House of Cards

How much are home owners betting on the past being repeated into the future?

King says roughly two out of three mortgages underwritten this year have been for a variable rate term, compared to a typical 25 to 30 percent share. She says this is part of a larger trend of homeowners opting for variable rate mortgages.

“Over the past decade or more, rolling a variable rate mortgage from month-to-month has consistently been less expensive than a fixed mortgage rate. In essence, a generation of homeowners has experienced nothing but declining rates and lower monthly interest payments,” she says.

“This expectation will be hard to change.”

As evidence of the damage a low-interest rate policy causes, King says we only need to look at the U.S. real estate bubble.

“The U.S. homeowner was lured down a very similar path by the Federal Reserve at the turn of the century. Indeed, in late 2000 the spread between a 1-year ARM [adjustable rate mortgage] and a 30-year conventional mortgage was as narrow as 30bps…households did not start to sour on ARMs until 2004 when the Fed finally started to raise the funds rate. By that time longer term mortgage rates were also on the rise and moving out of the affordability reach of many U.S. homeowners.”

As for Canada, King believes a 2-percent rise in interest rates will push a fixed rate mortgage beyond the reach of the average home owner.

From the article ‘Canada’s House of Cards‘ on BNN.

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Flip Flop, back in the 1960's and 70's CEO's were smart, frequently lead their companies to greatness, and made their stockholders wealthy long term. And you know what? They did it for about 35 times the pay of their shop-floor worker.

Now they do it for 400-500 times the worker salary, and that's without stock options.

Nuff said.


Interest rates are not going anywhere soon…

fixie guy

130 emmi Says: "Troll…. I get the sense you actually don’t give a crap about an answer."

To be fair, nor understand the questions.

Flip Flop

So the honest businesman should suffer because of there are others out there that break the rules?

Get a grip on life. For every Corizini there are 1000 honest men making honest livings. You just won't buy the newspapers if the stories are about them.


Flip Flop : "How do we make the system ‘fair’, so we don’t hurt anyone’s feelings?"

Fair? In Corizini case it was merely $700 million that was misplaced, left it in the other coat pocket, never missing, simple accounting error, completely safe. They will just juggle the books and shift the equity around, increasing the leverage on positions. You don't go to prison for carrying excessive leverage.MF Global should have bought a small bank like Goldman did, and then buried their losses at the Fed.

Worldcom, Enron, Madoff, Countrywide, AIG, MF Global. The US financial system is a pyramid of lies. As the system totters, more naked greed and corruption will be exposed.


@Best place on meth:

It's pretty hard to seperate government from the private sector at this point in history. What business is truly independent of government? Probably none. From that perspective, I think it would be very difficult to draw a line on compensation.


@Flip Flop:

Hurt my feelings! Dick-for-brains – it is about stealing. These huge pay checks are coming out of the hide of the customers, the share-holders, and the employees. The system is completely messed up and you are a pathetic apologist for it.

Flip Flop

I'm all for accountability. And I agree with you BPOM. But that's the govt's fault. They should have established those terms contractually when they went in to bail these guys out (the ones where they had any leverage anyway). I don't doubt that the system is broken. I like OWS, even though 99 pct of them don't have a clue about the solution, they just want to raise hell about the problem. Maybe this will be the driving force that brings people back to the polls. What was the turnout for the last federal election, and how many that turned out had half a clue about the person they were voting for? The fact of the matter is, if I have a company that I own, and I know someone that can potentially double my sales and reduce my expenses… Read more »


@Flip Flop: Nobody's confused here except you, apparently, on the concepts of merit and accountability; read, MF Global.

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@Flip Flop:

Private companies can pay whatever ridiculous salaries they want and people can choose not to buy anything from them, that's what I would do.

By private though, I mean not a nickel of support from government.

Any company that ever got a bailout, a subsidy or any help whatsoever ceases to have the right to pay any salaries they want to their top execs.

This would make dozens of US companies ineligible, if not hundreds.

By the way, Corzine is a real piece of work taking a 200 year old company down the shitter in a matter of months and getting $12 million as a bonus for his good work.

This would be a good time to bring back the guillotine.

Flip Flop

@ everyone

So where do we draw the line? $1M p.a. and stock options are off the table?

How do we make the system 'fair', so we don't hurt anyone's feelings?



@Flip Flop:

Think about it the $100 Million paid to the a$$-hole in the article, which is legal theft, could have paid for 2000 wasteful union employees in the US. people who protect with their lives at stake or, teach, or care – and other layabouts like that…who have been laid off…or they could go to one well-connected fat cat.


@Flip Flop:

You are obviously what is called "the useful idiot". kid, you still have a lot to learn in life.

