Mark Carney, we hardly knew ye’

Can you believe this?

Mark Carney is leaving us for the Bank of England!

Carney said he and Flaherty had enjoyed an effective partnership and added he will miss the camaraderie and clear sense of purpose he experienced with the finance minister. He praised the strength of the central bank and reiterated his confidence in it.

A smiling Flaherty said this moment is “bittersweet,” and that the loss of Carney will be felt in Canada.

Carney’s rumoured appointment to the Bank of England was the source of published reports last spring, and at the time he and the Bank of Canada denied the reports.

“I’m totally focused on my two responsibilities: as governor of the Bank of Canada, and the Financial Stability Board,” Carney told reporters on April 18. “I can assure you they add up to more than every waking hour of the day.”

I’d leave a job that added up to more than ‘every waking hour of the day’ as well.

Sort by:   newest | oldest | most voted
VMD
Member

For those interested in Toronto daily individual property sale prices, check out http://tosolds.ca/?cat=3
(Apparently it’s “sourced manually”, so probably doesn’t violate MLS usage rules)

Hope similar sites will spring up for Vancouver (and hope Competition Bureau triumphs over TREB in early 2013)
Still miss that short-lived “olvius” site, but at least we still have VancouverPriceDrop and the forums.

grant
Member

Dunno how you think “Toronto daily individual property sale prices” is relevant to this story…

As far as I’m concerned, Carney did a good job here- he fulfilled the BOC’s mandate and our banking sector is secure. UK was smart to poach him. I hope his replacement at the BOC can fill his shoes.

patriotz
Member

Not interested in knocking or defending Carney personally. But I would ask those who disagree with the BoC’s policies to say what it should have done differently, given that the BoC has a legal mandate to target CPI inflation at 2%.

trash crash alert
Guest
Contrary to what the mass media and his global banker buddies convey, Carney will go down in history as the absolute worst central banker in Canadian history. Hundreds of thousands of middle class families in Toronto and Vancouver are on the verge of being decimated financially. What we have is a 40 year amortization & zero down legacy coupled with the highest consumer debt in Canadian history all supported by emergency interest rates that are the new norm. We have seen this movie before in Spain, etc. The good news for Mr. Carney is that he will be sipping champagne… Read more »
jesse
Member
@patriotz: ” But I would ask those who disagree with the BoC’s policies to say what it should have done differently” Had this convo last night as well. The Bank has a mandate beyond the basic tenet of inflation targeting, they are also responsible for advising the government on appropriate fiscal policy so as to ensure economic growth in the medium and long terms. The Bank, I think, advised to open up the fire hose on household spending and construction as a method of producing rapid GDP growth, which was successful. Some of that ended up getting siphoned into land… Read more »
RaggedyRenter
Guest
He was vocal about the household debt and RE market. He made it clear it is in trouble and change won’t come from his office because he doesn’t have the mandate. It had to come from Flaherty’s. He made it very clear the fault lies with the government, not BOC. His frequent public jawboning must have forced Flaherty’s hands and rollback the prolonged mortgage term and other mortgage tightening measure Not sure if we are going to get a replacement with the same spirit. I’m sure the govt would like someone with less affinity to public statements and rethoric now.
real_professional
Member
Yes, the Bank of Canada use of interest rates to deflate an asset bubble would have been wrong. The first thing you learn about Central Banks is that in a free floating currency economy the use of interest rates to stimulate or retard the economy is at the best of times only a crude lever. However, we were seeing prints on headline inflation above 2% up until this summer. Fortunately, core inflation was muted so I give Carney the thumbs up. The asset bubble should have been dealt with by the Finance minister years ago. It has been such a… Read more »
Extend and Pretend
Guest

@patriotz: re: BoC, “what it should have done differently”

For one thing each time YoY CPI crept into the 2.5-3% range, the rate could have been temporarily hiked by a 1/4 point. It happened several times and Carney blew it off like some drunk frat boy. This would have tested the waters on unemployment effects and would have provided vital information about sectors of the economy in need of improved economic productivity relative to otherwise free money.

Carney is a punk. He could have done more than jawbone.

Extend and Pretend
Guest
@patriotz: re: BoC, “what it should have done differently” For another, within the resources of his office Carney and Statistics Canada, could have pioneered a new consumer price series designed to examine the tenants and assumptions of the fixed basket CPI statistics. Call it a Consumer Expenditure Index, CEI. The CEI could measure the percentage of individual consumer expenditure on each CPI component instead of simply assuming consumer expenditures on the various CPI components are the same as they were in 1970 and 1950. It is clear that Carney was targeting the price of eggs when most household income was… Read more »
Googley
Guest

I was on backpage.come and the whore index is creeping up. Lots of inventory especially downtown/westend/kits/burnaby.

