Close your eyes and load up on debt

This National Post commentary is one of the most direct attacks on Canadian personal debt levels I’ve seen in the mainstream media.

The takeaway is this: YOU are responsible for your own debts, don’t go whining to anyone if it gets you into trouble.

It’s mindboggling to think that an entire population can look at what happened in the US when personal debt levels got this high and shrug it off.

Analysts and economist are filled with forecasts of doom, and that was before the latest figures showed debt had continue to pile up over the past year to a record 163% of household income, which is where the U.S. was before the 2008 collapse, and about 10 points higher than anyone thought. As the housing market cools and home prices slip, a lot of people could find themselves making monthly payments they can barely cover for a house that isn’t worth what they thought it was. If you can’t cover the mortgage, you just have to pray the roof doesn’t start leaking or the furnace fail.

And borrowers won’t really have anyone to blame but themselves. The warnings are out there. The examples are rife: all anyone has to do is examine the experience of U.S. homeowners over the past few years. The dangers aren’t a secret, they’re just being ignored.

But people keep borrowing, because it makes them feel good to spend, because they’re too busy to think about it, because they figure they can cover the payments in the short term and will deal with the future when it comes. And because they can always blame it on someone else when the roof caves in.

Read the full article here.

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G
Guest
G

“It’s mindboggling to think that an entire population can look at what happened in the US when personal debt levels got this high and shrug it off.”

Because Canadian banks know they will get bailed out if housing market crash like in US.

VMD
Member

This is how our earthquake was reported in China.

“Canada’s west coast rocked by 7.7 earthquake” – photo: “Ruins”
Not the best image for BPOE.

Ben Rabidoux
Guest
Ben Rabidoux

I wanted to take the opportunity to invite the VCI crew to a seminar I’ll be putting on in November:

http://realestate2013.ca/

A special invitation to the bulls, who will have an opportunity to publicly discredit the bear thesis during the Q&A session.

patriotz
Member

@VMD:
“photo: “Ruins””

They don’t look like Haida to me. But I guess the Chinese can’t tell the difference.

patriotz
Member

“The examples are rife: all anyone has to do is examine the experience of U.S. homeowners over the past few years. ”

So why didn’t the Cons start to restrict credit back in 2006 or 2007 and prevent this problem from happening in the first place?

The article completely ignores the fact that this massive rise in consumer debt was enabled by government loan guarantees.

Anonymous
Guest
Anonymous

Did the National Post say anything when the Conservatives injected steroids into the CMHC? Did they chide Carney on Zero interest rates? Did they complain about loose lending at the Canadian banks?

These things do not happen over-night. They develop gradually in response to a number of bad policy decisions, most of which the National Post was very happy with.

A bit late now isn’t it???

Berniebee
Guest
Berniebee
Why people are indebted up to their eyeballs? Let me give you an example that demonstrates nicely. Have you shopped for a bicycle lately? There are city bikes, hybrid bikes, road, touring, commuter, mountain, jumper, downhill, and oh yes, custom bikes too. Walk into any bike store. Bewildered by the colours and styles, you can easily drop $5,000 on two wheels. A cautious spender should do their research first! But if you should ask in a biking forum how much you should spend on a bicycle for say, riding to work, you will soon find out that $500(!) buys you a “starter” bike that can be “upgraded” for a few more hundred dollars to a “reasonable level of performance”. You will be warned in no uncertain terms to never buy a $300 “department store” bike (Yes that includes Canadian Tire.)… Read more »
No Money Down
Member
No Money Down

From the Sydney Morning Herald

Unconscionable tactics that soured investment property venture

http://tinyurl.com/9mfhvrk

“”This was a disaster and for the sake of my young family I need answers,” Bellamy later wrote to authorities, wanting to know how an investment that was meant to have paid itself off in just eight years went so wrong.”

(Coming soon to The Vancouver Sun.)

Deliverator
Member
Deliverator

From what I understand from economists, stretched finances from too much debt is pretty rare. If it’s legitimately bad debt, the homeowner has ways to shut that whole thing down. But let’s say that doesn’t work or something. I think there should be punishment, but the punishment should be on the people who refused to buy their house.

Simple
Guest
Simple

@Ben Rabidoux:

Hey Ben,

The seminar sounds awesome. Are there any plans to have a webcast?

bubbly
Member
bubbly

Finally someone in mainstream media puts the blame where it belongs (50% of it). I am tired of all the excuses and scapegoating that has been going on for years. If you took on more debt than you can handle, it’s your fucking fault! You are NOT a victim. So STFU!
Too bad, that this will mostly fall on deaf ears. In the end, it will be capitalism’s fault all the while the banks will be receiving taxpayers’ money to cover losses caused by their own stupidity.

bubbly
Member
bubbly

I love bicycles, but they have become yet another instrument for marketers to extract every penny of disposable and borrowed income from hapless consumers.

