously the end is not happening right now, but we could see change in a moment.

#90 gb on 03.29.12 at 7:57 pm

The wealthy get more wealthy…

#91 Waiting... on 03.29.12 at 7:57 pm

On a more important note… Justin Bieber hit by the Housing crisis.
Lol

http://www.nationalpost.com/m/wp/arts/blog.html?b=arts.nationalpost.com/2012/03/29/justin-bieber-hit-bu-the-housing-crisis-canadian-pop-star-cant-get-a-mortgage

#92 Debtfree on 03.29.12 at 8:05 pm

@44 are you old enough to remember paul volker and 23 % interest rates . It was like shooting fish in a barrel . The bottom was in . Rates had nowhere to go but down and nobody was buying houses except me and my gal .Everyone said I was nuts . two and a half years later we made our first real big pile of cash . If this ain’t the top it’s well above the tree line . elfin h just think they can spin hard enough to not get any bubble gunk on themselves . Like most people that don’t listen to other opinions they will get it wrong . oas cuts picking on the poorest of the poor . they have taken my disgust for them to a new low.

#93 Observer on 03.29.12 at 8:06 pm

CMHC currently falls under the jurisdiction of the minister responsible for Human Resources and Skills Development Canada. But sources have indicated the Crown corporation could soon fall under direct supervision of the Office of the Superintendent of Financial Institutions — a powerful financial regulator with the power to enforce a broad range of changes at a financial institution.

http://business.financialpost.com/2012/03/29/ottawa-to-toughen-cmhc-oversight/

Garth, looks like CMHC under OSFI according to sources.

#94 Beach Girl on 03.29.12 at 8:08 pm

A bit perturbed today. I don’t turn 55 till the fall. Am I going to get my pension at 65 or 67. Or is it the year you turn 55 in?

This is not very funny. Now it is my time to whine.

#95 CrowdedElevatorfartz on 03.29.12 at 8:08 pm

@#45 BPOE

Is this you? In Richmond?
13.5 million “hits” in one week? Impressive !

http://imgur.com/a/RjInD

Thanks from #23 Arron in Mellie for ……
FINALLY REVEALING BPOE’s IDENTITY

Folks, check out our chubby gangsta …..

#96 Dave on 03.29.12 at 8:12 pm

What a mistake by F. Although it did make me laugh watching him deliver the budget. He can barely see over the podium!! Such a cute little leprechaun.

#97 LJ on 03.29.12 at 8:13 pm

No more penny? Sell all your copper stocks…..

Wait, it is made almost entirely of steel now with a tiny copper plating. Copper, zinc and tin are too expensive to use for small monetary increments.

Guess that we can all carry around steel nickels from now on, which by the way don’t have much nickel either. Plus we get to pay a rounding premium on all cash transactions – as long as we have actual cash around.

Love those new plastic bills, they’re so nice and slippery. Coming soon to a denomination you can afford.

#98 CrowdedElevatorfartz on 03.29.12 at 8:18 pm

@#64 Blatherer
Keep blathering my smug 20 something. Ive seen 3 recessions in my lifetime. (2 more than your pa”rents”).
Just when you least expect it. Thats when it all goes to sh#t!

#99 CrowdedElevatorfartz on 03.29.12 at 8:20 pm

@#70 Smoking Man
“Dwarf-o-nomics”
jayzus! just about snarfed a drink out my nose! Good one.

#100 Beach Girl on 03.29.12 at 8:20 pm

Just read the internet. It seems only people under 54 are screwed. Ignore previous post. Have to get out the Cubans and Cognac.

#101 Boy Named Su on 03.29.12 at 8:24 pm

17 Makavelli on 03.29.12 at 4:50 pm

no, just some other guy who had a rough childhood! ;-)

#102 Al on 03.29.12 at 8:26 pm

F & H will be the laughing stock of the world when the Canadian RE market eventually crashes and brings the banks down with it.

#103 Alex n calgary on 03.29.12 at 8:26 pm

did anyone else just see Garth on that Connect segment showing past budget cuts? he was standing next to some giant number readout sign thing!

Yeah. I tried running for PM once to save the country. Didn’t work. — Garth

#104 Tim on 03.29.12 at 8:29 pm

Who cares about that? They cut funding to CBC again. CBC is underfunded compared to many public broadcasters. This is part of Harper’s strategy to force them to compete with generic US stations, and hope that this will diminish public support. What else can you expect from a neo-con govt who doesn’t value democracy, culture, the arts, the environment, freedom of speech…

#105 Ken on 03.29.12 at 8:30 pm

The budget made allowance for CSB being at 5% in three years which is currently 2.3%. Does this mean they are expecting interest to increase dramatically? The recovery has been maintained by purchases of interest sensitive stuff, cars, houses. Doesn’t factoring for a doubling in rate mean that would stop? House prices fall. Or it’s just a ploy to pull a surplus rabit out of their hat? I don’t get it.

#106 Valyrian_Steel on 03.29.12 at 8:30 pm

On the bright side, by F doing sweet F’ all perhaps the housing will implode on an even greater scale down the line. It is a purely selfish thought I realize, not taking into account the hardship of thousands of families…. But my wife have built up a nice little financial situation for ourselves and have done it the right way…. And now we think we deserve a house – at the right price.

In essence, I am a vulture in human guise.

#107 Daisy Mae on 03.29.12 at 8:31 pm

GLOBAL TV, 6 o’clock news: “What are we going to throw into the fountain since we’ll no longer have the penny?

How about Jim Flaherty?”

#108 Tim on 03.29.12 at 8:33 pm

Harper has rung up the biggest deficit of any PM in the history of this country. He’s done little to change this. His cuts to the civil service are ideology-driven. He’d like nothing more to see a small government, and hence no avenue for the public to influence or debate important issues. Just wait when he disbands CBC…What will we turn to? Fox news north or Global…so much to look forward to…

#109 Bottom Feeder on 03.29.12 at 8:44 pm

F;F; nooo, Don’t do this to me. I’m only 52 !!!!!!

Oh well, there is always the Alpo; and pop bottles are 10 cents in Alberta.

#110 Herb on 03.29.12 at 8:47 pm

#90 Debtfree,

Charlie don’t surf and the poor don’t vote, so the OAS move is a safe one for the Harper government.

#111 Devore on 03.29.12 at 8:47 pm

#106 Tim

There must not be very much demand for viewer funded television. Seems most people either want something for nothing (make everyone pay for what they want) or expect advertiser-funded channels to bite the hand that feeds. Media is always and only accountable to the one who pays the bills: special interests with power to funnel funding, or corporations buying commercial time.

#112 Herb on 03.29.12 at 8:47 pm

#92 Beach Girl,

good question, but just in case, we all thank you for your sacrifice in the interest of budgetary efficiency.

#113 MapleLeafsSuck on 03.29.12 at 8:48 pm

#93 CrowdedElevatorfartz on 03.29.12 at 8:08 pm

Dude, that is a gangster in China. I actaully met that guy at a drinking lounge in Guangzhou. This guys lives the dream. He hooked me up with some “Hot” chicks. Lucky guy.

#114 Joe_Blown_Away_By_High_Housing_Costs on 03.29.12 at 8:53 pm

The budget released today anticipates a balanced budget by 2015. But if there is a major crash in the real estate bubble, won’t this delay Flaherty’s plan to return to surplus by 2015? Tax revenues will be down and taxpaers will be on the hook for billions through CMHC, when the bubble bursts.

So by failing to adequately address the real estate bubble issue, can’t we make an argument that by extension Flaherty is also not presenting a credible plan to return us to balanced budgets? So he is shirking his role as prudent fiscal manager.

His balanced budget by 2015 assumes no crash in the real estate bubble.

#115 eddy on 03.29.12 at 8:59 pm

Harper will never disband the CBC, it’s an idle threat used to keep them obedient: “beg,.. beg nice”
Every nation at war (that’s us) needs a Wartime Minisrty of Propaganda (that’s CBC)- the war is on Humanity, and keeping the world safe for Cleptocracy. Notice F didnt give an accounting of our share of the Libya heist

#116 John on 03.29.12 at 9:02 pm

Mark Carney’s warnings? Warnings happen with action, not the “good cop – bad cop” head fake. Warnings are meaningless, that’s why he was “issuing” them.

The real question is what do central banks do, why are they doing it right now, and what’s behind the drive to create so much debt.

Absolutely everyone knows the answer to these questions, but prefer to pretend that F and the PMO are driving rather than responding to policy. The decisions aren’t even coming from inside Canada.

Start with Mark. Follow the trail. Any probable cause guesses? C’mon.

#117 Something on 03.29.12 at 9:05 pm

There are 2 types of landing: Hard one and Soft one. Today Mr. F helped the market to face the hard landing. The crush will be fast and very painful and it will happen in 2013. If you think the interest rate will go up very soon and very fast, think again. USA can’t afford it, the reason is very simple. They can’t carry the debt with high interest. If they do, it means – bankruptcy. So it will stay low even longer than you can think. Canada will follow the big brother. :) To stay alive they have to do the same thing again – print the money which means – inflation. Gold will sky rocket to 2500 very soon. If you think to buy a house on dips, please don’t. I do believe we are facing Japan scenario – low interest forever :), so check the history chart. Prices will drop 3 times on average, but it will take so many decades to rich the current level.

#118 Peter Pan on 03.29.12 at 9:06 pm

F. Worst. Finance. Minister. Ever.

#119 X on 03.29.12 at 9:09 pm

Unfortunately it looks as if your pridiction that the 30 year amortization period would be ended this year will not be made true. Too bad, it really is the right thing to do. And wouldn’t have made that much of an impact, a difference of a few hundred dollars a month in carrying costs.

So….how does it work from here on in. Is F hoping to make Carney the bad guy when he makes a .25 interest rate hike or two later this year? Will the RE market slow or more, before the end of the year, or will OFSI implement stricter lending standards? Will the CMHC ceiling get hit this year with no changes?

#120 Victor on 03.29.12 at 9:10 pm

Ottawa shouldn’t increase CMHC mortgage cap: Ed Clark

Mar 29, 2012

No more bulk mortgage insurance.

In a nutshell, that’s TD Bank chief executive Ed Clark’s advice to the federal government as it considers whether to raise the $600-billion limit on Canada Mortgage and Housing Corp. insurance.

In recent years demand for CMHC mortgage insurance has ballooned, especially so-called bulk guarantees used by banks to securitize and sell pools of mortgages. Critics worry that a downturn in the housing market could leave the CMHC exposed to losses that might eliminate its capital cushion, potentially leaving taxpayers on the hook.

Speaking to reporters after TD’s annual meeting on Thursday, Mr. Clark said the bulk insurance business is lucrative for CMHC and helps it increase its capital cushion, but at the same time he acknowledged that $600-billion is a large number and it might be prudent for Ottawa to keep the cap where it is instead of lifting it.

http://business.financialpost.com/2012/03/29/ottawa-shouldnt-increase-cmhc-mortgage-cap-ed-clark/

#121 Some catch phrase on 03.29.12 at 9:11 pm

re: Will #74

I commented on that when it was linked yesterday. It’s realtor rubbish. — Garth

Preach it, brother!

#122 These pretzels are making me thirsty on 03.29.12 at 9:15 pm

ME BUY HOUSE TOMORROW

#123 Onemorething on 03.29.12 at 9:17 pm

They tried the same in the US and look where it got them. Not IF just WHEN and really gives those of us who havent sold time to and those waiting more time to save.

Things so obvious right now it’s silly!

#124 Claudius Emperor on 03.29.12 at 9:18 pm

is there a chance of voiding the OAS rule? it is clearly a discrimination based on age. I am donating 1k to anyone with guts to stat class actions suit that puts F in jail and fixes the OAS discrimination. just made that 2 k. absolutely serious.

#125 Westernman on 03.29.12 at 9:18 pm

Tim @ # 106,
Oh my God! What if we lost the CBC? The end of life as we know it…
How could we possibly survive with a constant daily dose of socialist propaganda…
We are doomed…DOOMED I SAY!

#126 Bottoms_Up on 03.29.12 at 9:22 pm

#56 Ballingsford on 03.29.12 at 6:31 p
——————————————–
12,000 actual people losing their jobs in Ottawa over the next 3 years. That’s about 11 per day, every day.

#127 ANONYMOUS on 03.29.12 at 9:24 pm

So basically, we should see home prices continue to rise 20% to 30% per year for the next 35 years, correct?

#128 Can'tbelieveit on 03.29.12 at 9:28 pm

When did the 5 year rates go to 5.44% seeing right now on TD and RBC’s webpage.

#129 Claudius Emperor on 03.29.12 at 9:32 pm

BTW this is only the first/out of many to follow OAS age increases. By the time when I retire it would be 72. or 75.
and the OAS would be the equivalent of probably less than 200 cad monthly/current purchasing power. in the richest in terms of natural resources/grain/water/gas country on earth. with 34 million population. and as there is no enough land for 34 million, people live in basements /the only country on earth where people live in basements/ and a wooden house is ‘worth’ north of 1 million dollars….
there is definitely some very dangerous mass delusion out there, on my part I will take every legal action to protect my interests and if the law is trying to screw me I am wiling to take every chance of paying and lobbying in order to change that law in my own interest.

#130 Stevenson on 03.29.12 at 9:38 pm

Looks like you speculators out there were wrong again. What happened to the regulation changes? Maybe no news is good news. Maybe they don’t see a big of a problem as the market will correct itself in a moderate way(IF it ever corrects). So keep waiting and believing. Most people with religious beliefs like the ideas here do.
Speculate all you want, but if its out of your control.

I believe in “facts” and facts are you all missed out. Boo hoo.

Not saying renting is bad. You’re not at risk, but sorry you missed the party. Risky business? Liquidity? Seems pretty damn liquid when I can get bidding wars on my properties.

Living for free is great. Getting paid for it is better.

#131 Jamaican_Gal on 03.29.12 at 9:40 pm

It doesn’t matter what they do or neglect to do. When the time of reckoning comes there will be no quelling this tide. it’s that simple.

#132 TurnerNation on 03.29.12 at 9:40 pm

Looks like Smoking man called it. Buy on, bubble heads!!

Let’s have another few months of unbridled bidding wars.

#133 J in Calgary on 03.29.12 at 9:45 pm

@ Alex in Calgary

The market is going down in cow-town. Some friends bought in Feb for $100K less than the original asking price, my boss earlier in March did the same thing, almost $100K less than the original asking price when she downsized her house. We are looking right now as well and prices keep getting reduced on the properties we are looking at. There are lots of properties on the market and I’m in no rush to buy. Waiting to see how soft this gets first.

#134 Herb on 03.29.12 at 9:48 pm

#123 Westernmoron,

I assume you are trying your hand at the high art of sarcasm, in which case your second sentence should read “… withOUT a daily dose …”

You’re welcome. Always happy to help a moron.

#135 Miko on 03.29.12 at 9:48 pm

don’t even worry about it…

I’m seeing stale Kitsilano condo listings being reduced like CRAZY in the last 3 weeks!

it’s starting…

#136 Across the Pond on 03.29.12 at 9:51 pm

Smart stuff from F today, and the C’s over the last couple of months. Scare people into thinking they’re going to cut everyone’s life into submission, get them used to the idea of an OAS increase – hit a middle ground in the level of cuts and gloss with some newscast leading items like the penny and duty on cross border shopping.

As a conservative (note the small ‘c’) I was hoping for more cutting to the bone, but the government have found a way to piss everybody off a little bit, and save the absolute outrage from anyone.

The opposition can’t protest it, the unions will get no public support over decrying it and the conservatives have got enough of what they want to stem the backbench grumblings.

Of course in the long term we all know that today was but one missed chance to steer the Canadian ship back to a fiscally responsible port – how in terms of pure politics, F and H will be able to have a comfortable night of sleep without the phone ringing off the hook.

#137 ozy - market is toast anyway on 03.29.12 at 9:51 pm

market is toast anyway, F does not matter, is irrelevant, just look at listing explosion in last 3 days, is like 2 months combined

#138 Seven Stars and Orion on 03.29.12 at 9:59 pm

My wife rubbed my back while I gently weeped at the budget reportage…. well almost. She kinda giggled at me.
She won’t laugh so much when I write my Master’s thesis.

#139 ozy - F was scared neighbors will shooo him on 03.29.12 at 9:59 pm

Flathetdy was scared neighbors will shooo him, so he decided to become a lost war HERO. Like Mr. Clean! good for history toilets.

