What lies ahead? One local real estate agent calls the bottom.

As the news about November's real estate sales circulates in the media, the main emphasis shifts from declining sales to actual prices.

The mantra being pushed is that prices aren't (and won't) be coming down.  We saw that message on November 30th:

"If you've been staying out of the housing market, waiting for a big drop, you might be in for a long wait."

And it's been a theme Tsur Somerville has pushed since early October.

Yesterday it was Eugene Klein, president of the Real Estate Board of Greater Vancouver (REBGV):

November home sales in the Vancouver area fell 28.6 per cent compared with a year ago as what was once the country's hottest real estate market continued to cool.

Despite the sharp drop in sales, the board said the MLS home price index composite benchmark for homes Greater Vancouver was $596,900, down just 1.7 per cent compared with a year ago. The index peaked in May at $625,100.

"Home sellers appear more inclined to remove their properties from the market today rather than lower prices to sell their properties," said Eugen Klein, president of the Real Estate Board of Greater Vancouver.

At this stage of the process, it's no surprise that listings are being pulled to wait out conditions.  And it isn't really surprising that the real estate industry is focusing on the convoluted HPI to dampen the impact of any price drop.

For while the HPI is only down 1.7%, the average detached home price is now down 14% from the February 2012 peak.  Who wants that figure prominently publicized?

Conditions are mimicking what we saw in 2008 when the Financial Crisis started.  As Garth Turner noted, the parallels are eerily similar. 2008 saw a huge drop in sales and the average price started to plummet:

Of course the collapse was resuscitated. "In 2008 a variable-rate mortgage was 6% and a five-year loan was 5.75%. The world fell into a financial... and the Bank of Canada rushed in emergency interest rates. By May of 2009 a VRM had collapsed to just 2.25% – the lowest point in history. With rates almost 4% lower than they’d been months earlier, and mortgage payments slashed by more than half, the collapse in real estate prices and sales was quickly reversed"

The efforts were complimented by the federal government's bailout of the banks through the Insured Mortgage Purchase Program (IMPP).

Not only was the collapse halted, but the bubble blew even higher as Canadians plunged themselves into historic levels of debt:

But as the crack cocaine of cheap easy money has run it's course and the government has started to pull back on those emergency measures, the slide is happening again (despite the HPI only dropping 1.7%):

So as the average price mimics 2008, what divine intervention will occur to see that prices only 'flatline'?

What is going to cause prices to resume their upward trajectory?

The changes to the mortgage rules have frozen out the entry level buyer, the ones who used to be balt o to get into the market with nothing down.

Without their business the market freezes, as Thomas Neal of Royal LePage Estate Realty noted in the Globe and Mail:

While people are still coveting single-family houses, those move-up buyers who already own a condo are more hesitant to purchase a house because they don’t know how long it will take to sell the condo. That’s a change from the dynamic of the last eight years or so when condo owners would often list the unit first, reap more than they expected in a bidding contest, and then in turn funnel that money into winning the competition for a house.

“Now they’re not buying first; they’re selling first,” says Mr. Neal. With that shift, he explains, the number of buyers out there is cut roughly in half.

Enter the current industry campaign: "buy now because prices won't be going down."

I have a feeling this theme is going to ramp up over the winter months before the Spring re-listing begins in earnest:

It’s a market that’s winding down in the dwindling days of November. Few new listings will arrive on the market in December. Those sellers who do list now have likely already purchased another property.

“If you don’t have to sell I think you’re going to wait until the spring,” says Mr. Neal.

As for those sellers whose condos and houses are already lingering on the market, Mr. Neal predicts many of those people will be taking down the “for sale” sign by Christmas.

“People who don’t sell in December will be back out on the market in February,” he says.

And when they come back in Spring, they want to hear that there will be people to buy their homes.

Perhaps that's why some bearish agents are starting to change their tune about market conditions.  Let's face it, who wants to list with an agent who tells you it's only going to get worse.

Perhaps this explains the about-face in attitude from real estate agent Andrew Hasman.

