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March 24th, 2009 at 3:51 pm
Dave, then you’re not asking the question very well.
March 24th, 2009 at 3:51 pm
Raven:
I think a lot of the pessimists are experiencing ‘group think’. I mentioned that on Friday but most post vanished.
I find it interesting that some people find it OK to attack contrarians (e.g. scullboy above) but then demonstrate indignation when a contrarian responds in kind.
March 24th, 2009 at 3:45 pm
“I noticed that Dave is asking great questions but people are giving him the red arrow. Goes to show you here that the bears don’t want to listen to his questions and they’re very one-sided.”
Pessimists high-five themselves and each other, call folks with contrarian views trolls and vote them down. I’m not surprised if it’s just one or two folks signing off and on multiple times just to click the ‘red arrow’.
March 24th, 2009 at 3:36 pm
In the 81-82 recession, the Dow fell 24% from top to bottom. Vancouver’s real estate fell 33% from peak to trough. Unemployment in BC went from 6.7% almost doubled to 12.2%.
In this current 08-09 recession, the Dow fell 54% from its peak. I think it has already priced in a depression when it fell to 6500 and shot right back up when depression is off the table. Vancouver’s RE has fallen so far 15.3% from peak. Unemployment in BC went from 4.5% to 6.7%.
No two recessions are exactly alike, so it’s not very useful to compare the two. The 81-82 recession was triggered by monetary policy to reign in inflation, so as interest rates soar, the prices of RE plunged.
This recession is unprecedented, with the governments doing the opposite, dropping interest rates near zero. Certainly RE prices will fall due to increasing unemployment, but as you can see, BC’s unemployment ain’t that bad compared to 81-82. Even if it surges to 8% or the worst case scenario 10%, you’ll see some impact to RE prices, but the low interest will mitigate that. I think that’s why Vancouver’s RE hasn’t fallen as fast as it should have.
According to this chart: http://www.canadian-housing-pr....._chart.htm , we should be at 2005′s prices in April 2010. I think that’ll be the bottom.
March 24th, 2009 at 3:28 pm
Arwen:
Nice speech, but it doesn’t address my question.
March 24th, 2009 at 3:28 pm
I noticed that Dave is asking great questions but people are giving him the red arrow. Goes to show you here that the bears don’t want to listen to his questions and they’re very one-sided.
March 24th, 2009 at 3:27 pm
Ah, and Dave, who’s here tends to be people talking about the system. So. Like doctors speak medical jargon, lawyers speak legal, and software engineers worry about algorithms, people here are suggesting that IN REAL TERMS the homeowner who doesn’t break even is suffering an economic effect, which he or she may only observe through symptoms like having to spend more on credit to maintain the same standard of living, which in turn has a systemwide effect.
You may not use those terms, and that’s fine. You may only notice the symptoms. Or maybe you don’t have that particular symptom. That’s fine. Did you notice there was a bit of a churn in the markets?
March 24th, 2009 at 3:22 pm
Don asked me when our imaginary homeowner broke even on a ‘real dollar’ basis. I said, who cares? I have yet to hear an answer.
I care, and so do most people here.
And so does everybody else who is utterly baffled, gobsmacked, confused: everyone who thought they were making the right decisions to find their assets bleed their worth away, whether or not they account that way or use that language to describe what’s happening to their family’s income.
“Declining standard of living” pretty much sums it up. So does “Worldwide liquidity crisis”.
I’m a software engineer. People might not “care” to use my language to describe the malfunctions within a system, but they sure do care if the system overpromises and underdelivers. They care if all their data goes missing. They care very much about the fundamentals, even if they have neither the jargon nor the detailed understanding. You can tell how sound something is – in real terms – by its performance.
So. Who cares? Specifically, some care about the jargon, and others care about the performance.
