It doesn’t take a lot to topple a house of cards. Or in this case, a nation of toppy houses floating on a foundation of debt. Maybe it’s just another week of excess borrowing and undisciplined spending as real bloats higher. Or, perhaps, this is it. The moment of capitulation. Over the cliff.
In case you missed it, big news. Shares in Canada’s premier non-bank mortgage lender, Home Capital Group, just collapsed 64.5%. Stunning. Historic. That rolled back 14 years of corporate growth during which HCG loaned tens of billions in mortgages, an unknown number of which were liar loans, falsely documented, fraudulently taken and now the very poison killing the company.
Meanwhile yield-hungry investors who plowed their money into Home Trust or Home Bank high-interest accounts and GICs are getting out as fast as they can, worried the entire operate may blow up. About $600 million has been snatched back in the last few weeks, and the run could accelerate tomorrow.
The damage being done to the mortgage sector doesn’t end there. Pulled down in sympathy and terror were the shares of Equitable Group, Street Capital, First National Financial and Genworth. Remember all the buzz a while back about ‘bonus’ interest being paid by EQ Bank? Yup. Same guys. This blog warned you then the company behind those rates – Equitable – was an Alt mortgage lender with a giant portfolio of risk-drenched loans made to people who probably never should have been given home loans.
Home Capital was found to be making liar loans almost two years ago, punted at least fifty brokers, had a boardroom bloodletting and has been targeted by the tough-nuts regulators at the OSC. Now hemorrhaging depositors and facing serious securities charges, the company took a rescue package from an unnamed source with terms so punitive they’ll likely destroy it. What was an investment-grade, deposit-taking institution a few days ago is now a tatty rabble on life support forced to pay 22.5% interest on a borrowed billion.
This may be an interesting implosion of a rogue lender. Or more. Over the past year we have passed many milestones on a dangerous journey. Canadians owe more personally than the size of the entire economy. We’ve allowed housing to become the dominant part of the national GDP. The average home price shot ahead 33% in a single year in our largest urban area. Real estate values, and the borrowing to support them, have detached from economic fundamentals. Personal savings are down. A third of us are in worse shape than last year. Half are living paycheque-to-paycheque. Now the non-bank mortgage industry is on fire.
And it gets worse. On Friday Donald Trump tears up NAFTA.
The Canadian dollar lost more ground (and the Mexican peso croaked) on reports the Trumpster will sign an executive order Friday removing the US from the North American Free Trade Agreement. It’s a shocking second shoe after the White House slapped a fat tariff on our lumber industry this week. The ugly face of protectionism, nationalism and America-first populism is now countenanced towards Canada. So much for the three amigos, for thirty years of free trade and the efforts of our current prime minister to protect our most vital interests.
In fact as the news of the NAFTA bomb broke, Justin Trudeau’s cover-story interview with Bloomberg’s global magazine was being published. When asked about our most critical trade agreement, here was his somewhat incomprehensible response:
Nafta has been improved a dozen times over the past 20 years, and we’re always looking for ways to improve the benefits for all of our citizens. One of the things with Canada is we’re of a modest enough size that we never feel that the ideal outcome of any given deal is, we win and you lose. I mean, I think we’re always looking for ways where there is mutual benefit. And I think we’ve been able to demonstrate time and time again that trade can benefit both partners.
Take that, America. But he did pose for a fetching picture.
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Update – Wednesday 10:40 pm EDT: White House now says US will not leave NAFTA ‘at this time’. Link
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To summarize. We’ve become economically-dependent on real estate and now a key portion of the industry financing it is in a state of meltdown. Savers will be worried about billions sitting in the GICs and deposits of these companies. The most important trade agreement we’ve ever had, with our largest partner, could be about to end. And Canadians have amassed $2 trillion in personal debt as the greatest asset bubble of our times nears its climax.
This may pass without incident. But don’t count on it.
268 comments ↓
Email every MP and tell them to shut down CMHC. Fraudulent mortgages are out of control and everyone knows it.
Some people love being under stress….Just a reminder, Stress Kills …
Pink Pollen falling in Vancouver.
These guys are looking at a decent loss as well.
They shelled out 1.58m a year ago 100k more than the bloated assessment that came later in the year and with it being 1 block in from busy ,noisy and dirty Knight street these guys are in for a fight to not lose a chunk of change it would seem.
I did an 8 week study of the market during February and March, in which I analyzed thousands of properties for sale after noticing a spike in the amount of sellers that had purchased in the last 3 years,and one of the stats I unearthed was that 30% of the people reducing their asking price during this time were recent buyers, or as I like to call them when the tide turns …motivated sellers…which obviously in turn puts downward pressure on prices.
I have done a couple of smaller study samples in the last week or so and the results of 8/21 and 6/18 would seem to suggest that this trend continues.
There has been a lot of oscillation in the market with a lot of sellers reducing their price coming into the previous Winter,seemingly accepting that a loss might be a distinct possibility,then putting it back up for the Spring Fling and now some of them are realizing that it isn’t happening the same as last year and have lowered again.
To be continued…
M42BC
4855 Lanark Street, Vancouver
Feb 20:$1,598,000
Apr 25: $1,498,000
Change: – 100000.00 -6%
https://www.zolo.ca/index.php?sarea=4855%20Lanark%20Street,%20Vancouver&filter=1
https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAwMktIUQ==
I hope Le Pen beats Macron. I have wrong before – I can admit it – not that bastard. I have eaten a lot of my words. I simply do not know enough. This is a country that overthrew royalty and helped the US to win a war. There are things she says with I disagree and some views I think are small. I can debate and work with her – I do not want her job. I will cover her back to my best ability.
So – what happens if you have a mortgage (or loan?) with Home Capital or one of the other non-bank lenders? No ability to pay the mortgage with the bank? Or does Home Capital ratchet up rates in search of money?
Once again great post on todays events Garth
APRIL 26, 2017 – THE DAY CANADA’S MORTGAGE BUBBLE BLEW UP
Those who know bubbles knew this type of thing would happen a long time ago. It was only a matter of time.
Those who know bubbles also know that it’s only a matter of time before house prices in every Canadian city will be in correction mode, and that bubbles don’t have soft landings.
Today’s major event was all part of the inevitable outcome of Canada’s massive housing bubble. The bubble which has followed the same basic series of events that produced brutally destructive housing boom-bust cycles in so many other countries throughout the last several decades.
And you thought stuff like this only happened in other countries, countries that are completely different from Canada, like the US, Japan, Ireland, Spain, Greece, Iceland, or any other country that had a housing bubble (the list is long).
Home Capital, a Canadian mortgage lender, which is regulated under federal legislation, saw the value of its stock crater 65% today, in one trading day.
In 2014, its stock traded at a shade under $56. Today it completely crashed and closed below $6.
And what exactly is Home Capital famous for? That’s easy – issuing liar loans. Mortgage fraud. Liar loans are illegal, often encouraged by mortgage brokers and have been, by and large, ignored by Canadian policymakers with little to no enforcement. This illegal activity, which always later proves to be destructive to house prices and, therefore, the economy, has helped inflate Canada’s housing bubble.
The fraudulent activity of issuing liar loans has been identified as one of the main causes of the US housing crash, as well as other housing crashes that have happened in other countries.
THE BASIC SEQUENCE OF EVENTS OF THE HOUSING BUBBLE BOOM-BUST CYCLE:
* Policymakers dramatically lower mortgage lending standards with the intention of bloating house prices.
* Prices skyrocket, leaving gains in incomes far behind. The party is on.
* Home ownership levels surge, dramatic increases are seen in real estate investment, speculation, construction activity and HELOCs.
* Household debt-to-income levels skyrocket, creating a threat to the economy that only goes away after the inevitable severe price correction plays out and households deleverage.
* Risk is always ignored – instead of doing their jobs by presenting the facts (which includes the risks) to potential buyers, the real estate industry and the media often engage in spreading false FOMO, for their own self-serving reasons.
* Policymakers, bankers, economists, etc. deny the existence of a country-wide housing bubble, or only admit at the end that bubbles exist in certain cities, and only as a result of recent activity, which they are not responsible for in any way.
* The economy becomes more and more dependent on abnormally high levels of activity in housing, making it increasingly unhealthy. Major problems with the economy don’t become apparent until house prices stop rising.
* As affordability continues to sink, mortgage broker-assisted mortgage fraud rears its ugly head (in a lot of cases), allowing even more applicants with no money and low credit scores to get into mortgages at extremely bloated prices (as if the lax lending standards weren’t risky enough already).
* Policymakers ignore this mortgage fraud until the very last moment (it helps to push prices higher after all).
* Speculation increases dramatically as prices soar toward the peak and homes are treated as commodities.
* The bubble reaches its maximum size, then prices begin to fall. Each city has a different start date, but end up recording the biggest yearly price drops in the years that all cities experience falling prices together.
* Policymakers do everything they can to limit the depth of the price decline, but their efforts are futile as the powerful momentum of the correction is unstoppable. In most cases, prices fall back to the level where the bubble started (approximately).
* Liar loans and speculation played a big role in bloating prices. However, the net result of their role in a housing bubble is devastating for prices.
* For years the economy had been artificially boosted by the effects of rising house prices. That ends. The party ends.
* The multi-year price decline crushes the economy as consumer spending falls dramatically and jobs are lost (artificially inflated, abnormally high levels of activity in housing-related industries changes to abnormally low). Incomes often fall.
* As a result of job losses and the reversal of the wealth effect, consumer spending is hit hard (it accounts for two-thirds of the Canadian economy).
* A dramatically weakened economy leads to further drops in house prices.
* The price correction finally hits bottom, but not before overcorrecting (in most cases).
* The correction is much deeper than almost anyone could have imagined, leaving a big chunk of households in extremely poor financial condition.
* After denying the existence of a housing bubble for years before it finally peaked, policymakers, who had repeatedly calmed the herd by claiming they could engineer a soft landing, realize that it was impossible, but it’s too late.
* Policymakers claim that nobody could have seen it coming, when, of course, plenty of people did (the facts made the outcome obvious).
IT ISN’T DIFFERENT IN CANADA
A bust follows a boom 100% of the time.
EQ Bank? Yup. Same guys. This blog warned you then the company behind those rates – Equitable – was an Alt mortgage lender with a giant portfolio of risk-drenched loans made to people who probably never should have been given home loans.
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but everyone is paying back just fine, on time.
none of the shenanigans of hgc over here .
guilty by assocation? a profitable business?
20% gain by lunch tomorrow.
bet on it.
it’s a herd thing.
It’s poetic that Home Capital Group takes an Alt loan to try to save itself. Good luck with that…
It was a surreal rodeo today. Got the same feeling back in late 80’s, and at end of Tech boom. You see the wave coming, you can’t quite believe it.
Home Capital, the CBC’s coming investigation about big GTA syndicate mortgages (rhymes with Whoretress) and now Trump pulling NAFTA.
Up till this morning I could still sell my house and buy Jared Leto’s in Beverley Hills. And I hate Jared Leto.
Sure will pass without an incident, because HCG is 2% of all mortgages in Canada and since focused in Ontario probably 5-6% of the market there. Substract that liquidity suddenly and voila! Le crash c’est ici!
Who would have thought it’d take a chicken farmer from the US. Bloody diligent, nosy, persistent, pissed off, chicken farmer
Thank you Marc Cohodes. You exposed what Canadian media, big banks, mortgage companies all refused to either see, or blatantly lied about.
Canada Economy:
BC – forestry to be destroyed
Alberta and Sask – already decimated
Quebec and Ont – weak manufacturing
Housing – most expensive in the world.
Garth pls list your top 3 incident predictions for 2017
Subprime loans are spreading like a virus across the GTA. Bank of Canada released numbers and they don’t look good.
https://betterdwelling.com/city/toronto/more-people-are-buying-toronto-real-estate-that-shouldnt-and-half-are-at-risk-of-defaulting/
MIC.TO just now said:
” As at March 31, 2017, Home Capital originated mortgages represent approximately 1% of Genworth Canada’s overall business. At present, our delinquency rate with respect to Home Capital originated mortgages is less than our overall business delinquency rate of 0.21% as at December 31, 2016.”
#5 Buddy O’ Pal,
Nothing happens to your mortgage except that if it is variable, your rate may rise at the discretion of the lender, and the party you owe the money to may change if the mortgage is sold. Although when your fixed term ends, it may be tough to renew.
It will be interesting to see how quickly these non-bank home lenders sources of funds will dry up. This all could unravel very quickly. In Ontario you also have the specter of the new softwood tariffs coming on May01/17 with the subsequent layoffs soon too follow.
So – what happens if you have a mortgage (or loan?) with Home Capital or one of the other non-bank lenders? No ability to pay the mortgage with the bank? Or does Home Capital ratchet up rates in search of money?
Admittedly I have never seen a HCG mortgage/loan contract. However, the big-5 mortgage loan contracts, even fixed term contracts, include clauses which allow them to ‘call’ the loan if, in their sole opinion, the value of the property has decreased.