In 2011, when prices were going crazy on the west side, he was calling the market 'unhealthy' and warning about the consequences:

"The local person is completely out of this market," he said. While skyrocketing prices have made business good, Hasman said that the current market, with housing prices rising 10-15 per cent each year, is unhealthy.

"Anytime you have extremes in markets, it's never healthy," he said. "You end up with a bubble. If the local economic base can't support these levels, then at some point you're going to have a lot of people burned big time. It's not sustainable."

In July 2012 he told us that:

This feels like the first Normal Real Estate market in many years. That is if you can even define or remember what 'Normal' really feels like.  Gone are the bidding wars and gone (for now) are the days when homes were selling in mere days. For buyers there is now good selection and no pressure to make that big commitment... Sales of homes across the Greater area of Vancouver are at levels not seen since 2000!

Overall, prices still seem to be holding with some price softening in specific markets only. Vancouver’s Westside looks to be one of those markets.  Fewer buyers from China, tougher mortgage regulations and concerns over the global economy are all weighing on consumer confidence. I predict these market conditions will continue through the balance of 2012 with further price softening.

So does Hasman see more dismal times ahead for when all those disgrunted sellers re-list in the Spring?  Apparently not, according to his December 4th market report:

We continued to slow sluggish sales activity on the Westside during November. That being said there is some promising news. The number of homes on the market at the end of November has dropped substantially since peaking in mid-September. I have also noticed a lot more calls on our listed properties combining with more viewings too. Even though sales volumes continue to remain well below last year’s levels, the shrinking supply and stable sales volume over the past 6 months points to a stable market moving forward. In fact, I’m going to go out on a limb and predict a robust Winter Market with brisk activity in January and February.

Really? And what are we going to hang our hopes on for this resurgence in the market?

For home owners thinking about selling in 2013, keep in mind if you list your home in March (based on the last 4 years of sales activity) you missed the best time for selling. Home owners that listed their homes just before Chinese New Year achieved the highest selling prices. The period of Late January to end of the February was the busiest time for housing sales the last 4 years. Why should this year be any different?

Ummm... because that period in 2012 also wasn't like the years before it?  Based on 2012, that period was a disaster. Are we really going to continue to hang out hats on Hot Asian Money (HAM) again this Spring? 

It appears so. Hasman not only pins his clients hopes on HAM, he goes further than that and calls a bottom for the market:

I do not see any housing crash or even much more downside to house prices. Prices have already slipped 10-15% in some cases and I feel that is as far as it will go.

So there you have it: Buy now, because prices aren't going to go down.

Pardon me if I read the tea leaves a little differently.

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

Mon Post #2: The Canadian Banking System - a myth built on quicksand?

Long time readers of this site know that on numerous occasions we have talked about the Canadian Banking System and the myth of it's stability.

It was on December 7th, 2009 that we quoted a Sprott Asset Management report and discussed how the Canadian banks escaped the 2008 meltdown unscathed.

Few realize all five Canadian banks are levered at an average of 31:1 and that if tangible assets were to drop by 3% in value, tangible common equity would effectively be wiped out.

Nor do many realize that Canadian Banks were bailed out by receiving $65 billion in liquidity injections from the Insured Mortgage Purchase Program (IMPP) in 2008 - Canada's version of TARP - whereby the CMHC purchased insured mortgages from Canadian banks to provide additional liquidity on the asset side of their balance sheets.

No one seems to be aware that the Bank of Canada then gave our Canadian Banks an additional $45 billion in temporary liquidity facilities or that the Canada Pension Plan, through the purchase of $4 billion in mortgages prior to the IMPP program, raised the total government bailout to $114 billion.

Back in 2009 we talked about how we have been fed almost daily fed propaganda that tells us that the dramatic performance of our nation's real estate during this worldwide economic crisis is all a result of the solid foundation of our nation's banks and the virtuous conservatism of the Canadian financial system.

And that's it is... propoganda.

Earlier today on of the contributors to our first Monday post left a link to an article titled "Canada's Housing Bubble Blow out amid Global Collapse".

The article provides an interesting analysis of the recent downgrading of Canada's banks by Moody's and the reasons behind the downgrade.

The move by Moody's marks the first of what will, no doubt, become widespread worldwide realization that the stability of Canada's Banks is more myth than fact.