#140 TakingResponsibility on 03.29.12 at 10:04 pm

Bwahaha – What is with commenters who actually think the housing ‘market’ was or is without political interference. Seriously. What’s with the shills coming out of the woodwork proclaiming ‘housing was/ is a free market’ and ‘let the market correct itself.’ Geesh. If only. Just because F is not taking responsibility for creating bubblicious-ness with 0 and 40 and oh, yes, the Lemon Socialism disguised as CMHC, the shills are bleating after him; “let the market correct itself.” Ha!

The Conservatives are pure lemon socialists.

#141 daystar on 03.29.12 at 10:06 pm

RE bubble sustaining, credit bubble bloating policy remains unchanged! Emergency rates for another year (thanks to the blown U.S. RE bubble that could never, ever happen here ’cause its so different)… hey that spells PARTY ON!!! Business as usual. Don’t worry about who pays for it, live for today, tomarrow never comes because we still have lots of credit.

Oh, and this thing about covered bonds:

http://www.mortgagetalkcanada.ca/2012/02/understanding-canadian-covered-bonds/

We talk about CMHC backing off raising their limit past $600 Billion? Here’s why. The covered bond market will be picking up the slack and CMHC backs them but to my understanding, covered bonds won’t show up on CMHC’s balance sheet (meaning they are insuring more mortgages than they say they are but if I’m wrong, please, by all means correct me on my assumptions).

If you understand what the link is saying, its another form of derivatives where more than one form of debt is backed by the same asset. We can thank the Conservative Stephen Harper government for this one too. They introduced it. 2010′s covered bond market in Canada last year? 24.7 Billion. Anything these guys can do to increase the value of RE and expand the credit bubble, they’ll do it. Its going to be one hell of a hangover.

And oh yeah! The federal government plans to issue 100 Billion worth in government bonds this year, the summation of deficit spending and mortgage related bonds and most of this 100 Billion will again be bought by foreigners, namely U.S. investors. Is anyone getting the picture yet on how our Conservative Stephen Harper government runs things? They love debt and the sooner we ask ourselves “who benefits”, the sooner we will know why.

#142 Miko on 03.29.12 at 10:06 pm

Re: DEb #48

“If changes are necessary in order to guarantee the future funding of OAS, for goodness sakes be fair about it! The Conservatives have attacked lower-income Canadians who are younger than 54 years of age (by this weekend), in terms of full, partial and lower eligibility, which will be phased in between 2023 and 2029. Instead of looking at a reformulation of the current clawback of OAS benefits, based on income, he has targeted an entire demographic, no matter what their income, to pay the price. In other words, if you are a hard-working, low-income Canadian who happens to have been born at a certain point in Conservative history: It’s Your Fault! I am so mad at this man, I will leave now to have a second cup of tea, or perhaps something stronger, and plan for what I will do in preparation for the next federal election in 2015.”

totally agree Deb, your scenario makes much more sense

#143 Sebee on 03.29.12 at 10:10 pm

Did you really expect Santa to bring you a B.B. Gun you really wanted for Christmas?

You’ll shoot your eye out!

#144 DonDWest on 03.29.12 at 10:11 pm

This budget can be summed up in three words:

F*** THE YOUNG!

#145 Busted Boomer on 03.29.12 at 10:15 pm

Though I am retired, I must say this guy F has put the screws to many boomers as well as the younger generation. 40 yr amortizations & ridiculously low interest rates started the ball rolling toward an impending economic crisis. Despite insincere warnings (but total inaction) about rising debt, the typical herd mentality in Canada trumped and real estate soared to unjustifiable heights. Are we greedier than our neighbors to the south? I think so. As one journalist put it when asked why we pay so much more for housing & vehicles, in Canada we want it more badly and are willing to overpay .
However, what really angers me is the gold-plated MP pensions have been left untouched. Many federal employees will be let go, those remaining will have to match one-for-one thheir employer contribution (that’s fair), yet the employer gets to keep their 23.30 to 1 ratio pension and their 10.4% guaranteed annual return (courtesy Canadian Taxpayer.com).
Yet in interviews prior to budget release “we are looking at it”when asked about changes and reductions to the MP pension. Well, I guess they looked
PS Garth….any pension for you there?

My gold-plated pension for nine years of service and three years of campaigning is $26,000, which I donate. — Garth

#146 OnlyTheBankersLaugh on 03.29.12 at 10:15 pm

Pixie boy has done what is right for conservatives beginning with the 0/40 back in 2006 to create this monster. Only wish I could remember the economists comments when he implemented this bubble. He’s done enough with his mention of tightening 3 times over past few years and he will not be the perceived little prick to this bubble. I guess despite ridiculous valuations far exceeding wage increases under the watch of USA housing implosion, this may continue with the concentration of media with herd paying only glancing quotable attention. I have to admit that Flaherty, despite my disdain for what he has done to our country, has played this country’s media extremely well. We are led by our noses extremely well. Smokin Man could be right but don’t think 25% is possible. GTA may have to outdo Vancouver and NY before this thing finally falls hard. Amazing. Interest rates cannot go up if the world economy wants to survive. I have 15 years until the kids are educated and I’ve added some Smokin Man reality show clips for the kids to balance them (favorite lines include “you lie, you steal and you cheat. You’ll make a great vice president one day””Booze, hookers and gambling downtown is where it’s at”) so should be prime time for the crash.

When are you getting that CBC reality show? Cheap and funny!

#147 Anon on 03.29.12 at 10:16 pm

All bubbles burst. It’s never different. F&C cannot do squat. The bubble has officially popped in BC, and soon the shockwaves will reach the banks, and then: Panic On, Garth! Panic On, Wayne!

#148 SE Asian Expat on 03.29.12 at 10:20 pm

I’m so disappointed that the Katimavik programme has been axed and that unsustainable household debt levels have not been addressed.

Instead of supporting our youth in the development of a sense of selfless community service and intercultural understanding, the Federal budget through inaction is supporting the continuation of self-indulgent overspending especially in the housing market.

What were they thinking?

#149 MD on 03.29.12 at 10:20 pm

Waiting for interest rates to rise to see the actual picture of housing.

#150 Smoking Man on 03.29.12 at 10:25 pm

@#70 Smoking Man
“Dwarf-o-nomics”
jayzus! just about snarfed a drink out my nose! Good one.

I’m sure Gartho did too, but he can’t endorce. He’s got a real name. I’m just a drunkin ghost name.

Few posts ago someone saud I was a fake hunter thompsen
Don’t even know who the fk that is.

Asked my son, he said has a few of his books.

I let him come to this site and read some of my crap.

He was blown away. He wants me to finish my book, and script and manage me.

This is the little shit that makes 6 figs door to door sales.

Now If only I could have an attention span more than 3o seconds so I could read something and see who this guy was…

Sone is going to rent me fear in los vegas or somthing like that.

Back was bad tonight, dub and 1 litter of wine am i making sence

#151 pablo on 03.29.12 at 10:27 pm

what’ve i been saying all along, there’s no changes coming as all the sheep have’nt been sheared yet.

#152 Smoking Man on 03.29.12 at 10:28 pm

#133 Herb on 03.29.12 at 9:48 pm

your to hard on westerman for he can change a car light bulb in no time flat, i respect that skill

#153 coastal on 03.29.12 at 10:29 pm

F will go down in history as the Canadian Greenspan, except there is no doubt he is a bigger incompetent fool who has set this country up for one mother of a housing crash. No brains, no balls, no glory, F man.

#154 Frank on 03.29.12 at 10:36 pm

No crash only a cooling down.

#155 earlymidlifecrisis on 03.29.12 at 10:38 pm

This government has got to go before they completely destroy our country. On another note- had a good chat the other day with a wise old man who said that he’s been listening to people say Vancouver’s going to tank for 40 years. I’m on the fence about selling. so far the quality of my life has deteriorated since the sell off. Hmm time will tell if it was the right move. However i wasn’t mortgaged to the hilt. I still agree the low/no downpayment people built on unstable ground should get out.

#156 Smoking Man on 03.29.12 at 10:38 pm

#131 TurnerNation on 03.29.12 at 9:40 pm
Looks like Smoking man called it. Buy on, bubble heads!!
Let’s have another few months of unbridled bidding wars.

I always call it with presision, I have an advantage, had a near death experiance, went on a tour of the universe with a stripper angle, zomed trough the universal conciouness consolidator.

fk I know everything.

hell Gartho just thinks Im a fast typer, yet when I pre write my shtic it’s always on topic.

O yaaaaaaaaaaaaaaaa
.

#157 $$$BPOE#1 on 03.29.12 at 10:40 pm

The Master Plan is being unveiled. That’s right folks. The Master Plan which was put in motion several years ago is now slowly being unveiled. Anyone notice that OAS is unchanged for baby boomers? This is by design. The housing boom must continue until Canadian boomers can exit out making out like a bandit til the New World order buys up the weak bids. This is also by design. All unfolding like I have stated. Low interest rates and high prices til the last baby boomer closes the door. Then their will be a slight lull as the New World Order takes BPOE to a new level. Expect average house prices in the 3 to 5 million dollar range within 25 years

#158 $$$BPOE#1 on 03.29.12 at 10:42 pm

F is doing what needs to be done. Drive housing prices up to maximum levels allowing Canadian baby boomers an exit making way for the New World Order aka the Creme de la Creme
*****************************************
coastal on 03.29.12 at 10:29 pm
F will go down in history as the Canadian Greenspan, except there is no doubt he is a bigger incompetent fool who has set this country up for one mother of a housing crash. No brains, no balls, no glory, F man.

#159 John G. Young on 03.29.12 at 10:42 pm

#190 eaglebay – Parksville on 03.29.12 at 9:18 pm

“My real name is Jack Meoff.”

In your dreams.

Yeah, you’re a real man all right — hiding behind your insults and pseudonyms.

I’m done with you, loser.

#160 Soggy Dreams on 03.29.12 at 10:43 pm

#64 – 400 grand for one of those trashy townhomes sprouting like mushrooms all over suburban Raincouver?

Have you taken a close look at the finishing?

Don’t bother answering. You won’t say truth. You couldn’t say the truth.

You’re not any “idiot” though. That term doesn’t do you justice.

#161 disciple on 03.29.12 at 10:44 pm

Smokes, that was a good one. Elfonomics. But there was something else causing me uncontrollable laughter tonight: Here is Gerald Celente… trust me, it’s him…

http://www.adidam.org/audio-video/video/radical-truth-1.aspx

http://www.adidam.org/

#162 $$$BPOE#1 on 03.29.12 at 10:44 pm

American and Junius cue crickets. 40% never was going to happen. Wishful thinking for some

#163 Harlee on 03.29.12 at 10:46 pm

#123 W
Simmer down,simmer down….Everything will be okay Harold…Really,everything will be okay….That’s it Harold…Now it’s time for you to nap.

#164 The Real Jimbo on 03.29.12 at 10:52 pm

Once again my older sisters win. They get OAS at age 65. I get it at 67, assuming they haven’t bled it dry by then.

It reminds me of the 1980s… My sisters both bought brand new $80,000 houses in suburban Vancouver and received both a provincial and federal grant as first time buyers.

When it was my turn to buy a few years later, the grants had been eliminated and my $110,000 bought only an old condo that went down in price for the next 10 years.

In the 1990s, there was no way to break through to middle management because the Boomers had staked their claims. Their company pensions were preserved while, for my generation, they were eliminated. And when it came time to buy recreational property, the Boomers had once again got there first, pricing us out of the market.

Finally, the Boomers embraced offshore speculative money because it made their home prices rise. “Yippee! The neighbor’s house sold for $1M! I’m rich!” Did they stop to think that their million dollar houses created a generation or two of younger Canadians who were no longer able to afford a home without becoming lifelong debt slaves?

All my life I’ve walked behind the greedy, destructive, spoiled-rotten mob of Baby Boomers and have smelled their stench.

#165 Uh Oh Canada on 03.29.12 at 11:02 pm

Can’t expect the government who created the bubble to pop the bubble. What’s really looking like the pin is unemployment. Here in Quebec it’s happening already.

#166 Not 1st on 03.29.12 at 11:03 pm

Ask yourself what the real consequences of quitting the penny are? If its costs more to produce it than its worth, thats because inflation made it so. And now, every retail price in the country is going to be rounded up so nobody has to give penny change anymore – this is basically another tax resulting from stealth inflation.

No, its not hyper inflation but you add a few of these little changes together and it certainly starts to bite the average joe.

#167 TurnerNation on 03.29.12 at 11:04 pm

And, yet, this scotch-fueled weblog keeps its calm and carries on.

#168 U-The Man on 03.29.12 at 11:13 pm

The cons are shrewd politicians all but admitting that they are afraid of the voting wrath of the boomers. But we boomers are not fooled by these George Bush clones. They forget we have children who will follow us and we will show them next election that their ineptitude at fiscal responsibilty and F-n-up the finances of most Canadians, will not be forgotten. Canadians will turf them next election just like the Americans got rid of the Republicans. 4 more years unfortunately of these CON clowns.

#169 obert on 03.29.12 at 11:27 pm

Triple A rating of Canadian bonds will be gone soon. If the government does not try to deflate the housing bubble, the markets will do it eventually. What minister F did is an error of omission – inaction – still an error. Maybe the last chance of gradual deflation is missed. What will be next could be a RE crash… that nobody could have predicted – this is what F+C+H will say.

Folks, do not blame Garth for the Conservative (in name only) gov’s mistakes.

#170 T.O. Bubble Boy on 03.29.12 at 11:31 pm

@ #112:

bingo!

2 things that would make a balanced budget impossible:

1) global recession — taxes from oil revenues go way down

2) housing crash — taxes from banks, construction, and personal income go down, and EI claims go WAY up

Would it be the “perfect” ending to this scam if Flaherty made a promise of a balanced budget in the same year the wheels really come off this bubble? In the U.S., the housing market started getting shaky in 2005-2006, but the real crash didn’t come until 2007 and then into the financial crisis of late 2008.

Can’t wait for another “we won’t be in a recession” statement from the elfin F — that will be the sign to run for the hills!

#171 Not on the boat. on 03.29.12 at 11:31 pm

I care less about this budget and more about the terrible grammar and spelling on all these posts.. start with the basics kids.. it only gets better from there.

#172 45north on 03.29.12 at 11:32 pm

City Slicker: At what point will market forces take over to do their thing?

in the US it was the summer of 2006 that things started to look odd. Spring is the peak selling season but spring had come and gone and the lawns were turning brown in the California sun, neighborhoods were filling up with For Sale signs.

Flaherty has passed up his chance to make a stand. Maybe his last.

#173 Guy_in_Regina on 03.29.12 at 11:33 pm

Great analysis Garth!

We must admit that F’s political strategy is well played.

He just doesn’t mention it and the oblivious mainstream continues along its merry way towards total debt saturation.

I bet he’s banking on holding off any significant housing correction until after the next election. Expect more delay tactics – these boys are playing the long game. They don’t want to touch the house of cards!

#174 scib on 03.29.12 at 11:39 pm

“The Boomer Generation” – The most selfish generation that ever trod upon the earth!
They always got what they wanted and now managed to snatch 2 years pension from the younger generations… well they sacrificed a few of their own boomers to make it look legitimate.

#175 T.O. Bubble Boy on 03.29.12 at 11:40 pm

One other thing to note: Flaherty is turning 63 this year… did anyone really think he’d make changes that would impact HIS pension?

Is there some hidden tax credit for shoe inserts in this budget too?

#176 Fisc on 03.29.12 at 11:40 pm

100% agree with you Garth.

This Federal Gov. and BoC duo are dangerous for our long term economy.

They psychologically push all Canadian to pile massive mortgage debts and always more massive mortgage debts.

A country of stupid debtors!!!

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/home-affordability-uncertain-for-many-with-even-small-rate-hike-report/article2384125/

#177 Bottoms_Up on 03.29.12 at 11:58 pm

if you’re retired and make 100g’s you have to repay all of the OAS anyway:

http://www.servicecanada.gc.ca/eng/isp/pub/factsheets/oasrepay.shtml

Instead of raising the age at which we qualify, they should have dropped the threshold at which the entire benefit must be repaid. Does a retired couple making $160,000/yr really need an extra $800/mo?

#178 Carpe Diem on 03.29.12 at 11:58 pm

I see stress in a neighbor that is employed at the feds. I tell them don’t worry it’s all politics and they will retire 7000′s people per year and keep young gen-x folks like you that work hard & make things happen.