I suspect HCG’s managers are working overtime to identify these loans in their portfolio, those with positive equity and reasonable sale prospects, and begin the process accordingly. Of course on loans with adjustable rates, the rates are going up. Remember what the banks (ie: TD) did recently by redefining “Prime” into “Mortgage Prime” and “Prime”? If HCG has the legal flexibility to do that, they will.
HCG as an entity is done, dead, stick a fork in it. The question at this point is how much contagion will result from this? Its all about recovering money for HCG’s creditors and maintaining themselves as a going concern for the next few years as the liquidation takes place. The equity is done, worthless, short it to zero*, its not coming back.
* not investment advice.
Who cares about Home Capital.
Best news today: O’Leary, our wannabe Trump, is out. I can drink to that!
Best case is that US corporations buy up Canada for Cents on the Dollar after Canada has crashed, hard landed and is in search of a bailout.
IMF, BIS, OECD and God knows who else have been issuing warnings about Canada’s RE industry for a couple years now. These guys were looking behind the scenes and did not like what they uncovered. The truth of their findings was never publicized. All they could do is issue dire warnings to Canadians. Too bad the citizens didn’t listen. Now the crash is here and we are collectively hooped, up shit creek without paddle.
Only chance for all is to convert all savings to USD and keep it there. The CAD is going to get sacrificed.
Ross Kay on HoweStreet.com Radio:
Bubble Indexes, House Price Illusion, and Mortgage Warnings.
How will new Ontario real estate rules effect Canada ?
http://www.howestreet.com/2017/04/24/bubble-indexes-house-price-illusion-and-mortgage-warnings/
The madness hasn’t ended in Toronto real estate. Looked at a semi in termite town listed for $799k and found out it sold for $1.116m yesterday. The place is a condo with a backyard almost in Scarborough. Nothing has changed since the “big announcement”. You can’t win – if you save/invest and rent a dumpy apt you lose over time, you’re punished while the gambling homebuyers are winning. And winning BIG. This bubble is going nowhere but up anytime soon, unfortunately. The potential death of HCG is just another fart in the wind of this bubble.
Country Wide Financial anyone?
Forget HCG, I think NAFTA itself has the potential to breakdown us
#7 Victoria Real Estate Update
Very nicely said!
No worries…I’m sure Justin Trudeau has a plan to save the Canadian economy…not.
Don’t expect the Beavis and Buttshead Show in Ottawa to come up with any solutions.
@Westcdn:
You really don’t know enough. The French overthrew Royalty for democracy… then less than a century later, voted to elect an Emperor(!) one that looted the Republic and bankrupted it at the same time. The only wars that France helped the US win were:
– the war of 1812, by having the decency of capitulating in Europe
– World War 1: by initiating a war, giving up, but providing land on which to hold battles
– World War 2: same.
– Vietnam: same.
What will go off first the the bomb on North Korea or Canada’s debt bomb – tick tock
RATM
I think Marc Cohodes just got paid shorting HCG. He was right… they were dirty. Now there’s a disciplined investor.
#7 Victoria Real Estate Update
I’m lazy and don’t feel like writing but I don’t have to, you said it all. So sick of hearing it’s different this time.
Seriously, I ve been outside Canada for the whole bubble and stupidity and it was not only 1 month ago, when I discussed the issue with a Canadian, that the response was, “No, it’s different this time”. Really.
It has been so frustrating.
Sad thing is, if this is officially the end , it’s gonna hurt everyone!
Just like the Dot.com bubble, or the bubbles before, fundamental have been detached from reality, but this time for a long long time. So it’s gonna suck even worse.
“Never bet against the US.”
What WILL happen to people that have mortgages with Home Capital?
Are rates for those loans going to reset? Does the company that provided the line of credit expect that people will start paying those mortgages back at 10%?
Or will the loans be called, and the borrowers forced to take their chances with the banks?
If I had a mortgage (or mortgages) with HCG, I would be scared out of my wits right now, waiting for the other shoe to drop.
I used to be with Street Capital. I say used to be because I paid it off just over a month ago and I’m mortgage free. I’m still waiting for the mortgage discharge papers though and they said it may take 3-4 months. I can’t see why it should take that long but that’s what they told me.
I watched this re-run before down south a few years ago. First one falls, then soon the next. Lies, spin will dominate the news, all other institutions will seek to distance themselves from their fallen comrades. Assurances will be shoveled into the media like feeding coal into the a steam powered locomotive. Bigshots with more nerve then cash are going to be found out, houses will become hot potatoes that few will want compared to the frenzy at the moment. POP. The soap film just disintegrated, watch the lies spew forth from all manner of experts, real estate professionals, owners, banks, government… IT HAS BEGUN
“The Anti-Trump” … reality hits virtue signalling…
WOW!! the toronto sfh listing is surging so much that under 1 million property now over 750, way way way more than last year and they all come out all of a sudden, some are not closed and relist to the market and some were never sell. This is just the beginning… it’s gonna be stunning!!
Wow, just wow!!
More people better start to find the solution to this craziness …… Read the Book, “The Wealthy Renter” by Alex Avery and ignore all the marketing hype of needing to own real estate ….. and do it before it is TOO LATE !!
Thanks for a great book Alex :)
Wow reminds me of what happened in the states
I think this bubble is going to blow. Glad I sold and pocketed fists full of cash.
#5 – If they go bust – You win and the ‘buy the dip’ guys lose.
If they get bought out by another bank – you pay your new masters and Marc Cohodes wins.
if the almighty feds intervene – the btfd guys win and we’ll pray for your soul.
Borrowing as much as you can from HCG might be the best short on them right now.
Also props today to Christy Clark, for handling Trump like a BOSS.
Those clunky coal trains are a scourge, despised by Americans in Washington and Oregon as well as oceanfront homeowners in White Rock, that have to deal with the noise and the choking dust, not to mention anyone south of the Fraser who has been stuck at a level crossing while one of these 100-car coal trains rumbled through.
Banning that coal move would hit Trump’s Republican backers where it hurts, too: particularly those from Wyoming, where most thermal coal is mined.
Meanwhile, Horgan looks like he can’t get his (Adrian) Dix out of his mouth, trying to blame anyone and everyone for the tariff – except, of course – Donald Trump.
Why is it, that whenever I hear Prime Minister Selfy talk, all I actually hear are Charlie Brown’s parents.
#30 Doug T.
I will take bomb on N. Korea for $100. Donnie needs a distraction for the masses as his tax plan will unlikely go through, Wall has been delayed til fall (maybe forever) and health Care is still up in the air. His ego needs a boost and the boys he works for demand it.
Bust in Canada? As long as rates stay low and people hang on to their jobs, the show continues.
So this week I find myself in a timeshare in the Poconos along the Delaware River….notes… all Main Street downtown villages are vibrant looking quite successful. (Don’t worry, I plan to show up with a Grey Dog on May 13, Belfountain 2:00 for free sprinkles!)
My advice NEVER EVER BUY A TIMESHARE!!! You find yourself in the back of beyond just to use up weeks paid for in fees earlier.
Time to revisit:
Housing roller coaster 1890 to 2007
https://www.youtube.com/watch?v=kUldGc06S3U
Vancouver housing roller coaster 1975 to 2010
https://www.youtube.com/watch?v=hqOn5XEm86A
Yawn….
Home Capital had a minuscule percentage of the market. Its decline will hardly be felt.
Meanwhile:
* the economy is in an upswing;
*rates are to be low for years with negligible yearly increases absorbed by inflationary wage increases; *Canada is still noted as the 4th money laundering market for real estate in the world;
*continued waves of 300k immigrants per years plus hundreds of thousands of temporary foreign workers, foreign students, and 10 year super visa holders all desiring to plant some cash in RE;
* a political system dependent upon maintaining the wealth effect from housing because no one has any saved money money;
* every successive generation lusting after homes because it worked for their parents;
* an unshakeable belief in hard assets on most cultures and fear of the stock market;
* a shared economy with Air B+ B that will continue to distort the supply of housing.
Yawn….wake me up when rates double…
As our economy begins a catastrophic meltdown, ensure you have supplies and other forms of currency stashed away.
Conflict in Korea is coming, and this will likely quickly involve Russia, China and a rapidly destabilizing Europe.
It will be brutal, quickly.
Solar panels have come down a lot in price. Get some. If you have not already, start thinking 18 months ahead for your supplies, not just next week’s groceries.
Clock is ticking…….
Garth, Its my birthday today… Maybe a fitting Beginning of the End? Anyways keep up the good work.
You CONservatives all know your ONLY chance of winning was O’Leary. Now he knows you CON’s are losers and have NO CHANCE. Look at all leadership. They are all corporate puppets who will destroy Canada for the benefit of corporate interests.
Maybe too specific of a question but do you know what will happen to the TN-visa program if NAFTA gets pulled? I’d hate to show up at the airport one day and be told “Sorry, you aren’t going anywhere! You’ve been Trumped!”
When has an entire asset class ever imploded and it passed without notice?
Hell, the tulip bubble burst in the Netherlands is still talked about.
Ugly and getting uglier by the day is all I can say and we have the template for the next 5 years written in stone in the form of the US from 2005-10.
Me thinks there’s going to be some pretty nice power of sale properties in 3 years.
This really could be the beginning of the end. It won’t happen overnight, but this looks serious imho.
So it’s not Trumpocalypse but Trudocalypse.
Good thing I stocked up on Doritos and vodka. And popcorn.
“Nafta has been improved a dozen times over the past 20 years, and we’re always looking for ways to improve the benefits for all of our citizens. One of the things with Canada is we’re of a modest enough size that we never feel that the ideal outcome of any given deal is, we win and you lose. I mean, I think we’re always looking for ways where there is mutual benefit. And I think we’ve been able to demonstrate time and time again that trade can benefit both partners.”
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Yes. I am sure that the U.S. is shaking in their boots.
This guy must feel silly today http://www.fool.ca/2017/04/24/why-home-capital-group-inc-is-the-stock-of-the-year/
And so it begins!!!!!!!!!!!!!!
Does anyone have a very small shovel, as it appears the canary in the coal mine has died?
It always starts and ends in a similar pattern.
These fly by night mortgage companies were just the TIP of the iceberg.
This will get ugly.
If you are debt free and comfortable, enjoy the second chapter as its sure to be a thriller.
Received my local realtor’s Muskoka update today. Apparently listings on the big 3 are down 50%. That’s a big number.
Normally that would have meant a screaming market this spring, but if GTA collapses, then the cottage market will fizzle too.
Going to be interesting!
I read the book “The Big Short” 2 times already, and still goes back for quotes.
Here’s a quote from chapter 2:
“What you want to watch are the lenders, not the borrowers,” he said. “The borrowers will always be willing to take a great deal for themselves. It’s up to the lenders to show restraint, and when they lose it, watch out.” By 2003 he knew that the borrowers had already lost it. By early 2005 he saw that lenders had, too.
HCG was writing liar loans in 2015. We are at the edge.
“What was an investment-grade, deposit-taking institution a few days ago is now a tatty rabble on life support forced to pay 22.5% interest on a borrowed billion.”
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So, what’s the purpose of this loan.
Borrowing @ 22.5% and lending @ 5%. ? WTH…
It’s amazing to consider that Toronto real estate prices have risen for years on individual units in the face of this debt crisis!
The Canada-US Free Agreement, which eliminated many tariffs has never been repealed. So, if Trump kills NAFTA we go back to the original agreement. Canada can also carry on NAFTA with Mexico. Not great losing NAFTA but probably Mexico would be open to better terms with Canada. Besides, Trump is probably just doing this as a strong arm negotiating tactic.
Justin thinks he can just sit back and not touch these marketing boards ,dream on .Trump is going to make him negotiate or we can get into bed with the Chinese ,big mistake.http://www.zerohedge.com/news/2017-04-02/china-may-import-its-workers-canada-it-seeks-total-access-canadian-market
My question to fellow blog dogs: is HCG a harbinger of things for the Big 5 (or 6 or 7) Canadian banks? Or, are these banks revenue streams adequately diversified that it won’t have a material impact when RE eventually corrects.
“..Outrageous. Canada Geese terrorizing our American skies. Eating our crop fields. Fake animals. Very dangerous….”
– @realTonaldDrump
“Today, I have just signed a Presidential Order for a fleet of fully equipped septic tanks. Just waiting for the instruction manuals how to drive them. Invading Canada to eradicate them this fall. Watch!”
– @realTonaldDrump
Interesting that O’Leary quit the same day as the housing bubble officially blows up. Perhaps Kevin did not want to spend ten years of misery “cleaning up” the mess of 40 years useless politicians screwing up Canada. And the RCMP eating doughnuts all day and not busting money launderers does not help.
@Smartalox
The French DID help the Americans win another war, the Independance War. See La Fayette, honorary citizen of the United States.