The article is a great read and while the blog doesn't agree with all of it, it does articulate many of the points we have attempted to make in the past.

For your consideration:

--------------------------------------------------------------

Canada’s Housing Bubble Blow Out Amid Global Collapse.

Sunday 24 June 2012, by Christiane

By Matthew Ehret-Kump

While this shouldn’t come as much of a surprise, the long-standing myth, proclaimed by official talebearers, that the Canadian banking system is the most “stable system in the world” due to its “conservative banking culture”, has been seriously undermined. Moody’s Investors Services recently spooked the Canadian banking community when it announced in a June 25 [1] report that the emergency “corrections” being made to the overblown Canadian real estate bubble to deleverage itself from oblivion, has come too late.

What happened?

In April of 2012, the Canadian Centre for Policy Alternatives (CCPA) issued a report called “Big Banks Big Secret” which demonstrated the sleight of hand $114 billion of bailouts of Canada’s five biggest “too big to fail” banks which had found themselves loaded with worthless assets from November 2008 until 2009 [2]. As the CCPA report documented, these bailouts were initiated by the Canadian government directly via the Canadian Mortgage and Housing Corporation (CMHC), which produced $67 billion to clear the books of private financial institutions of their toxic paper, followed up by the Federal Reserve’s 0% open discount window of 2011, which was tapped heavily by those same five banks who all the while maintained that they were in perfectly sound shape, and didn’t need any help yet took liquidity injections nonetheless. This Fed scheme, as well as a similar operation conducted by the Bank of Canada represented the remainder of the $114 billion bailout (figure 1).

Defenders of the bailout from all sides of the aisle in Canada, much like their American counterparts, will defend the scam by first calling it either a “liquidity injections” or “investment”, and then stating that they actually turned a profit after the initial capital was returned with interest! However, like in the United States, what tends to be avoided is the fact that those toxic assets covered by taxpayer revenue, represented magnitudes more than their nominal value due to infamous leveraging practices on the national and international derivatives scene. In the case of the USA, actual assets associated with those bailouts were in fact over $29 trillion [3]. This begs the question: how much fictitious speculative capital was actually represented by the underlying $114 billion?

Figure 1,

Canada’s Real Estate Crisis

Canadians have swallowed hook, line and sinker the story that ours is “the finest banking system in the world”. As a by-product of such a delusion, a great number of citizens have allowed themselves to get caught up in a gigantic real estate bubble where prices have doubled on average since 2002, although countless cases of quintupling or sextupling prices over the same interval exist (figure 2*). This bubble has resulted in average real estate values having surpassed even those of the United States at its peak as of June 2011 (see figure 3). When this is combined with the personal debt to GDP ratio of $1.50 to $1.00 as one of the highest of all Western countries, the image of Canada’s “conservative” financial culture no longer holds, and in its place, the dark shadow of a predatory banking system is expressed in the great northern dominion of the British Empire.

It now stands that total assets associated with securitized mortgages have stretched beyond $1.1 trillion dollars, and it is important to keep in mind that this is happening, not within a vacuum but within the context of the hyperinflationary meltdown of the trans-Atlantic monetary system.

Figure 2.

Figure 3.

What has kept this bubble growing?

In the immediate maelstrom now at hand, the chewing gum holding the hull of the Canadian financial system together is to be found in a few key factors, but not least among them is the ultra low interest rates being maintained by the Bank of Canada. These low interest rates of nearly 0% (figure 4) make borrowing cheap; attract international speculative agencies resulting in an ever stretched bubble. Insiders in the Canadian government have revealed to this author that during internal briefings, Mark Carney himself has pointed out that should even a small increase in interest rates occur, an immediate 10% default of houses across the board would follow resulting in a vacuum much greater than its $110 billion dollar nominal value.

These interest rates have been kept artificially low primarily as a function of the unprecedented taxpayer-backed insurance scheme provided by the Canadian Mortgage and Housing Corporation which was created in 1946 as a federal insurance agency modelled on the American Fannie Mae and Freddy Mac, but which under the current liberalized order, now behaves as a monster used only to prop up a dying system, evidenced by its astronomical insurance cap of $600 Billion dollars (a ceiling that had been increased several times by the Harper government in recent years from its $350 billion limit in 2007, and $50 billion in 1988 (see figure 5)). The other major mortgage insurer Genworth Canada, while remaining private, also has a cap of $250 billion, 90% of which would be covered by the Canadian government were it to go under.