20K of mostly Ottawa fed jobs over 3 years is basically the amount of folks retiring and the departments having to shape up and be more productive. Getting rid of geezers and scaring the < 50 is a good way.

But not addressing the housing market is very sad. Most of my kids' friends live in homes that I can see causing stress to the parents. They have awesome homes and somehow keep super clean and organized. I am impressed and wonder what kind of people would not have toys all over the house but have a kitchen with over 20 bottles of liquor on display on the granite counter top.

1. no fun for kids
2. I'd have drunk those bottles by now.
3. I see no stress in my life but see plenty in theirs.
4. I work at home most days … ahahahaha

More upsetting is this 2 acres + mansion we rent for lots cheaper than buying …. We found out the water tank is heated by the oil furnance.

WTF? Why would any idiot do that?

F'ing boomers … Aside from heating water with oil,, they keep OAS for over 10 years while their kids keep getting more in debt.

Lots of properties going up in Ottawa West …. and non are moving…. is that a sign?

#179 Guy_in_Regina on 03.30.12 at 12:04 am

#164 Not First

Seriously?

I throw my pennies on the ground – nickles too.

#180 Popeye the sailor man on 03.30.12 at 12:09 am

Well at least the Coast Guard got a bit of a boost to replace 40 year old ships. My ship is 45years old and we work hard to keep it going.

#181 Ronaldo on 03.30.12 at 12:13 am

Will be interesting to see who the OSFI will pass the hot potatoe to. In the meantime, party on. Didn’t expect much different. Bunch of weak-kneed politicians.

#182 Alberta Ed on 03.30.12 at 12:20 am

Well, heck, F is a politician, and that means shifting the blame to anyone else when the RE SHTF. Likely he’s counting on the average Canadian’s gnat-like attention span, and the ignorance of the MSM when it comes to significant issues such as the RE bubble, and the attendant consequences.

#183 gtrz4peace on 03.30.12 at 12:23 am

#102 Tim: We agree – it is like attempting to kill Public TV in the US. However, from what we have seen since moving here, CBC has done much to help the Neocons by becoming – much as NPR has — a watered-down version of itself that is more of a government (corporate) mouthpiece than those of us looking for an alternate voice would like.

Time for a Canadian version of Current TV or MSNBC that can really deliver real news, while carrying programs like Democracy Now, etc.

The playbook of the Neocons and the evangelical right wing in North America is steadfast. From what we see in the US, it is vital to have some news alternatives to counter the corporate propaganda machine.

#184 gtrz4peace on 03.30.12 at 12:29 am

#162: As a baby boomer I agree, the BS of it is stunning. Those thinking “Yippee! I’m rich” also never stopped to think of the long-term consequences of selling their sovereignty to the Chinese.

A VERY bad decision. The Chinese destroyed their own economy and make those lovely cheap plastic goodies using citizen executives and SLAVE LABOR. They have no free speech compared to what we know.

And if you have not kept up with North American news, there are those at work in both the US and Canada to “China-size” our countries.

What do you think all the new prisons are for? An endless supply of cheap labor for corporations. Really cheap labor. This is already happening in the US, where the private prison system is growing at an astounding rate. In the US, slavery is illegal — except in prisons. Look it up. Find out how those prisoners are doing the work of corporations in a “China-lite” model.

Perhaps Harper has the same idea, inspired by his many very wealthy Chinese investor friends.

#185 whatever on 03.30.12 at 12:30 am

Yeah. I tried running for PM once to save the country. Didn’t work. — Garth

Foolish to even try, no good deed goes unpunished! You should know better at your advanced age. People get the government they deserve.

#186 John G. Young on 03.30.12 at 12:36 am

#66 TRT on 03.29.12 at 6:47 pm

“Boomers, expect a meaner society in your senior years.”

No need to wait until then — it’s already happening.
Just look at the comments on this blog.
Including yours.

#187 gtrz4peace on 03.30.12 at 12:37 am

#156 BPOE – Yeesh, our 3rd post tonight. Hey, what IS with your “creme de la creme” routine?

Do you mean “creme de la criminals” because so much of those bringing the suitcases of cash got it through some form of rape and pillage, either corporate/environmental degradation of areas other than BPOE, drug and money laundering, financial scams a la Goldman Sachs, etc.

The “creme de la creme” are coming here cause it’s easy — and cheap for them for now. And can leave just as easily when their shiny new BPOE toy wears off.

YOU are left to clean up the mess. Jokes on you I guess.

#188 backwardsevolution on 03.30.12 at 12:42 am

#139 – yes, there was never anything “free” about this market. Manufactured and engineered right from the get-go (just like Greenspan did). In fact, take a look at housing the world over – bubbles everywhere! All markets are being manipulated.

The Central Banks are running the world, taking their orders from their masters, the bankers. Mark Carney? Good old Goldman Sachs boy. He’s just following orders.

Who pays for the policitians’ campaign contributions? You? Me? Or developers, the real estate lobby, big oil, the big banks? It’s a game of “you grease my wheels, I’ll grease your’s”. They’ve got some favours to pay back. “Build those condo towers, boys, but don’t forget to contribute handsomely to our re-election campaign.”

Canada is no different than the U.S. Corporations, big banks and the government are joined at the hip.

#189 GeneticistX on 03.30.12 at 12:44 am

father: son, a penny saved is a penny earned

son: whats a penny?

#190 Don on 03.30.12 at 12:46 am

Logic dictates it is still over – it can happen at any moment now – the tipping point is near – affordability is tapped out – use your senses, observation is a powerful tool.

#191 Nostradamus Le Mad Vlad on 03.30.12 at 12:46 am

-
#113 eddy — Well said!
*
BRICS Leaving us in their dust; Expanding the debt bubble four times faster than GDP, but Limitless Debt “Sure it can. As long as the Fed has ink and paper they can go on purchasing US Government debt … until the money junkies OWN the whole place!” wrh.com; What Next? Good question; Double Dip (or more) recession and 2012 vs. 2011 Could be worse; UK Gas Panic Someone is profiting nicely from this; Spain, the UK, Greece — when will NAmerica have a general strike; 12:27 clip Avoiding govt.-induced cuts; Top 10 things banks won’t tell us; Innovative Greeks New ideas coming forth; Red Hot is super cooled natural gas; 15 US States pus Canada would be hit by a hard Chinese landing; Strange Split in US economy; Chart How world powers view one another; Japan’s lost decade; Bernanke tells how QE works with colorful chart; Russia Selling gold; Portugal and Spain Both unraveling, with Italy to follow; Homeless Parents; Google freaked.
*
One in 88 children have autism; H1N1 Vaccine Linked to spike in narcolepsy; Cheap Drug kills most cancers; Mercury in Vaccines and Polio Vaccine (dangerous); Flu Pandemics Brief history; Thwarted “UPDATE: Israel is trying to circumvent US resistance ti the attack on Iran and has now apparently reached an agreement with Azerbaijan to use Baku as a launching point for an attack on Iran.” wrh.com; DHS Why does it need so many bullets; Good night and Goodbye, America.

USS Enterprise to cross the Suez Canal shortly. Bait or FF to provoke war with Iran? The ship is being retired anyway, so there’s not much point in keeping it, and US Tweaking things for Iran; 1:56 clip Dances with Wolves? Wolves come back to meet woman; The noise in the world increases, but very little happens; Racial Slurs “Someone is really trying to ignite race riots in this country.” wrh.com; 4:02 clip English subtitles. A UFO drawing energy from the sun? Japan’s troubles and North Sea Possible methane explosion.

#192 EJ on 03.30.12 at 12:48 am

It’s startling how much damage the cons have done to this country in less than a decade. Why is our system so broken that a handful of clowns can cause such destruction in so little time, yet fixing this mess will take a generation or more?

Canadians are complacent fools to stand for the gutting of their own country. They’ve been played like fiddles by harper and his gang, drunk on the belief that their houses will save them, oblivious to what’s happening around them.

Makes me yearn to move to a country were the populace has already learned their lessons about bubbles and debt, humbled and enlightened by such an experience. Canadians have yet to see the light.

#193 TaxHaven on 03.30.12 at 12:51 am

Not 1st…

You miss the point entirely.

They should be FORCED to continue minting pennies, the more the better.

The public thinks pennies are inconvenient.
The public throws them out.
The public love their debit cards.
The public are afraid prices will be rounded up!
The public think this’ll SAVE money.
The public trusts “their” government.

Canadian jackasses!

KEEP the penny. What better way to constantly remind the silly sheeple that government debasement and money-printing is the real cause of rising prices?

Why doesn’t Mr. F explain why a 95%+ COPPER penny, 25mm in diameter and produced before 1921, could cost LESS than one cent to produce, yet today’s debased small zinc tokens cost nearly two cents each to mint?

Why was the five-cent coin once SILVER? Now STEEL?

Why could two cents once send a letter anywhere in the British Empire? How about NOW?

Where’s the five-cent cup of coffee, Mr. F? WHY did it disappear, Mr. F?

Why were 7.6m cents enough in 1921, yet somehow we needed to crank out 1,089,625,000 of them in 1999? The same holds for the 5c, 10c, 25c, $10…$100… plus OODLES of CREDIT issuance…

Do we feel wealthier now? Less indebted?

Every penny one sees should serve as a living indictment of central bank inflation policy. And if you hit the silly myopic masses over the head long and hard enough, perhaps they’ll catch on…

#194 Dan in Victoria on 03.30.12 at 1:15 am

Paully @ 36
So is F really as tall as a dachshund.
I guess if you tilt the wiener dog on end it will be close.

#195 Harper is an a$$ on 03.30.12 at 1:23 am

Maybe Harper is not as stupid as he looks and sounds like.

Maybe Harper is purposefully fleecing the next generation by creating and sustaining a bubble for the boomer generation to get equity out of their houses because the boomers have no other retirement plan than housing. Meanwhile every next-gen man, woman, child, and cat purchases 5 houses/condos as rental properties … oh wait, there is not enough people in Canada to occupy all those … duh!

So that’s how Harper takes care of the boomer pension problem — brilliant! :-P

#196 Monster Cookie on 03.30.12 at 1:39 am

#16 City Slicker on 03.29.12 at 4:50 pm

So what now, the party goes on. At what point will market forces take over to do their thing? Maybe this will keep inflating to infinity?
As James Sinclair says QE to infinity, ultimatley that’s what the Cons are doing, endless cheap credit expansion.
—–
yup, Canada is inflating to keep up with the Fed’s Bernanke. And or course, why not? It’s great for the government, they get to spend like crazy without raising taxes, just like the USA.

#197 Tres Bien Goat on 03.30.12 at 1:43 am

maybe we should change Fs name to Oflaherty and put in the national anthem so we will always remember him. bhad bhad ladd.

#198 stage1dave on 03.30.12 at 1:54 am

Well, that was certainly “much ado about nothing”, cigarettes didn’t even get taxed, FCS! Kinda glad I spent the afternoon finishing the frame horn repair on that 59 Buick LeSabre; watching the budget @ 2pm would’ve been a waste of time. Tomorrow, it’s a toss-up between engine install or listening to all the punditry…that nailhead startin’ to look pretty good already!

I’m beginning to wonder if anyone (myself included) knows what’s going on economically…nationally or locally. Here in Edmonton, prices are off 20% from highs a few years ago. The GF & I rent for about half the carrying cost of a mortgage…business-wise, I see many vacant shops, lots of “for lease” signs; & yet my landlord (who owns several buildings) has a full occupancy rate with few delinquents.

One of our frequent customers who does a lot of oil patch work has been repeating the line “…once everyone goes back to work this summer” since Christmas…he’s getting ready for a banner year. A shop down the road (in the same line of work) has half the workforce they did 3 years ago & very little to do. Apparently, “it’s all downhill from here…” Huh?

Several of my customers have been complaining about being turned down by the bank for refinancing because their TDS was too high…then I run into a 20-something with a BA in Dead Languages or Putting Things on Top of Other Things (and no actual job, of course) who just bought a 600K McMansion with the proverbial 5% down…& he’s driving a new Toyota.

The landlord at our Edmonton house figures the value will be up to pre-recession levels next year, (!) & then keep appreciating…

My sister in Calgary couldn’t give away her 750K “semi-detached” (JHC, there’s an oxymoron!) two story, but rented it out for 40% more than the mortgage payment…& then switched it to “interest only” (thereby defeating the entire concept of having a mortgage, IMHO…but what do I know? She’s got two degrees) That way, she could save another couple hundred bucks a month.

Anyway, misc observations from street level…

There’s always a chance, I suppose, that Mr. Flaherty is as confused as I am…or getting as many conflicting economic indicators & gossip as I…or even worse, he cares about these things as much as I do…

Which would be bad, because as an elected official he’s supposed to give a damn…or at least fake it real well…OK, at least passably well. I don’t have to…I had nuthin’ to do with it! I will, however, be an unwilling participant in whatever colourful disaster befalls us all thanx to this ongoing debt orgy. Which Mr. Flaherty has obviously decided to tune out…for now.

Now I’m off to buy a pack of smokes…for the exact same price that they were yesterday!

#199 Shopar on 03.30.12 at 2:04 am

billions of dollars in national debt and negative budget, billions of dollars in provincial (from ontario)debt and negative budget, thousands of dollars in canadian individual debt. And housing market is major employer and gdp contributor?
canada is using the future, i don’t know what will be the trigger, but this will be a lot of fun for sure.

#200 daystar on 03.30.12 at 2:06 am

More on covered bonds:

http://business.financialpost.com/2012/01/31/covered-bond-issuance-by-banks-hits-record-tax-payers-on-hook/

And I had to laugh when I stumbled upon this link about CMHC:

http://www.lendingmax.ca/artman/publish/The_facts_about_CMHC_risk_printer.php

Now… the interesting part about this link is that the spokesman for CMHC says the average mortgage has 45% equity so its hardly something to worry about right? That is until one looks at the recent numbers. CMHC mortgage insurance debt has gone up from $275 billion in 2005 to roughly $560 billion over 6 short years under Harper. 90% of mortgage holders over the last 6 years took the minimum downpayment and the maximum amortization.

How much equity do these newer, much larger mortgages have compared to the mortgages that are over 6 years old with much shorter amortizations with larger downpayments? Common sense suggests these much larger, newer, riskier mortgages have well under 20% equity. The mortgages that have the most risk (much newer, larger mortgages with intitial downpayments of 0 to 5%) have very little equity and make up the majority of the mortgages CMHC holds. The entire interview is misleading, about what you would expect from the Conservative Stephen Harper government.

Here’s another interesting tidbit that I was unaware of until a few days ago when another blogger mentioned it and its found in this link here:

http://www.mortgageproteam.com/articles.cfm?action=intro&NewsletterID=25462

Currently CMHC has roughly $560 billion worth of insurance in force, or a $560 billion dollar mortgage insurance portfolio that offers 100% protection against loss for our banks. However… CMHC also backs 90% of private insurers. The entire mortgage industry is at a collective 1.1 trillion in Canada. Thats the number CMHC truly backs. If I’m reading this link right…

“Though there are a handful of private sector insurers, the CMHC is by far the dominant player. It also backstops 90% of the private sector guarantees.”

… CMHC is backing the entire mortgage industry which is a 1.1 trillion dollar pie. Half of it is 100% insured while the other half (the private half) is 90% insured, the equivalent of twice the size of our national deficit. With 30% of homeowners with no savings and housing and credit both in a bubble with rates at rock bottom and nowhere to go but up, how can this end well?

Answer: It can’t! We are so screwed…

#201 Ben on 03.30.12 at 2:16 am

Is English still the first language in VAN and TOR ?

#202 backwardsevolution on 03.30.12 at 3:04 am

“How did we get here? An argument can be made that miscalculation, accident, inattention and the like are why things go bad. Those elements do have a role, but it is minor. Potential catastrophe across the board can’t be the result of happenstance. When things go wrong on a grand scale, it’s not just bad luck or inadvertence. It’s because of serious character flaws in one or many – or even all – of the players. [...]

I’m going to argue that the US government, in particular, is being overrun by the wrong kind of person. It’s a trend that’s been in motion for many years but has now reached a point of no return. In other words, a type of moral rot has become so prevalent that it’s institutional in nature. There is not going to be, therefore, any serious change in the direction in which the US is headed until a genuine crisis topples the existing order. Until then, the trend will accelerate.

