TD defends Canada from Krugman

Why is everybody picking on the Canadian housing market lately?

US economist Paul Krugman was one of the latest to say that we’re at risk for a housing market collapse.

An economist at TD bank couldn’t let that stand though, and was there to defend our delicate reputation.

“Largely owing to a continued low interest rate environment, mortgage interest costs as a per cent of personal disposable income have fallen despite the sharp rise in the debt-to-income ratio,” she added in her report.

“Meanwhile, while mortgage delinquency rates in Canada and the U.S. were similar during the 1990s, the per cent of mortgages in arrears 90 days or more in Canada is about a third of what they were in the U.S. leading up to the 2008-2009 crisis.”

Ms. Petramala cited the “riskier lending practices” in the U.S. between 2002 and 2007, and the tighter restrictions now in place in Canada.

Of course the reason ‘tighter restrictions’ are in place now in Canada was because they had become rather loose.  And as Patriotz points out, mortgages arrears are a trailing rather than leading indicator.

The TD spokesperson is ignoring the fact that the US housing bust started in 2006, when mortgage arrears were at historic lows, not in 2008. Mortgage arrears are a lagging indicator of falling prices.

Lots more “it’s different here” for your enjoyment.

Read the full article in the Globe and Mail.

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Sunshine 123
Sunshine 123
7 years ago

RE: Barb Rennie #61

Looks like Barb the Nazi has nothing to say except generalization about the cause of real estate prices in Vancouver…I am not far off calling her a Nazi. If we were in Germany in the 30’s, she would be the 1st to fire bomb Jewish stores…She is giving Canadians a bad name…

patriotz
7 years ago

” Markets are in meltdown. You should have invested in something tangible. ”

You mean like gold?

Anonymous
Anonymous
7 years ago

I guess a lot more Realtards stay up late trolling these days as they obviously don’t have a reason to get up early.

Anonymous
Anonymous
7 years ago

“Markets are in meltdown”

S&P500 still up 18% yoy. Do not check the scorecard.

The US is recovering.

rp1
rp1
7 years ago
Anonymous
Anonymous
7 years ago

Garth the Cult Leader stated yesterday that Yields up a massive 22% !!

Today he conveniently omits the part where yields crashed 11% !!

What a dweeb!

Anonymous
Anonymous
7 years ago

Doomers Doomers will never learn!!

….Hang Seng is crashing hahahaha.

It’s only down 1% ahem. 🙂

http://www.google.ca/finance?q=INDEXHANGSENG%3AHSI&ei=PDDJUaD1De3LiQKm9wE

jjss
jjss
7 years ago

#96
I have GIC’s. Just the other week an RBC employee was trying to talk me into mutual funds, but I refused and reminded him about 2008. Perhaps I’m not very financially savvy, but at least I sleep at night.

N
N
7 years ago

http://markets.on.nytimes.com/research/markets/worldmarkets/snapshot.asp?symbol=$SHI

I remember seeing the Shanghai composite doing this once before. Mind you, on that occasion it had just finished doing the same thing in reverse.

Harvey
Harvey
7 years ago

House bears check your RRSP accounts tomorrow. Markets are in meltdown. You should have invested in something tangible.

kabloona
kabloona
7 years ago

Okay, I’ll bite….what’s a CRADH?

😉

Balboa
Balboa
7 years ago

#Ponzi

you destroyed your credibility with your bogus statements about Richmond inventory. There is NO CRADH. Get it?

Anonymous
Anonymous
7 years ago

Based on the inventory at this time the last 3 years, Richmond is on a comeback. We all though inventory was going to explode. Feel like eating crow…we were all wrong again.

Anonymous
Anonymous
7 years ago

“wobbles on the Hang Seng could cause another reduced wave of capital flight into Canada”

Fixed it for ya.

Somebody’s going to get a margin call. Which way do you think the capital is going to have to go to settle outstanding debts? Hint: it’s doubtful a deed to Canadian property will be accepted.

YLtn
YLtn
7 years ago

Some of these money launderers hire mainlanders to live in the house (squat) and forward the mail to fake primary residence and prevent break ins and real squatters.

Receding Gains
Receding Gains
7 years ago

No reason to liquidate assets here to support Chinese stock market meltdown. We have to assume the Chinese “smart money” (I’m using the phrase loosely) got out of China in 2011 exactly to avoid this stock meltdown. Isn’t the money parked here supposed to be safe and hidden from Chinese taxman?

I’m guessing, but the only thing that will move money out of Canada is the taxman knocking on doors demanding taxation for offshore earnings. In fact wobbles on the Hang Seng could cause another wave of capital flight into Canada.

kabloona
kabloona
7 years ago

Democrass @85:

The crap-tacular chairs are a real hoot, but what really slays me is the “legal 2 bdrm suite” with swanky laminate flooring….

In a $2.7 million dollar house….WTF???!!

😀

Only in Vancouver…..

Son of Ponzi
Son of Ponzi
7 years ago

Wow,
Hang Seng stockmarlet continues its descent into the abyss.
Watch out for Dow and TSX to further decline tomorrow.
Credit Crunch in China will force Chinese to liquidate Re holdings in Vancouver to meet obligations at home.
Rising interest rates will squeeze out new home buyers in Canada.
Ergo, RE collapse with biblical proportions.

Best place on meth
Best place on meth
7 years ago

Shanghai Composite getting destroyed again tonight 🙂

Son of Ponzi
Son of Ponzi
7 years ago

Today’s PB report was 217 new listings and
160 price reductions.
As my friend Re Canary pointed out Price Reductions are what drives the market down as they are a leading indicator.
I think 160 price reductions in one day must be a record.
Tells me Sellers are panicking.
Buyers sit back and watch.

Democrass
Democrass
7 years ago

Here is a look inside a $2.7M Shaughnessy listing that is probably a HAM gambling chip.

Notice the plastic folding chairs arranged around the Walmart kitchen table. This is living in Vancouver’s most exclusive neighbourhood?

http://www.ecorealtyinc.ca/listing?id=260179161

Aggregator
Aggregator
7 years ago

@N “Do you really think that Vancouver RE appreciation was ever fueled by money from the Philippines? ”

I added Philippines because of its share in immigration figures. I wouldn’t say it was hot money from Philippines, rather hot taxpayer’s money that pay for public jobs (like $60-$80K nursing jobs) that Canadians didn’t want to do.

Filipinos are the biggest beneficiaries of public jobs in Canada. http://i.cubeupload.com/IyRzOE.png So ya, they matter and boost demand for housing.

Anonymous
Anonymous
7 years ago

“When it comes to whores”

I’m listening

Bull Equation: Expenses Exceed CashFlow
Bull Equation: Expenses Exceed CashFlow
7 years ago

http://www.cknw.com/news/audiovault/index.aspx

Confirmed June 24 10:00am + 51:53

“Mortgage Freedom” apparently is a below assessed submarine morgue-gage!

SUBMARINE MORTGAGE = BULL STEALTH WEAPON

LOL!

FATHER
FATHER
7 years ago

#80
we love juicy