Figure 4.

Figure 5.

To restate the formula: risky assets are guaranteed by the government on the condition that interest rates are kept nearly nil by the government such that exponential profits may occur as out of thin air. For this scheme to function, however, a highly centralized top down meshing of government and private finance must occur. As historian Tom Taylor wrote in 1976; “The political power of the larger banks and of the Bankers’ Association can hardly be exaggerated. The bank acts were written largely by the very banks supposedly regulated by them [4] .”

While it is important to understand the current chewing gum holding the ship of Canadian finance together, it is vital to keep one’s mind on the more important question “who designed the ship, and sailed it into the maelstrom?”

For this to be understood, it is necessary to look back a little farther into history and recognize the treacherous effects of the Mulroney governments’ destruction of three of the four pillars of banking in 1987. It is demonstrable that those speculative practices underlying the current bubble which Canadian financial cartels have been complicit in creating, both at home and internationally alike, could not have occurred were it not for the repeal of those laws which forced the separation of commercial banking, trusts (which were the sole issuers of mortgages), securities dealers, insurance companies and which had been maintained for decades following World War II, otherwise known as the “Four Pillars”. After the repeal of those pillars all of the above financial institutions could all mingle under one roof and waves of mergers of the already cartelized financial institutions during the 1990s resulted in a new type of beast which could take legitimate deposits and create the means of leveraging risky securitized debts (as well as other insured liabilities) as “universal banks”, much of which would be now backed by tax guarantees. To re-emphasize, mortgage related securities could not have existed had the Four Pillars not been repealed.

This was the Canadian experience of the same essential process which lead up to the repeal of the Glass-Steagall under the Gramm-Leach-Bliley Act in the United States in 1999 orchestrated by the City of London centred oligarchy around Lord Jacob Rothschild’s Inter-Alpha Group of banks.

Today, this system has inflated itself beyond all containable limits. The Canadian Council of Chief Executives has implemented a veritable coup over the past several decades for their London masters. The time has come to decide whether Canada will move with the LaRouche three-step program of a Glass-Steagall-like bank separation, the adoption of a public credit system and the North American Water and Power Alliance (NAWAPA) or abandon all remnants of national sovereignty as it follows the City’s crazed British financial empire faction into hell.

*Graphs 1, 3 and 4 were taken from www.theeconomicanalyst.com and Figure 2 was taken from www.mjperry.blogspot.com

Footnotes

[1] “Moody’s Warns on Mortgage Debt” June 25 2012, www.globeandmail.ca

[2] “Big Banks Big Secret: Estimating Government Support for Canadian Banks During the Financial Crisis”, by David Macdonald, Apr 2012. www.policyalternatives.ca

[3] “$29,000,000,000,000: A Detailed Look at the Fed’s Bail-out by Funding Facility and Recipient” by James Felkerson Dec 2011. www.levyinstitute.org/

[4] History of Canadian Business: 1867-1914, 1976

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

How can we be so blind?

Yesterday I mentioned that I had an encounter with James, a casual acquaintance of mine who happens to be Scottish (he's a tolerable guy though, so we overlook that).

I've known James for almost 20 years, but yesterday was the first time we had ever talked about real estate... and it was an intense 15 minute conversation in which he hit on just about every stereotypical defense for real estate.

'Real Estate never goes down, you can't ever go wrong buying and our solid Canadian banking system won't facilitate any sort of collapse here.'

It was almost a surreal encounter.

But it speaks volumes.

Mainstream Canada is still completely unaware. They have bought into the 'official' line that everything is alright.

And perhaps it is just as well. Can you imagine the panic to dump real estate were it any different?

The average Canadian is blissfully ignorant about what has happened... about what is happening... about what is about to happen.

They are completely unaware about how our Canadian banks barely escaped their own meltdown in 2008.