The reason is that a certain class of people – sociopaths – are now fully in control of major American institutions. Their beliefs and attitudes are insinuated throughout the economic, political, intellectual and psychological/spiritual fabric of the US.”

#203 eagle eyes on 03.30.12 at 3:21 am

Let me digest-
F says that he’s worried about Canadian household debt levels, yet he doesn’t seem to take any actions to discourage it.
F says that he’s worried about the Canadian OAS not being sustainable, yet he doesn’t do a clawback based on income. Instead he raises the age of eligibility for everyone.

I think he doesn’t want to rock any boats. He wants a good night’s sleep. So tonight, he changes into his tiny elfin jammies and his little elf cap. He crawls into bed, pulls the covers under his chin and smiles. He thinks to himself “I’ve gotten away with another budget without upsetting anyone. (giggles) Gee they must think I’m really smart. No one knows that I am really an idiot” And with a sigh he falls into dreamland after counting pennies jumping over the fence…..

#204 Michelle on 03.30.12 at 3:38 am

@#48- Deb:

I too was a little bummed that at age 51 I was going to yet again eat my older sister’s dust by losing out on 2 years of OAS payments …
but then I watched this video of a Canadian criminal being arrested and it totally made me smile:

http://news.yahoo.com/blogs/sideshow/man-sings-bohemian-rhapsody-police-car-being-arrested-193858892.html

#205 Monster Cookie on 03.30.12 at 4:04 am

#21 John on 03.29.12 at 4:57 pm

Who cares about mortgages at a time like this! They’ve MURDERED the penny!
——
Inflation killed the penny,
Beauty killed the beast,
Video killed the radio star,
Ben Bernanke is currently killing the dollar,
And soon it will be dead too.

#206 Freedom first on 03.30.12 at 4:18 am

Like Warren Buffett says: “Leverage is always fun on the way up, on the way down, not so much. Another favourite quote of his when he was asked by an interviewer if he always kept some cash liquidity: “Cash is like oxygen, you always want plenty of it around. Sounds simple, but having ample cash flow, liquid investments, and being diversified always works, as well as absolutely hating debt of any kind…….please note, this last statement is my personal long time philosophy, which works at any income level. Please save any “Yabuts”…….not interested. You can argue with Garth, but don’t waste your time with me, as I can’t comment right on your post, like he can:)…..sic em Garth:)

Canadian Real Estate Market is going to really cause a lot of pain when the tide goes out, and we see who has been swimming naked ( part of another Buffett quote).

Please note, I take no satisfaction in the people who have been slaughtered world wide by their perspective RE Markets, as I will find it painful to watch the Canadians I know learn a painful, and major lesson when the Market tanks here.

Lastly, when you least expect it…….Fire in the hatch……KABOOM!

#207 Monster Cookie on 03.30.12 at 5:04 am

#26 arctodus on 03.29.12 at 5:04 pm

Garth, Garth, Garth……tsk tsk tsk…….

You expected a different result….

History lessons badly needed all round….

Governments are not there for the people…they exist for themselves….all politicians, beauracrats, functionaries etc etc etc…..they are all useless feeders on the pyramid….they will suck the host for as long as possible and then scurry like rats as the ship goes down…..

I am thrilled…as a confirmed (and never dissappointed) doomer things are proceeding exactly as one who has studied history would expect….

Perhaps you would like to regal us again with how the US housing market is in recovery? How the US dollar will be the reserve currency for the next 50 years? How the “correction in the canadian market will be “gasp” a full 25%…….

Get a grip on reality man…..the canadian housing market, the canadian economy and the future in general for the great white north is entering a depression that will make the 1870 debacle look like a christmas party (the 1930s were not even a hiccup by comparisson)…..

SAY IT….actually SAY IT…….

Greatest Depression EVER……driven by resource constraints (peak everything) and stupid monkeys social responses
—-
yup

#208 Daisy Mae on 03.30.12 at 5:17 am

“In his much-hyped budget, F choked. As expected.”

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

He’s scared! The government has its collective head in the sand! He avoided the one extremely serious issue causing great concern around the globe. Instead, zeros in on the ‘penny’ and ‘cross-border shopping’….an attempt at giving Canadians something else to think about.

#209 Daisy Mae on 03.30.12 at 5:23 am

“No suggestion that minimum down payments be raised from 5% to 7%, as experts had suggested, to protect property virgins from themselves, and massive debt.”

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

Would this really have made a difference — 2%? Why not 20%? The banks are once again, thinking only of themselves and their shareholders….

#210 Daisy Mae on 03.30.12 at 5:38 am

“(Consumers will be able to continue using pennies “indefinitely,” but prices will be rounded to the nearest five-cent increment if pennies aren’t available.)”

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

‘Rounded’ up or down? Take a guess.

#211 Monster Cookie on 03.30.12 at 5:45 am

#48 Deb on 03.29.12 at 6:10 pm

Quit voting, you’re wasting your time. Why does it matter what they say, you’ll lose. The should end OAS and everything else they do.

It puzzles me why Canadian bicker endlessly about what the want from the government while the government endlessly disappointing us. Why don’t Canadians realize governments are incompetent like the Americans did when they wrote their constitution; which has kinda been lost in the dust but I’m sure they will find it somewhere under all them guns!

#212 Daisy Mae on 03.30.12 at 5:57 am

#36 PAULLY: “So is F really only as tall as a Dachshund?”

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

He’s a little man in sooooo many ways…..

#213 jonathan on 03.30.12 at 6:05 am

DoN’t wOrRy it wiLL hApPeN. A lot of SELLERS and very few buyers, it will correct. They know it……. They just avoided panic

#214 betamax on 03.30.12 at 6:32 am

#64 blatherer: “Plunked down 400 large…And of course I put 5% down”

Can’t keep your lies straight?

“on Burke Mountain in North Coquitlam”

If true, good luck living in your rainy mountain microclimate. By the time you and your wife are dying to move back down to Vancouver’s mere 50% rainy day average, you’ll be stuck owing more than its worth.

#215 David B on 03.30.12 at 7:01 am

Much has been said ….. but perhaps those 70,000 + pay cuts will have an effect on spending and where is the $15-20 Billion going to come from for those fancy unproven F-35′s. In any rate it really is nothing new … Smoke and Mirrors and continued back room dealings. The real budget will be heard on the street in the months to come before rounds 2-3-4 to 50 as they plan to be in power at least that long. Just imagine Garth you were once part of the team and who knows in line for leader one day once you were knighted ….LOL lucky you. Off to Second Cup my new reading home in the morning with the Economist in hand for now and my almost new iPad II at the standby. Life is good and cool eh.

#216 Kip on 03.30.12 at 7:02 am

“That $6,000-per-year handout just because your knees won’t work will continue to be paid to everyone currently 54 or older, when they hit 65.”

So, the Boomers sail through it with the best jobs, houses and pensions an then we get to hand the bill to Gen-whatever. Perfect, thank-you Mr. Flaherty. Now we won’t have to vote you out after all.

Let’s hear it for Mr. Flahety!

#217 tiny bottoms on 03.30.12 at 7:04 am

TD Chief

“Because a good thing can become a bad thing by having too much of anything.”

http://www.theglobeandmail.com/globe-investor/td-chief-backs-ottawas-mortgage-tightening/article2385474/

#218 I'm stupid on 03.30.12 at 7:07 am

The fed may as well eliminate OAS. I’m 32, I think by the time I retire it won’t be there. Even if it is with my pension plan, my rrsp’s, tfsa and investment account I will be eligible for exactly zero. Maybe less than zero depending where I fall in the tax bracket. I say let me keep my contributions and invest them myself. At least I know it will be there when I retire.

#219 Pr on 03.30.12 at 7:07 am

Its what i expect from F! That is why he will enjoy a very, very, very happy retirement!

#220 blase on 03.30.12 at 7:29 am

Garth,

I’d say the fact that F didn’t talk about mortgages and personal debt in the budget means that the situation is so bad he couldn’t even mention it, for fear of being associated with it.

Instead, they will backdoor the mess through CMHC being assigned to the federal regulator.

It’s done, start counting the days, but the ever ignorant average Canadian will be more focused on the by-gone penny. I’m sure the banks know exactly what’s going down though.

#221 Bigrider on 03.30.12 at 7:44 am

C’mon people. RE prices going to continue to move higher in T.O as credit keeps flowing , along with immigration ,HAM, Russians and Persians.

I have to admit that my belief that prices had apexed 4 years ago has been wrong.

T.O going to catch up to Vancouver especially as financial markets continue to disappoint and people continue to withdraw from equity markets … net redemp-tions year after year since 2003.

Yeah, gotta watch out for that Persian invasion. Sheesh. — Garth

#222 Dontcallmeshirley on 03.30.12 at 7:49 am

Ouch!!! That let a lot of wind out of the sails eh?

CMHC & Genworth still have $30 billion+ insurance limit and banks still have no problems raising money at < 2%.

We're looking at 2 more yrs of this folks…no love until 2014 now.

Not much wind, but one could always hope. As I said days ago, F is leaving OSFI to do the demolition work. — Garth

#223 Bond junkie on 03.30.12 at 7:53 am

Garth, not going to say I told you so…. but I told you so. And the rest of you, how is it that this is the first time you’ve ever heard about the IMPP!!? (#80 ottgal) HELLO, that was instituted almost FOUR years ago!!! It’s simple, collectively that program freed up 200B in residential mortgage lending capacity at the big 5. Memo: that takes roughly a decade to work through.. so the party continues for another couple of years but look out in 2016-17 when all these 2.99s roll off, that will mark the top. Anybody renting in the meantime is a FOOL. CMHC ceiling?? It’s going higher, covered bonds? Bankers aren’t letting that source of free money go away. Sorry guys, onward and upward especially if you live in the GTA. Do you know how many sov institutions are looking at domiciling their trading operations here in Toronto to circumvent the Volker rule?? Hint: lots. That brings in thousands of new millionares and those types don’t rent. Forget the Chinese, shrewd, intelligent, financial sociopaths are the next catalyst to the bidding wars coming to a neighbourhood near you! Don’t hate the messenger.

#224 wheredideverybodygo? on 03.30.12 at 7:57 am

#206 Daisy Mae:
I think you are on the Money that F and the government gave us an election year budget. The Penny was a headline grabber and the crossboarder shopping the carrot. I ponder if this robo-call thing has them a little scared and so throwing us a nasty curveball in the budget would be the last thing they want to do. I say this because there are these odd attack ads in Toronto on TV dissing Bob Rae as a terrible leader of the Liberal Party. And I’m thinking this isn’t an election year? And it won’t be thank’s to the vanilla budget. Besides the correction contageon it sounds like has started in the west and spreading east. F may have to do nothing because when it reaches the shores of the media navel gazing of centre of the universe (Ontario) it will be housing correction news 24/7. And the gas going up to $1.45 – $1.50 will put a damper on spending. So it will indeed be an interesting Summer.

#225 Andrew toronto on 03.30.12 at 8:06 am

“Actually I said not to expect any such changes, since F was leaving the heavy lifting to OSFI. Did you miss school that day? — Garth”

Now what Garth , homeowners become more over extended and the bubble grows further , where and what wil be the breaking point.

Will it be gas prices.. ($1.50) wait that wont work tons of condo being build in toronto.. talk on a radio show 2 days ago stressed moving near your work..

so will it be suburbs that will take the hit , with driving all over the place may not be ecomonically feasable going forward..

seems a lot of our manufacturing has left the province and most of what we export is oil and gas , and potash and mining .. the federal government seems to be quite happy letting the west do the heavy lifting while ontario and quebec industries fizzle away.

yet no sign of this housing meltdown anywhere listen to F yesterday he says they will have the federal deficit paid by 2015 .. says canada has avoided the mistakes other western countries have done… REALLY..

How can these guys get away with this.. Can this go on indefinity!

#226 Butch on 03.30.12 at 8:17 am

Welp, time to buy a house I guess.

#227 Stupesing in Cabbagetown on 03.30.12 at 8:20 am

#48 Deb – I also agree with you. The OAS clawback begins at net income $67,668. That’s more than most Canadians’ gross working income.

The average Canadian household income is $83,100. — Garth

#228 Anotherlowlyrenter on 03.30.12 at 8:22 am

Hi Garth,

I can’t tell you how many times I’ve explained what the CMHC is doing to people who are amazed by its scale. I continue to be amazed by the public’s inertia. I’m also amazed that no politician has figured out that there’s likely a large pool of savers/renters who would be galvanized by this issue.

I think part of the problem is that seniors (who would likely be net losers in a housing crash and taxpayer-funded CMHC bailout) are unlikely to be readers of a blog.)

Perhaps old-school full-page newspaper ads/TV commercials are the way to go? I’d contribute $100 to that cause.

#229 Bigrider on 03.30.12 at 8:26 am

#219 Garth’s reply to Bigrider-” Yeah gotta watch out for that persian invasion..sheesh”

Who said anything about an ‘invasion’.

Persians are a large portion of the buying along the Yonge corridor northbound from Hwy 7.

Seriously Garth, cool the melodrama

#230 Bigrider on 03.30.12 at 8:29 am

Hey Garth, what is your take on the net redemptions equity markets have experienced since the early part of this century?

Before you blame retail investors exclusively, pension funds and institutional have also reduced equity exposure rates every single year.

#231 raider on 03.30.12 at 8:55 am

Let’s sneak this one in at the 200s comment post so it doesn’t gain too much attention. I’m just 30 and not Canadian citizen (German passport still looks nicer), but received my “tax education” from people who have been around in this place for a while. Is anyone familiar with Alex Doulis works from the early 90s? The whole mess reminds me how he started one of his earlier books (sorry Garth for the competition, maybe a writing book on taxes would do you good as well):
“Which is more reprehensible: The charging of $2.8 million to the government of Canada for airplane tickets by the Canadian senators, rather than utilizing the expense accounts which one would assume were set up for this very purpose, or the efforts of every citizen to deny the government as much money as possible so as to force it back on the road of fiscal responsibility.
[...]I have seen our country reduced from a proud independent nation to a supplicant begging at the doors of the international lending community for another quick ‘fix’ before it kicks the debt habit. I have heard people who made this country great, the workers, being greedy in expecting the pensions they paid for, while at the same time the people who didn’t pay for their pensions, the politicians, demand ever greater benefits.”

Sound familiar? Deja-Vu? This time just a bit more severe? When do the true patriots call in @ Canadian Tire for the price of torches and pitch-forks… Oh wait in the 80s/90s it was not Boomer’s retiring, but people who were actually concerned about their children’s future.

Alex Doulis is a tax-evading doofus. I thought Germans were smart. — Garth

#232 Steve on 03.30.12 at 8:59 am

The budget was more liberal than the liberals themselves.
They made it clear that they only care about the old farts that have homes, jobs, and lived a decent life. The young generation is doomed from the boomers.

#233 maxx on 03.30.12 at 9:00 am

Personal debt is one of Canada’s largest elephants in the room. Recently, I received a promo coupon for a 2-for-1 at a fast food retailer, valid on the proviso that I pay with my credit card. 3 bucks on a credit card! No wonder people are so out of touch with their money, let alone their spending….and now we also have speed passes, aka “touchless payments” popping up everywhere. I want to feel pain when money leaves my wallet!
TNMATB looked at me as though I was from Mars when, upon asking if I had any debt, I replied that I hadn’t yet paid the ‘phone bill.

#234 Angela on 03.30.12 at 9:08 am

How much do thoughts cost now?

#235 Steven Rowlandson on 03.30.12 at 9:14 am

Let’s see now. We have a budget that has hardly any cuts at all and people are whining…. Saving the country does not mean saving the real estate market, seniors or boomers. They are all going to die any way!
What counts is not people but the governments bottom line and right now the government has a cancer called debt. Usually if you don’t have debt and your a little short on cash a bit of debt is harmless as long as you pay it off and not let it acccumulate. This is the basic logic behind keynesian theory. The problem builds when keynesian theory comes in contact with human nature and politics. Government starts to view borrowing as a substitute for taxation and since government likes to grow and stay big it is not into reducing itself for the sake of paying down debt.
Self sacrifice is not on the agenda and that is the problem. They would like to preserve themselves and sacrifice others. Example : Artificially low interest rates. Great for spendaholic government that have borrowed too much but bad for creditors who buy GICs and othe debt related securities because it lowers their income from their savings to next to nothing.
The capital cost of retiring or getting a decent investment income is not a 6 figure sum on deposit. It is actually closer to 7 and 8 digit sums on deposit.
It requires more bucks for a bang when you have low or almost no interest rate .
It gives both government and citizen an incentive to borrow too much at too low a rate. What happens when interest rates have to climb?
The cost of borrowing goes up and if it goes up high enough to make saving worth while after taxes, debt defaults can and will happen. For home owners they risk losing their homes and for government they go to the printing press to make up the difference and the you get inflation that requires higher rates that cause more deficits and more printing untill the currency won’t buy anything and it’s time to start over from scratch with a new dollar and less of them.
All the currency you thought you had is cancelled or recalled and for let’s say a million old dollars you get a new dollar. It can be worse than that, sometimes 12 zeros get knocked off the money supply…. This is the way of things when government borrows too much and resorts to the printing press because it can’t sell bonds and won’t cut spending.