The French did not elect an emperor as such. The future Napoléon III was elected president, then made a coup and proclaimed himself emperor.
Cheers!
I am surprised by yesterday’s comments here.
Firstly, I would never buy something that is not there.
However, as an example, drive Islington south of Bloor on the west side you will see a very large subdivision, foundations going in as I type. New towns, they sold out over 3 years ago when it was a sales mobile. Today each is worth in the 1 million range. They sold pre construction in the 600s! so why would anyone call a buyer of that ‘insane’. Pre construction is a tried and true, time tested way to profit in residantial real estate. It’s not for me, but I would not criticize anyone buying in the kleinberg development
An past performance is no guarantee of future returns. Be careful. — Garth
Wow…big news!…(but predictable I guess).
Can we call all of them “toxic subprime” as in USA couple of years ago?
What will be the impact on the Canadian banks? On financial market except that their shares has plunged?
Is bail in/bail out (I don’t know which one) is coming?
Betcha all the cons Trumpfos on here are wailing now…. and let us know how that Keystone pipeline works out, once the protestors start going all Iraqui and start blowing IT up.
To big to fail,goverment or taxpayer bailout.End of story.
Time to short the AA traunches. Short the big 5 banks, too late for HCG now. And Get your money out of all Canadian banks while you still can. God help you if you own prefereds.
Common stocks may be impacted but preferreds will motor on, churning out their 4-5% tax-efficient dividends. Learn a little before you type. — Garth
.
Those who think SFh in Vancouver or Toronto will drastically reduce, are delusionalz.
Even in unemployed Calgary nothing sort of that happened.
Young Canadians at scewed. Low salaries, high inflation(real one, not fake one by govt)
#35 The real Kip on 04.26.17 at 6:13 pm
I used to be with Street Capital. I say used to be because I paid it off just over a month ago and I’m mortgage free. I’m still waiting for the mortgage discharge papers though and they said it may take 3-4 months. I can’t see why it should take that long but that’s what they told me.
………………
Kip, it shouldn’t take that long. They are in no hurry to remove themselves from the title. Why would they be.
You should demand that it be done this week. No excuses. It’s not their house anymore… it’s 100% yours and they are messing with you.
This is certainly an interesting event in Canada’s housing bubble. I’l be holding my breath as to if its a Lehman moment or a blip on the radar of this housing Juggernaut. I’ve pretty much lost all expectation for any housing correction in this loony country.
Regarding Trump signing an executive order getting the USA out of NAFTA – he can sign whatever he wants, but as an American friend of mine said. “Treaties are the purview of the Senate. The executive can’t abrogate with an executive order.”
Trump’s executive order will end up like his other previous work. Dead in the water. This isn’t to say that the Americans want to change things, or that we’re not about to embark on a fair amount of conversation about trade, but NAFTA won’t be dismissed with a stroke of Trump’s pen, thankfully.
Marc Cohodes was on Bloomberg Canada this afternoon and said he is getting ready to announce another company that he will be going after and said ” It’s a doozy” . He said he would reveal who it is next time he’s on Bloomberg. This is in addition to HCG and EQB.
Could you be more melodramatic? First….you have been pumping the climax in the housing bubble for 6+ years so one day you will be right. However, by your own admission, we should expect a 30% correction which is less than the last year of appreciation. Second, have you seen the forecast for the US GDP number to be released Friday? In case you missed the memo….we are looking at 1% or lower. In which case Canada’s economy is significantly outperforming that of the US. Third….in case you haven’t noticed….Trump is all bluster. The US trade deficit is atrocious and the trade between Canada is actually in surplus. So Trump….in his blind ignorance, is defaulting to a paradigm that no longer Services the current reality: the once might US is sadly a fraction of what it used to be, and any trade barriers he imposes will only further hurt a US economy that is collapsing under its own debt bubble. If you map out the current US GDO growth to debt chart you will see that the US isn’t growing at a rate that supports the debt they have taken on to invest in growth. So two more rate hikes and more protectionist policies means only one thing: the US will be looking for a war.
Interesting coincidence that CMHC released a news bulletin that says, “Strong evidence of overall problematic conditions”? Here are the key points:
“Overall rating to be held at “strong evidence of problematic conditions”.
Evidence of overvaluation at the national level has been downgraded from strong to moderate. It is now present in six centers instead of eight.
Evidence of overvaluation has increased from moderate to strong in Victoria, as fundamentals are not keeping up with higher prices. There is also moderate evidence of price acceleration and overheating, leading to strong overall evidence of problematic conditions.
Conditions have improved in Regina, Montréal and Québec relative to home prices.
Overbuilding has gone down from eight centers to six.
In Moncton and St John’s, the supply of homes is adjusting to the demand.
Toronto and Hamilton continue to face price acceleration, overvaluation and overheating. Price growth has intensified and demand is outpacing supply in the rental, resale and new home markets.
Vancouver’s housing market continues to show strong evidence of problematic conditions due to moderate evidence of price acceleration and strong evidence of overvaluation.
Markets in the Prairies continue to show moderate to strong evidence of overbuilding.”
Note the graph showing areas of concern. Not looking good.
Long ago, in a far away galaxy similar to the one we find ourselves in there was a similar situation where economic woes unfolded. Price of oil was way down, house prices dropping, and CCB and Northland Bank began to stumble. Then other smaller banks like Continental were affected as was Bank of British Columbia (although a strange thing occurred with the latter as western canadians got behind a western based bank and deposits began to actually grow). History may not repeat, but it sure does rhyme.
If some players go under due to reckless underwriting practices no tears will be shed. But sometimes there are innocent bystanders who are hurt as well. That’s a shame.
Here’s the link to today’s CMHC’s report. https://www.cmhc-schl.gc.ca/en/corp/nero/nere/2017/2017-04-26-1200.cfm
Wow, things got serious quickly. Maybe it is time to learn how to speak Greek? I was invited to an awesome Greek party once, and it was exactly like this video. Opa!!
https://www.youtube.com/watch?v=Sl0tPf7QLnc
…in its insanity:
http://www.priceypads.com/buy-4-move-in-ready-french-chateaux-for-the-price-of-1-vancouver-tear-down-photos/
1. How fast should I drop Big 5 Bank Stocks… honestly
2. How likely is a NAFTA withdrawal cause I could be out of a job and I’m making a mess in my pants right now
Hi!
Wow this sucks. Let me say that I am not (totally) in favour of eliminating the CMHC. That said, the banks need to take the lions’ share of the risk of their loans.
Insurance for mortgages by anyone should be restricted to the traditional 2.5- 3x annual income.
Annual income = $100k, mortgage insurance max = $300k.
On the issue at hand, well, no use cryin’ over spilled milk comes to mind.
#12- pass without incident … lol on 04.26.17 at 5:44 pm
Sure will pass without an incident, because HCG is 2% of all mortgages in Canada and since focused in Ontario probably 5-6% of the market there. Substract that liquidity suddenly and voila! Le crash c’est ici!
+++++++++++++++++++++++++++++++++++
Very likely true. The US cratered when 10% of the homeowners got into trouble. And their housing problems were a $100k each. In Canada, we go big or go home; 5% getting in trouble for $ 500k each. That makes the Yanks look like pikers.
Do ya feel lucky?
What you are seeing in real estate is the result of last week’s big real estate talk down by the govt.
Buyers are sitting on the fence till the ontario budget is realesed to see what further action the govt takes.
Judging by the new listings poping up sellers are tring to cash in. The fact that there is lots of new inventory hitting the market the govt will take no further action.
And then the fundimental problem. Demand for housing. Toronto is booming and people are coming here in droves.
All the new listers are not desparate, they just want the March highs. If they don’t get them, their not going to sell. Where do they go.
It’s a blip that will work it’s way out once inventory drys up again. So buyers now is your chance to pounce. This blip may be finished once the budget is out.
For now bidding wars end but just for a little while.
Dr Smoking Man
PhD Herdonomics
@#70 Kyle Bass
Seriously?
You think the “big 5” are anywhere near the outhouse pit that HCG has dug?
Go ahead. sell. Lose money.
Unbelievable
Before NAFTA we had the Canada-US Free trade agreement, do we revert back to that?
I suppose Morneau and Trudeau might be forgiven for misreading Trump given he seems unclear which way to jump himself, but it was only last week that Morneau said the White House was “positively inclined towards Canada” behind the scenes and Trudeau insisted we would hash out changes to NAFTA in a “respectful fashion.” Maybe Trump is dealing with different people “behind the scenes”. After the misplaced praise heaped on Trudeau post meeting Trump – presumably because Trump did not eat one of his kidneys – we are now staring in to the Nafta abyss. Clearly our pols in Ottawa, elected and unelected alike, have no idea what is going on down south.
What was an investment-grade, deposit-taking institution a few days ago is now a tatty rabble on life support forced to pay 22.5% interest on a borrowed billion.
========================
“Investment grade” doesn’t pay 22.5% for anything. Them’s Mafia rates. Yes they were caught short and had to take whatever was on offer. However the new lenders have now had close look at net realizable value of the mortgage portfolio and this is their offer. Possibly it was the only offer. You would have thought there would be a feeding frenzy for such a wonderful investment opportunity. If the accepted rate had been 10%, I would say its harsh but it’s life in the fast lane. This is a virtual admission of bankruptcy.
Either (A) we believe it’s different in Canada because of our superior regulatory oversight or (B) there are lot of really dodgy loans on other lender’s books and we taxpayers are about to take it where it hurts. Choose A or B.
wow, talk about being taken behind the woodshed.
What i would be most interested in regards to HCG is finding out the cities that they own the largest market share in– those are were you will see an impact.
I expect CEO of tier 2 and tier 3 lenders to be writing up memo to all employees shortly about how it is important to be prudent and how their company is sound etc.. (all the while having their internal audit hunt down the loans that they know are at risk)
Credit will dry up for those without regular streams of incomes, self employed etc.. expect a lot more scrutiny if you are applying for any mortgage in the next few months to a year- please for your own sake if your in this group do not sign an offer to purchase without a finance clause
those that indulged in liar or ninja loans or paid for some “paper” from a broker on an open variable mortgage or one that is going to open in the next year or you should look at listing now while the market is still hot.
me thinks that all of those speculators that recently purchased 2-3 4 homes better list soon or be willing to shoulder a significant higher cost of there mortgage rate when renewal come
http://www.fool.ca/2017/04/24/why-home-capital-group-inc-is-the-stock-of-the-year/
“Why Home Capital Group” is the stock of the year!!
Really?
No need to worry , all the trillion plus in loans are 100% collateral backed by noname particle board, 2 year guaranteed recycled asphalt shingles and former corn fields stripped of top soil.
Does Stevie Poloz sign the CDIC cheques ?
22.5% interest rate, coming to your society soon (immediately after the collapse).
I suppose that somewhere hidden in the ‘laws’ Canada has a clawback regulation to go after those who saw the writing on the wall and got out of Home Capital (et al) in time.
Guys, relax, Bernanke just offered his two cents on the Canadian housing market:
“The problems seem likely to be contained” – Ben Bernanke – 2007 & 2017
“It’s amazing to consider that Toronto real estate prices have risen for years on individual units in the face of this debt crisis!”
No they haven’t. That’s why we have this crisis, which is only going to get worse as the collateral that underlies the mortgages continues to stagnate/deteriorate in price.
So far the cadence is proving similar to the USA. Canadian prices peaked in 2013. USA prices peaked in 2005. New Century, etc., blew up in 2007/2008. Canadian subprime mortgage companies ran into difficulty in 2016/2017. So about 3 years of stagnation after reaching peak prices is all it took.
# 15 Alice
There is any problem because banks and other in financial market sold debts to another fool.
Bizarro world!
#61 One Door Closes Another Opens on 04.26.17 at 7:03 pm
The Canada-US Free Agreement, which eliminated many tariffs has never been repealed. So, if Trump kills NAFTA we go back to the original agreement. Canada can also carry on NAFTA with Mexico. Not great losing NAFTA but probably Mexico would be open to better terms with Canada. Besides, Trump is probably just doing this as a strong arm negotiating tactic.
————————————————————
It’s my understanding of American politics than the POTUS cannot modify, ratify, nor terminate a treaty without the Senate’s approval. His actions, however, have all the markings of an irrational man trying to get his way; hardly a position of strength.
Garth, honey, please turn off your autocorrect when you’re writing your blog entries.
Isn’t the GIC / high-interest savings account at Home Trust CDIC insured up to 100K?
Who has more than 100K locked in those things anyways?
It might be small in relation to the big banks, but it looks like the fallout could be a lot bigger.
http://www.raymondjames.ca/en_ca/equity_capital_markets/equity_research/sample_research/docs/HCG.pdf
Major market participants consistently describe this market as underpenetrated and cite this as a
reason for its historical growth trend. Based on a yield-based stratification of Teranet-provided
industry data, Home estimates that ~20%, or ~$280 billion, of the ~$1.4 trillion Canadian
residential mortgage market falls into the non-prime category. After further refining this market
to exclude higher-yield (i.e., subprime) loans and loans in regions not targeted by Home (including
most rural locations), Home estimates that ~60%, or ~$168 billion, of the non-prime segment
represents its addressable market. Home’s current Traditional mortgage portfolio of $11.1 billion
therefore represents an estimated 7% share of its true target market.