March 24th, 2009 at 3:03 pm
ella:
It is hard to say, isn’t it. Most people avoid contemplating regret, and are rarely honest with themselves, let alone others. But most people muddle through and make the best of what they have and are either capable of forgiving themselves for good faith screw ups, impose hindsight justification, or avoid thinking about it entirely. Hey, I regret not buying in 2001. But whaddyagonnado, my head (as well as my wallet) was somewhere entirely different, and despite that non-decision, life is still good. People buying overpriced real estate will live through the flipside of my hindsight 2001 non-purchase decision, and most will live just fine in the home they chose, though they may be a bit sheepish if you ask what they paid.
Amyway, I don’t want to argue the point too hard, because I have already voted with my actions here (happy renter blah blah blah). But the essential point that started it was that there was only one “blanket recommendation”, which I didn’t agree with. Many people are quite content to do financially unwise things: drop out of life and travel, go to grad school, buy a sailboat, marry the wrong person, own a rec property, get cosmetic surgery, have kids, whatever. Yet the transaction (forgone wealth vs the benefit of travel or rhinoplasty or darling darling children) is perfectly acceptable to them. Same goes with buying overpriced real estate. Unwise, you bet. Acceptable, maybe. Happiness enhancing? Possibly.
Now if the question is — is buying now a recommended financial/wealth-building/profit maximising strategy? The answer is — are you nuts???
March 24th, 2009 at 2:55 pm
heres a good example of how governments play silly buggers with statistics and how easy it is for a desperate owner to grasp onto whatever number is easier to swallow. In the following example is the market up or down. It depends on which numbes appeal to you. The whores will take the positive ( even though it’s also down) to spin in a positive light, the realists will quickly see that they’re talking crap.
“Home prices post 6.3 pct annual decline in January
Email this Story
Mar 24, 10:45 AM (ET)
WASHINGTON (AP) – A government report says U.S. home prices fell 6.3 percent in January from the same month last year.
The Federal Housing Finance Agency says prices, on a seasonally adjusted basis, rose 1.7 percent from December to January.
Changes in the geographic mix of sales explained the unexpected monthly increase. Home sales included in January’s data were weighted toward areas that haven’t borne as much of the brunt of the housing recession, the agency says.
The government index is calculated using mortgage loans bought or guaranteed by federally controlled mortgage-finance companies Fannie Mae (FNM) (FNM) and Freddie Mac. (FRE) (FRE) It is down 9.6 percent from its peak in April 2007.”
March 24th, 2009 at 2:50 pm
Arwen:
Arwen, my question could have been more precise. Whilst I agree with much of your response, it doesn’t address the larger context of my actual question. What I meant to ask was… What is the purpose of correcting nominal dollars from the perspective of an individual homeowner?
Don asked me when our imaginary homeowner broke even on a ‘real dollar’ basis. I said, who cares? I have yet to hear an answer.
March 24th, 2009 at 2:45 pm
buzzkill:
You are misreading my posts and don’t know the data source. The data was taken from the UBC Sauder webpage which is based on a Housing Price Index for average homes in Vancouver. The data is sound as is my use of it.
Nobody said the market went down only 12% from the peak. I suggest you read the post again.
March 24th, 2009 at 2:43 pm
Arwen, you’re being nice to Dave by trying to explain it to him in a gentle way, but don’t bother. He’s been around here long enough and heard it over and over again.
I could spend the effort to prove the claims he’s making here false, like I usually do, but what’s the point?
Don’t feed the troll. He’s been proven wrong over and over again – no point arguing with him. He doesn’t get it and he never will.
March 24th, 2009 at 2:35 pm
Dave:
#23 , Sorry Dave but the REBGV simply doesn’t publish the raw data in any specific market segment and what you see from the REBGV stats are aggregate average figures.
You need to be more specific in evaluating real estate prices and values which is not what the REBGV does ( or BC Assesment for that matter even thogh thety have the ability to do so it is not thier mandate)and how it fools many unsophisticated members of the public who have no education in statistics or evaluation.