The solution of course is for government to stop borrowing and pay down its debt by 20 or 30 billion a year untill the debt is gone and all debt is private sector debt and all the cash paid back is invested in the economy instead of government debt.
After the government is out of debt the correct strategy is to build up a huge 500 billion to a trillion dollar fund to invest in the economy to provide income for the government and reduce the need to tax…
By that time the seniors and boomers will be dead and gone and that following generations will be small and forced to look after themselves. The legendary benefits of a communist democratic society that looks after people from cradle to grave will be a myth.
To get to this wonderfull future the politicians and their supporters have to be stopped some how before Canada goes the way of the United States or Zimbabwe.
Otherwise you all might as well buy canned food, shotguns,gold and silver just like the so called doomers do.
At the federal level if interest rates rise to 10%.
Ten percent interest on 600 billion is 60 billion in interest charges. It has to come from some where.
Now consider the provincial, municipal and real estate debt financed at 10%. We are talking big coin and it has to come from some where. Think about it.

#236 Andrew toronto on 03.30.12 at 9:23 am

Here’s more proof ,those that followed you like me , lost and continue to los, Rent has sucked for the last 4years not to mention prices have not corrected but gone higher..

Canada is different apparently per this article below
how we have the right ingredients and how realestate will cool but not crash.. even Benjamin Tal from CIBC says we have the luxury of time on our hands. So I guess F does know a thing or 2 .

http://realestate.yourmoney.ca/2012/03/infographic-is-canada-heading-for-a-us-style-sub-prime-mortgage-crisis.html

Yes, your actions are my fault. Well, if you want to believe that realtor commercial for home ownership, because (of course) there is no risk, go ahead. Let us know how it turns out for you. — Garth

#237 Dontcallmeshirley on 03.30.12 at 9:30 am

Not much wind, but one could always hope. As I said days ago, F is leaving OSFI to do the demolition work. — Garth

Agreed. OFSI and CMHC insurance cap are the surgical instruments our gov’t have chosen to wield.

The time lag on those two things having effect is years though…frustrating.

The stark reality is Canada’s resource industry brings in so much $$$. All that cash makes raising funds very, very easy for banks. I can’t think of any practical constraint that would cause them to tighten credit enough to affect property buy & sells.

What was the tipping point in the US? Concretely, what was the catalyst that made that sucker finally pop in 2008? I can’t figure it out.

#238 jess on 03.30.12 at 9:33 am

On Friday the Spanish government approved a new voluntary “code of conduct” for banks with the aim of helping poorer home-owners to settle debts and stay in their homes.

The economic crisis has caused a huge increase in the number of evictions which has reached “crisis point”.

The new guidelines will mean defaulting owners can now hand back the property to the lender as a way of cancelling the debt. Mortgage conditions can also be modified for a period of up to 40 years.

Under current rules a bank can repossess a home if the mortgage payments are not up to date and they often demand further payments from the owner if the value of the property has fallen below the amount borrowed. Other “administration” fees are also often added to the debt.

The new guidelines will not protect every home-owner, deputy prime minister Soraya Saenz de Santamaria explained. The rules will apply where all members of a household are unemployed or when the mortgage repayments are equal to, or more than, 60% of the total household income.

“We have adopted these measures in parliament to ease the dramatic situation of many Spaniards, who have lost everything, who have lost their job,” she said in a press conference following the approval of the guidelines.

“Many families, more than one and a half million, have all of their members out of work. These are families that have no revenue and, given their inability to pay their mortgage, are facing eviction.”

Since the property bubble collapsed in 2008 there have been over 300,000 registered evictions, Sra. de Santamaria said.

With the unemployment rate at 23%, one of the highest in Europe, and the governments austerity measures, introduced over last month, many people are continuing to struggle and many are facing the prospect of eviction. However, with so many people in the same boat Spanish solidarity is spreading across the country.

#239 a prairie dawg on 03.30.12 at 9:39 am

You could say that F:

-took the low road
-was short on vision
-has little common sense
-can’t touch the debt ceiling (it’s too high)

But you really want to blame H and his policy makers. Political expedience in Ottawa has trumped logic, no matter what the cost. (business as usual)

Thank you sir, may I have another…

#240 TurnerNation on 03.30.12 at 9:43 am

Worth a mention, over 900 layoffs in NB and NS announced yesterday.

Mine closing:

http://www.cbc.ca/news/business/story/2012/03/28/nb-bathurst-mine-xstrata-closing.html

Canjet (now a charter airline) laying off staff:

http://www.cbc.ca/news/canada/nova-scotia/story/2012/03/29/ns-canjet-layoffs.html

And we know about the 300 Rogers workers. Plus 20,000 Federal workers. Killing us softly. The (economic) war must go on.

#241 TurnerNation on 03.30.12 at 9:45 am

Who loves the smell of a new budget in the morning?

“Read my lips: no new taxes”.

#242 Steve in Saskatoon on 03.30.12 at 9:50 am

While at a business lunch yesterday I mentioned to the 5 people with me (2 somewhat looking to buy a house) about what’s going on in Victoria, Kelowna, and even Vancouver w/ their record listings and stagnant sales… All 5 of them nearly crapped their pants in shock and disbelief at what I was saying. It’s amazing how ignorant and blind ppl are about the world around them. I’ll continue to spread the word. My little effort to help get housing prices back down to “normal” :) Happy Friday Everyone. PS. For all those non-boomers – Stop crying about the OAS going to 67. If you’re really hard up for $6k extra a year at that age, you’re screwed anyways. :)

#243 Rural Rick on 03.30.12 at 9:50 am

Harper gets his majority government elected by fraud then steals your pension. Canadians are outraged. They will band together in cities and towns across this great nation and do nothing as usual.

#244 disciple on 03.30.12 at 9:54 am

#228 shirley… Allow me to offer my opinion… The catalyst for the US collapse was probably a group of insurance companies and MBS bond holders that for some reason that will never be fully known, wanted to crystallize their gains and demanded their money. Bank of Wachovia and drug money laundering was somehow involved. Perhaps a feud between families such as WW1 and WW2.

So, to extrapolate to Canada, what will probably eventually happen is that institutional investment funds will for whatever reason, want to cash in their “housing trusts” debt instruments and along with whomever is providing insurance for delinquent homedebtors, will collectively bring down the ponzi scheme resulting in another bailout (CMHC insurance and more taxes).

Flaherty does keep mentioning economic factors OUTSIDE of Canada a lot. Perhaps he is hinting at something and preparing your minds for the eventual catalyst that will cause the Canadian Mutual Fund companies to demand their pound of flesh?

#245 AokakesuDigital on 03.30.12 at 9:58 am

Tired, worn out stock of 1960′s housing that hasn’t seen a penny invested in maintenance or improvement since new PLUS

Large number of soon to be retirees looking to fund their future with sales of tired, worn out stock of 1960′s housing that hasn’t seen a penny invested in maintenance or improvement since new PLUS

Local resource extraction based economy riding high on export demand PLUS

Lots of six figure income jobs tied to local resource extraction based economy riding high on export demand PLUS

People with six figure income jobs all house horny, chasing worn out stock of 1960′s housing that hasn’t seen a penny invested in maintenance or improvement since new PLUS

EQUALS a microcosm of Western Canada here in depressed ol’ Ontario called Greater Sudbury.

Besides the major centers, this is also an RE market to watch for big adjustments if/when Asia has a sudden lapse of sanity.
Even though it’s not at the scale of insanity of Vancouver, Toronto or The Oil Patch, this RE market is under the same distortions which are currently outlandish. $200 kiloCAD will net you a 800 sq.ft. INCO shack that is barely being held up by the dozen poorly tacked on additions. Any new sub-1000 sq.ft. RE stock starts at $400 kiloCAD. Everything in between is worn out and in need of five figure repairs or has been carved up into tri-quad-hex-plexes.
/vent off

Ankle biter F has apparently passed the buck, so go get ‘em OFSI! Take a bite out of the shoddy Sudbury Spec N Flip industry! I can’t wait for this market to catch a clue.

#246 eaglebay - Parksville on 03.30.12 at 10:07 am

With his first majority budget, Stephen Harper has laid bare his vision for the future Canada: Government will be smaller and less intrusive, individuals will take more responsibility for their own retirement and business will return to driving the economy.

The 2012 budget is a showcase for Mr. Harper’s hands-off political approach, one that combines sweeping spending cuts to the public service with a handful of targeted policy changes geared to drive future investment.

#247 Aussie Roy on 03.30.12 at 10:11 am

Aussie Update

History was made a few days ago here in Australia, as it was announced there are currently a record number of properties for sale across the country 300,000 in total.

No bad seeing we have a shortage of houses, how does this make any sense?. Surely we have a glut on the market?.

The Australian Council of Social Service (ACOSS) national conference has heard that the lack of affordable housing has reached crisis levels.

Housing experts say there is a shortfall of tens of thousands of social housing homes – a number that will grow unless funding increases.

The new Housing Minister Brendan O’Connor told the conference he was there to take suggestions about how to tackle Australia’s housing affordability problems.

He said the Government needed to explore future options “with an opening and enquiring mind”.

But his open mind closed quickly when it came to the question of reducing negative gearing and capital gains tax concessions.

“The fact is that there are some things that the Government will not, at this point, consider,” he said.

http://www.abc.net.au/news/2012-03-29/acoss-conference-hears-affordable-housing-debate/3921510?section=business

The latest HIA new home sales report, which finds sales rising slightly in February, but over the first quarter of 2012, down quite a bit on the same period last year. The main culprit is no surprise – Melbourne Victoria.

http://www.macrobusiness.com.au/2012/03/new-home-sales-have-a-noisy-bounce-in-febhia/

Property bull site, quotes “Keen”. I wonder why?

Australian housing market still facing Japan- or US-style downturn due to deleveraging: Steve Keen

http://www.propertyobserver.com.au/residential/australian-housing-market-still-facing-japan-or-us-style-downturn-due-to-deleveraging-steve-keen/2012032954078

#248 fancy_pants on 03.30.12 at 10:11 am

I figured as much as a whole.
jacka$$e$ are simply full of hot air. I should have stayed with the sheep and not sold my investment condo in the fall of 2008. little muddling $hits and golden boys are morons.

#249 eaglebay - Parksville on 03.30.12 at 10:13 am

This blog is loaded with negativism from all the entitled doomers. No realism.

Harper expects us to take more responsibility for our retirement; he expects environmentalists to get out of the way of the resource economy; he is shrinking what government does and how often it does it. He is forcing everyone from the CBC to the military to the regional development agencies to absorb cuts.

#250 disciple on 03.30.12 at 10:16 am

John – Give eagles another chance. He may think his heart is like an indestructible aluminum wallet, but he has to open it sometimes…

#251 truth hammer on 03.30.12 at 10:19 am

As expected…the real estate pyramid just sold a new line to the suckers who thought they’ve missed out on the deal of a generation. Why even consider having to pay any of the borrow back……..it’s not like Marc Carney hasn’t been officially outed as a neutered goof drawing a comfortable $400,000 K salary with major perks…for basically holding up the the toilet paper roll in F’s personal crapper. So much for an independant BOC……gee…was that newz?

The fact is that CDN’s are not paying 100% of their pretax income in housing yet……and that makes the spread for increasing prices a lock in the near future. Virtually every speculator and condo pimp has made gobs of money on this budget…..and will untill such time as the game falls apart under it’s own weight….or such time as the US raises rates…..which as you all know where CDN fiscal poicy is made.

UP UP UP goes the price of real estate foir at least the next year…..guaranteed.

#252 Sebee on 03.30.12 at 10:20 am

Does $1T in outstanding studen loans for U.S. students put $600B of CMHC debt into perspective? I think it just may.

http://money.cnn.com/2012/03/30/news/economy/student-loans/index.htm

#253 disciple on 03.30.12 at 10:21 am

Garth – I’m setting you up for a witty one-liner… but what does the F stand for in today’s blog entry? Flaherty, Fear, or…

#254 Kaganovich on 03.30.12 at 10:27 am

#235 Don’tcallmeshirley

You wrote “The stark reality is Canada’s resource industry brings in so much $$$. All that cash makes raising funds very, very easy for banks. I can’t think of any practical constraint that would cause them to tighten credit enough to affect property buy & sells.”

You maybe right at this moment, but as for thinking of possible practical restraints to this dynamic you are describing, a big one comes to mind: demand destruction. Namely, China being unable to grow at 12% per annum will undoubtedly affect our resource extraction industries. Mish posted an informative article lastnight, and more commentators are talking about the probability of China having to significantly scale back its growth. Hell, even BHP has went public about this potential practical constraint. How many vacant cities will the Chinese authorities have built in order to keep the ball rolling and avert a civil war? Not enough in my opinion. The riots we were/are able to glimpse on youtube before they are yanked are merely the tip of an iceberg of mass sentiment among ordinary Chinese methinks. Riots over there may be positively correlated to slackening demand for our resources over here.

#255 Blasé on 03.30.12 at 10:34 am

What’s historically stunning is The Cons buying 75 billion in toxic mortgages, and THEN F decides, hey, let’s raise the lending limit for CMHC a couple hundred more billion! We’re in a deep, deep hole, the Free world just went over a cliff, so let’s create MORE toxic debt! and what’s the lead story? Pennies. I remember when Canada had a moral compass. It’s going to take a crash for these criminal politicians to be held morally accountable. Who wouldve thought wed yearn for the Liberal days. CHEAP money, just like Charlie sheens character in wall street.

#256 Daisy Mae on 03.30.12 at 10:44 am

217Pr on 03.30.12 at 7:07 am

“Its what i expect from F! That is why he will enjoy a very, very, very happy retirement!”

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

He will always have to live with himself….

#257 Bond junkie on 03.30.12 at 10:51 am

#235 outright blatant mortgage FRAUD. The likes of which, no matter how many people argue otherwise, is next to impossible to pull off in this country under the current scrutiny of our financial regulators.

#258 Daisy Mae on 03.30.12 at 11:03 am

#226 ANOTHER LOWLY RENTER: ” I continue to be amazed by the public’s inertia….”

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

They don’t want to hear any bad stuff so they tune out….

#259 daystar on 03.30.12 at 11:04 am

There’s an old expression, “if you look after your pennies, the dollars take care of themselves!”

We’ve seen the way F looks after pennies… quite a penny pincher he is. But hey, lets not forgot who F works for or where he takes his orders from, shall we? Its Stephen Harper that wanted this RE bubble and credit bubble. Its the Stephen Harper party, lest we forget, the Conservative Stephen Harper government we are talking about here.

100 billion worth of government bonds will be sold this year in Canada, all fresh debt and who is buying 84.5% of this debt? Americans.

Now I have to ask…. who does Stephen Harper work for?

#260 Pr on 03.30.12 at 11:07 am

in the European Union the 6 try to hide everything they do not know what to do , it is a desperate situation you cannot have austerity measures and expect tax revenues to rise , there are protests in Spain in Greece in Portugal , by the 100 of thousands of people and YOU HEAR 0 of that in the MSM,the whole system is coming down …..Europe is doomed…so as canadian realestate when it happen.

#261 Dontcallmeshirley on 03.30.12 at 11:08 am

#140 Daystar,

Covered bonds aren’t derivatives. They’re just bonds.

Their unique distinction is that they are backed by specific collateral (ie. a bank’s CMHC insured conventional property mortgages). [conventional = <80% loan-to-value).

A "regular" bank bond doesn't have a specific collateral attached to it…they're secured by a bank's overall assets.

Raising money via covered bonds is why banks have been chewing up CMHC's insurance in force limit.