With that comment, T2 proved he’s the idiot we always suspected.
If justine adds free weed free to winnies guaranteed income experiment, everything will be fine.
With love, ground zero Venezuela
Genworth will be the next to topple. Start loading up the truck to short this one. From their recent news release:
“As at March 31, 2017, Home Capital originated mortgages represent approximately 1% of Genworth Canada’s overall business. At present, our delinquency rate with respect to Home Capital originated mortgages is less than our overall business delinquency rate of 0.21% as at December 31, 2016.”
Just how bad is their book of business if their delinquency rate for HCG is LESS than their overall rate? I don’t expect either HCG or Genworth to exist in 2018.
Mark: Admittedly I have never seen a HCG mortgage/loan contract. However, the big-5 mortgage loan contracts, even fixed term contracts, include clauses which allow them to ‘call’ the loan if, in their sole opinion, the value of the property has decreased.
yes standard mortgage contracts have such a clause but I’m betting reality is quite different. I’m thinking that if the mortgage is paid up, the bank does not go looking for problems. Quite frankly the idea that Home Capital Group would call its performing mortgages is bizarre and contrary to the interests of the big banks. Ergo it won’t.
in canada, everybody can buy a house with cash, don’t need no stinky mortgage, that’s why HCG is falling, because nobody needs them anymore
Funny in a way how a 30% decrease in RE valuations sounds like it would be such an absurdly large amount. Almost sounds inconceivable. However it only wipes out the past year of overzealousness. After several years of growing valuations, that isn’t so bad. (Unless you recently purchased, with little down)
If a $1,000,000 house rises in value by 30% it’s worth $1,300,000. If it then falls by 30% it’s worth $910,000. Math’s hard, isn’t it? — Garth
“Canada’s premier non-bank mortgage lender”
Premier? I don’t think so.
Premier = first in size (assets). I think so. — Garth
#59 AK on 04.26.17 at 6:59 pm
“What was an investment-grade, deposit-taking institution a few days ago is now a tatty rabble on life support forced to pay 22.5% interest on a borrowed billion.”
——————————————————————-
So, what’s the purpose of this loan.
Borrowing @ 22.5% and lending @ 5%. ? WTH…
==================
Stay afloat long enough so that insiders can dump the last of their shares? This thing could go to zero.
Marc Cohodes was on Bloomberg Canada this afternoon and said he is getting ready to announce another company that he will be going after and said ” It’s a doozy” . He said he would reveal who it is next time he’s on Bloomberg. This is in addition to HCG and EQB
WOW you realtor and mortgage shills are true garbage. If he mentions one of the big 5 banks it will be a disaster
I have a big decision to make this weekend.
One the one hand I could advance vote in the provincial election.
One the other hand I could go to the annual police auction on stolen goods.
Some people would say either way I am dealing with the consequences of a bunch of crooks…
M42BC
#85 Smoking Man on 04.26.17 at 8:05 pm
Did you sell tonight?
Anyone know if that BMO offering for uninsured MBS actually closed?
Would have been very opportune if they closed it before this mess hit the wires.
Gold in CAD looking good, buying puts on some of these names and on some banks looks even better. Who has the nads to make tons of cash. US recession underway. Forget about markets only manipulations going forward. Bet accordingly.
“here was his somewhat incomprehensible response:
Nafta has been improved a dozen times” etc.
I dunno Garth. Seems comprehensible to me. Can you please explain how this is not comprehensible to you?
Now read the rest of it. — Garth
This story is not even on the top 5 list on CBC National !!!
To those posters that say this is nothing– with markets, not always but some times the market movers happen on the margin side of the business.
yes its not a huge player, but the threat of investigation from FSCO and the massive dump in stock is enough to push other better capitalized lenders to drastically change the way business is done- with great consequences in credit availability……leading to price discovery in the markets were that credit is utilized.
for those wondering how the mega rich get richer- look at the billion dollar 22% loan- thats how its done folks, instead of waiting for the crumbs, this company will win huge no matter what:
HCG folds, they are the largest lender, get choice of best assets, write down the loan as a loss on this years tax and get a massive tax advantage and great assets at fire sale prices- without the trouble or fees of having to issue an IPO, sell, market stocks.
HCG limps around and recovers, they get paid a crazy amount of interest, do a change for shares in lieu of interest, take an ownership stake and all that was basically for free
win win for them
the “ill buy your gold, silver” clowns on tv must be drooling at 22% interest- that even more then they get from fools
#1 Shut down CMHC
If you did email every MP, 90% would accuse you of being a heretic and being blasphemous.
You may at end up in Pakistan accused of being a non-player.
Read a book.
They are politicians and you’re confused.
Bust in Canada? As long as rates stay low and people hang on to their jobs, the show continues
Bingo
Well.
BC Election leadership debate tonight.
Time for popcorn and beer….a veritable war in my stomach for gas supremacy……I vote for the beer……
Canadian economy is showing positive signs. Except for the NAFTA thingie. Can you reconcile the letter and this development which shouldn’t really be a surprise?
It’s hard to be a voyeur, but that’s what you’re selling.
Always fun to see Mark’s continued insistence that the peak happened in 2013 despite ongoing price increases (or is it the sales mix)???
Sorry – couldn’t resist… ;-)
For the Analyst on fool.com, I wonder how the deposit exodus and new financing rate will affect HCGs book value… It might still be a buy at $6 (or not).
It’s stormy today in Uruguay but methinks it’s a little chillier for many a millennial in a newly purchased home with Mom’s money. There is still time to get out! Probably a slow melt for a year or two and then a steeper slide
Great West life is letting people go in the next 2 years, or early retirement, also manitoba hydro letting people go as well
Garth, any thoughts on the stability of Capital Direct, which seems to be the big alt-subprime lender here in BC?
From what I read on the Globe and Mail site just over 10 million dollars in GIC’s have been cashed in out of 13.1 billion, in the last month at Home trust. Should Home Capital go bankrupt in the next few months depositors with Home Trust and Home Bank will probably be paid in full. The longer it drags out the less the changes the depositors will be paid back and CDIC will come into play.
Actually $600 million of roughly $2 billion in deposits has been removed in the last month. — Garth
More bull for deplorables’ consumption.
I think the reason Toronto real estate prices have gone up on individual units are lusty boomers fueling millennial moisters
#65 Cheap Houses on 04.26.17 at 7:16 pm
Interesting that O’Leary quit the same day as the housing bubble officially blows up. Perhaps Kevin did not want to spend ten years of misery “cleaning up” the mess of 40 years useless politicians screwing up Canada. And the RCMP eating doughnuts all day and not busting money launderers does not help.
……………….
Look. The Housing Bubble did not blow up today. Garth is simply reporting the news and correlating with his housing theories, as usual nothing is going to happen. CMHC is going to cover the losses…. Marc will make a ton of money, tighter lending rules, interest rates will stay in the ditch for another minimum 5 years… etc.. etc… etc…
There is no bubble… no yet, people.
Well known American economist, Tyler Cowen, says the US can afford Trump tax cuts and they are essentially the same as Keynesian stimulus.
https://www.bloomberg.com/view/articles/2017-04-26/u-s-can-afford-trump-s-radical-tax-cut
#118 Leo Trollstoy on 04.26.17 at 9:06 pm
Bust in Canada? As long as rates stay low and people hang on to their jobs, the show continues
Bingo
* * *
If credit starts tightening then the deleveraging that follows will make hanging onto a job much more difficult.
~ breathe deep
Re: #116 toronto1 on 04.26.17 at 9:03 pm
22.5 and it’s 15 percent if Home Capital Group takes the full first one billion dollars.
Getting ready for the BC leaders debate. I felt a “fugitive emission” building up. I then passed gas and decided to send the Green Party 23 cents for a global warming credit.
#101 by Barb @ 8:38pm.
Barb, very true. However, people who believe the same way about T2 are in the minority in today’s Canada.
Better batten down the hatches… next 12-18 months will be tough for working Canadians and for the country in general.
#42 Smartalox on 04.26.17 at 6:32 pm
Also props today to Christy Clark, for handling Trump like a BOSS.
Those clunky coal trains are a scourge, despised by Americans in Washington and Oregon as well as oceanfront homeowners in White Rock, that have to deal with the noise and the choking dust, not to mention anyone south of the Fraser who has been stuck at a level crossing while one of these 100-car coal trains rumbled through.
Banning that coal move would hit Trump’s Republican backers where it hurts, too: particularly those from Wyoming, where most thermal coal is mined.
Meanwhile, Horgan looks like he can’t get his (Adrian) Dix out of his mouth, trying to blame anyone and everyone for the tariff – except, of course – Donald Trump.
**********
If you did your research and stopped reading the headlines only you would have noted that Christy Clark was in favour of the coal movement through that region and now she has decided to make it look like she is being tough by asking the feds to make the call. Research man, google is your friend. Something about Massey bridge.
Massive bailouts are coming.
For institutions and homeowners.
10mil SFH in Toronto and Vancouver are coming.
Hello 45c loonie.
#111 Paul on 04.26.17 at 8:52 pm
#85 Smoking Man on 04.26.17 at 8:05 pm
Did you sell tonight?
….
No. No bidders.
Its only been on the mls for 5 days. Had about 20 people visit. Had the bid off tonight trying to beat the ontario budget. No takers.
Feed back was excellent but no is making a move till the ontario budget is released.
Buyers are quite smart these days.
My whole purpose for selling was to escape to usa. If Trump burns nafta then that’s not an option. I’ll de list.
I’ll be stuck here in Toronto working for 1/2 my rate thanks to Temporary foreign workers flood that T2 opened up.
Not the end of the world. Just less Seneca trips.
And Marc Cohodes laughs…
Many of us have no job security, pension or benefits.
The reason.. you can source every thing global.
Let’s agree to trade at home first keep the jobs here.
I am glad free trade may be gone. Lets do it here in Canada.I will trade lumber for cauliflower maybe.
‘half are living paycheque to paycheque’. Is this for real? 50% of working Canadians (or does this statement mean 50% of the Canadian population?) is living paycheque to paycheque? Can one enquire as to the source of this data? Is it verifiable? Or did some information to clarify the statement get dropped? I just have difficulty believing the figure is that high.
Here you go. — Garth
today …is everyone buying Gold?
lol
You realtor shills are finished. All of you who are posting your nonsense sound scared. For those realtor and mortgage shills who missed this….” Marc Cohodes was on Bloomberg Canada this afternoon and said he is getting ready to announce another company that he will be going after and said ” It’s a doozy” . He said he would reveal who it is next time he’s on Bloomberg. This is in addition to HCG and EQB”
The dominos are falling and you shilled are finished. Happy Housing Crash Everyone! :-)
anyone can build with old money, that money was spent a while back, who are they trying to kind
http://www.theglobeandmail.com/report-on-business/economy/economic-insight/is-home-capitals-crisis-the-pin-that-pops-the-housing-bubble/article34824837/
For sale signs everywhere and crickets is all you hear on offer night. With the mortgage fraud exposed and more frauds to be exposed/uncovered spells trouble. Realtors and sellers in an all out panic. The ponzi scheme is falling apart. The Americans will continue to expose this Canadian fraud. Happy Housing Crash Everyone Everyone! :-)
I was watching Barry Schwartz ( Baskin Wealth Management CIO) on the BNN Market Call taping posted on the BNN website from April 17,2017. He said that regarding Home Capital’s problems “There’s misleading information out there promoted by short sellers that is categorically false. If you put out misleading information, you should be punished in my opinion.” Un friggin believable ! Two days later the OSC filed allegations against Home Capital and the rest is history. April 17 closing valuation $22.12… April 26 closing valuation $5.99. Chief Investment Officer, really ?
135 Smoking Man on 04.26.17 at 9:39 pm
#111 Paul on 04.26.17 at 8:52 pm
#85 Smoking Man on 04.26.17 at 8:05 pm
Did you sell tonight?
….
No. No bidders.
Its only been on the mls for 5 days. Had about 20 people visit. Had the bid off tonight trying to beat the ontario budget. No takers.
Feed back was excellent but no is making a move till the ontario budget is released.
Buyers are quite smart these days.
My whole purpose for selling was to escape to usa. If Trump burns nafta then that’s not an option. I’ll de list.
I’ll be stuck here in Toronto working for 1/2 my rate thanks to Temporary foreign workers flood that T2 opened up.
Not the end of the world. Just less Seneca trips.
..
I thought you were a gazllionairre moving to Antigua.. what the hell do you have to work for.