They seem to use the fact that most people don’t understand the market specifics to promote thier own silly nonsense and thier blather always falls apart whenever specifics are published by an independant body.
Anyone who states that real estate prices were only down 12% for a few months in the 80′s is drowning in kool aid.
March 24th, 2009 at 2:33 pm
Dave @31 – Over 20 years productivity in real dollars is up, as are mortgages, but wages in real dollars are constant.
The reason this matters is the big picture, the aggregate economic machine and how it runs.
Using that big picture, lots of people saw this particular market collapse happen.
It seemed pretty simple – if your growth comes from credit, you’re borrowing from tomorrow to fuel today.
At the most extreme, the nominal picture makes that equation obvious – 18% interest on retail credit per annum and wage increases at 1-2%, and someday the aggregate consumer is going to tap out and have less money to spend on stuff because they’re clearing debt. Those numbers are pretty clear. And there was a lot of handwaving about further increases in productivity and other invisible pink ponies that would save it all.
But to actually see the subtler picture, real dollars mean you’re actually seeing what’s happening.
Nominal always comes back to the individual, and it’s too easy who make wishes on your own wallet — or worse, assume that your particular financial scenario and how that works is what happening with the rest of society. We can keep looking at individuals (I’m fine, other people are idiots) but the big picture has been pretty clear for awhile.
Markets include everybody.
March 24th, 2009 at 2:26 pm
1) Really? I challenge you to ask some ‘real world’ people if they use inflation adjusted figures when looking at their salary or mortgage. I have a hunch, it’s a small minority.
2) How so? And please define, ‘amongst other things’.
3) See #2, backatcha
March 24th, 2009 at 2:26 pm
“Real Estate can only crash when interest rates are 18%”
-guy who never heard of Japan.
Here, all save you from making your next quote.
“It’s different here. Vancouver is limited by geography”
-guy who never heard of Japan or Tokyo
March 24th, 2009 at 2:15 pm
“I wish all those jokers who were hanging around bear blogs in 2005, patronizingly arguing until they were blue that there’s no way there were going to be defaults on mortgages while interest rates were so low — …I wish they’d come back and explain again“
If wishes were horses…
Those same people will twist things around again and say they always knew what was going to happen, or that no one knew what was going to happen, or whatever. They will never be “wrong”. On these boards, you can see that Raven likes to call herself “a happy bear”. I guess everyone likes to feel like they’re right. Everyone’s a clever bear these days. It’s quite fashionable.
You must have noticed your acquaintances giving you a little lecture about the crash? Telling you not to buy? It turns out, there’s very little satisfaction in actually being right
(The trick is not to care and just do what you think is right).
March 24th, 2009 at 2:09 pm
1)I think you meant people LIKE YOU don’t care about inflation-adjusted figures, and it is for this and I’m sure many other reasons that you cannot complete the most basic financial analysis.
2)Declining standard of living amongst other issues
3)See #2
March 24th, 2009 at 2:02 pm
Don Lapre:
1) In the real world, people use nominal dollars. People get paid in nominal dollars and take out mortgages in nominal dollars. That’s meaningful. People don’t care about imaginary numbers made up by an arbitrary basket of goods.
2) And so?
3) And so?
What is the purpose of correcting nominal dollars into real dollars?
March 24th, 2009 at 1:48 pm
27-
1)People concerned with meaningful fundamental analysis who want apples to apples comparisons, not misleading figures.
2)Yes in adjusted terms
3)Yes in adjusted terms
March 24th, 2009 at 1:38 pm
Raven:
I also like the use of the word ‘just’ to imply 5% was somehow a conservative expectation.
March 24th, 2009 at 1:31 pm
“5%? Really? Do you really think unemployment is going to go up by 5%? Do you really think that all 5% are homeowners as opposed to renters? Do you really think that 100% of that 5% still have mortgages, don’t have savings and/or don’t have a spouse with an income?”