In other words, there's nothing nefarious going on with covered bonds, just banks doing their thing – raising money.

#262 Wage Slave on 03.30.12 at 11:10 am

I’ll just leave this here:

http://ca.news.yahoo.com/mps-gold-plated-pensions-untouched-budget-no-change-200611666.html

#263 Federal Budget – No Changes To Mortgage Lending | Vancouver Real Estate Anecdote Archive on 03.30.12 at 11:10 am

[...] “I had hoped this budget was really going to have some significance, but its totally anti-climatic. Canada is being crippled economically with the biggest ponzi scheme this country has ever seen.” – ‘Vancouver Mt Pleasant renter’ at greaterfool.ca 29 Mar 2012 6:08pm [...]

#264 Daisy Mae on 03.30.12 at 11:14 am

#229 RAIDER: “….(sorry Garth for the competition, maybe a writing book on taxes would do you good as well)”

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

Waste of time. It’d be obsolete before it went to print. After all, the feds are forever changing the rules year after year….always ‘simplifying’ income tax reporting.

#265 truth hammer on 03.30.12 at 11:17 am

Elite Liberals won’t admit the corrupt profits of crime are pouring into Canada…but the Chinese government doesn’t agree.

http://www.thestar.com/news/world/article/1153837–hong-kong-s-kwok-brothers-arrested-on-suspicion-of-corruption

This is a very big reality slap for the corrupt millionaires now residing in Wankouver…….just because you have a CDN passport…the Commies are still gonna get cha…if you step out from behind momma’s skirt.

Shame of the Liberals for shielding these criminals for the sake of politically correct vore pandering in the immigrant community

#266 45north on 03.30.12 at 11:19 am

DontCallMeShirley: What was the tipping point in the US? Concretely, what was the catalyst that made that sucker finally pop in 2008? I can’t figure it out.

reminds me of a problem solving course I took. I nailed the problem before anybody else. The instructor made an effort to throw me off track. I stuck to my guns and was rewarded with grudging respect.

Debt as a percentage of income is the most significant factor.

#267 anon on 03.30.12 at 11:36 am

#221 Bond junkie

Garth, not going to say I told you so…. but I told you so. And the rest of you, how is it that this is the first time you’ve ever heard about the IMPP!!? (#80 ottgal) HELLO, that was instituted almost FOUR years ago!!! It’s simple, collectively that program freed up 200B in residential mortgage lending capacity at the big 5. Memo: that takes roughly a decade to work through.. so the party continues for another couple of years but look out in 2016-17 when all these 2.99s roll off, that will mark the top. Anybody renting in the meantime is a FOOL.

^^ I don’t understand how people renting are fools. My calculations put us ahead by over 200K in 6 years and over 1M in 20 years by renting vs buying in our market. That is being CONSERVATIVE with returns from investments but also assumes RE doesn’t continue to rise at 10-20%.

In my mind, it is foolish to buy with those numbers staring at you in the face…sadly though, most don’t understand why renting can sometimes be far more beneficial than buying *shrugs*

#268 Snowboid on 03.30.12 at 11:39 am

#162 The Real Jimbo on 03.29.12 at 10:52 pm…

Remarkably similar to your great-grandfathers’ note from 1899:

Once again my older sisters win. They get one day off at age 65. I get it at 67, assuming I haven’t died by then.

It reminds me of the 1880s… My sisters both bought brand new $800 houses in Vancouver and received a new horse for buying.

When it was my turn to buy a few years later, the recession of 1884 had hit and my $1100 bought only an old tent that went down in price for the next 10 years. Luckily my tent survived, while my sisters lost their homes to the great fire of 1886.

In the 1890s, there was no way to break through to management because the Victorian lumber barons had staked their claims. Their company profits were preserved while, for my generation, they were eliminated.

And when it came time to buy a horseless carriage, the Victorians had once again got there first, pricing us out of the market.

Finally, the Victorians embraced offshore speculative money because it made their home prices rise.

Hooray! The neighbor’s house sold for $10,000! I’m rich!” Did they stop to think that their $10,000 houses created a generation or two of younger Canadians who were no longer able to afford a home without becoming lifelong debt slaves?

All my life I’ve walked behind the greedy, destructive, spoiled-rotten mob of the Victorians and have smelled their stench.

And don’t get me started on those bloody Liberals that really messed it up for us after the 1896 election.

#269 stage1dave on 03.30.12 at 11:44 am

#200 backwardsevolution:

I think you’re bang on here, but would add a detail. The sociapathic tendencies of these people are the most visible trait, but the ultimate problem is positions of great power occupied by persons known as “double highs”.

Check this out: http://www.counterpunch.org/2012/03/23/is-scott-walker-a-conservative-without-a-conscience/

Human beings exhibiting these personality traits are truly scary, but they do lend themselves very well to pyramid-climbing in a private or public institution, or running the same. And the resulting duplicity required to function on a day to day basis.

I’m not going to get into detail here, but more info is available at Robert Altmeyer’s site @ the University of Manitoba; “The Authoritarians”. He’s been doing pioneering research on this personality type for several decades; including most of the pioneering research.

He also goes into some detail about “authoritarian followers”, another personality type that explains a great deal about the cognitive dissonance that surrounds the blind loyalty that some people exhibit when following leaders or politics & social belief systems of dubious quality.

Great info & interesting read…his site (as Dean mentions) is getting upwards of a half-million hits a month, so more & more people are picking up on this.

#270 zeeman1 on 03.30.12 at 11:56 am

#2106 Tim.

You think a bigger government will allow the average citizen to be heard?

Where do you guys come from?

#271 City Slicker on 03.30.12 at 11:56 am

#265 45north on 03.30.12 at 11:19 am DontCallMeShirley: What was the tipping point in the US? Concretely, what was the catalyst that made that sucker finally pop in 2008? I can’t figure it out.

reminds me of a problem solving course I took. I nailed the problem before anybody else. The instructor made an effort to throw me off track. I stuck to my guns and was rewarded with grudging respect.

Debt as a percentage of income is the most significant factor.
———————————————————-
so the party ends when debt payments can’t be made? resulting in a systemic domino effect?

#272 Steven Rowlandson on 03.30.12 at 11:58 am

#257 daystar

Now I have to ask…. who does Stephen Harper work for?

Answer:
Ultimately it must be for the House of Rothschield and their allies in politics and finance.
If that were not the case then we would have a 20 to 30 billion dollar surplus in this budget and the paying down of the debt would have resumed. Also many of the the social reforms and monetary reforms of the last 100 years would have been overturned and past errors corrected. This has not been done and problems that undermine Canada persist.
Some one had to tell the truth.

#273 Sticky on 03.30.12 at 12:00 pm

#117 X

“Unfortunately it looks as if your pridiction that the 30 year amortization period would be ended this year will not be made true. … And wouldn’t have made that much of an impact, a difference of a few hundred dollars a month in carrying costs.”

>> “only a few hundred more a month…no big deal”? $300 X 12 = $3,600/year of after tax dollars…so what $5000+ per year of people’s salary getting re-purposed would be no big deal. Check your head.

#274 City Slicker on 03.30.12 at 12:02 pm

#170 45north on 03.29.12 at 11:32 pm City Slicker: At what point will market forces take over to do their thing?

in the US it was the summer of 2006 that things started to look odd. Spring is the peak selling season but spring had come and gone and the lawns were turning brown in the California sun, neighborhoods were filling up with For Sale signs.

Flaherty has passed up his chance to make a stand. Maybe his last.
———————————————————-
Why did everyone start selling?

#275 City Slicker on 03.30.12 at 12:06 pm

And what happens when on reset the LVT differential payment can’t be made? Does the house go into foreclosure?

No, the mortgage is denied unless teh borrower brings it back into line, sells and discharges or finds another lender. — Garth

#276 arctodus on 03.30.12 at 12:27 pm

#65
How can the greatest depression ever due to peak everything be a problem for a country that is a net exporter of peak everything.

High prices for resources is the main reason we’ve been able to pretend it’s different here finance wise for as long as we have!

Because grasshopper…just like the tumor that thrives for a time in it’s host’s abdomen….growing and expanding and “exporting” its products througout the body…eventually the host suffers a medical crisis (read “great depression in economic terms) that ultimately causes great pain and agony to the host and kills off BOTH the host and the ‘exporting” tumor.

Canada was part of a metastisizing cancer called economic growth driven by cheap energy…the obvious breakdown is debatable but I chose the 2006 breakdown in the US housing bubble for ease of explanation…..western economies went into hard decline after this event and they have never stopped (and they never will) contracting since.

Canada is just as finished as everyone else. For ease of understanding…watch canadian exports to China this year and next…as the chinese economy crashs down our markets will die…..and no the USA will not pick up the slack…they are in freefall….

Stop being sheep people (hell I do not care if you stay sheep honestly)……but get this……we are finished as a modern economy….be greatful….your childrens children might have just a glimmer of chance of surviving into the 22 nd century if we crash hard enough..fast enough…for us today though we are in for a very very very rough time.

#277 GTA Girl on 03.30.12 at 12:27 pm

Thought you’d get a kick out of this, Garth.

http://www.ipolitics.ca/2012/03/30/behind-the-musings-budget-speech-the-pop-up-video-edition/

#278 Muzza on 03.30.12 at 12:29 pm

From listening to the complete speech it sounds like the big “F” is playing his cards on the asian bet for prosperity, sigh, so look forward to more outsourced jobs and annoying phone calls from God knows where just before the CBC airs the Leafs in a losing campaign, once again. Prosperity for who ? Back biters and insiders or fat cat oil execs… ? Anyway, the banks will bury themselves and look for a bail out, none will be given though, the big “F” has already hinted on that, govern yourselves at your own peril, they obviously want a hands off approach, which goes along with overzealous hornies over extending their inches to get in a pumped up market. Business as usual, buyer beware… Now what’s new on MLS today…

#279 DonDWest on 03.30.12 at 12:33 pm

247 eaglebay – Parksville

“Harper expects us to take more responsibility for our retirement.”

Unless you’re a baby boomer – then by all means, eat cake! By the way, while we’re at it, the cake will be made out of the flesh of younger Canadians.

#280 $$$BPOE#1 on 03.30.12 at 12:43 pm

It’s called a UFD Unrecoverable Financial Decision. Life is short and sometimes it takes one into their 40′s or 50′s to discover this truth. Those years renting you could of been building equity, you could of been an owner a Winner, you would of made out like a bandit as prices rose. You could of participated in the greatest flowering of Canadian consciousness. this is not America where one buys a home due to their own people’s misery. Only the American goes to Hawaii and takes advantage of his own people. Renters with the exception of a small percentage who rent for lifestyle or short term and invest in stocks are in a very precarious situation. the renter is being forced out of the City they love or having to take on onerous rent payments. Rent is only going higher while mortgage payments cease sometime in the future. I will pray for you and all renters today. I am taking some time sway from the board. There is no question that I have been proven correct on every point. The Canadian renter is a tragedy. Let us all pray for him. The Winner’s Circle of owners who have all made out like bandits, tonight let us all pray for thse poor renters and the scary unknown future they face. Amen and God Bless
********************************************
Andrew toronto on 03.30.12 at 9:23 am
Here’s more proof ,those that followed you like me , lost and continue to los, Rent has sucked for the last 4years not to mention prices have not corrected but gone higher..

#281 Canadian Watchdog on 03.30.12 at 12:48 pm

#260 Dontcallmeshirley

Nothing nefarious other then the fact that the BoC, Fed and Euro banks (courtesy of LTRO) are buying, repo-ing and swapping Canadian covered bonds while private sector participation is fleeing, cause after all, who would buy 5yr bonds posting a real negative return?

If they don’t get our banks back into funding themselves with private capital, then we are certainly on a path to insolvency. This is all that is going on, watch how it’s done here. http://www.youtube.com/watch?v=LKsZ1hqHBHU And yes, the same ponzi system applies to Canadian banks via their US branches http://www.newyorkfed.org/markets/pridealers_current.html

What you think is happening and what is happening are different.

#282 blatherer on 03.30.12 at 1:05 pm

#64 blatherer: “Plunked down 400 large…And of course I put 5% down”

Can’t keep your lies straight?

“on Burke Mountain in North Coquitlam”

If true, good luck living in your rainy mountain microclimate. By the time you and your wife are dying to move back down to Vancouver’s mere 50% rainy day average, you’ll be stuck owing more than its worth.

Lies? Lol, you didn’t know u can put 5% d/p on 400 large? It amuses me how people on this site don’t believe in owning a primary residence, when 1/2 million people are lining up worldwide to come to this country and buy one. And your warning about being Stuck owing more than its worth? Well, the mortgage is 1800 a month for a 3bed, 3 bath. In 5 years from now it’ll be cash flow positive if we decide to move on and rent it out. It’s a win/win IMO, as to rent this unit it would cost 1800 a month anyways. Go check craigslist.

#283 Dontcallmeshirley on 03.30.12 at 1:08 pm

#270 City Slicker

Debt as a percentage of income is the most significant factor.
———————————————————-
so the party ends when debt payments can’t be made? resulting in a systemic domino effect?

Agreed. The ability to service a periodic debt payment is more meaningful than the absolute debt level.

Collectively, Canadians can quite easily service $1.1 trillion of property debt.

If you buy that, we are barely on our own 40-yd line in the big game.

#284 EB on 03.30.12 at 1:09 pm

“#185 gtrz4peace on 03.30.12 at 12:37 am: BPOE – Yeesh, your 3rd post tonight.”

I actually suspect that BPOE is a rather carefully planned troll (or at least provocateur); he’s very extreme and consistent, and his posts seem targeted to pander to and confirm xenophobic tendencies. I don’t believe the real elites would be wasting their time gloating on the internets so persistently.

#285 Franco Mazzuca on 03.30.12 at 1:12 pm

Debt pushers, as bad as drug dealers..

Walked into PC Bank kiosk. Looking to open a $USD account. They don’t have one.

But I did get offered a mortgage. Quoted me 2.99% but if I had good credit I could get it for 2.50%.

A month ago CIBC called me in. Wanted to review my investment. Really wanted to give me a HELOC to do what ever I wanted with it. There is a special on now where they will waive all the fees…

The party will come to an end. In a dramatic fashion. One debt the source of monies to create this type of lending will cease. Investors are fickled. They rather have 2% return wil government insurance. When they begin to question the ability of the insurance company to payout or the insurance company can no longer payout it’s claims(AIG) then you can turn out the lights because the party will be over.

#286 Dontcallmeshirley on 03.30.12 at 1:13 pm

#280 Canadian Watchdog

Nothing nefarious other then the fact that the BoC, Fed and Euro banks (courtesy of LTRO) are buying, repo-ing and swapping Canadian covered bonds while private sector participation is fleeing, cause after all, who would buy 5yr bonds posting a real negative return?

——

You know W’Dog, it would be very interesting to see a list of the folks buying those securities. Must be published someplace?

Irregardless, the $$$ is out there in play. Don’t waste too much energy spitting into the wind.

It’s incumbent on all of us to play the game as the gov’t has laid it out rather than fruitlessly challenging it.

So what right? The “so what” is i’d like to know how much runway is left, and act accordingly.

#287 blatherer on 03.30.12 at 1:21 pm

There are no guarantees in life. The world is flat now. The smartest minds out there figure by 2050, we’ll either hit a technological singularity, or endure a nightfall event. The next 20-30 years will see technological innovations unbeknownst to us now, massive population growth (9+billion people), and tremendous resource pressure.

Stake your claim now, because in real terms, real estate has only one place to go: UP!

#288 daystar on 03.30.12 at 1:24 pm

#260 Dontcallmeshirley on 03.30.12 at 11:08 am

Covered bonds essentially create 2 separate loans backed by the same asset. How do you define derivative?

#235 Dontcallmeshirley on 03.30.12 at 9:30 am

“What was the tipping point in the US? Concretely, what was the catalyst that made that sucker finally pop in 2008? I can’t figure it out.”

#99 daystar on 03.28.12 at 2:27 am

Please read this entry from Garth’s piece “Written in the wind”. I have yet to find a better explaination than the one I’ve provided concerning what triggered the U.S. housing meltdown. If you have questions, by all means feel free.

#289 Alex N Calgary on 03.30.12 at 1:26 pm

J in Calgary, that is interesting to know! all the houses in our inner city neighborhood for sale (10 or so) haven’t been touched in 8 months now, I think the era of 800k for a infill is over, the question is how low will it have to go to make it affordable, I’m thinking a lot closer to inflationary norms.

also at this drywall place, they seem to only be doing showhomes….I think new construction is hitting a wall too, time will tell, I don’t think rentals can get more expensive then they are now, its getting a bit silly.