‘half are living paycheque to paycheque’. Is this for real? 50% of working Canadians (or does this statement mean 50% of the Canadian population?) is living paycheque to paycheque? Can one enquire as to the source of this data? Is it verifiable? Or did some information to clarify the statement get dropped? I just have difficulty believing the figure is that high.
……..
it’s from a poll of about 5,000 people. Take it for what’s its worth
Andrew Weaver is killing in the BC debate…
Sorry….he’s “Killing It” !!
Wow, just wow. Our next 10yrs lies in the hands of Jeremy Rudin. Look him up. OSFI literally has the power to crash our entire economy right at its finger tips and it all comes down to a relatively subjective decision. Is HCG a going concern or not?
Myself and the smartest people I know looked at their balance sheet today 9 ways till Sunday and although I agree with most ppl here, at this point the equity is all but worthless, that is not what’s important to our discussion. We believe they can and should remain a going concern to promote an orderly wind down of their mortgage book.
OSFI may disagree and if they do, oh boy send an APB out for Kyle Bass. Expect an announcement from OSFI in the next 30 days (just around the time their 2.35% May 17 mature), this will be no coincidence.
Should the bank be deemed viable, we can all breathe a sigh of relief as there is a fairly well defined roadmap for them to wiggle their way out of collapsing our entire economy (ie. Housing market). It’s all there for you to see in their public filings, balance sheet stuff.
The tricky part is where those prime uninsured mortgages find a new home, but I have a feeling the big five will be motivated participants given their exposures and the virtually unpalatable alternative.
Now if it’s door #2, where HCG is deemed non-viable, yikes. That is your cue to head for the exit as the probably of a disorderly unwind increases exponentially. HCG has ~10b mortgages rolling off inside a year and if they are prevented from renewing and the other banks refuse to underwrite, you become a forced seller and list.
What do you think is going to happen when 4 out of every 10 houses in Brampton suddenly has a for sale sign pop up in the span of 3 wks? Now think of the media spectacle and the shift in broader market psychology in that event! Not hard for the dominos to start fast! Cross your fingers on Rudin.
-Bj
“The ugly face of protectionism, nationalism and America-first populism is now countenanced towards Canada. ”
— depends… I find those beautiful when practiced within the limits of decency. Is what prevents McDonald to become universal and the the same goes for the low quality of north american high schools. Ditto for the lack of manners.
“So much for the three amigos,”
—- when comes to dough Gartho boy, there is no such thing. One would help a friend in need… but will not prop its weakness.
It might actually serve canadians well: less disable more entrepreneurial, more work, less games revamping the frontier spirit of the forefathers.
..and yes… maybe losing some weight too
A fascinating denouement.
FLOP:
Over lunch today I strolled to the office of Croix-Rouge Canadienne on Franklin Ave. here in the Fort. I wanted to donate a $ double sawbuck to answer my losing wager to you on the AFL match to preserve what is left of my reputation. They do not accept cash so I’ll do it digitally and confirm when paid. All gambling losses should be tax deductible. A GDP booster.
And FLOP, I expect that you know that Sir John Franklin was Lieutenant-Governor of Van Diemen’s Land (Tasmania) 1837-1843. 25 years earlier he had travelled overland through what is now Fort McMurray. You should visit and match that feat.
Smart ass bastards.
Beware of a real man chewing on a stir stick with Jack breath walking the traded floor solving problems while being visioucly abused 100 hours of clips all the while with the record button turned on that big phone in his shirt pocket, camera looking forward.
I don’t want to shit on diversity, inclusion, that love shit with a fake smIle that’s out there.
But if I run out of options. Plan z don’t work.
Sell the cabin in Ellicottville. DM will toss you in the bin in a second. We saw what he did to a class mate.
Got a youtube channe now. I got eat. We all got to eat.
Figure it out. Do the right thing.
#114 will on 04.26.17 at 8:58 pm
“here was his somewhat incomprehensible response:
Nafta has been improved a dozen times” etc.
I dunno Garth. Seems comprehensible to me. Can you please explain how this is not comprehensible to you?
Now read the rest of it. — Garth
————————————————————
I think Garth is pointing out that the PM is speaking in platitudes instead of a direct message. I wouldn’t worry about it though.
It demonstrates that any talks about NAFTA will be handled by Chrystia Freeland, our Minister of foreign affairs armed with her teams of diplomats, rather than by the PM.
Always fun to see Mark’s continued insistence that the peak happened in 2013 despite ongoing price increases (or is it the sales mix)???
——————–
the most delusional behaviour, fascinating to watch.
Now that the “Yankee Traders” have disclosed their colours, maybe it’s time for T2 to grow a pair and seriously seek trade diversification, particularly with China as we could easily exchange good commodities for some real good high tech computer and internet technology for example as from what i understand they have some pretty high tech computer development going on and probably might be receptive to expanding their markets.
It might also be a great time to re-evaluate our NATO relationship as the warmongers want us to contribute 2% of our GDP to NATO ( over $ 40 billion per year ) to further their ventures when we are just a vassal contributor to that distasteful enterprise and have no real say in it or what it wants to do, even though as a member we are tarred with the same brush of what that organization does.
Any thoughts on this are welcome…… pro or con ….
#118 Leo Trollstoy on 04.26.17 at 9:06 pm
Bust in Canada? As long as rates stay low and people hang on to their jobs, the show continues
Bingo
********************************************
Not Bingo. We are a credit expansion society. Interest rates is just how lenders keep score. They have to first provide the credit in the first place before an interest rate is attached to it.
The shadow banking industry in Canada is doing a lot of the heavy lifting in terms of fueling these current prices. With stagnant incomes access to credit is the most important thing.
All these players are going to start tightening their belts in terms of of the creditworthiness of future applicants.
Here it comes folks. The contrarian’s dream. But don’t purchase Home Capital for its 17% dividend.
Wait six months. Then purchase the chartereds. They will come back to life to live again.
The subprimers likely will not.
Garth, you are confused. Funding dried up for Home Cap. The loans/mortgages/houses = Assets on Balance sheet are fine, Canadians are making payments, the LTV has gone down because the home have risen in value and the asset is fine, small compared to the overall market.
The equity maybe worthless due to lack of funding, but it they replace the funding, it’s back the races. Where it would be concern is people are not paying the mortgages, but that is simply not the case. I believe you should fix this in your post tomorrow or tonight.
“the most delusional behaviour, fascinating to watch.”
How so? The real delusion is that of those who claim higher prices when prices have not moved higher on individual identical units since 2013. If HCG’s affiliates were lending as though there was appreciation, and there wasn’t appreciation (of course there wasn’t appreciation), then they have a huge problem on their hands. Especially since the nature of HCG’s business was to lend to people without a lot of money or equity to take care of the potential error in valuations.
The reason a lot of people are running scared at the moment is because nobody (who has a clue about finance and real estate) believes the current narrative being spun publicly, of a robust market with rising prices. They can look at the numbers, they can do the same math as I can with respect to the drastically shifted sales mix and see, in plain view, that there has been no appreciation in years.
Its not rocket science, and the fall-out is now arriving from the decision of Flaherty et al, in Budget 2013, to stop the expansion of CMHC subprime mortgage insurance. A move which marked the peak of the Canadian housing market.
Anyone know why the Loonie spiked at 720pm PST??
Did Trudeau take a selfie with selfie stick? Anyone?
#151 WUL on 04.26.17 at 10:25 pm
A fascinating denouement.
FLOP:
Over lunch today I strolled to the office of Croix-Rouge Canadienne on Franklin Ave. here in the Fort. I wanted to donate a $ double sawbuck to answer my losing wager to you on the AFL match to preserve what is left of my reputation. They do not accept cash so I’ll do it digitally and confirm when paid. All gambling losses should be tax deductible. A GDP booster.
And FLOP, I expect that you know that Sir John Franklin was Lieutenant-Governor of Van Diemen’s Land (Tasmania) 1837-1843. 25 years earlier he had travelled overland through what is now Fort McMurray. You should visit and match that feat.
/////////////////////////
Good Man WULLY,I wasn’t counting on the windfall but when I saw that story about the Fort the other day it triggered that thought.
As well as you,when I went to take the wheelchair back that I lent for the recent surgery I tried to give them a cash donation and they told me the same thing.I remember giving them a cash donation a few years ago and so I guess they changed the rules….I don’t own a credit card either.
Regarding Sir John Franklin, that doesn’t ring a bell but I do remember my mum getting excited about a visit from Sir Elton John…
M42BC
Bond Junkie #149
What do you think is going to happen when 4 out of every 10 houses in Brampton suddenly has a for sale sign pop up in the span of 3 wks? Now think of the media spectacle and the shift in broader market psychology in that event! Not hard for the dominos to start fast! Cross your fingers on Rudin.
I can’t believe how many people know about the Ponzi scheme that’s going on in Brampton. It’s unbelievable how Canada is a house of cards. No large numbers of HAM only large number of fraud. Crazy
“Canadians are making payments, the LTV has gone down because the home have risen in value and the asset is fine, small compared to the overall market.”
The crisis here because nobody with half a brain (or more) believes the LTVs. The prices have not risen. All that has been seen since the 2013 apex is a shift to the sales mix, which the RE sell side has tried to overly generalize into a systemic price increases.
Its not going away either. As I pointed out much earlier, the Canadian banking system is moving towards a liquidity/funding crisis systemically, and quite significant policy action, in the form of interest rate cuts, QE, and other measures are likely to be required. Just as our neighbours to the south required when their housing market went south. Given that we’re roughly 4 years past-peak, and the US took roughly 3-4 years past-peak for their mortgage market to reach a crisis after the apex, it does seem to me that many more fireworks are in the not-so-distant future. Remember that the USD$ weakened quite significantly in late 2007/early 2008 until shooting sky-high as credit markets froze. I’d expect the same to be replicated in the CAD$ as there is almost insatiable demand to repay CAD$-denominated obligations.
i pity the fool who has to read 150+ boring comments before 10:30, and has to cover the Ontario budget for more crazies tomorrow.
Willing to bet 50% of new mortgages in Vancouver are liar loans. Only way for locals to keep up with HAM.
Canada needs a real leader and a vision.
Hearing that Trudeau’s response will be to drop the dollar. Well Trump will label us ‘currency manipulators’.
Anyone watching the CAD$/USD$ pair tonight?
WTF just happened? Almost a whole cent jump in less than an hour.
A liquidity crisis brewing?
Trump has reversed his NAFTA position. No exit at this time. — Garth
sold all my loblaw shares today. close to 100% gain. i like that.
Thanks for the link, Garth. The article indicates 48% of working Canadian are living paycheque to paycheque. Google search says that as of September 2016 there were roughly 16.5 million working Canadians, so lets just say 8 million Canucks are spending every dime they make. Eek. There is a video about Christmas shopping with folks justifying blowing their budgets. Seems to me the best gift would be to spend time with your loved ones doing some mutually enjoyable activity together, with the bonus that they need not worry that you will be struggling financially. Peace of mind – now thats a gift!
marc’s new target will be in fact a member of the big 5, the one that provided a significant portion of the funds advanced/commited to hgc. it is not the one most would
consider at first glance. it will be a doozie as claimed.
couple of other players in this segment also in dire shape
and on life support think 123 done called it here first>
#167 Mark on 04.26.17 at 11:05 pm
Anyone watching the CAD$/USD$ pair tonight?
WTF just happened? Almost a whole cent jump in less than an hour.
A liquidity crisis brewing?
Trump has reversed his NAFTA position. No exit at this time. — Garth
.. And bam another chunk of my HELOC wiped out in microsecond… man I gotta stop this forex gambling shit…. there is nothing left of my house!
Today we all are Iceland. Remember them? Small country, boated with debt. Then economic weaponry was unleashed thereupon.
The USA has done their work worldwide. Who thinks we are to be spared?? Look up.
Print, print, print just like the USA did and is.
Goodbye middle class.
TRUMP NO LONGER KILLING NAFTA, THAT IS WHY LOONIE SPIKED.
Imagine having the power to steer the Global Markets with your words.
If I was a buisnessman with that power I’d use it to my advantage.
#161 YVR Update on 04.26.17 at 10:53 pm
Anyone know why the Loonie spiked at 720pm PST??
Did Trudeau take a selfie with selfie stick? Anyone?
****
Oddly enough he did, wishing his wife a happy birthday, so says my other half.
More to the point, what can make the change so sudden, followed by more static in the upward direction?
Poloz will responds with lower interest rates, so unprdictable, let the stagflation begin.
Taxes on everything heading up, including goods and services heading south of the border, Trump will tear up NAFTA, Canada’s on going challenges are just beginning.
DELETED
I find it interesting that Trump supporters declare along the lines of “Finally, a President doing what he said he would do!”
Where and when?
The Muslim ban from countries in which he does not have business interests? Nope.
Repeal of Obamacare? Nope.
Tearing up NAFTA? Nope.
A halving of corp taxes? Unlikely.