That number is arbitrary, pulled out from the air with no rationale behind. 5% just sounded sexy.
March 24th, 2009 at 1:29 pm
Don Lapre:
Who cares?
Did their salaries go down because of inflation?
Did their mortgages go higher because of inflation?
March 24th, 2009 at 1:18 pm
17- And when did said purchasers break even in inflation-adjusted terms?
March 24th, 2009 at 1:17 pm
Have you taken your med today yet, Dave? Are you even living in BC like the rest of us? With unemployment going up like this in BC, we will definitely see big tix item going down in price (like house and car) simply because ppl just cannot afford it. Just wait till the national unemployment rate hit 10% comes this Summer, BC will be around 9% and VAN will be around 8%. Olympics will not save us except for a couple of months.
March 24th, 2009 at 1:17 pm
And Scullboy’s use of the term shows what an arxehole he is.
His use of phonetics suggests he is also a racist prick.
March 24th, 2009 at 1:10 pm
buzzkill:
Prices collapsed in 1981 and had lost an average of 54% by 1985.
No they didn’t. The market lost 33% peak to trough. Keep in mind that the peak was one hell of a run-up. Further, the market bottom price of $150k was past just 2 quarters prior to the peak. In other words, most buyers never experienced a nominal loss.
Let’s look at that time again in relation to average Vancouver prices:
1975 – $75k (never to be seen again)
1983 – $150k (never to be seen again)
1991 – $300k (never to be seen again)
2006 – $600k (never to be seen again?)
If we could play the 80’s out again, I would take that in a second. I would even buy one year past the peak. Wouldn’t you? If not, why so greedy?
March 24th, 2009 at 1:08 pm
“what is a “window licker””
It’s a nasty term for mentally handicapped people.
March 24th, 2009 at 1:07 pm
” I also say this as someone who knows a number of people who have bought in the past few years, and you know what? They are all genuinely happy with their decisions. Tell them they shouldn’t have bought.”
I don’t know if I agree with what you’re saying. It is very rare for people to admit that they are sorry they bought. It’s embarrassing. If I was in their shoes, I would tell people the same thing. You only talk to very close friends and family about something like that. I probably wouldn’t tell a friend who had told me that it was a bad decision. But if someone purchased next door from me, and paid $150,000, I wouldn’t feel good about it.
I also think it depends when they bought. Some of my in-laws bought 2 years ago, and said they were looking at the long-term. But now they do have some regrets, because they bought at the peak, and so they are the first to lose value in their homes. People I know who bought 3 or 4 years ago are still very confident that their homes’ retaining at least the value of purchase price. It is much easier to be philosophical if you don’t think you’ve actually lost anything.
I have a friend who I counselled not to buy a few years ago, and she did. She admitted she was avoiding me for fear I would say “I told you so” (I wouldn’t). But outwardly, and day-to-day she is happy with her decision.
The only time I tell people that it’s more about their happiness, is if they already bought. And I only say it to be nice and to make them feel good. But I actually think that wasting tens of thousands of dollars due to impatience is dumb. Think how many hours a person has to sacrifice to earn that, after taxes.
March 24th, 2009 at 12:55 pm
A point of clarification: what is a “window licker”?
March 24th, 2009 at 12:55 pm
“Look, if I hated my job, and someone offered me my dream job even though it paid substantially less than what I make now, who would recommend not taking the dream job just because it is financially not the wisest choice?”
Your creditors
March 24th, 2009 at 12:54 pm
“Come back when the nominal % decline during this bust exceeds that of the early 80’s – and I’m now sure it will happen”
Hey Patriotz, I read this blog often and respect your opinion. Percentage-wise, if we’re now down 15%, where do you think the bottom will be this time?