#290 blatherer on 03.30.12 at 1:26 pm

#275 arctodus on 03.30.12 at 12:27 pm

“Canada is just as finished as everyone else. For ease of understanding…watch canadian exports to China this year and next…as the chinese economy crashs down our markets will die…..and no the USA will not pick up the slack…they are in freefall….”

200 million additional people have yet to start urbanizing in China. China is one of the few bright spots in the global economy, and Canada is lucky to have strong brand power in that region.

#291 pbrasseur on 03.30.12 at 1:37 pm

@daystar #198

Good post, as usual from you!

You are right to point out that covered bond are the next schema used in force by this disastrous government to encourage Canadians to take on more debt.

They are bragging about getting closer to a balance budget but of course they don’t need to take on much debt to stimulate the economy when they are getting others to do it instead.

This is absolutely outrageous!!!

#292 Keith on 03.30.12 at 1:37 pm

Garth,

You may be good at policy. But you’re terrible at politics. If you were the Finance Minister, would you publicly announce that you were going to pop the bubble so that when the inevitable happens, you and your party would wear it?

Far better to quietly tighten up the rules through OSFI and new legislation governing CMHC. Without even touching mortgage amortizations and minimum downpayments, Flaherty could significantly tighten the mortgage market. Sometimes a scalpel can achieve more than a hammer.

#293 GTA Girl on 03.30.12 at 1:39 pm

Here is story of big devloper busted in Hong Kong. arrested for corruption. Developers of many projects in vancouver

http://www.vancouversun.com/news/Billionaire+Kwok+brothers+arrested+Hong+Kong+Hung+Properties+value/6385750/story.html

#294 daystar on 03.30.12 at 1:45 pm

#271 Steven Rowlandson on 03.30.12 at 11:58 am

Stephen Harper was a lobbyist for U.S. multinationals for 5 years before becoming leader of the Conservative party. The goal? Expanded market share in Canada’s economic sectors including our bond market. I have yet to see any indication that Harper ever gave up his old job.

Harper doesn’t exclusively lobby for americans. Stephen also lobbies for the Thompson family who easily controls the largest media market share in Canada (you have to have media watching your back to win elections):

http://en.wikipedia.org/wiki/List_of_Canadians_by_net_worth

Harper is also a Bilderberger:

http://en.wikipedia.org/wiki/Bilderberg_Group

And what do they do? They decide the course of the world specifically through transfers of wealth and power.

http://en.wikipedia.org/wiki/List_of_Bilderberg_participants

Happy reading.

#295 blatherer on 03.30.12 at 1:57 pm

#266 anon on 03.30.12 at 11:36 am

#221 Bond junkie

Garth, not going to say I told you so…. but I told you so. And the rest of you, how is it that this is the first time you’ve ever heard about the IMPP!!? (#80 ottgal) HELLO, that was instituted almost FOUR years ago!!! It’s simple, collectively that program freed up 200B in residential mortgage lending capacity at the big 5. Memo: that takes roughly a decade to work through.. so the party continues for another couple of years but look out in 2016-17 when all these 2.99s roll off, that will mark the top. Anybody renting in the meantime is a FOOL.

^^ I don’t understand how people renting are fools. My calculations put us ahead by over 200K in 6 years and over 1M in 20 years by renting vs buying in our market. That is being CONSERVATIVE with returns from investments but also assumes RE doesn’t continue to rise at 10-20%.

In my mind, it is foolish to buy with those numbers staring at you in the face…sadly though, most don’t understand why renting can sometimes be far more beneficial than buying *shrugs*

//// I call b.s – how could you be 200,000 ahead over 6 years by renting? That works out to an extra 2,800 a month! My entire mortgage (400K), insurance, strata, hydro and cable works out to 2,200 a month. A similar townhouse to mine just rented out for a 1 year contract at 1,900 a month, so its cash flow neutral. Where are you renting? West Vancouver?

#296 Sebee on 03.30.12 at 2:01 pm

OK Garth, I had a moment of doubt, but today my faith was restored.

I was passing by this in Bloor West Village area. We always used to make fun of this shoe box dump when today I saw a For Sale sign on the lawn. I couldn’t wait to find out how much this dump was – turns out it’s just shy of 1/2 a million! I love the night shot of the outside of this place. People of T.O. pass by 466 John’s Road and enjoy your moment of reflection.

May I please suggest we all chip in our discontinued end-of-life pennies and buy the new proud owner a house warming gift?

http://www.realtor.ca/propertyDetails.aspx?propertyId=11653618&PidKey=64421194

#297 Canadian Watchdog on 03.30.12 at 2:03 pm

#285 Dontcallmeshirley

Here’s one list http://i44.tinypic.com/28k802a.png and another from Bloomberg http://i41.tinypic.com/2dbv6gg.png

#298 mad vancouver on 03.30.12 at 2:11 pm

BPOE: time to sell your assets
http://www.yattermatters.com/2012/03/west-vancouver-where-has-the-cozy-gone/

#299 Dontcallmeshirley on 03.30.12 at 2:21 pm

#287 Daystar,

I get your point, i really do…a malevolent, unseen hand engages in non-commercial transactions to further their own selfish interests…i really understand what you’re saying. But a bank pledging a mortgage as collateral is not a derivative.

The closest thing to an explanation of a singular event that caused the US crisis was Henry Paulson’s book. And even that was just a 6 out of 10.

#300 OkanaganInvestor on 03.30.12 at 2:33 pm

#183 brainsail on 03.29.12 at 5:00 pm

Who was the trophy blonde sitting behind him?

That would be Candice, 47. Reminds me of Beach Girl.

#301 Cato on 03.30.12 at 2:34 pm

Guess it wasn’t surprising, more of the same. The dirty little secret is the deficit improvement was primarily a result of increased consumer spending brought on by dangerous lending. All F has done is create an even larger problem that has yet to come.

By kicking the can down the road a few more years we are setting ourselves up for yet another repeat of the damaging cutbacks seen in the ’90s. I was in university in the mid 90′s, had plenty of classmates who were planning on medical school – most of whom would have made excellent doctors. In our brilliance we cut spending many CDN universities dropped the number of medical seats by half in some cases. Now we whine about lack of physicians & specialists. Cause and effect. We drastically cut spending but there were long term consequences that have yet to be felt. Cuts made in the 90′s may very well result in outright collapse of our healthcare system.

When you see the various shiny happy politicians showing up for various photo ops tied to stimulus spending think of this. When gov’t attempts to pick some to succeed they are infact picking others to fail. Maybe we both run businesses in competition with each other, maybe your ideas are better then mine but I happen to have contacts in gov. I get favorable grants, wage subsidies , financing terms from the BDC. Your tax dollars flow to me and give me a competitive advantage in the market. This isn’t gov’t aiding Canadian business, its economic socialism to further political careers. How do you think the bureaucracy determines how to divvy up all this generosity. Hope no-one actually thinks its a fair or equitable process. The level of corruption I have seen is simply to be expected when you have gov. and not the free market attempting to determine who succeeds and fails.

There are 300K Canadians in silicon valley. Think of that for a moment. We supposedly have a problem with innovation in this country? Its because our innovators have left. Some leave simply to be part of the center of the tech universe but most leave because the socialist economic policies advocated by our gov’t. The poisoned business environment means there is no choice but to leave in many cases. You can point to a few success stories in Canada but I guarantee they will pale in aggregate to the value of the success stories from Canadians who have left the country. Its clear the gov’ts current focus is to have all us peons going to work in the oil patch or in some dirty mine. These Harper Conservatives are starting to sound more and more like Putin’s United Russia Party all the time.

#302 Devore on 03.30.12 at 2:41 pm

#294 blatherer

No one is paying 1900 for a townhouse on Burke Mtn, when $2000 gets you a townhouse in Vancouver. If someone is, they’re idiots who do not know how to use craigslist.

#303 Kevin on 03.30.12 at 2:46 pm

@SE Asian Expat

“Instead of supporting our youth in the development of a sense of selfless community service and intercultural understanding”

In what world is any of that the government’s job?

The government has one main job: To protect us from invasion from other governments.

The government has a couple secondary jobs that wouldn’t get done if it weren’t for the government, such as maintaining roads, inspecting our food, and that sort of stuff.

In a left-leaning society such as Canada’s, the government also takes on some responsibilities that arguably are personal responsibility, but might otherwise not be available to everyone if the government didn’t do it, such as education and health care.

Instilling a “sense of selfless community service and intercultural understanding” is a parent’s job.

#304 Boomer on 03.30.12 at 2:55 pm

Well Garth, BMO just announced it was extending it’s 2.99% mortgage. Will this insanity ever end? Sure doesn’t look like there will be a slowdown on sales, all those house horny 20 somethings will be tripping over each other to buy. Sad.

#305 safetypup on 03.30.12 at 3:37 pm

Crazy listing of the day!

Take a look at this super overpriced $2,100,000 house in Riverdale, Toronto. The neighborhood is nice, but $2,100,000??? You can actually get a house in Rosedale or Forest Hill for this amount. The renovation looks kind of generic and cheap too.

http://22fairview.com/index.cfm?id=550780

#306 down and out on 03.30.12 at 3:39 pm

No pennies rounding up to next nickel WOW I am now practicing stopping the gas pump on the nickel so a miser like me does not hold up you drivers of Hummers .I can see it now everyone at the pumps clicking away to the nearest nickel and missing by a cent ,click again Ah gas on my pants ‘Click again Ah gas on the ground .

#307 Arshes on 03.30.12 at 3:40 pm

#297 blatherer
//// I call b.s – how could you be 200,000 ahead over 6 years by renting? That works out to an extra 2,800 a month! My entire mortgage (400K), insurance, strata, hydro and cable works out to 2,200 a month. A similar townhouse to mine just rented out for a 1 year contract at 1,900 a month, so its cash flow neutral. Where are you renting? West Vancouver?
——————————————————
$400,000 for a townhouse???

I cant believe someone would pay that much for a townhouse.

#308 Bigrider on 03.30.12 at 3:46 pm

How can a city like T. O be considered a ” world class city” with a crumbling infrastructure… a mass transit system stuck in the sixties , and traffic jams that make Los Angeles roads look like an open highway in the Yukon?

#309 Bigrider on 03.30.12 at 3:48 pm

Only thing ” world class” in T.O is the horrendous gridlock , forest of condo towers, and drug induced obsession with real estate.

#310 whibur on 03.30.12 at 3:48 pm

Sadly it is up to the individual to realise that the housing market is going to crumble, how far no one knows for sure.
The scary aspect is that four out of 10 Canadian’s are unsure if they could afford their mortgage rate if they went up as little as 2 percent.
It is no ones fault but your own, if you live outside your means.
The part none of us like is when interest rates rise, which they will, Canadian’s are going to default in mass amounts and the tax payer is going to be on the hook for them drinking the house Kool aid, that houses will only continue to go up.
Sadly many of them may not have been around or remember the last housing bubble/correction.
All one can do is have a balanced porfolio and hope when the housing correction happens your porfolio will have earned you a decent amount of money to compensate for any downturn reaction you could experience.

#311 Network Admin on 03.30.12 at 4:29 pm

#309

$400,000 for a townhouse???

I cant believe someone would pay that much for a townhouse.
======

I think it is cheap…
http://www.realtor.ca/PropertyDetails.aspx?&PropertyId=11659310&PidKey=548397175

#312 Don on 03.30.12 at 4:34 pm

#312
If rates go up 2% your payments go up 60%

#313 Reverend on 03.30.12 at 4:37 pm

Flaherty is just a politician. There is nothing wrong with that. He takes his decisions in order to satisfy his electorate. As any other politician, he can think only in a short-term. This means he does´t care about the problems you described in your article. He is an ignorant. Of course, there are other important indicators, that everything is OK, like the statistics about the housing market Calgary vs Toronto, that talk about increase in sales. So poor Flaherty just follows what market says and does´t care about any signals of problems that could destroy our economy in the future. He will be in some Caribbean isle by then, drinking his Mojito.

#314 betamax on 03.30.12 at 4:46 pm

#284 blatherer on 03.30.12 at 1:05 pm
#64 blatherer: “Plunked down 400 large…And of course I put 5% down”

“Lies? Lol, you didn’t know u can put 5% d/p on 400 large?”

When you wrote “plunked down”, I assumed you paid a 400k downpayment. Down = downpayment. Sorry, I forgot that not everyone has cash. You actually only plunked down a few bucks. $400k total for a new townhouse these days buys a cheaply made shack.

“In 5 years from now it’ll be cash flow positive”

In 5 years you’ll discover that rents fall with prices. Later, you’ll be paying assessments. You’ll see.

#315 Smoking Man on 03.30.12 at 4:53 pm

GTA spring market 1Ding

People are so stupid, 30 40 50 or 60 years on this planet they still don’t know that a 1 ding at an elevator means it’s going up, 2 dings means it’s going down. At leased 4 times today I saw people go the wrong way. Oblivious to such obviousness.

Figured out how the lord of dings decided to make the 1 ding for up, and the 2 dings for down.

God is one syllable, Devil is two. If you’re going up, 1 down 2.

Just thought I would share that.

O and Western Man I’m not a ding bat but that’s what you’re thinking right now isn’t it.

#316 ManfredSteyn on 03.30.12 at 4:56 pm

Larry at YatterMatters has posted the latest market snapshot of West Vancouver. Quite a tumble!

http://www.yattermatters.com/2012/03/west-vancouver-where-has-the-cozy-gone/

#317 daystar on 03.30.12 at 4:56 pm

#290 pbrasseur on 03.30.12 at 1:37 pm

Thanks! I would caution however, that I’m quite capable of being wrong. There’s a big difference between thinking and knowing. Sometimes all we can do is guess (and sometimes we just don’t dig hard enough for the answers that are already there).

While looking for the answer to the question of whether or not covered bonds ends up on CMHC’s balance sheet I found this link on covered bonds:

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2012/02/changes-coming-due-to-cmhc-mortgage-insurance-limit.html

The point I made earlier that you alude to is essentially the same. CMHC spokespeople can make all the noise and fluff they want about how CMHC is well positioned to handle a severe housing correction but guess what….

So did AIG…
And Freddie Mac…
And Fannie May…

Their PR people said the exact same things as CMHC does now, sighting past trends and how their balance sheets can take many times the number of defaults so not to worry. We know what happened to them now don’t we? The largest private U.S. insurers went bankrupt and public insurers needed hundreds of billions in bailouts to make it and the MBS bond market needed trillions in bailouts by the U.S. government to make it function and to pay for it all, the U.S. government still buys their own bonds to keep rates low. History proves such fluff and calm speak to be nothing more than lies and propaganda.

Like as not, Canada’s bloated RE/credit bubble is mainstream now, having been a running theme on MSN as an example for months now with daily stories like this:

http://ca.msn.com/?ocid=OIE9HP

To the national post:

http://business.financialpost.com/category/personal-finance/mortgages/
http://business.financialpost.com/2012/03/28/many-pinched-in-mortgage-rate-stress-tests/

But still, one would expect more media coverage then this. Once RE values fall significantly, that will change along with sentiment and Canadians are going to want to know why media was mum for so long, why government did everything they could to create this mess and why people in the know didn’t speak up (other than the Garth Turners of the world which are presently still very few and far between) and all I can say is that many Canadians don’t want to know until it ultimately effects them but by that time, its too late. It takes me back to a macleans magazine article from a year ago that is far from dated:

http://www2.macleans.ca/2011/03/23/a-mortgage-monster/

The industry and government doesn’t want Canadians to know just how bad it is either. Again, the U.S. comparison comes to mind because the same muzzling and denial was rampant in the U.S. before their crash and the stats aren’t much different than Canada. Homeownership here is 70%. In the U.S. at the height before the crash, it was 67% (with the percentage of mortgage holders roughly the same). Employment in Canada generated by RE has averaged 18% over the last 5 years in Canada. At the height of america’s development, they averaged 13% over 3 years (2001 to 2004). The higher this number (Nevada & Arizona averaged 25% and 23% respectively) the worse the collapse. All the bubble indicators from peak home values to RE generated employment to the percentages of mortgage holders with no savings (its 32% in Canada) to debt per capita and household debt to GDP, on almost every category, Canadian numbers are uglier than U.S. stats at their peak and we haven’t hit our credit bubble peak!