Some Guy
Guest
What Carney should have done is the same thing other central bankers should have done and still need to do: Print money and keep interest rates higher. Higher interest rates would contract the money supply by causing defaults and discouraging new borrowing. This contractionary effect would be offset by the printing of new money, leading to an outcome with stronger growth and less debt overall. However, this solution is so far outside of the mainstream, inflation-paranoid, consensus (folks like ‘Extend and Pretend’) that it is hard to blame Carney in particular for failing to apply it. Operating within the mainstream… Read more »
Extend and Pretend
Guest
@Some Guy: Inflation paranoid consensus folks? Really? Did you read my post? I said (1) raise rates at every opportunity. (2) Find out why CPI isn’t tracking fraction of income actually spent on what is measured. Read my post. Carney is to blame. He is to blame because he is the typical frat boy elite finance guy. If he was at all exceptional beyond simply playing his cards for a long political careeer, he would have picked up the new skills and sensibilities needed to change things for the better instead of trotting out 50 year old mantra in his… Read more »
Anonymous
Guest

@trash crash alert: “. Hundreds of thousands of middle class families in Toronto and Vancouver are on the verge of being decimated financially. ”

Oh, so those families played no part in getting themselves into trouble? Give me a break! It’s fair enough to criticize gov policies, but we all know who the blame really lies with in this mess. I’m tired of all this ‘I’m a victim’ bullshit.

yvr2zrh
Member
@trash crash alert: Not to lose sympathy – but frankly, nobody put the gun to their head. . . . . If they bought and overpaid (like most “Joe Howmuchamonths do)” – I frankly don’t care. . and Frankly – I made my own decision all along the way not to play the game. I paid my “subsidized rent” which amounted to the tune of $3,000 per month below cost of ownership, saved my excess, invested and had an increase and ultimately did leave to be part of a different game outside of Canada. I feel very sorry for those… Read more »
Some Guy
Guest

“Did you read my post?”

Sure I read it, you were advocating raising interest rates to fight inflation in an environment where the economy was below capacity and there was little or no upward pressure on wages. That’s exactly what I mean by inflation-paranoia.

Interest rates shold be higher because negative real rates are directing resources toward anything that involves borrowing (speculation and housing primarily) and away from everything else – not because inflation is out of control and we just don’t realize it because it’s not being measured right.

yvr2zrh
Member
@jesse: I think what you say makes sense. What would have been helpful however is if they opened the fire hose slower as the rapid release of credit meant that the economy could not respond to the increased demand fast enough without causing a massive run up in prices. We would be much better off now if they had not reduced rates and changed amortization rules. But then again, we perhaps would not have a convservative government. Who will end up paying in the end is not known but at the end of the day, those who are hurt the… Read more »
Anonymous
Guest

Here’s a good clip for understanding Carney/Goldman and banking in general.

http://www.youtube.com/watch?v=lsmbWBpnCNk

Aleksey
Guest

@Anonymous:

There will be a time when we can make a list like Americans did after their crash:
http://www.time.com/time/specials/packages/article/0,28804,1877351_1877350_1877339,00.html
And American consumers are #5 on that list. They should be like #2 IMHO and MSM should be #1, but you wouldn’t find MSM in the list because it’s Time’s website =)

Extend and Pretend
Guest
@Some Guy: re: “where the economy was below capacity” Says who or what? Relative to the US, in the present economic environment, it is above capacity. Unemployment should be higher in historical terms relative to the US. It all goes to antiquated measurement, which was my point. I am not paranoid for inflation, I just want to make sure the Bank is measuring inflation as it is, rather than as it was. There would be no need to for discretionary money supply tinkering if the effect of prices on income buying power was measured in relation to what most income… Read more »
boogeybear
Guest

@yvr2zrh: I don’t buy that the home owner is completely to blame. It isn’t the person that recently bought their home that is in difficulty. It’s the misused home equity lines of credit that are the problem. The lenders, CMHC and the government were predators on those that where easy victims. This was a confidence game, backed and insured by our government.

Anonymous
Guest
@RaggedyRenter: And just who do you think was advising the government the whole time on what it should do to stimulate the economy. Carney has been playing nothing more than a blame game with his comments on household spending, etc. Same goes for Flaherty and his comments. This spreading around of the blame does nothing but confuse people ahead of time so that when the SHTF nobody is culpable. All you need to know is that Flaherty wants votes and Carney works for Goldman. Stop fooling yourself, you sound like you are gushing when you allow Carney to hide behind… Read more »
Anonymous
Guest

@Extend and Pretend: Carney could also have:

1. Been more critical of US monetary policy and its effects on the Canadian economy, particularly those who save.

2. Been more critical of the EU’s insistence of propping up a failed economy.

3. Been more critical of the Chinese/US Dollar peg.

I suppose that you can replace ‘more critical’ with ‘more vocal’, especially in regard to how it effects the Canadian dollar and economy as a whole.

RealityCheck
Guest
How is the Tolling on the Port Mann going to affect RE prices (relatively speaking)? Comments? I noticed that the Golden Ears bridge tolls resulted in less demand north of the Fraser. Prices never really went up in Maple Ridge since 2008. Less immigrants locating there. Also, Tolls on new bridges are a given. We have two and added to that list will Patullo. These are a given. Any future new bridges will be tolled as well. Now, Translink will get more money…past experience has shown this. Question is, what happens to existing bridges with respect to tolls? The RFID… Read more »
Many Franks
Guest

OECD warns Canada about consumer debt:

The two big domestic risks, the OECD says, are the record level of debt Canadian families hold and their dependence on house prices remaining firm.

“Continuing high household debt levels could lead to a sharp deceleration in household spending, while a sudden weakening of the housing market could have sizable negative spillover effects,” the OECD says.

Hey, almost sounds like they’ve been hanging around here too long.

RaggedyRenter
Guest

@Anonymous:

“And just who do you think was advising the government the whole time on what it should do to stimulate the economy. ”

Why do you think Carney had to go public? You don’t air out problems (especially at the federal government level) unless it’s the last resort

wpDiscuz