I’ve also been hearing a lot about hyperinflation to come in the next few years, and if that is true, it won’t be a good idea to be sitting on a pile of devaluing cash. Typically real estate is a good investment during hyperinflation, but does this make sense in the Vancouver market? Will there be a point sometime in the next few years where we reach an axis between falling real estate prices and rising inflation where it makes sense to turn that cash into a real estate asset?
March 24th, 2009 at 12:52 pm
patriotz:
You’re sure? I’m not. I’m pretty optimistic about BC pulling through this recession just fine.
Back to 1982… If you bought a home JUST three months before the peak, you would only lose 12% by the time the market bottomed. Further, you would have been even in price in less than one year from that bottom.
March 24th, 2009 at 12:51 pm
Dave, I really doubt we’re anywhere near a trough, which in fact would indicate a bottom. The fact is prices continue to deteriorate as negative economic factors slowly filter through the tightly held denial and propaganda of government, industry and a whoring media.
This is certainly not 1982, I wasn’t in school, I got to live through that mess in real time as an adult. Prices collapsed in 1981 and had lost an average of 54% by 1985. It was only apparent to ‘main street’ that prices had troughed and the recession was waning in late 1986 and 87. I would say the most of the gloom had lifted in 87 but there were still lots of people who took much longer to recover. Some never did.
If this is going to be a repeat of every other recession in the last 70 years then we haven’t even started to see the worst. By the numbers it will get much worse as was the case outlined by Statistics Canada this morning in the National press conferance they held in Ottawa.
Unemployment is only ‘officially’ stated at 7.7%. we all know that it is much higher because the hedonic measurements such as seasonal adjustments, revisions, underemployment, bankruptcy, self employment, new part time and youth part time season employment are not factored in to the headline numbers. The government of Canada is forecasting 10++% by 4th Q 09 unemployment as is the forecast with most major economic forecasts.
It will be undoubtedly higher as it was in the 1980′s when huge numbers of people stopped being officially unemployed when they no longer able to collect benefits. What we saw in the 80′s was a swelling of the welfare rolls. People on welfare are not counted as unemployed because they are off the EI radar.
Based on the economic forecasts and an eye on the historical behaviour of all recessions ( which most agree that this one will be one of the worst) then we can make an educated suggestion to avoid the real estate market for at least anothe few years as we will most likely see much lower prices after the bubble euphoria is swept away in it’s entirety. The current optimism is misplaced and smack s of desperation.
March 24th, 2009 at 12:51 pm
You know what I wish? I wish all those jokers who were hanging around bear blogs in 2005, patronizingly arguing until they were blue that there’s no way there were going to be defaults on mortgages while interest rates were so low — “..but in the 80s there were rates of 18%. You guys just don’t remember that, you don’t GET it…”
I wish they’d come back and explain again how with low enough interest rates, a trillion dollar price tag is affordable housing and good value to boot, which is why no one at all is anywhere close to defaulting, and there are first time buyers flooding the streets….
After hearing yet another round of hoocouldanode on the news, I’m getting sort of sick of it.
March 24th, 2009 at 12:47 pm
Dave, you’re a bit of a window licker, aren’t you?
Even if unemployment rose by 2% and half of them were home owners, that would mean a lot of over leveraged, unemployed individuals. Spousal help? How many of those laid off people were one half of “I buy three my huzzba buy three” over leveraged Donald Trump wannabes?
How many “motivated sellers” does it take to turn a town market into a tailspin? My guess is only a few hundred, if that. If sales are flat and a couple of desperate, paniced people slash their prices because they *must*, that would be the pebbles that strt the avalanche.
Have you been paying attention at all? In the last few years the average savings in BC households was about -8%.
Very shortly we’re going to have an entire city full of people desperate to cash their phantom real estate wealth back into liquidity. They’re going to discover the painful gap between “paper fortunes” and “money in the bank”.
We have a province full of greater fools. The tide’s going out and we’ll soon see who has been swimming naked. Pick your cliche then get the popcorn, the show is about to begin.