Hapless consumers? No. Childish and stupid – yes.

We’ve been sucked in by “needs” like Iphones and Ipads.

Odd. I don’t have these “needs”…

Anonymous
Guest
Anonymous

@patriotz: “The article completely ignores the fact that this massive rise in consumer debt was enabled by government loan guarantees.”

Sometimes people have to think for themselves and not depend on the government to do it for them. A new concept for you?

Anonymous
Guest
Anonymous
Can someone make sense of this poorly written Vancouver Sun article? “Fourteen per cent of all trips were taken on public transit in 2011, the highest proportion since TransLink began recording its trip diaries in 1994. … The proportion of transit and cycling trips grew faster than that of trips taken in cars, which grew slower than the population. Cycling trips as a proportion increased 26 per cent, transit was up 17 per cent, walking increased by six per cent and car trips increased by four per cent. The population grew by six per cent.” That last paragraph is a real stumper. How can the PROPORTIONS for ALL categories have increased??? As a PROPORTION OF ALL TRIPS, cycling is up 26%, transit is up 17%, walking is up 6% and car is up 4%. That just does not make sense.… Read more »
Bo Xilai
Guest
Bo Xilai

From what I know from the Debt Crackheads I’ve enountered in the past 10 years, guaranteed they will deny all personal responsiblity when things go pear-shaped.

It’s going to be sob stories on the front pages of the Vancouver Sun, with a “Foreclosed” sign in the background of the 4 year old pressed sawdust monster house. And the media will eat it up because it makes for a compelling story for simple-minded people.

coc
Guest
coc

Caucasians on credit.

Deliverator
Member
Deliverator

@patriotz: So why didn’t the Cons start to restrict credit back in 2006 or 2007 and prevent this problem from happening in the first place?

The article completely ignores the fact that this massive rise in consumer debt was enabled by government loan guarantees.

Enabled? It was absolutely, positively, deliberately created by them. Given the facts in evidence, I don’t see how anyone could conclude otherwise.

VMD
Member

@Berniebee:
Debt-ridden family rises to the ‘100 Thing Challenge’
Family heirlooms, bed frame purged in anti-consumerism effort
– For some over-extended families in the not too distant future, the “100 thing challenge” might become a need, not a choice..

Anonymous
Guest
Anonymous

Not sure if this forum has seen this interesting article that quantifies capital flight out of China:

“Astronomical sums of money are fleeing China at a much higher velocity than has previously been estimated, according to recent reports.

One report by Washington-based Global Financial Integrity estimates China suffered a net outflow of $472 billion last year, the equivalent of 8.3 per cent of gross domestic product.

Another report by the Hong Kong-based head of research for the Standard Chartered bank, Stephen Green, suggests at least $80 billion fled China in just the third quarter of this year.”

http://www.vancouversun.com/Business/asia-pacific/Waves+illegal+money+leaving+China/7461039/story.html

bubbly
Member
bubbly

@Deliverator: Data shows that the bubble started forming in 2002 – 4 years before Cons came to power. (That does not mean that Cons are innocent – a lot of fuel has been added to the fire during their reign)

Aleksey
Guest
Aleksey
casual
Guest
casual
@VMD “Tired of being on the “status-quo, middle-class treadmill” of mindless consumption and mounting debt, the Glad-Timmonses undertook a project that most people would consider drastic: paring their worldly possessions down to 100 items…Included in the items Glad-Timmons and her husband either sold or gave away were cross-country skis, a handmade wooden chest that once belonged to her paternal grandfather and their bed frame. She and her husband now sleep on a mattress on the floor.” I am all for ending “mindless consumption and mounting debt” and getting rid of cheap Made-in-China plastic crap from Wal-Mart, but I think this really is overkill. She got rid of a hand-made wooden chest that belonged to her grandfather! That sounds like a family heirloom, something with sentimental value, something one-of-a-kind with character as it was hand-made. Getting rid of something like that… Read more »
Bally
Guest
Bally

@coc:

Don’t be a cock. It’s “Canadians on Credit”.

MM
Guest
MM

@Anonymous #14:

Maybe the proportion of trips taken by yellow helicopter is down!

Anonymous
Guest
Anonymous

@MM:
Those Cheena Men or Women are still full of cash stolen from the peasantry,are glad to snatch any property abroad before the end game of The Middle Kingdom.So don’t worry.

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