To further your education, may I suggest you to read this book: "The Corporation – The Pathological Pursuit of Profit and Power"?

If your attention span is not long enough to read a book, you can still watch the DVD. Not as deep, but you'll still get the idea.

You can order them here:

Flip Flop


You'll never be in the class of top paid execs. No matter what kind of pay cuts they take.

Let's not confuse compensation with corruption. Hiring these guys comes with risk as well, and that gets shouldered by the shareholders. Risk/return. you want big return, you gotta take big risk.

Seems fair to me.

Public companies are a different story, but eventually they have to answer to the public so they'll get theirs. I'm more concerned about corruption in the political system than I am about what big companies do to make their shareholders money.

Flip Flop

@BPOM. That's a different matter entirely. Those are public dollars and, I agree, we need to make sure they're better spent.

Makes me sick to think how much we pay people to do so little in our public system. Unions have financially ruined this country.


@Flip Flop: My politics are right of Attila the Hun and I'm a long standing entrepreneur and investor. I agree with Frank. CEO compensation is off the dial and has been for some time. Its not just CEOs, however. Just look at the pork barrel BC Hydro has turned out to be. Hundreds of thousands in bonuses paid out to top executives based on alleged profits, the existence of which is dubious at best and in any event scathingly rejected by the Auditor General. There is no doubt a huge wing nut element involved in the Wall st. protests but I can certainly sympathize with the sentiment.


Flip Flop: "I see no reason why any company shouldn’t have the ability to buy the talent that’s in the best interest of their shareholders."

you mean talent like Corzini at MF Global that run company to the ground, stole money from their customers and still will receive 13 mil? It's a CLASS WAR out there and 99% is losing it.


@Flip Flop: Flip Flop You are obviously posting that garbage to incite a response. Best talent! Give me break. Even CEO's that bankrupted their companies like Greenberg of AIG walked away with hundreds of millions. This is how it works. CEO pack the Board with old cronies and buddies and the same soul-less whores turn up in company after company. The Company does well because oil prices go up and the CEO gets $300 Million (like Lee Raymond of Exxon. The Company does badly like AIG or Lehman or Bank of America or etc etc the problem is external factors and the CEO's cronies vote him only $100 M Meanwhile they are busy busting unions and firing staff to make the bottom line. Did you even read that article??? 25% of the highest paid CEO s in the US make… Read more »

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@Flip Flop:

That's fine until we get to public companies like these BC Hydro assholes getting 6 figure bonuses for absolutely nothing.

That's our money.

Flip Flop

@Frank Those are contracted terms, and a lot of the financial compensation that execs receive are driven by stock options. I see no reason why any company shouldn't have the ability to buy the talent that's in the best interest of their shareholders. If we had put McLovin in charge of running Gilette, it would have surely been run into the ground. As a shareholder, I don't want that. I want a guy that's going to make me a 10 percent return on the stock that I own. Who the fuck is anyone to tell me what I can offer as salary or compensation to secure the talent that I need to make a return on the money that I'm investing. I don't hear much about shareholders complaining about these payouts. Could it be that a lot of it is… Read more »


Troll, you can have cost-push inflation in something that is an input into other things, a drought on grain production or major oil supplier having a revolution. That pushes up the cost of everything downstream without changing the size of the money supply by one penny. Consumers, now shorted by having to pay more for essentials, cut back on non-essentials, causing deflation pressure in non-essentials due to the smaller remaining discretionary income.

But, I get the sense you actually don't give a crap about an answer.


@paulb.: Thanks Paul- now that is more like it. Here is why the OWS are out there (From Huffington Post): As most Americans have watched their incomes fall during the recession and recovery, one CEO is netting a huge cash payment for relinquishing some responsibilities. Eugene Isenberg will get $100 million in cash for dropping his title as CEO of Nabors Industries, the Wall Street Journal reports. Isenberg, who will retain his title as chairman of the oil-drilling company, will net the payment due to a clause in his contract that was triggered "as a result of this change in responsibility," according to a regulatory filing reported by the WSJ. Isenberg is just the latest in a long line of CEOs to rake in huge payments after leaving a company or changing roles. Douglass Foshee, CEO of El Paso —… Read more »


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Extremely rich Van h

"As for Canada, King believes a 2-percent rise in interest rates will push a fixed rate mortgage beyond the reach of the average home owner."

It may be true in White Canadian Cities but two % or 5% rate hike won't affect Vancouver home owners who mostly, are wealthy mainland Chinese or middle class local Chinese who are very prudent in managing their finance while their ground floor are renting out.Unlike,white home owners who would squader left-over money after mortgage pament,in drug and beers.