A single onshored job? Nope.
Plummeting popularity? Yup.
The Commander (Vulgarian) in Chief. His base was lied to.
#161 YVR Update on 04.26.17 at 10:53 pm
Anyone know why the Loonie spiked at 720pm PST??
Did Trudeau take a selfie with selfie stick? Anyone?
============
Trump said he wouldn’t pull out of NAFTA.
http://www.financialpost.com/m/wp/news/blog.html?b=news.nationalpost.com/news/world/trump-told-canada-mexico-he-has-agreed-not-to-terminate-nafta-at-this-time-white-house&pubdate=2017-04-26
‘And it gets worse. On Friday Donald Trump tears up NAFTA.’
……….
he’s already backed away from this. He changes his mind on a whim……odd fella
The post was updated to reflect that earlier tonight. — Garth
Junior T really fought for Canada on this one. Too bad for us we had Kunioe T leading the charge. Turns out…..he’s just a smoke and mirrors drama queen. Great a bending over for Obama…..but Trumps no bum slapper. Gorgeous day in Thailand. The Thai baht is trouncing the $C…..now that’s proof Trudeau, Butts and Moroneau have achieved third world status for Canadark. Poloz must be so proud.
“Poloz will responds with lower interest rates, so unprdictable, let the stagflation begin.”
If the US experience was anything to go by, there was no stagflation, and it took a good decade, if even, for consumer demand to recover after the peak of RE prices (2013 in Canada, 2005 in the USA).
If Poloz lowers policy rates, it will be for a good reason. As it stands already, the BoC is chronically missing inflation targets. Demand is weak. The employment market is a disaster. A 30% weakening of the Canadian dollar, which under ordinary circumstances would cause a lot of domestic economic growth, accomplished nothing stimulus-wise. A few cauliflower at high end grocery stores aside, nobody experienced price increases of any level of significance.
Canada, unlike the USA, invested massively over the past 10-15 years in export capacity. And is only minimally indebted to foreigners. So we cannot rely upon foreign demand, or foreign selling of Canadian debt to suppress our currency or the economy.
The big question at this point is will Poloz allow a lot of systemic damage to the Canadian economy to take place stubbornly clinging to his current high interest rate policy (high, as in, higher than required to keep inflation at the BoC’s 2% target, not high historically), or will he simply start cutting rates and start pouring on the QE to pre-empt a US style systemic meltdown?
@#146 Sceptical Linda
“it’s from a poll of about 5,000 people. Take it for what’s its worth”
+++++++++++++++++++++++++++++++++++
gee, “only” 5000 people.
My personal experience with co workers, friends and relatives is that about 50 % live pay cheque to pay cheque…some are even more indebted than that….
Just a personal observation.
As a lark, tell your friends , co workers, relatives etc. that someone hacked your password at the bank and your assets are frozen for 2 weeks…..see how they react. Shock. Horror. Fear. Is usually the result.
@#179 Home Capitol fartz.
“Deleted”
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Nice try…..stealin my name has retribution written all over it……..
Hope Justin threatened to nuke DC if he didn’t renege.
Whatever he said, der great and powerful Trümpenführer did what he always does….
Cave. Bigly.
#29 Smartalox on 04.26.17 at 6:07 pm
“@Westcdn:
You really don’t know enough. The French overthrew Royalty for democracy… then less than a century later, voted to elect an Emperor(!) one that looted the Republic and bankrupted it at the same time. The only wars that France helped the US win were:
– the war of 1812, by having the decency of capitulating in Europe
– World War 1: by initiating a war, giving up, but providing land on which to hold battles
– World War 2: same.
– Vietnam: same.”
You’re forgetting the war of independence…
@#147 Cheap Houses
“Andrew Weaver is killing it in the BC debate…”
@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
Nah. He came across as another annoying , interupting, arguementative, rude …….politician.
That he took great pains to distance himself from.
Christy looked desperate….
RE: 159
“The equity maybe worthless due to lack of funding, but it they replace the funding, it’s back the races. Where it would be concern is people are not paying the mortgages, but that is simply not the case. I believe you should fix this in your post tomorrow or tonight.”
The drop in equity is the recognition that HCG is running low on funding and exhausting their capital reserves. They are getting closer to not being able to meet withdrawal demands and they will need replacement funding in the form of a legit capital raise (issue stock, preferred shares, deposits). The high interest loan will make it difficult or impossible for them to grow out of the problem. They may need to call back mortgages (loans to be repaid) or sell the loans to a willing taker with sufficient capital reserves.
Who the heck will want and pay full price for these UNINSURED mortgages on their books now after the fraud, and “alternative” lending practices? Big banks won’t want to, although may be forced to to prevent contagion.
Further HCG will be in no position to refinance or make new loans due to funding difficulty. The other “alternative” lenders may pull back as well and could need their own high cost funding to shore up their capital. People looking for alternative financing may have a harder time or find it impossible. Costs to borrow may rise for both new and existing loans. This may pull new buyers from the market and force others to sell, pushing asset prices down.
There are all sorts of second order and potentially contagious effects that could result from this. Just like in the US in 2007, no one except the bankers and regulators stand a real chance of knowing the true extent.
Now to see how this unfolds.
paulo 171, any bets on CIBC being Cohodes next target?
They would deserve it.
#180 WUL.
I find it interesting that Trump supporters declare along the lines of “Finally, a President doing what he said he would do!”
——–
Yeah I totally expected him to get it all done inside of the first 100 days….we wuz lied to….
Nafta? ‘Art of the Deal’ demo….start at the most extreme position and work your way in to what you actually want….
Oh and this happened today due to the new lumber tarrif…
http://bangordailynews.com/2017/04/25/business/citing-new-tariff-jackman-lumber-mill-to-add-jobs-second-shift/
#122 Fish on 04.26.17 at 9:14 pm
“Great West life is letting people go in the next 2 years, or early retirement, also manitoba hydro letting people go as well”
I feel bad for Winnipegers (and London, Ontario folk) who will be disproportionately affected by GWL’s decision. In cities with only a few corporate champions, good paying jobs can be hard to come by for the white collared folk. I’m sure blue collared folk won’t sympathize too much…
#123 Fiendish Thingy on 04.26.17 at 9:15 pm
“Garth, any thoughts on the stability of Capital Direct, which seems to be the big alt-subprime lender here in BC?”
And what about BC/Ont credit unions? I suspect their equity buffers are lower than chartered banks and have loose lending because of the feel good factor of putting ppl in homes (and fighting SJW causes, like Vancity does).
#169 Leo Kolivakis
Home Capital shorting firm suspects it is Fairfax behind the loan. Interview was on BNN.
#118 Leo Trollstoy
Leo. This is not Freedom First thinking.
It is how slaves think.
#1
Boss of me
Master of Freedomonics
Some insights from hinterland SoSur-ish YVR, Panorama, White Rock, the other ‘HAM’ centre of the universe. Sorry TO you’ve got ‘Vancouver-itis’ now, good luck. Time your market accordingly.
Builders with SFD >$1.5 raize-raise-flip hoping to flip to hot foreign $ in WhiteRock/ Ocean Park/ SoSur many carrying multi-years now with no takers. Hot money drying up no thanks to (complete lack of) supply management (responsible govn’t policy) on our end, but capital controls from The Country We Shall Not Name & threat of eventual extradition treaty in full effect and likely to be enforced further going forward. This is corroborated regularly from builders, bankers, mortgage brokers & others in the trenches in my circle. It is also readily apparent also to any market observer paying close attention here. I know realtors recently cashed out of their SFDs and renting. What may that imply?
< 1.5 SFD is another story, still alive, builders competing with move up families cashing out condo/townhome equity, utilizing equity & cheap financing & buyers fueled by Chrusty's timely redistribution of our tax $ as helicopter $ to FTHB = suburban SFD still in the range (jsut barely) of local dual-income fundamentals keeping prices close to (outrageous – over 40% increase yoy) current ask/assessment with SFD bidding wars still happening locally in the great pockets with some land attached (large lots). Fn cray cray. The earlier poster commenting that cheap $ allows locals (the illusion) of competing with foreign is spot on. It's why this market is completely detached from income fundamentals.
Condo-townhome uppa (for now) thanks to Chrusty FTB helicopter $$$. SFD in desirable suburban 'breeder pocket' areas still in high demand due to dominoe effect. Every single homebuyer, homeowner, and renter in Lower Mainland is essentially engaged in market timing for shelter. It's shameful it has come to this, essentially a broken market, blame firmly at the feet of our elected officials. /rant off. Bet accordingly.
What Marc Cohodes had to say back in June 2016.
https://betterdwelling.com/city/toronto/marc-cohodes-short-canadian-real-estate/
Will be interesting to watch the trading in HCG tomorrow. So far this month 50% of shares have changed hands.
RE: #169 Leo Kolivakis on 04.26.17 at 11:06 pm
“Wonder if any of the big Canadian pensions are behind this loan. If not, then who is behind it?”
My guess is Bain Capital. They will lock in first rights to all of the assets, then figure out a way to beggar the share and bond holders. Whenever these guys are involved, I leave the scene.
https://www.youtube.com/watch?v=5ywjpbThDpE
#95 Mark on 04.26.17 at 8:18 pm
Canadian prices peaked in 2013.
———————————
You keep saying this, but it’s definitely not the case in the GTA. My in-laws house in Richmond Hill has gone from $1.5M to $2.5 in the last 18 months alone. Another family member in R.H. had one of their investment bungalows DOUBLE in the last 2 years. Sold and crystallized the gains. FACT. So please, for the love of god, explain you methodology, cite some data sets or explain WTF you’re talking about. It’s not “sales mix” in the GTA, because I’ve just given you 2 examples in Richmond Hill where the same houses have greatly appreciated. Another example: Old Thornhill. On my block, a very affluent area, houses have appreciated almost $1 Million since last year alone.
I’m not calling you a liar, but you lack credibility because you never provide a source. I’ve asked you before and you told me it’s “proprietary”.
Bullshit. Cite your source so that we can verify your claims.
If Mortgage Rates Tick Up Even a Little, What’ll Happen to Canada’s House Price Bubble?
http://investmentwatchblog.com/if-mortgage-rates-tick-up-even-a-little-whatll-happen-to-canadas-house-price-bubble/
They don’t need soft lumbar, they need cocnrite steel and Barby wire
http://imgur.com/a/0VKt5
Throw back Thursday
http://www.greaterfool.ca/2017/02/09/the-resistance/#comment-499530
And yet another reason Trump is the most dangerous person in the world right now.
What next? And how does he NOT move the stock markets that much? I always thought uncertainty makes people less inclined to invest in stocks?
My god…
I’m not calling you a liar, but you lack credibility because you never provide a source. I’ve asked you before and you told me it’s “proprietary”.”
You threw a lot of numbers out there. The problem is, unless you transacted that often, you can’t just easily ascribe gains or any price movements to such specific periods. Houses aren’t liquid, they don’t mark to market every hour or every month. So when you make such claims, I have to be very suspicious because real estate doesn’t really work that way. Price changes are not so clear cut.
Certainly in the post-2013 era, there are areas of the GTA that have seen appreciation. There are units that have seen depreciation. The problem is, when you look at the data, is very clear that the median sales price has significantly and dramatically outrun the average sales price. This speaks to a large shift in the transactional mix overall. Brand new supply has been a very prominent part of the GTA mix with so many new units delivered over the past few years — that alone will drive average transactional prices up because its mostly the new, un-depreciated supply that’s selling!
If you own an asset (which you obviously do), its easy to get lulled into simply reading the newspaper, looking at the headline, and extrapolating such experience to your own situation. However, in a homogenous asset class like real estate, consideration of the sales mix is of paramount importance. Even the CREA has been increasingly, in their press releases, been warning of such.
“And what about BC/Ont credit unions? I suspect their equity buffers are lower than chartered banks and have loose lending because of the feel good factor of putting ppl in homes (and fighting SJW causes, like Vancity does).”
Oh what a mess if you’re suspicion is correct (which I suspect it is!). Oh what a mess. And they have no access to the capital markets to recapitalize themselves, so a failure could very quickly cascade through the entire credit union system.
Its terrifying. I’ve written a few comments about the dangerous practices and lack of market discipline that exists at the relatively unregulated credit unions.
“Who the heck will want and pay full price for these UNINSURED mortgages on their books now after the fraud, and “alternative” lending practices? Big banks won’t want to, although may be forced to to prevent contagion.”
Exactly. LTVs are likely to be very much exaggerated, which is why they’re not saleable. If they’re marking the LTVs to the alleged “2016” prices but the prices haven’t appreciated since 2013 (as my analysis suggests), their 67% LTV suddenly looks much closer to being a 90-95% LTV with many loans significantly underwater. Asset sales would force them to recognize impairment across much of their portfolio which would have immediate consequences from their auditors and the OSFI.
Wake me up when foreclosures begin to spike, until then
the bubble will keep bubbling.