Does anyone want to wager a guess as to what our employment percentages are in say… Vancouver and Toronto from RE? Once rates rise even modestly and layoff’s are triggered enmasse’ in the construction/financial sectors, where will the new jobs come from?

This can’t end well.

This post is already long, but Canadians have always assumed that wealth can be built on credit which is true or has been when valuations keep going up and they have for at least 17 years but we are entering a reversing trend within a year that will turn the opportunity of leverage creating wealth into a debt trap that makes most if not all holders of credit slaves to debt or bankrupt and it won’t be isolated to just BC or Ontario, it will effect us all.

In case readers aren’t paying attention, RE/credit bubbles and their collapses are a world wide phenomenom. The causal effects are the same and utterly predictable. Nations have gone and are going bankrupt because of it. It might not happen here unless we vote these buggers in again, but the damage will still be extreme. Of this, I no longer have any doubt. May God help us all.

#318 Steven Rowlandson on 03.30.12 at 5:02 pm

#296 Daystar
The Bilderbergers are allied to the House of Rothschield.
I rest my case. You will find that many of the elite people, corperations, foundations, think tanks, secret societies and political parties have cross membership with each other and tend to cooperate with each other when they have to. Same gang but with different badges and uniforms thats all. That is why you can not ever change the government by voting. The political parties are all part of the same gang. They only require 4 basic things from you. Votes, taxes and that you don’t make trouble and obey them.

Conspiratorial crap. Take this garbage off this site. — Garth

#319 daystar on 03.30.12 at 5:07 pm

#301 Dontcallmeshirley on 03.30.12 at 2:21 pm

Ok, you win, covered bonds are not derivatives!! Uncle!!! (I really mean it)

Peace :)

#320 industrial Guy on 03.30.12 at 5:31 pm

Kevin ……..”The government has one main job: To protect us from invasion from other governments” is so myopic it’s hardly worth commenting on ….. The next time you need the services of a Doctor, Nurse, Firefighter, Police Officer … or even an agent of Service Canada please remember what you wrote.
Yes, “supporting our youth in the development of a sense of selfless community service and intercultural understanding” is the Government’s responsibility. Too often, parents instill by accident or design their intercultural misunderstanding upon their children.
Thirty years ago, I was a Project Manager with the Katimavik organization. The decision to cancel the program is just a partisan attack on something the Conservative have always seen as a “Liberal program”. You may want to Google: Senator Jacques Hebert hunger strike.
The young Canadians I worked with were dedicated to the betterment of their country. At a dollar a day, they were hardly in it for the cash … For many of the people we encountered this was their only opportunity to meet and live with Canadians from another region of the country. Are not programs which foster national unity worth saving? Hey! I’ll be honest, we didn’t solve all of Canada’s cultural and linguistic issues over the supper table every night, but everyone left the program with an better understanding of our nation, its people and our unique place in the World after their nine months were over. The three groups of young Canadians I had the privilege of working with were rightfully proud of their achievements. The projects these participants completed are still used by the citizens of our host community thirty years later.

#321 Smoking Man on 03.30.12 at 5:49 pm

July 5, 1970

Cockpit Voice recorder Pilots talking Real Easte over High Park.

FO Those apartments there. See them? The high-rise there
FO Yes It looks over the (unintelligible). It’s quite a good view out over the lake there.
SO The housing in Toronto is out of this world. Expensive, yeah.
FO Yeah, expensive all right.
FO Yeah, a lot of people have made a lot of money.

Perhaps they should have been paying more attention to landing the bloody airpalne.

Captins last words.
FO Oh, gosh
?? We’ve lost a wing

Oh gosh, they where so polite back then

http://planecrashinfo.com/cvr700705.htm

#322 whatever on 03.30.12 at 6:04 pm

#320 Steven Rowlandson on 03.30.12 at 5:02 pm

Conspiratorial crap. Take this garbage off this site. — Garth

All 100% true! Start signing your drivers license “without prejudice” and present that the next time you go to court. I have not paid for a traffic ticket in years. The drivers license is property of the state, so once you tell them the facts so certified they FREAK! In fact the government stole all your “future Labour” when they collateralized the possession of your Birth Registration Docs. Government places the populace into debt slavery so the Bilderbergers & House of Rothschield can live high off the hog.

Get lost. — Garth

#323 Canadian Watchdog on 03.30.12 at 6:06 pm

#321 daystar

A Credit Default Swap would be a derivative, not a covered bond, and for the sake of this debate, there is currently $707 trillion in notional amounts outstanding in the OTC market, of which Canadian banks hold an estimate of $18 trillion worth. http://i43.tinypic.com/v5ke91.png

That money doesn’t even exist, but it makes the banks look profitable.

#324 Katimaviktim on 03.30.12 at 6:37 pm

@ industrial Guy #322

I think that it’s sad that in one speech, F lauds the entrepenurial and innovation skills of the Israeli economy – fosetered in large part by programs where 18 year olds gain real-world management and entrepenurial experience during their mandatory two years’ of social (or military) service, while in another speech, guts Canada’s OWN program for teaching management and entrepenurial skills to youth.

Well, at least there’s still the military for youth to learn leadership, management and entrepenurial skills. Oh wait, they cut that too!

#325 larry on 03.30.12 at 7:03 pm

5 billion loss in one day

http://www.vancouversun.com/news/Billionaire+Kwok+brothers+arrested+Hong+Kong+Hung+Properties+value/6385750/story.html

#326 daystar on 03.30.12 at 7:11 pm

#320 Steven Rowlandson on 03.30.12 at 5:02 pm

Not exactly. Lets revisit this link (good ol’ wiki):

http://en.wikipedia.org/wiki/Bilderberg_Group

As prior suggested, happy reading which includes “conspiracy theory” in the link. Are you willing to admit that you are guessing as to what really goes on in the annual meetings of the world’s elite?

I am. I haven’t clinked glass at such functions and as such, anything that rests on nothing more than speculation, educated guesses or at best theory is what it is. A guess. Not much to rest on.

But… lets assume the world’s elite have one thing in common. They want to preserve if not add to their power and wealth and to achieve this, the rich with old money or new would want to know the will and talents of the worlds leaders both public and private. (a reasonable assertion I would think) In other words, they would want to know what these leaders really think and what makes them tick.

I would also assume that just because a leader public (elected) or private (corporate) is invited to become a member or attend annual meetings doesn’t mean they are supported. Nor is it a stretch to assume that its invited members are both informed of or share the worlds deepest threats and at the same time observed and assessed for character weaknesses and strengths and yes, I think also to address the world’s challenges and keep order but mainly to assess the weaknesses and strengths of our leaders world wide to not only more clearly predict where the world is headed, but to potentially exploit such weaknesses and strengths.

Why do I come to these assumptions? Because if I was one of the richest most powerful men in the world, I would be doing the exact same thing. It reminds me of an interview Jean Chretien gave to the CBC where he touched on his own attendance and talked about this strong feeling of being watched. Simple rhetorical question when it comes to Stephen Harper, if exploit is the right word, what would they exploit with Stephen… weakness? Or Strength (or the weakness he leaves behind, particularly in Canadian bond markets).

But yeah, Garth’s right, we’re both off topic, lets get back to RE.

#327 Blacksheep on 03.30.12 at 7:16 pm

Steven R. #320,

“You will find that many of the elite people, corporations, foundations, think tanks, secret societies and political parties have cross membership with each other and tend to cooperate with each other when they have to.”

Check out ALEC, it’s fact, not conspiracy.

http://alecexposed.org/wiki/ALEC_Exposed

take care,
Blackheep

#328 Nemesis on 03.30.12 at 7:18 pm

@IndustrialGuy #322…

SaladDays they may have been… but they were an authentic exercise in NationBuilding.

CulturalTransmission is the glue that holds ‘it’ together.

We could have had a Nation… in the end… we got Steel&Granite.

In other news, OldPol related – yes, I’m talking to you, OldChap…

Galloway. UK ByElection. Thoughts?

#329 Devore on 03.30.12 at 7:22 pm

#201 daystar

The entire interview is misleading,

All the points you made were perfectly valid, but more fundamentally, what is “an average mortgage” the report refers to? By value? By equity? By age? By maturity?

about what you would expect from the Conservative Stephen Harper government.

Aaaaand then you drop the ball ;) why bring politics into this.

#330 PW on 03.30.12 at 7:28 pm

blather: If your rate was 8%, you would pay over $3000/month. But that could never happen, right?

#331 Devore on 03.30.12 at 7:35 pm

#316 betamax

The confusion is understandable, but it was created directly by blather. “Plunked down” implies you have something to “plunk down”, in this case $400k. But he didn’t have it, he borrowed it. It’s easy to “plunk down” other people’s money.

It’s simply a case of mistaking debt for wealth, sadly, a common mistake these days.

#332 Daisy Mae on 03.30.12 at 7:47 pm

#294 KEITH: “Without even touching mortgage amortizations and minimum downpayments, Flaherty could significantly tighten the mortgage market. Sometimes a scalpel can achieve more than a hammer.”

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

That doesn’t negate the fact that Flaherty screwed up in the first place. And doesn’t have the guts to rectify the problem he alone created — or, should I say, the ‘cons’.

#333 McLovin on 03.30.12 at 7:54 pm

Why is every so down on Harper?

Who would be better?

Trudeau jr?
The guy who took over for poor Jack who no one has ever heard of?

I think he’s doing a decent job and he didn’t create the housing bubble.

#334 Nostradamus Le Mad Vlad on 03.30.12 at 8:06 pm

-
Holy Toledo! Something like 320 comments about a do-nothing budget. At least it’s sunny and cool here!
*
2:48 clip Gas troubles to hit NAmerica soon, same as UK? Lies, damn lies and Statistics Brings us to where we are now; US Exports to China top US$100 bln.; BoA stealing At least he admitted it; Fraud costs 73 bln. pounds / yr.; 450 plus banxter resignations; Best Buy to close 50 big box stores; Bankrupting local economies.
*
USS Enterprise “Were I a betting person, I would bet that the Israeli government, which has absolutely no love for President Obama, will time such an attack based upon two factors; the first is selecting a time when they believe they have their best chance for such an attack to be successful, and the second is when they believe they can create as much critical damage to Obama’s re-election campaign as humanly possible, as a “lesson” for future US presidents.” wrh.com and and 5:01 clip Iran’s naval drills; 5:05 clip Liquid fluoride thorium reactors; 3:22 clip Ron Paul rock star? Confirmed Asset Mohammed Mehra was an asset of the French secret service (the gunman in Toulouse a few weeks ago); Nikola Tesla’s missing secrets; Anonymous “…are we jumping on a bandwagon designed to take us for a quick ride to the closest Fema Re-education Center?”; Iran “An “error?” Reuter’s claimed these martial arts students were actually training to be terrorist assassins! Reuter’s defamed those girls.” wrh.com; George Galloway The UK’s Ron Paul. Landslide win; Monsanto Doing more than crop damage; 50% decrease CNN (m$m) loses half its’ audience; 2:03 clip Land day, complete with violence; John McCain angry he can’t arrest Americans.

4:18 clip “BUSTED! WikiLeaks alters digitalized cache to appear to BREAK the NEWS. This is nothing new. Back when the Climategate emails were leaked, Wikileaks tried to claim credit for the story, even though the actual leak had been to a server in Russia, and several websites, including this one, had the story three days before Wikileaks did.” wrh.com. WikiLeaks is a CIA asset; Fukushima Radiation in California; 7:18 clip Jet Blue incident; Spain’s general strike is quite nasty; Cold War starting again? Syria “Russia and China are not going to BUDGE at the Security Council on this; so, what’s next?!?” wrh.com. The west is committed to war; Race War :Obama needs a race war to win back black voters for November! Folks, we have seen this before. Every time the American people get angry with the government, the government responds by tricking into fighting with each other. It is called “divide and conquer.” wrh.com. Harper does the same thing.

#335 The American on 03.30.12 at 8:23 pm

At #253: Sebee, actually it doesn’t put anything into perspective. $1Trillion in student debt in the U.S. vs. $600Billion (it is actually more, though) in Canadian housing is apples and oranges. Understand that the student debt level includes not only those who are currently enrolled in colleges in the U.S., those who recently graduated, but also those who graduated several, sevaral years ago. It is an aggregated number. Today, the U.S. has nearly 23,000,000 college students currently enrolled, or over 2/3 of the entire Canadian population. Yeah, that’s how many UNDERGRAD COLLEGE STUDENTS are in the U.S. alone at this very moment. This does NOT include those who are also in secondary degree programs, including masters and doctorates. We are talking about a debt number of $1Trillion that is spread across over 120,000,000 people as it includes current enrolled undergrad students, recent graduates, students in graduate programs, students in doctorate programs, and those who graduated over a decade ago. That’s a far cry from mere 35,000,000 supporting over $600Billion as is the case in Canada.

#336 daystar on 03.30.12 at 8:24 pm

#325 Canadian Watchdog on 03.30.12 at 6:06 pm

Right you are concerning the definition of derivatives. When one works with volume, it will increase one’s mistakes and I’ll always in hindsight wish I could take some entries back (oh, the humanity).

As for the link you provided on derivatives, sorry, these numbers are too high for me to wrap my head around or even believe. I would have to question the validity of the link just because the numbers are so high. Sorry, but there is no way for me to validate it. Dummy links are all over the net. If you can prove your link is genuine, get to back to me as you are not the first person to come to me with info like this and likely won’t be the last. If I’m wrong, truly, I’d like to know but it could be a hard sell.

#337 The Thing in the Basement on 03.30.12 at 9:13 pm

314 Don

“If rates go up 2% your payments go up 60%”

Not so at these low rates, or even rates somewhat higher.
You can check for yourself with an on-line calculator.

#338 daystar on 03.30.12 at 10:48 pm

#331 Devore on 03.30.12 at 7:22 pm

The equity average of their entire mortgage portfolio I would assume and since government decides CMHC regs and OSFI regs and every other reg under the sun, they deserve fair mention.

#339 Tony on 03.30.12 at 11:08 pm

Re: #43 Mitch on 03.29.12 at 5:50 pm

Are you kidding me? Why would the Canadian banks want to slit their own throats? Any pressure on house prices would tighten lending standards and bank profits would fall sharply. Where did you get this line of mumbo jumbo from?

#340 wopaholic on 03.31.12 at 2:33 am

I’m fed and up and give up on this sparse meat locker we call a country. Some idiot RE agent told me my house near Lake ON in East Toronto is worth over $1 million bucks, I’ll take it and run and sell every other condo and piece of property I own before every idiot up here comes to their senses. Going to buy me a 4000 sq + ft mansion in Mesa/Scottsdale Arizona for less than $200 k with a 3 car garage,a swimming pool that I can actually use, built in 2009 or newer and live in a climatic paradise. And I’ll even pack a 9mm if I have to, (consider that I’ve never held a gun in my life). What a hopeless, reckless bunch of self-entitled losers we are. When is this madness going to end???

#341 Steven Rowlandson on 03.31.12 at 11:06 am

#335 McLovin on 03.30.12 at 7:54 pm
Why is every so down on Harper?

Who would be better?

Trudeau jr?
The guy who took over for poor Jack who no one has ever heard of?

I think he’s doing a decent job and he didn’t create the housing bubble.
.

Who could do better? I could!
Providing I had absolute power to make all the changes required to restore public morality and reform the budget to get this country out of debt and also reform Canada’s foreign policy. Under my leadership political correctness, democracy ,communism and the new world order would be ended and outlawed for ever.

#342 Bill Gable on 03.31.12 at 7:08 pm

Mr. Turner donates his Pension to Charity.
How about Flaherty?
He probably wrote off his new Budget shoes.
Little creep, that Flherty. His IQ matches his shoe size – 2 EEE.

As in Empty.

If we had Mr. Turner on the Hill, this Country would be a lot better off.

But, seems that honest, and forthright, doesn’t fit in Ottawa anymore.

#343 ozy - Simple, very simple on 04.01.12 at 4:35 pm

The market has peaked, it reached a CEILING, banksters know and will try to keep it there, by using all government puppet strings they got.
We need to short the government, to let them wihout tools, we’ll be foreced to vote NDP on all next 5 elections, provincial and federal, no more libelo-conservants.
Aside that, the CEILING will anyway collapse like in United States of the puppets, protect yourself, you do not want to be under RUBBLE.