Comments on: Banker Bubble-talk Bundle

By: Aston Lau – How the Canadian housing market doesn’t make sense

Aston Lau – How the Canadian housing market doesn’t make sense — Tue, 27 Apr 2010 00:24:18 +0000

[...] A roundup of bubble comments that the major banks have been making lately. The prevailing sentiment is that a bubble is forming or has already formed, and come mid-2010 when the Bank of Canada raises rates, we might see the start of a shake-up in the real estate market. Bad news like this is rarely seen in the mainstream media, so when so many noted economists publicly voice this opinion, it’s a good idea to perk up and listen. [...]

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By: bestplaceonmeth

bestplaceonmeth — Sun, 06 Dec 2009 00:13:04 +0000

@stagnate: What land constraints? There is plenty of land in the Lower Mainland.

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By: “No Brainer… or Madness?” « Vancouver Real Estate Anecdote Archive

Sat, 05 Dec 2009 23:45:59 +0000

[...] 5 December 2009 · Leave a Comment This from realtor Maggie Chandler’s blog 1 Dec 2009 (hat-tip to Starving Artist at vancouvercondo.info)- [...]

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By: realpaul

realpaul — Fri, 04 Dec 2009 04:00:59 +0000

#11 Patriotz, I meant that foriegn investors 'can't' buy CDN bonds at .40% compared to the 3.75% they can get from the Oz bonds. Its a case of 'they won't' buy CDN bonds because the CDN government is buying up all its own debt to keep from having to go into the open market. Sorry for the confusion. PS Garth has done again on his latest posting, suggested reading for sure. #32 T192, 1)Debt obligations are a liability. Its costing Canadians plenty to utilize the 800 billion used to backstop the CMHC debt orgy as debt instead of capitalizng into other areas of the economy. Thats a philisophical argument though and I am not on the side of socialism in the marketplace. It always ends badly for the taxpayer. 2)The failure stats are not public information so we don't really know what the cost to Canada is. We will find out eventually through FOI or the Auditor general but both systems are fraught with delay. Guaranteed, this massive debt overhang is far from 'free'.

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By: realpaul

realpaul — Thu, 03 Dec 2009 22:07:44 +0000

So, you all remember when Vanoc gave the DTES crack whores and all other prostitutes a flyer about how to deal with Olympic vistors. I think it said something like "Be nice and don't say anything bad about Vancouver'.

Well obviously Vanoc is saying to the Olympic committee "hey guys, we've greased up the pig, now get out there" with the purchase of 100,000 condoms to be distributed amognst the Olympic organizers. These cracked up yahoos will be cruising the streets on your dime!!!!

Is this also why Campbell decided to close all the elementary schools? So that a few stray kiddies might get dragged in to the bushes by a 'visitor'. Of course he'd have diplomatic immunity and get away with it. This is our gift to the world. Abundant whores and poverty stricken single moms desperate enough to have to streetwalk. Don't you feel proud to be a Canadian.

http://www.vancouversun.com/Swifter+higher+strong…

A very astute reprter in Aussie during the Sydney games picked out a group of 'visiting Olympic dignitaries' and followed them straight from the airport to see where they went. They all went straight into the prostitution area and he photgraphed them in the act.

These are the type of scum who are involved in the Olympic Committee. And now you know. You not only pay for this but are expected to like it.

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By: “After having met recently with “respectable mortgage brokers” who have been in the business for over 25+ years, I am now firmly convinced that this market is going to have a crash landing like one never experienced before.” « Vancou

Thu, 03 Dec 2009 20:53:45 +0000

[...] position of being able to experience both, first hand. This lengthy anecdote and opinion from San Franciscan in Vancouver at vancouvercondo.info 3 Dec 2009 12:06 pm [...]

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By: stagnate

stagnate — Thu, 03 Dec 2009 20:46:22 +0000

San Fran in Van: whoa there cowboy, homework time. apart from some macroeconomic differences vancouver is not like san fransisco due to much stronger in-elasticity of demand. you have to get into factors like immigration trending, land constraints, etc that can be specific to a region. you have to put in a bit more work than paraphrasing garth turner.

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By: patriotz

patriotz — Thu, 03 Dec 2009 16:57:50 +0000

Excuse me, that's "current account", not "current exchange".

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By: patriotz

patriotz — Thu, 03 Dec 2009 16:56:50 +0000

@oneangryslav2:

I think what the original poster implied (or this was how I interpreted it anyway) was not that foreigners can not buy these bonds but that they are unwilling to, given the low coupon rates.

Yes, foreign purchasers of Canadian debt would get low yield combined with exchange rate risk. But the real reason there is little holding of Canadian debt abroad is that the country hasn't had to borrow abroad - until very recently Canada had a longstanding current exchange surplus. In other words, Canada had been lending to the rest of the world, not the other way around. Note that USD debt has a low yield as well but is widely held abroad, for the simple reason that the US has to borrow abroad. As well a number of the US's trading partners (e.g. China) have an interest in supporting the USD and so will buy their debt at a low yield. But now Canada is running a current account deficit, for the same basic reason as the US has been for years - a very low savings rate. And need I mention that the policies of our "Convervative" government have abetted that low rate. If our savings rate does not improve soon, interest rates will have to go up to attract foreign lenders. http://www.economist.com/markets/indicators/displ...

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By: San Franciscan in Va

San Franciscan in Va — Thu, 03 Dec 2009 16:52:57 +0000

How do we captalize on that? I am thinking of shorting the Canadian housing market. The problem I have encountered so far is that 1) there are few publicly traded home builders (if any), 2) no tradable sector-wide indices (except banking which I would ignore for the moment as banks in Canada have been smart to pass on the mortgage risk to the government thanks to the explicit guarantee through entities like CMHC. The only exception being the confluence of multiple risk factors to bring about systemic risk in the financial system just like in the U.S.), 3) most financial bellweather companies outside of banks and holders of income producing real estate (e.g. pension funds, life companies, REITs etc) are also privately held and not tradable. The problem is that the market appears to be much more closed and not easily permeable than that of the U.S. In that sense, the most direct effect of a decline in the sector in the future would be a sudden and severe decline in gross domestic output against which the government is going to have to print out a whole bunch of inflated Canadian dollars to counteract that. Betting on cyclical changes in output is a painstaking undertaking and not very lucrative, either. I guess the Canadian dollar appears to be the only viable proxy for a possible future hedge betting on housing prices decline in Canada. However, housing price adjustments can take place over multiple years (e.g. the United States), and often without a clear and immediate shorting target it would be very difficult to make money this way. Any suggestions in an open forum?

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