Uninformed comment. Canadian foreclosure laws are dissimilar to American ones. In the 1990s housing crash, prices declined 30% in the GTA, but distressed sale numbers barely moved. Learn more, then type. — Garth
“stains” coming out in the wash
Tracker mortgage scandal is ‘systemic’, Central Bank governor
http://www.thejournal.ie/bank-of-ireland-ray-flavin-3280386-Apr2017/
The financial regulator found AIB guilty of six breaches of anti-money laundering laws, and legislation to ensure funding doesn’t make its way to terrorist organisations.
It said the breaches were the result of “significant failures” in AIB’s controls, policies and procedures.
This was the biggest fine levied against AIB by the Central Bank and followed a €3.325 million fine issued last year to Ulster Bank for similar breaches.
http://www.irishtimes.com/business/financial-services/aib-s-failure-to-comply-with-2010-legislation-is-striking-1.3061969
How many people lost homes and should not have
He told Fianna Fáil’s finance spokesman Michael McGrath the Central Bank it had ordered 15 banks to examine their mortgage books because it feared the problem of denying people trackers was so extensive.
http://www.thejournal.ie/tracker-mortgage-scandal-3200502-Jan2017/
If the loonie crashes and the mighty buck soars on the possibility of NAFTA being cancelled, which country do you think currently benefits more from it?
Justin and the Mexican guy who is so proud of his people that he doesn’t want any of them to come back home had to call President Trump and ask for terms.
I wonder who has the upper hand in negotiations?
Looks like I will be lucky today and get a good shot at selling the loonies I bought the last 2 days at a small profit.
That will be the last time I try to trade a short-term bounce in the loonie, I swear.
I will attend currency traders anonymous starting today. Or tomorrow at the latest.
Seriously though, I don’t see much upside for the loonie from here. Not a huge downside either, but we might see 69 cents before too long. I suppose 62 cents is possible eventually (after housing crashes and panic sets in?)
YO!! Canada!! The music’s stopped and the seats are all gone….
Nothing T2 or his “team” does will EVER permanently stave off the shredding of NAFTA, in part or in whole. There will inevitably be negative, wide-swath economic impacts to jobs in Canada because the US is in repair and rebuild mode – something our short-sighted leaders should have been doing since the GFC….as many other countries have been. And blowing billions in debt on “infrastructure” doesn’t do much for the medium and long term.
This is likely the worst time to be in debt with little to no savings and diminishing job prospects.
Ultra-low, zero-bound interest rates underpinned this disaster and unforgivable management by intransigent government with a hate-on for savers preserved it.
Still think government has your back?
Whoever is behind HCG loan – be sure they are pretty shrewd and think there’s value there, if there wasn’t they wouldn’t lend them 1 dollar. $2 billion is nothing to sneeze at and 15% is about the going rate for a distressed loan.
Seems to me the economy still tends to follow a 7 to 10 year cycle. What I am noticing is that with each successive “correction” the amplitude grows more and more significantly uncomfortable.
Let’s face it, this Ponzi Scheme economic paradigm we adhere to is unsustainable and doomed to end.
We can breath life into a dying economic model only so long before it finally succumbs to it’s systemic failings. The longer we do the more horrific the day of reckoning will be.
#203 common sense on 04.27.17 at 6:28 am
And yet another reason Trump is the most dangerous person in the world right now.
What next? And how does he NOT move the stock markets that much? I always thought uncertainty makes people less inclined to invest in stocks?
My god…
—
It’s a fluid world. Stay flexible.
Inclinations don’t matter near zero interest rate, you grab what you can.
whats the long game for HCG? Can they stabilize? Is this just the long slow death?
#15 Dont misled public . Toronto doesnt have many subprime loans its a high ratio loans for anyone with less than 20% down and mostly for a first time buyers .
We are still behind in RE price growth .
http://www.economist.com/blogs/dailychart/2011/11/global-house-prices
What a joke the GTA is. A lot of these bone headed urbanite specuvestors who bought in over last 6 months are going to come out looking like they were tossed into a wood chipper.
Let ’em burn to a crisp – that’s what it’s going to take. The GTA RE market is like a cheating wife lost in her affair and unable to think properly or see the reality of her actions. It’s only when her Husband files for divorce that reality starts coming back into focus.
#211
the player in this case will get first go and choice of the assets,if you are going to have to eat dead fish,might as well pick the ones with the most meat on the bone.
If you think Toronto is alone in to crease RE appreciation you wrong . Its global . Look at Auckland NZ median price went from $562 in 2012 to $956 – 2016 so its doubled in lust 4 years and no economic foundation to support this , just foreign and domestic investors . So economic rules dont apply any more its all political now.
https://www.enz.org/house-prices-auckland.html
I’d expect the same to be replicated in the CAD$ as there is almost insatiable demand to repay CAD$-denominated obligations
Apparently it’s quite satiable today lol
The reason Toronto real estate prices have increased on individual identical units over the last 2 decades is obvious. Interest rates in the dirt resulting in Cheep money. Boomer parent downpayments and a no-lose mentality fostered by ignorance and group-think. Secondary accessories to this madness is plentiful jobs. Especially in finance, IT, government and healthcare
I’m not calling you a liar, but you lack credibility because you never provide a source.
I was the first to point out that you only need to ask for a source and he’ll avoid the topic, change the subject but otherwise not provide one.
Because a source doesn’t exist.
No need to dig further. :)
#204 Mark on 04.27.17 at 7:00 am
I called it again!
“I was the first to point out that you only need to ask for a source and he’ll avoid the topic, change the subject but otherwise not provide one.”
Am I amazing? Yes I am!
Anyone watching the CAD$/USD$ pair tonight?
WTF just happened? Almost a whole cent jump in less than an hour.
A liquidity crisis brewing?
No. CAD at the whim of the US Trump economic machine
Ghost town Markham: Area plagued by vacant houses, crazy real estate market
So I watched the BC election debate yesterday, and it became clear to me why I dislike John Horgan so much:
He’s a provincial.
His presumption of the BC economy is primarily domestic, and that international trade is an oddity, and the exception to the rule. Not unusual if you look at his background as a labour leader, attuned to local representation, but in government, it’s that some small-time thinking that coloured perceptions of BC 20 years ago. It’s like Horgan still thinks of the robots from expo 86, and thinks ‘golly gee whiz!’
Christy Clark is an unabashed globalist, but is more aware of BC’s unique opportunities on the global stage. It’s a 21st century attitude, and it suits me better.
Andrew Weaver’s performance made it clear that while the Greens might not form government, he thinks that his party can make gains at the expense of John Horgan and the NDP. To that end, he succeeded in making Horgan look bad: at one point, Weaver had Horgan casting the image that the BC Liberals had already won the election!
That one made the highlight reel!
@ #199 conan
RE: #169 Leo Kolivakis on 04.26.17 at 11:06 pm
“Wonder if any of the big Canadian pensions are behind this loan. If not, then who is behind it?”
My guess is Bain Capital. They will lock in first rights to all of the assets, then figure out a way to beggar the share and bond holders. Whenever these guys are involved, I leave the scene.
https://www.youtube.com/watch?v=5ywjpbThDpE
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Apparently, the pension fund behind the HCG is HOOPP. Marc Cohodes says they have more money than brains, we’ll have to see
#225 So who speculates houses in Markham? Crazy! I say if they want to pay >>2 mil + prop taxes to keep them empty, we should supply as much as we can to them. It’s their money – once they pay it’s their house now and ‘our’ money, maybe they have something in mind, why is there anybody else’s problem? Empty tax home? Who wants to rent there?
Can you imagine, the lender are going bust while house price are still rising.
Can you only imagine what will happen when they are going down!!!
Looks like Healthcare of Ontario Pension Program is behind the Home Capital C$2 Billion Loan. Complete with a shank you in the kidney’s interest rate. Ironic that a non-prime lender is getting a high interest loan
“Kevin Smith ($HCG Chair) is on the Board of HOOPP. Jim Keohane (HOOPP President/CEO) is on the Board of $HCG”
I call Shenanigans!
@#171 paulo
Wrong. If you listen closely to his interviews and read Marc Cohodes’ twitter, you will see that he has repeatedly asserted that he thinks the Big 5 are well-run, and he respects them.
He has no intention of shorting them. He has another target in mind, and we should be able to find out in short order.
#225 AK on 04.27.17 at 10:22 am
Ghost town Markham: Area plagued by vacant houses, crazy real estate market
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“60-80% sold to foreign buyers”. Canada must be Algonquin for “Suckerland”.
‘half are living paycheque to paycheque’. Is this for real? 50% of working Canadians (or does this statement mean 50% of the Canadian population?) is living paycheque to paycheque? Can one enquire as to the source of this data? Is it verifiable? Or did some information to clarify the statement get dropped? I just have difficulty believing the figure is that high.
Here you go. — Garth
I’m all for a huge correction in the housing market and idiots who overleveraged but using this survey as evidence is misleading.
The survey of the 5000 people does not mention what kind of statistical analysis was done eg. what was the p value? And was a test done to see if the sample size of 5000 represented the +35million population? Without any of this, the only conclusion that can be made is that only within the 5000 surveyed, half would have a hard time coming up with extra money.
JCommon stocks may be impacted but preferreds will motor on, churning out their 4-5% tax-efficient dividends. Learn a little before you type. — Garth
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Correct but not the whole idea. Check preferreds today almost down 1% with the TSE itself. They’re quite correlated with common bank stocks with the added pain of any BoC actions.
Technically the dividend is unaffected like you said however just like with rate cuts, it is not inconceivable to find them hammered down 15-30%. Who cares if the dividends are 4.5% when you’ve lost 30% equity that would take years & years to recover from, if ever.
Irrational fear. Buy prefs for yield and to ride rates high. You should worry more about crossing the road. — Garth
#145 Deplorable Teslians on 04.26.17 at 10:08 pm
135 Smoking Man on 04.26.17 at 9:39 pm
#111 Paul on 04.26.17 at 8:52 pm
#85 Smoking Man on 04.26.17 at 8:05 pm
Did you sell tonight?
….
No. No bidders.
Its only been on the mls for 5 days. Had about 20 people visit. Had the bid off tonight trying to beat the ontario budget. No takers.
Feed back was excellent but no is making a move till the ontario budget is released.
Buyers are quite smart these days.
My whole purpose for selling was to escape to usa. If Trump burns nafta then that’s not an option. I’ll de list.
I’ll be stuck here in Toronto working for 1/2 my rate thanks to Temporary foreign workers flood that T2 opened up.
Not the end of the world. Just less Seneca trips.
..
I thought you were a gazllionairre moving to Antigua.. what the hell do you have to work for.
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Ditto…
RE: #214 yorkville renter on 04.27.17 at 9:16 am
whats the long game for HCG? Can they stabilize? Is this just the long slow death?
That’s what I’m wondering. Their asset base appears to be mostly residential mortgages, supported by deposits which appear to be GICs and high interest savings accounts.
The problem I see with HCG is that if they get a “run on the bank” and their depositors start withdrawing and moving their money elsewhere, they will not necessarily be “saved” by the government, because they are not “too big to fail”. Usually what happens when you get bank runs, is the government institutes capital controls and then people can’t withdraw money from their bank anymore (look at Greece).
However governments only do this when the banks involved are “too big to fail” or their collapse would cause economic chaos. In the case of HCG, they are not really that big and they account for a minor percentage of the market.
My prediction is that they will be treated similar to Lehman Brothers or Bear Stearns, ie they will simply be allowed to either collapse, or support themselves. Likely there will be no assistance from any level of government.
How is this even possible?
As Bloomberg reports, the Healthcare of Ontario Pension Plan (HOOPP) is the lender behind Home Capital Group’s C$2 billion loan ($1.5 billion) to shore up liquidity, citing people familiar with the matter.
HOOPP President and Chief Executive Officer Jim Keohane sits on Home Capital’s board and is a shareholder.
http://www.zerohedge.com/news/2017-04-27/crashing-canadian-mortgage-lender-bailed-out-321000-retired-ontario-healthcare-worke
“Actually $600 million of roughly $2 billion in deposits has been removed in the last month. — Garth”
Garth regarding your response to comment #124, please correct me if I’m wrong but I have heard the Canadian business channels indicating that the $2 billion in deposits at HCG that you are referring to is their payable on demand high interest savings account money. As you have pointed out $600 million has already seen the exit by the end of March and probably much more due to the events in the past week. Apparently as of December 2016, they have an additional $13 Billion in GIC’s which mature over the next 5 years . Unless their deposits are taken over by another institution or the current panic is quelled then they will have to make large monthly payouts on these expiring GIC’s because it will be very hard to get renewals under their current status.
Crashing Canadian Mortgage Lender Bailed-Out By 321,000 Retired Ontario Healthcare Workers LOL!
#206 Joe
Canadian foreclosure laws are dissimilar to American ones. In the 1990s housing crash, prices declined 30% in the GTA, but distressed sale numbers barely moved.
