http://www.kamloopsrealestateblog.com/canadas-subprime-mortgage-secret/ Sun, 05 Feb 2012 18:55:55 +0000 hourly 1 http://wordpress.org/?v=3.3.1 http://www.kamloopsrealestateblog.com/canadas-subprime-mortgage-secret/comment-page-1/#comment-2976 Marc Fri, 28 Jan 2011 22:11:14 +0000 http://www.kamloopsrealestateblog.com/?p=2189#comment-2976 Kirsten, you seem like a lovely lady, however please don`t misunderstand why bubbles form in the first place. All interest rates and cheap credit my dear. Has our own M3 (credit supply contracted yet like in the USA) It hasn`t due to the fact that when the first contraction came in 2007 Canadians screamed and whined and the government caved (which is what they do by the way - they are politicians you know) with 0.5% central bank policy lending policy and stimulus to the tune of 50 billion which turned into 125 billion as this is always what happens in government. They underestimate the losses. Now....over the next year or two you will see what will happen to Canadians and their indebtness. They now rival their US counter parts in Debt percentage to GDP. The CMHC is on the hook greater than Fanny Mae and Freddie Mac were before the bubble burst because of the decades of loose mortgage lending policy (you know the 5% DP or less). Here is the greatest factor you can account for. The average home in the USA is 175K and falling as wave 2 of the double dip in housing hits. Our Canadian market is still at around 325K average across Canada. The difference has always been around 25-30K between our two countries in average price of a home because of the weaker loonie however now that we are at parity do you think there is a bit of a disconnect here. No my dear this will not be a nice soft landing and if you believe your so called leaders who had a moral obligation to do the right thing in 2007 which was to keep the interest rates higher rather than follow the USA like a good 53rd state) then you will be seriously disillusioned when the bubble collapses. It will be fast and furious and not soft. Carney is now warning. So is Flaherty. Too little too late and you know if they are warning they follow the trend, they don`t lead it. All they want to be able to say is, `hey we told you`when the shit hits the fan. However don`t believe a word they say. It is their very loose monetary policy and a reliance on asset price increase and gambling models (like the OLG here in Ontario) that destroyed our country, no different than the USA. If you think I am wrong then you ignore inflationary impact of money over the past 30 years and the false demand stimulated by cheap credit or M3 expansion. This ignores why these collapses happpen in the first place....and states that bubbles are good for the economy. Manufacturing, indistrial output and expanding market share in these areas is the only type of good debt. The rest is bad and destroys an economy over time. It allows you to think you are far richer than you are and you believe it because of false demand. This in turn stimulates high risk which always ends badly for most. In high risk 95% lose. Where do you think this is going. Rememebr what I am saying here because I have been saying the same thing except in much more detail to our leaders since 2005. Oh by the way did you know Moartgages are considered assets on banks books. This works in infaltionary times but that model collpases and is destroyed in deflation. These huge gains turninto losses. THe banks in the US were the same before the bubble burst which would almost lead one to believe that bankers really don`t understand their own lending models do they. It is the buy and hold philosophy in the real estate market. You know if you hold you position long enough you`ll win. Except there is one problem. Markets don`t work like this. Sorry for the doom and gloom but reality is what it is and I will be shorting the subprime market. cheers, Marc Kirsten, you seem like a lovely lady, however please don`t misunderstand why bubbles form in the first place. All interest rates and cheap credit my dear. Has our own M3 (credit supply contracted yet like in the USA) It hasn`t due to the fact that when the first contraction came in 2007 Canadians screamed and whined and the government caved (which is what they do by the way – they are politicians you know) with 0.5% central bank policy lending policy and stimulus to the tune of 50 billion which turned into 125 billion as this is always what happens in government. They underestimate the losses. Now….over the next year or two you will see what will happen to Canadians and their indebtness. They now rival their US counter parts in Debt percentage to GDP. The CMHC is on the hook greater than Fanny Mae and Freddie Mac were before the bubble burst because of the decades of loose mortgage lending policy (you know the 5% DP or less). Here is the greatest factor you can account for. The average home in the USA is 175K and falling as wave 2 of the double dip in housing hits. Our Canadian market is still at around 325K average across Canada. The difference has always been around 25-30K between our two countries in average price of a home because of the weaker loonie however now that we are at parity do you think there is a bit of a disconnect here. No my dear this will not be a nice soft landing and if you believe your so called leaders who had a moral obligation to do the right thing in 2007 which was to keep the interest rates higher rather than follow the USA like a good 53rd state) then you will be seriously disillusioned when the bubble collapses. It will be fast and furious and not soft. Carney is now warning. So is Flaherty. Too little too late and you know if they are warning they follow the trend, they don`t lead it. All they want to be able to say is, `hey we told you`when the shit hits the fan. However don`t believe a word they say. It is their very loose monetary policy and a reliance on asset price increase and gambling models (like the OLG here in Ontario) that destroyed our country, no different than the USA. If you think I am wrong then you ignore inflationary impact of money over the past 30 years and the false demand stimulated by cheap credit or M3 expansion. This ignores why these collapses happpen in the first place….and states that bubbles are good for the economy. Manufacturing, indistrial output and expanding market share in these areas is the only type of good debt. The rest is bad and destroys an economy over time. It allows you to think you are far richer than you are and you believe it because of false demand. This in turn stimulates high risk which always ends badly for most. In high risk 95% lose. Where do you think this is going. Rememebr what I am saying here because I have been saying the same thing except in much more detail to our leaders since 2005. Oh by the way did you know Moartgages are considered assets on banks books. This works in infaltionary times but that model collpases and is destroyed in deflation. These huge gains turninto losses. THe banks in the US were the same before the bubble burst which would almost lead one to believe that bankers really don`t understand their own lending models do they. It is the buy and hold philosophy in the real estate market. You know if you hold you position long enough you`ll win. Except there is one problem. Markets don`t work like this.
Sorry for the doom and gloom but reality is what it is and I will be shorting the subprime market.
cheers,
Marc

]]> http://www.kamloopsrealestateblog.com/canadas-subprime-mortgage-secret/comment-page-1/#comment-596 There's No Secret Subprime Mortgage Problem In Canada | Kamloops Real Estate Blog | MLS | Listings | Information Sun, 29 Mar 2009 03:32:25 +0000 http://www.kamloopsrealestateblog.com/?p=2189#comment-596 [...] due to reduced lending standards over the past few years. To read the Globe and Mail article click here. What do you think about this “subprime problem” in Canada, is it just a fear-mongering [...] [...] due to reduced lending standards over the past few years. To read the Globe and Mail article click here. What do you think about this “subprime problem” in Canada, is it just a fear-mongering [...]

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