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Bloomberg also pulled the plug on CDOR and 3M OIS Swap about six months ago. Let's face it, our government is a control freak on data disclosure. You can also get daily quotes here along with many other useful rates.
And what was Genworth's insurance-in-force for Q3 again?
Household debt is a small variable in the BoC's policy decisions. Primary mandate is exchange stability. Today's announcement is a photo op like every other.
Until delinquent payments overflows and they can't bailout out homeowners anymore. Volatility is what poses the greatest risk.
Okie dokie VJ. But when CMHC and Genworth's insurance cap is breached and banks wind down loans (as they have been), just remember this post.
Banks are risk adverse? Here read a Noble prize written working paper on real estate, governments and banks. "Bankruptcy for profit occurs most commonly when a government guarantees a firm's debt obligations" Hmmm that sounds familiar... Nothing is different here. It's the same fraudulent scheme again and again.
The lack of disclosure in Canada is absolutely poor compared to other G7 countries, and without full disclosure, people will draw their own conclusions whether it's right or wrong. Before anyone defends CMHC, they should ask why hasn't CMHC released hard numbers or a comprehensive report comparing Emili to on-site inspections? Or providing other crucial information that is abundantly available in other developing nations? i.e. foreclosures, second mortgages, foreign investment, HELOCs, etc. Identifying and Deflating Asset Bubbles by Hugh C. Beck, a member of the SEC: "A bubble inflates as public information about an asset class diverges from private information possessed by the public information’s sources. Accordingly, the key to deflating a bubble is to gather relevant private information, compare it to the corresponding public data, and then publish the comparison for all market participants to see." As I stated in an earlier post, there is already a blueprint for how this crisis will unfold. Nothing is different about our housing bubble compared to any other. You can debate right or wrong facts all you want — it's irrelevant — it is however, dependent on the disclosure of private and institutional information for the public to conclude it's views on.
According to CMHC's home purchase report, the average market share for first-time buyers during 2010-12 is 35%; CAAMP's survey is weighted 56% of first-time buyers, which suggests the results were skewed to a self-serving opinion.
The only people who are 'warped' on this issue are those who believe the government could continue subsidizing loans without other economic consequences. If Ottawa hadn't tighten mortgage rules, CMHC and Genworth's insurance limit would have been breached by the middle of next year. That's a big problem for our banks. Yes, people will lose their equity, jobs and homes, because that's what happens to overly-subsidized markets that must eventually return to private market funding. We already have many blueprints for how this unfolds and blaming those who warned of unsustainable schemes has no part in it.
Anti-real estate propaganda by far. There is much more at stake here then falling home prices. Very soon you will know why.
Is this good news or CAAMP's fear mongering tactic?
My bad, just read Moody's report. No CMHC coverage. Surprisingly. CMHC and Genworth are approaching their limit anyways.
A large portion was CMHC insured and this issue was under a contractual covered bond framework. Good luck to RBC trying maintain overcollateralization when assets are denominated in CAD while home prices are falling.
They couldn't loosen slowly because the q/q accumulation rate of total insurance-in-force would have breached the limit by mid-late 2013. F wasn't not going to increase the debt limit and risk Canada's credit rating just to keep the house of cards from falling. It's game over. Deal with it. You want to borrow and lend money? Go get it in the open market and pay what the market prices you at. Keep the taxpayers out it.
My point is that a proposal is most likely to be arranged between the 15 day of notice and 90 day arrears, therefore is does not show in CBA stats. Speaking of consumer proposals (CP), just released by OBA. Alberta CP up 16.4% y/y in June. British Columbia CP up 8.4% y/y in June. Ontario CP down 4.4% y/y in June. Canada CP up 3.1% y/y in June. Hiding bad statistics has been around for years too Jim.
Ahh yes, "work-outs", otherwise known as consumer proposals (debt restructuring); so we can kick CBA's mortgage in arrears stats to the curb as it only indicates an overflow of delinquencies not 'worked-out'.
It can be used to monitor a particular market, but nowhere near an entire market. A 1.5% vacancy rate for Toronto is a fallacy and will rise as fast as it did for Vancouver in Q1. Speculative markets reverse extremely faster then most assume.
The key punch line from CMHC's rental survey. "The survey targets only privately initiated structures with at least three rental units, which have been on the market for at least three months."
No, the free market knows best, and just for the record I would have preferred no rules imposed. But can we really have a free market? Would the government allow a large bank or CMHC to fail should the market turn badly? No. Solutions in practical terms and understanding the market is non-linear is what parses industry from government thinking.
Stakeholders aren't even discussing fundamental problems, or even offering solutions for that matter. What do you expect the government to do? Wait? I'm always amused how brokers/borrowers don't evaluate government balance sheets, as would a pension fund or large institution who intends to lend long-term. We've been lucky the spotlight has been on Europe for the time being; as 'time' is something the government is learning not to take advantage of in a financial market that goes from zero-to-sixty in no time. If the housing industry, or even the general public don't understand the fundamental issues, then the government has every right to enact preemptive measures to prevent what could be an even worse disaster in the future. If it isn't being discussed, then the latest round of criticism is nothing more then a cry for taking away the punchbowl. Tell me: Whose job was it to warn OREA about those futures assignment contracts it created, or warning developers about selling new homes on deposit structures? These are some of the flaws that had them worried about the state of the market.
@Robert McLister You have yet to identify F and OSFI's concern, or, you're just ignoring it. Hint#1: Who's funding lenders and how will they return to private capital rates without going bankrupt? Hint#2: The BoC and all domestic banks have purchased and now hold 40% of all Canadian government/provincial bonds. Do we change course? Or do we set sail to become like Europe?
And while the BoC and every quant freak economist formulates useless micro-equations to forecast the decision of every small business and corporate CEO, here is one useful statistic (one that matters) of Toronto's employment rate. There is nothing central banks can do at this point (without losing their credibility) that can save the economy, when it is 'less' central bank and government intervention that restores economic equilibrium. One day the broker community will realize they should have been encouraging higher rates for the sake of their own jobs. I guess they'll never know until major problems materialize. Then it's too late.
You don't need luck at this point, but you do need a BoC 'get out of jail free card.'
For the blog poster under the name P.
Right, and you think Ben Tal is just going to come out and say payments are not affordable when the bank he works for is holding re assets and currently increasing their sales force. He knows damn well that when adjusting for inflation and accounting for interest on savings, mortgage payments have 'increased' over the past 20-30 years, not decreased.