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Friday Free-for-all

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It’s the end of the week! That means it’s time for another weekend news roundup and open topic economic discussion thread! Here are a few recent stories to kick off the chat:

–Pop goes the bubble
–Rosenberg: Good signs for Canada
–Delightfully expensive 1 bedroom condos
–Caring for terminally ill lowers property values?
–Whistler prices down
–Thousands flock to homes on untaxed native land
–Home construction soars in Metro Vancouver
–Building permits plummet in Vancouver
–Home-building stats send mixed messages
–These people will party for anything

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

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doug r

@Best place on meth: My wife suggests we hire Vincent D'Inofrio to reprise his performance in Men In Black, complete with Edgar suit: "Where do you keep your dead?"

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Yalie

@Devore:

You don't have to convince me that the CMHC is an abomination. I will go one futher, in fact: Their own data (from the link) show that if prices drop by just 20% nationally, then 30% of their insured mortgages will be under water. In the US, 30% of mortgages are currently under water, and we all know how well that turned out.

My point about Troll's post remains though: for once a bull presented actual facts and figures rather than the usual pablum. And since facts are so rarely presented by the bulls around here, I figure we should be encouraging that kind of behavior from them.

But maybe I'm just getting soft in my old age…

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Devore

@Yalie: but Troll seems to have dug up some relevant factual information. I for one have have been curious about CMHC actuarials for a while now. Let’s give credit where credit is due. Hasn't dug up anything. These numbers have been known for a long time, and no one was saying CMHC would run out of money in a week, rather that it would take something more similar to what happened in US to give it issues. The topic at hand, do try to keep up, instead of diverting to territory covered months ago, is that the very existence and activity of CMHC is distorting the market. If CMHC is indeed taking enough fees to be well capitalized against losses, then why is there no private insurer stepping up to the same, at equally low rates and equally high risk… Read more »

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OV Renter

Another condo put up for sale in the Angry Asian building.

That’s 2 in 2 days making 5 in total.

http://www.mls.ca/propertyDeta…..1451619357

FYI its not a All Asian building Gordan Campbell lives there!

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44444444444444444444

" If you’re in Vancouver or the north GTA, hire some Asians to queue up on your lawn."

http://www.greaterfool.ca/

Sorry, too late curse has begun

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vreaa

Regardimng mortgage changes: Perhaps this is the 'tap on the brakes' that causes our vehicle to come to a screeching halt; a 'tipping point' effect.

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Keeping An Eye On Th

Anyone expecting more than a little political window dressing, and a little insignificant tweaking would have set themselves for disappointment.

Flaherty cannot be associated with the pricking of the bubble. He and his party would have to face the wrath as most Canadians have all of their net worth in the equity of their home.

Flaherty also knows the bubble will pop on its own. He just has to be” seen “as trying to prevent one from forming.

The average working stiff is now convinced he is a financial wizard, when they wake up from this wonderful dream, you don’t want to be beside they holding the stick that poked them to reality.

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Yalie

@Best place on meth:

Looks like F. just shaved 7% off prices by lowering ams to 30 years.

And we all know exactly how the REALTORs are going to spin this news over the next couple of months: "Buy now before the new, tougher rules kick in!", which sounds a lot more convincing than "Buy now before prices go down by 7%!"

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jesse

@Troll: I used $700BB assets, not $500BB. I think your calcs are correct given your inputs and I too believe CMHC will likely stay solvent. However, as you agreed, if defaults occur in a higher proportion (defaults are cumulative of course) CMHC goes insolvent and needs taxpayer money as a bridge or pier loan. It's not a remote possibility by a long shot.

The gov't is obviously taking some risk off the table because, as patriotz has pointed out, if they were private their reserves would be higher and they would be clearing MBSs at a higher spread to boot.

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Best place on meth

Another condo put up for sale in the Angry Asian building.

That's 2 in 2 days making 5 in total.

http://www.mls.ca/propertyDetails.aspx?propertyId…

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Best place on meth

Already the first of my 2011 predictions has come to fruition.

http://vancouvercondo.info/2011/01/2011-please-te…

I can't say I'm entirely unhappy with this though since it was what I expected and much better than doing nothing.

Looks like F. just shaved 7% off prices by lowering ams to 30 years.

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Yalie

I'm all for voting down bulls when they post moronic statements (which is about 99% of the time), but Troll seems to have dug up some relevant factual information. I for one have have been curious about CMHC actuarials for a while now.

Let's give credit where credit is due.

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Anonymus

"http://www.theglobeandmail.com…..le1872323/

No change to down payments?"

Yup, just the Am and heloc. Bears will flip tomorrow 🙂

As many have said here the tightening will be gentle and slow until everything (debt/income) comes to the equilibrium. well, bears will scream crash the next 10 years. but they will be educated by that time.

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44444444444444444444

Mortgage Rules, interest rates, immigration, etc, cannot change the curse, it is done.

Even St. Joseph cannot stop the curse.

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Anonymus

Best place on meth Says: " Here’s mine: Fuck off and die, cheerleaders"

Mom did not teach you how to communicate in civilized manner?

what a shame.

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Phil

http://www.theglobeandmail.com/news/national/otta…

No change to down payments?

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Anonymus

Best place on meth Says:" The damage is done to the image of the Chinese immigrant though, whichever way this goes."

The damage is only done to your head. 99% of people DOES NOT CARE about stupid quarrel between UBC and homeowners. there will not be any uprising tomorrow morning.

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44444444444444444444

The curse has been set.
The real estate crash will start soon and last 44 years in China and Canada.

Be warned

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Troll

@Best place on meth:

Here’s mine: Fuck off and die, cheerleaders.

How is this dipshit not banned from this blog? No substance, just mindless cursing. Bringing facts just enrages him more.

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Anonymous

How ironic, the Troll appears to be getting irritated by what other people are posting.

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Troll

@Junius:

Even if the 8-16 Billion the CMHC ends up paying comes out of their fund it still indirectly comes via the tax payer.

No, it doesn't, what don't you understand about that? The reserved funds and invested money CMHC comes directly from insurance premiums paid by borrowers, not taxpayers.

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Spec

@fixie guy:

Wow, we had avoided Godwin for so long…

(http://en.wikipedia.org/wiki/Godwin's_law)

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Junius

#205 Troll,

You said,"To consume the whole $8 billion would require a 35% nationwide drop with 10% default. This scenario would be markedly worse than the US today at 25% and 10% defaults. Even then, CMHC still has the $16 billion in investments to cover any further shortfalls."

US isn't done in declines or defaults. It could easily exceed 35% and more than 10% defaults by the time the market drops are done. So could we.

Even if the 8-16 Billion the CMHC ends up paying comes out of their fund it still indirectly comes via the tax payer.

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Best place on meth

@Troll:

How cute, our idiot cheerleaders have little catchphrases, like cartoon characters.

Dave: Trust me on this.

Troll: Deal with it.

Here's mine: Fuck off and die, cheerleaders.

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