March 24th, 2009 at 12:43 pm
“You can’t make a blanket recommendation for everybody to not enter the market.”
Agree completely. At the end of the day, money is just money. An exchange of economic productivity for things. If you want the home-thing, and are willing to pay, and have your eyes wide open about the risks of a) paying more in debt servicing a few years and b) having the home-thing fall in value, possibly substantially, over the short to mid term (and, gasp, possibly even long term), then who is anyone to say you shouldn’t buy.
On the other hand, if you are buying for the sake of buying because you think buying is always a good investment, or you HAVE TO BUY or end up as a non-person renter type adrift in an existential hell — well, then that’s a crazy-ass mistake.
Look, if I hated my job, and someone offered me my dream job even though it paid substantially less than what I make now, who would recommend not taking the dream job just because it is financially not the wisest choice?
I say this as someone who happily rents and thinks real estate is a really really really crappy investment right now. I also say this as someone who knows a number of people who have bought in the past few years, and you know what? They are all genuinely happy with their decisions. Tell them they shouldn’t have bought.
All that realtor twaddle about “buy if you can afford it and don’t foresee selling for a long time” is actually OK advice — the problem is it tends to be acted on by the wrong people.
March 24th, 2009 at 12:41 pm
I don’t know if this has already been posted, but it’s an interesting article on the troubles facing Miami’s “condo king”.
http://tinyurl.com/cbanux
Good times…
March 24th, 2009 at 12:31 pm
Dave:
This isn’t 1982.
Really now? We are 10 months past the market top and prices are already down 15%. That decline is just as fast as the decline from the market top in 1981, and unemployment in BC is just starting to take off.
Come back when the nominal % decline during this bust exceeds that of the early 80′s – and I’m now sure it will happen – and tell us why “this time it’s different”.
March 24th, 2009 at 12:22 pm
Really? You are willing to make a blanket statement like that? You think that nobody should enter the market.
This isn’t 1982. Prices skyrocketed in the prior years and the crash only gave up about a year of gains. If this is 1982, then we have already passed the period of time from peak to trough.
5%? Really? Do you really think unemployment is going to go up by 5%? Do you really think that all 5% are homeowners as opposed to renters? Do you really think that 100% of that 5% still have mortgages, don’t have savings and/or don’t have a spouse with an income?
I was in school in 1982. Apparently, you weren’t paying attention in math.
March 24th, 2009 at 12:12 pm
Dave:
You can’t make a blanket recommendation for everybody to not enter the market.
Well yes you can Dave. If just 5% of homeowners lose their jobs and have to sell their houses or get foreclosed, what will that do to prices?
Where were you in ’82?
March 24th, 2009 at 12:08 pm
jigisup:
If your job is on shaky ground, then holding off on buying real estate is good advice. However, most people do just fine in recessions and are not at risk of losing their jobs. You can’t make a blanket recommendation for everybody to not enter the market. That’s just silly.
March 24th, 2009 at 11:55 am
OTTAWA — The number of people receiving employment insurance benefits rose to 567,000 in January, a 21.3% jump from the year before.
British Columbia saw the biggest percentage increase, rising 47.7% from last year, followed by Alberta, 46%, and Ontario 43%, Statistics Canada said Tuesday. But Ontario, where the manufacturing sector experienced heavy layoffs, suffered the biggest number increase with claims rising by 54,570 from the year before.
“In recent months, labour market conditions in Canada have deteriorated significantly,” the agency said in its report. “Through the early part of 2008, employment growth weakened, only to fall sharply later that year and into 2009, causing a spike in the unemployment rate. By February 2009, the unemployment rate hit 7.7%, up almost two percentage points from a record low at the start of 2008.”
http://www.financialpost.com/story.html?id=1422130
March 24th, 2009 at 11:54 am
Don Lapre:
It’s not a bailout of the banks. The mortgages were insured by CMHC at the time they were made at the expense of the borrower. CMHC has a contractual obligation to the banks to guarantee the principal of the mortgages. If CMHC wants to sponsor a program to avert defaults, they are not doing the banks a favour. It’s because it’s in their own interest.