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Isn’t this a problem on its own?
There was a 2nd Floor 1 bed condo near Keele/Sheppard listed at $295K last week. RE agent said it was overpriced by 30K. It sold Saturday for $332K. This is insane.
People in the condo “investment” market are going to have to take a really close look at this:
http://landlordrescue.ca/rental-fairness-act-how-bad-is-it/
This piece of legislation appears to specifically target mom and pop type single unit investor/landlords renting out condos, who cannot fit into an exemption for tearing down the building or renovating for another use (like those who own free standing rental units on privately owned land).
This seems to make the condo rental market into a rent controlled social housing project. It is scary. It may well create “condo ghettos” full of rented units being operated at a loss, by landlords who cannot sell and cannot obtain a rental amount that meets their monthly expenses.
If you own a condo in Toronto, right now, as an investment, really have a close look at this legislation. Might make sense to sell before it comes into effect.
#236 Conflict of interest? Out right FRAUD? on 04.27.17 at 12:11 pm
How is this even possible?
As Bloomberg reports, the Healthcare of Ontario Pension Plan (HOOPP) is the lender behind Home Capital Group’s C$2 billion loan ($1.5 billion) to shore up liquidity, citing people familiar with the matter.
HOOPP President and Chief Executive Officer Jim Keohane sits on Home Capital’s board and is a shareholder.
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Ooopsss… how come this news breaks from ZH?
THE BASIC SEQUENCE OF EVENTS OF THE HOUSING BUBBLE BOOM-BUST CYCLE:
* Policymakers dramatically lower mortgage lending standards with the intention of bloating house prices.
* Prices skyrocket, leaving gains in incomes far behind. The party is on.
* Home ownership levels surge, dramatic increases are seen in real estate investment, speculation, construction activity and HELOCs.
* Household debt-to-income levels skyrocket, creating a threat to the economy that only goes away after the inevitable severe price correction plays out and households deleverage.
* Risk is always ignored – instead of doing their jobs by presenting the facts (which includes the risks) to potential buyers, the real estate industry and the media often engage in spreading false FOMO, for their own self-serving reasons.
* Policymakers, bankers, economists, etc. deny the existence of a country-wide housing bubble, or only admit at the end that bubbles exist in certain cities, and only as a result of recent activity, which they are not responsible for in any way.
* The economy becomes more and more dependent on abnormally high levels of activity in housing, making it increasingly unhealthy. Major problems with the economy don’t become apparent until house prices stop rising.
* As affordability continues to sink, mortgage broker-assisted mortgage fraud rears its ugly head (in a lot of cases), allowing even more applicants with no money and low credit scores to get into mortgages at extremely bloated prices (as if the lax lending standards weren’t risky enough already).
* Policymakers ignore this mortgage fraud until the very last moment (it helps to push prices higher after all).
* Speculation increases dramatically as prices soar toward the peak and homes are treated as commodities.
* The bubble reaches its maximum size, then prices begin to fall. Each city has a different start date, but end up recording the biggest yearly price drops in the years that all cities experience falling prices together.
* Policymakers do everything they can to limit the depth of the price decline, but their efforts are futile as the powerful momentum of the correction is unstoppable. In most cases, prices fall back to the level where the bubble started (approximately).
* Liar loans and speculation played a big role in bloating prices. However, the net result of their role in a housing bubble is devastating for prices.
* For years the economy had been artificially boosted by the effects of rising house prices. That ends. The party ends.
* The multi-year price decline crushes the economy as consumer spending falls dramatically and jobs are lost (artificially inflated, abnormally high levels of activity in housing-related industries changes to abnormally low). Incomes often fall.
* As a result of job losses and the reversal of the wealth effect, consumer spending is hit hard (it accounts for two-thirds of the Canadian economy).
* A dramatically weakened economy leads to further drops in house prices.
* The price correction finally hits bottom, but not before overcorrecting (in most cases).
* The correction is much deeper than almost anyone could have imagined, leaving a big chunk of households in extremely poor financial condition.
* After denying the existence of a housing bubble for years before it finally peaked, policymakers, who had repeatedly calmed the herd by claiming they could engineer a soft landing, realize that it was impossible, but it’s too late.
* Policymakers claim that nobody could have seen it coming, when, of course, plenty of people did (the facts made the outcome obvious).
IT ISN’T DIFFERENT IN CANADA
A bust follows a boom 100% of the time.
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What a beautiful sequence. Like a symphony.
In the Province:
Horgan goes north.
Clark goes for Dim Sum in Burnaby.
This Sums it up nicely.
Unabashed Globalist, give me a break.
HOOPP, as in, if you are a member of this pension plan, you are now hoopped.
Jeebus. I shoulda known it was Ontario doin’ the rescuing. Betcha this is the Ontario government intervening, disguised as a pension plan.
Garth, if you are a Canuck, do the percentages change on the balanced portfolio? Should one consider US bonds instead of Canadian bonds, same for preferred shares?
why do doctors need to incorporate? ’cause their pension is not reliable. may not even be there when they retire.
#225 AK on 04.27.17 at 10:22 am
Ghost town Markham: Area plagued by vacant houses, crazy real estate market
Canadians, wake-up. All levels of our government have committed criminal negligence, and they have sold this country and our future out. What a shame!
Big news today, great writing. The Pension plan bailing out the lender for only 10%, I’ll be interested to see your take on this.
#7 Post was a good one. Its amazing how fast things can happen, all this talk of slow melt, and look how quick people panic and can pull out, how many more bail outs can there be? My Wifes pension at the City of calgary is already underfunded by something like 3 Billion, citing US real estate investments, add +9yrs onto retirement age and slash pension investment gains, I feel that retired health car works might be into the same boat.
Look forward to your next post, our lighthouse in the Storm, these are the days you’ve been waiting for.
#219 Vit on 04.27.17 at 9:44 am
If you think Toronto is alone in to crease RE appreciation you wrong . Its global . Look at Auckland NZ median price went from $562 in 2012 to $956 – 2016 so its doubled in lust 4 years and no economic foundation to support this , just foreign and domestic investors . So economic rules dont apply any more its all political now.
https://www.enz.org/house-prices-auckland.html
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Vit, you can’t just pick one of the other biggest housing bubble cities in the world. Jesus. Confirmation bias eh?
All your comments are basically useless, you are a hype machine.
225 AK
Thanks for this article, I have been saying this on this blog for the last couple of years, with Garth being concerned about my statements being racist. Yet LIVING in Unionville, daily walking my Grey Dog around Unionville chatting with folks as they get ready to sell, then afterwards knowing for a fact the house has been bought by off shore dollars, site unseen and no one shows up for months cause the seller was told purchaser couldn’t get a visa!!! Come on…it is NOT your average Canadian Family buying at these prices 2m$-2.5m$ for tract housing. Off shore money to buy and LIVE in, not a problem…but homes as commodities? There NEEDS to be a federal and provincial tax on foreign owned homes. Canada needs to get money from more than bleeding the 1%.
#247 ShawnG in TO on 04.27.17 at 2:16 pm
why do doctors need to incorporate? ’cause their pension is not reliable. may not even be there when they retire.
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What an ignorant post. The vast majority (over 95%) of physicians do not contribute to HOOPP as physicians are not salaried employees. But most nurses, technologists, and support employees are. As Garth often says, educate yourself before posting.
Trump’s saying he’s not walking away from NAFTA may mean that T2 is taking the right approach in negotiations.
It’s hard to say for sure and of course few here will admit it, but perhaps the best way to negotiate with a bully is to be friendly instead of just yelling back. Quietly and calmly point out what’s in it for him. You get more flies with honey…
Wow pure insanity, 10 million square feet of space available for rent in Calgary:
http://www.westerninvestor.com/news/alberta/calgary-awakens-to-a-10-million-square-foot-office-hangover-1.16706594
Trump’s saying he’s not walking away from NAFTA may mean that T2 is taking the right approach in negotiations
I agree. Taking off your pants and bending over is a good tactic
#253 CJBob on 04.27.17 at 3:29 pm
Trump’s saying he’s not walking away from NAFTA may mean that T2 is taking the right approach in negotiations.
It’s hard to say for sure and of course few here will admit it, but perhaps the best way to negotiate with a bully is to be friendly instead of just yelling back. Quietly and calmly point out what’s in it for him. You get more flies with honey…
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Perhaps the Trumpster should read up on how a NAFTA breakup would destabilize his own economy. Approximately 14 million people are directly employed due to NAFTA. Other articles other than this one point out as much as 2o million. Perhaps if Trump had attended a school of higher education such as Wharton he could read reports on how it all has worked. Oh snap, he did attend Wharton while escaping his Vietnam war duties. But then again he will call it fake news, that is the school where he learned to hone his unscrupulous business moves.
http://knowledge.wharton.upenn.edu/article/naftas-impact-u-s-economy-facts/
If a $1,000,000 house rises in value by 30% it’s worth $1,300,000. If it then falls by 30% it’s worth $910,000. Math’s hard, isn’t it? — Garth
In all fairness less than that after commissions.
Although unless you bought too much house, with too little down, and underestimated rates, not such a worry…..A prudent buyer shouldn’t need worry about a 30% RE drop, IMO. Assuming they stay in their house, the people I will feel sorry for are those that bought prudently, yet have to move for employment, etc, that are out of their control.
Having said that…if there previously were taxes on RE transactions for the 2nd+ property for people in the 1970’s, then dropped after X years….and we keep getting a RE boom/bust it seems every 20-25 years…would a small tax going forwards on 2nd+ properties balance this sector to avoid these cycles and swings in the market….sounds like a good thesis for an economics student.
S&P just cut Home Cap to Junk
Trump’s threat did what he wanted… create noise and make him appear magnanimous
Ontario Budget 2017;
http://news.nationalpost.com/news/canada/canadian-politics/ontario-budget-2017-read-the-full-text
“Wow pure insanity, 10 million square feet of space available for rent in Calgary:”
Yeah such a huge glut. But having been in many of those towers myself, and seen first-hand how they’re configured, the tenants certainly could reduce their density back to sane levels as the rents fall back down to Earth. So the glut might not be as bad as people think.
Like seriously, stuffing engineers into cube farms? Or you should see the Deloitte cube farm in the TD building. OMFG, I think every BComm/CA student would recoil in horror if they knew that they’d have to work under such conditions. Even the staff room fridge fully stocked with beer can’t make up for how inhumane that place is.
“THE BASIC SEQUENCE OF EVENTS OF THE HOUSING BUBBLE BOOM-BUST CYCLE:”
Overall, a very well written sequence of events. I’d add:
* At the apex of the bubble, the subprime credit gets chopped off. Realtor-quoted house prices keep rising after this cutoff, perhaps counterintuitively, but this is because the houses which were previously transacted in with subprime credit, particularly at the lower end, have simply become unavailable to buyers. This is the result not of individual houses appreciating, but rather of the sales mix shifting so that the Realtors are only transacting in the upper quartiles of the marketplace. Realtors claim that there is no housing bubble, and point to healthy LTVs, rising prices, and a low incidence of new subprime loans at this time.
(this is what I strongly believe is happening in Canada’s major cities at the moment, and certainly happened in the USA 2005-2008!).
@#226 Smartalox aka Goldielox
“Christy Clark is an unabashed globalist, but is more aware of BC’s unique opportunities on the global stage. It’s a 21st century attitude, and it suits me better. ”
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
Bwahahahahahahahaha
Christy Clark couldn’t SPELL “Globalist” let alone explain what that meant.
He entire schtick consists of smiling, blinking vapidly at the screen and blurting out ” Its about the kids!” as she avoids the horrible reality of the record amount of children dying on her watch.
“Its about JOBS!” as she claims responsibility for “creating” jobs from billions of dollars of taxpayer “legacy” projects ( Billions for LNG which is plummeting in price as more and more deposits of Nat gas are found everywhere).
Clark looked as desperate as she repeated the same hackneyd PR bullshite over and over and over.
The handlers trained her well.
If “globalism” means “willing to accept $50,000 per year in cash above and beyond her salary as Preem-ier”…..then yes….she’s a globalist,
Nice trade on HCG,easy money on a no brainer reversal.
Ontario budget out today,no one cares because money is free.I wonder if the Ontario Premier gets expensive hair cuts paid by the taxpayer just like Hollande?
Well, I always wonder why capitalism is not a criminals game in let’s say Scandinavian countries but it is in so called Anglo world. For North America I know, because all garbage from Europe found shelter here. We are talking about genetic code….
And by the way Clark can always make money. The ape looking Richard Bransson have a crush on here….
#265 Dan Your genetic code seem to be in less than top shape also since it seems you are taking a pretty good beating.
Merriam-Webster Adds ‘Sheeple’ to Dictionary and Lists Apple Users as Example
https://www.macrumors.com/2017/04/28/merriam-webster-adds-sheeple-to-dictionary/
Copyright?
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