Macleans on the CMHC bubble
Some juicy quotes about the CMHC fueled Canadian housing market in this article over at Macleans. How much longer can this madness go on?
“The CMHC is a driving force in the housing market. But critics warn its policies could fuel a U.S.-style meltdown.”
“CMHC’s balance sheet looks strikingly similar to both Fannie and Freddie”
“CMHC has distorted the housing market by making homes, especially ones that are on the pricier end of the spectrum, more affordable and encouraged a lot of people to get in over their heads.”
The full article is here and is worth the read.
This post was submitted by VanRant.
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March 25th, 2011 at 7:08 am
@Dave: “I read an interesting thing about that recently. It has been suggested that most people have an income that is the average of their five closest friends.”
This sounds impressive, but it is a consequence of the law of large numbers. If you picked a random salary X from the distribution of all salaries, then randomly picked 5 more salaries Y1,…,Y5 for their friends, then with decent probability, X would be close to the average of Y1,…,Y5.
March 25th, 2011 at 5:56 am
Take it up with StatsCan, Dave. I'm sure they will give your arguments the attention they deserve. Especially the "trust me on this" one.
March 25th, 2011 at 5:02 am
@Aleks:
$180k seems low for the upper 1%.
March 25th, 2011 at 3:44 am
Unfortunately I couldn't find any data specifically about Vancouver, however at the last census the top 1% of income earners in Canada made at least $181,000 per year. The population of Greater Vancouver was 2,116,581, which means the top 1% is 21,116 people. There were 30,595 sales in 2010. By definition, half of those sales were for above the median sale price. So to be dragging prices up, the people making $181,000 or more would have to have bought 15,297 homes in 2010, and would have to buy a new home every 16.5 months for the duration of the price surge. How likely is that?
March 25th, 2011 at 2:53 am
@UnagiDon: From my observation & personal contacts, these are some positions that would pay over $300k (excluding CEOs & business owners):
- Surgeons (not GPs = although there are GPs who freelance, who could pull this down)
- Dentists (large practices)
- Partner Lawyers (only at big firms)
- Partner Consultants (IT)
- Investment Bankers (not many in Van)
- Stock Brokers/Market Makers (only those with large books/private placements)
- Any VP+ position with Fortune 500 (not many in Van)
March 25th, 2011 at 1:26 am
@Gyts n blod:
"It’s one thing if Dave previously acknowledged in posts that he was a securities lawyer or an engineer, and commented extensively on compliance with private placements for (ahem) geo-thermal heating systems. Maybe, just maybe, I might think something of his “trust me on this.”"
Only a few years ago he was telling us his career did not involve real estate, it was just a sideline for him. Was he lying then or is he lying now (probably both times). Who cares? He is dishonest as hell and he's going to get burned in the collapse, that's all that really matters.
March 25th, 2011 at 1:23 am
@Dave:
"Laugh away. I really don’t care. Your loss."
Oh Dave we do. But it's not really our loss, per se. We gain the medical benefits of laughter from you, and because you are such an unreliable person we don't run the risk of accidentally trusting you on anything. When the market collapses look me up and I'll donate some food for your family, just for old times.
March 25th, 2011 at 1:13 am
When I use the phrase, ‘trust me on this’, you can be assured that I am completely certain of my statement.
*******
Lol – this is the best phrase ever!
"Trust me on this because trust me on this"