Now of course there is a case to be made that CMHC’s underwriting was far too lax (0/40 and all that), but that isn’t the banks’ fault, that’s the government’s fault.
Now if what you mean is a bailout of CMHC by the GoC in the case it exhausts its reserves, well that’s another issue. That would have to be authorized by Parliament, and I can’t think of anything that Harper would rather not do – it would bring lie to his claims that “it’s different here” and that the Cons have been responsible economic managers. Much more likely I think that CMHC would just quietly borrow money on the bond market, as it has already been doing for a long time. CMHC has a Crown guarantee and they can borrow for the same rates as the GoC itself – i.e. very cheaply.
March 24th, 2009 at 11:50 am
Every once in a while a gem of truth slips out of the labyrinth of stas can
“The number of Canadians receiving employment insurance benefits was up 22.8 per cent in January from the record low recorded in February, 2008, and consumer bankruptcies were up 21.7 per cent year over year in January.
“The source of it is the same: the poor labour market and economic conditions in Canada,” Mr. Mulraine said in an interview.
“As people get displaced from their jobs, they find it increasingly difficult to pay their bills.”
Statistics Canada’s employment insurance report “underscores the growing distresses in the Canadian labour market and suggests that not only is the pace of job losses in Canada continuing to be very brisk, but that displaced workers are finding it increasingly difficult to find new jobs,” he said in a research note.
“And in the coming months, with the Canadian economy expected to weaken further we should see this indicator edge even higher as businesses continue to cut back on the size of their work force,” Mr. Mulraine said.”
No matter what the real estate whores on CKNW, Corus Entertainment, REBGV, CREA, Rennie marketing etc etc, the big picture is screaming at you ” DON”T DO IT !!!!!!”. The CDN buisness climate is only beginning to slide into recession and it’s going to get much worse as confirmed by the ever loquacious Statistics Canada.
March 24th, 2009 at 11:05 am
We’re slowly inching towards the inevitable CMHC bailout….
March 24th, 2009 at 10:56 am
I think this article is a classic case of a wolf in sheep’s clothing. The banks are losing money on variable rate loans, especially those below prime. Yes, they borrow from the BOC at lower rates but the banks have other costs too.
They are doing this to try and get people to lock into a rate, that way they can CHMC stamp it and sell it off the BOC. This isn’t about saving homeowners, this is the govt and the banks slowly doing what Bernanke did with Fannie Mae/Freddie Mac in a much quieter way.
If the bank can write off a payment, lock in the rate, then carve the loan off their books, it’s a huge win for the banks. For the homeowners it’s a shot of adrenaline to save their life. If they go back to smoking, drinking and 5000 calories a day they will die quickly. If they get their crap together, they just might make it.
I won’t be outraged until they suggest writing off principal with the government supplementing the write-off.
March 24th, 2009 at 10:44 am
Yet one more thing that, while happening in the US, was never, never going to happen here.
March 24th, 2009 at 10:42 am
The government may want to suggest that the cure for my ‘mental problem’ and lack of confidence is to get out and be more proactive, but I’m not buying that either.
a) Bankruptcies continue to climb, up 21% in last count.
b) macro economic scenario globally continues to deteriorate, bad news for Canadian suppliers of goods and services.
c) Unemployment continues to accelerate , with BC now leading the number of new EI claims nationally.
d) Housing prices continue to fall as forced sales and auction type sales become the norm.
e) The Mounties get thier man (if a lieing sleazebag is what your after) in Constable Robinson , the fourth cop to admit he’s been lying to the Braidwood Inquiry. He’s assigned to the Olympic Security detail, stay off the streets or risk being mowed down by this drunken murderous idiot.