I read a couple of things worth reading over at Garth Turner's blog, which I have redacted below. (some of the commentary is good too - if you can get past the masturbation)
Whatever one might think of Turner the politician, he does know a fair bit about finances.
In any case, don’t let the media fool you. Stock market stories are not about stocks. They’re about the economy. Markets, you see, are harbingers. People who trade on them spend a lot of time betting heavily on what comes next. Right now, they’re worried.This was worth quoting too;
The world economy, dragged down by the States, is slowing. America has never been so in debt, or so long at war, or with such a weak currency. And on a day when realtors in Canada were trumpeting the greatest sales volume ever for residential homes...far too many buyers here could be in as much trouble as a couple of million of Americans who losing their houses. We...categorize the subprime mess as giving loans to people who did not deserve them. But...we are busy selling $400,000 homes to young couples with between 1.5%... and 5% down, and with 40-year mortgages that turn a $300,000 debt into one of $884,000 at current rates.
This is unwise. It’s gambling. Canadian banks have been handing out mortgage loans like candy... offering a zero-down option, asking them to come in with enough money only for closing costs.
No wonder Bay Street’s worried. Nobody in the world of financial securities would extend 98.5% leverage, and yet we are soothing your homebuyers into precisely that. Should the US slowdown affect our economy, which it will, buying an expensive house with no money might not look like such a great idea.
Like the North Star, we are a bright light for others to follow. Canada has emerged as a shining example in an economic universe of rapid change and uncertainty. We are leading the way with our tax cuts, our debt reduction and our focused and responsible spending. Our fundamentals are strong and we are well positioned to weather any sudden economic storms.The "experts don't know WTF is going on. You and I know better than the Federal Finance Minister. That's what freaks me out...
- Jim Flaherty, budget speech, October 30, 2007
“There’s reason for continuing concern about the weakening in the U.S. economy. The subprime reality … continues,” he said. “It’s broader and deeper than originally predicted and it’s reason for caution as we look forward.”
- Jim Flaherty, interviewed in National Post, January 2, 2008
In the sixty-odd days between those two comments, what happened?
12 comments:
Flaherty just got tired of rowing up river. Nothing serious. :<(
As for 0 down mortgages. I've always told these buyers that they are nuts. Get a cold, lose your job, kiss your ass goodby.
yah gotta luv it!
“In the sixty-odd days between those two comments, what happened?”
As a FM, he has to maintain calm and order.
It didn’t take him and the PM long to alert us.
Economic slowdown likely, PM says
Globe and Mail-December 20, 2007
Remember Greenspan’s 1-line statements during his years as Chairman of US Federal Reserve, and the stark difference of the freewheeling comments after he left his post?
In the course of time, how many experts resorted to this psychic to control the masses?
“In a report prepared during the war by the United States Office of Strategic Services in describing Hitler's psychological profile:
His primary rules were: never allow the public to cool off; never admit a fault or wrong; never concede that there may be some good in your enemy; never leave room for alternatives; never accept blame; concentrate on one enemy at a time and blame him for everything that goes wrong; people will believe a big lie sooner than a little one; and if you repeat it frequently enough people will sooner or later believe it.”
If you want to find a good picture for this blog entry look here
More bad news down south.
"# The Commerce Department announced that housing starts fell 14 percent, month-over-month, in December. That's an incredible 38.2 percent lower than one year ago. And it will get worse. Building permits also fell sharply, down 8.1 percent month-over-month.
# Merrill Lynch announced a $10 billion dollar loss for the fourth quarter amid writedowns of $14.6 billion dollars of bad debt. "
From salon.com's how the world works blog.
Public statements are made in order to influence the markets, and not to inform the general public of the speakers opinions about those markets.
I really hope the downturn coming up in Canadian Real Estate market takes out CMHC. CMHC should have never existed in the first place. No one with less than 20% down payment should every buy a home in the first place. Let's see how CMHC could pay out insurance claims when half their loans default.
Actually I'd rather see CMHC return to it's original state. Their mandate is to help Canadians buy good quality affordable housing. Many years ago they did all of the home inspections (before leaky condos) and they provided consumer advice etc. Insurance was only a small part of their scope.
Now it's all about helping the homebuilders and realtors out and publishing misleading reports.
drachen,
I rather have BC Housing help those who needs housing help. But not by giving money, rather building more projects. I believe anyone with less than 20% down payment should not buy a place. They are just taking on too much risk.
They can't stop the recession coming, except to cut rates and jumpstart more boondoggle projects.
http://tinyurl.com/yslp8x
"WASHINGTON — Ben S. Bernanke, has told lawmakers that he can support tax cuts or spending measures to stimulate the economy, even if they increase the budget deficit, provided the measures are quick and temporary."
Watching Paulson (Wall St), Bernanke (Central Bank) and Bush (politician) echoing one another made me giggle
If the straight talking GT had shut up, he would still be in the central stage. Oh well, what do I know? They'd like to think that we'd the IQs of 6 year olds.
for someone taking potshots at Garth all the time you sure feature a lot of his thoughts here. I suppose you must like the lower-gst, now-i-taketh and later-giveth-back income tax cuts, popping the income trust bubble and treating canadian-owned businesses like a fallen tree to hollow out, while pissing on some of our best trading partners (when not pissing on some premiers and provinces) CON-men now running this country.
I guess if you're looking to benefit from some temporary financial doom, so-called economist and PM Harper is the man you want holding the keys...
burlivespipe (and I do remember Burle Ives, I just don't remember his pipe) -
Actually, I am not taking pot-shots at Garth. I do think he's a little...ummm...peevish at times, but I respect him on many levels.
The Photoshops are not mine, I just appreciate good Photoshops, and humour.
Harper? My wife said to me not an hour ago: didn't you call Harper The Anti-Christ ten years ago? To which I replied: No, he is a puppet of The Anti-Christ
I am a member of no party, and never will be. I follow no doctrine, and never will.
I do not favour the GST cut - I rail at it. I do not favour income trust treatments either. I do appreciate a functioning medical treatment situation, and respect and care of the elderly.
If you have somehow taken the view that I am some kind of neo-con prick, you have not been following me for long. Fidel is "my hero". I like Chavez too, but he is such a bitch... Salvadore Allende? Now we are talking.
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