Few realize all five Canadian banks are levered at an average of 31:1 and that if tangible assets were to drop by 3% in value, tangible common equity would effectively be wiped out.

Nor do many realize that Canadian Banks were bailed out by receiving $65 billion in liquidity injections from the Insured Mortgage Purchase Program (IMPP) in 2008 - Canada's version of TARP - whereby the CMHC purchased insured mortgages from Canadian banks to provide additional liquidity on the asset side of their balance sheets.

No one seems to be aware that the Bank of Canada then gave our Canadian Banks an additional $45 billion in temporary liquidity facilities or that the Canada Pension Plan, through the purchase of $4 billion in mortgages prior to the IMPP program, raised the total government bailout to $114 billion.

And what about the CMHC being ordered by the Federal Government to approve as many high risk borrowers as possible to prop up the housing market (with entry level buyers) and keep credit flowing?

• In 2008 some 42% of all high risk applications were approved, a 33% increase over 2007.
• Between the beginning of 2007 and 2009 Canadian Banks increased their total mortgage credit outstanding listed on their books by only 0.01% - possibly the smallest amount of change in post WWII history - which was the only way we managed to keep credit flowing in our country while it dried up in the USA.

Canadians are oblivious.

They can't see how this all impacted the debt orgy. Aren't aware of how CMHC's obligation has grown from $100 Billion in 2006 to $776 Billion in 2010.

Last year the Conservative Government, after our nation spent 10 years digging ourselves out of a $45 Billion deficit with onerous taxes like the GST and years of cutbacks in government services, replunged us back into hock with a record breaking $50 Billion deficit.

If CMHC is forced to pay out on a mere 10% of that guaranteed $776 Billion, that amount would more that double that historic $50 Billion debt.

But the average Canadian is completely oblivious.

They sincerely believe that our secure, non-bailed out Canadian banks don't lend to 'risky borrowers'.

They are wilfully blinded to the ads all around them whereby someone with no money can go out and, courtesy of bank initiatives like this one that offers them 7% back, can get their 5% downpayment covered and actually get PAID 2% of the mortgage value to make that purchase.

Nothing down and get PAID to buy a house!!!

No... we don't see it.

We tell ourselves we aren't making the same mistakes the Americans did. And we do it with blatant ignorance.

But Americans can see it.

When I spoke to two tourists from Minnesota in August, they asked what the interest rate was on a 30 year mortgage here. When they found out virtually no Canadians have long term mortgages... that the vast majority have 5 year terms or less that reset at whatever the going interest rate is... they recoiled in shock. They instantly recognizing that all Canadian mortgages are set up exactly like American subprime mortgages: 2-5 year low teaser rates that reset higher once the teaser term is over.

But the average Canadian is oblivious.

We bailed out our Banks.

We allow people with no money to buy houses (which has driven up the price of our real estate exponentially).

We have a vastly higher percentage of Canadians juiced on teaser rate mortgages, mortgages they can afford now but for which the vast majority will not be able to afford when rates reset higher.

And when interest rates do climb higher, our real estate market will implode just as spectacularly as California, Phoenix or Florida.

That collapse has already started. As I have shown you in posts this month

• Okanagan Real Estate has stagnated and properties are down 50%,
• Victoria Real Estate, after three previous months of sales down by over 40% from the same month last year, are on target for a 75% decline this month,
• Vancouver is on track for a fourth consecutive month where sales are 40% down from the same month last year,
• Bob Rennie is selling luxury condos downtown at the Fairmont Estates for 40% off their March prices, and
• in Surrey developers are offering units for 35% off their 2006 pre-sale price.

We are like the people in South East Asia who, on Boxing Day 2004, witnessed the sea drain from their shores.

Not sensing the danger, they ventured out to check out the tidal flats in wide-eyed wonderment only to realize, too late, the danger as they tried to flee for their lives from the crushing Tsunami barreling down on them.

The only difference is that the South East Asians didn't witness a neighbour go through the same situation 3 years earlier and then make the same mistakes.

Canadians saw the Housing Tsunami strike America, the UK and Europe. We have no excuse for not seeing this coming.

Yesterday my friend James revelled in calling me a doomer.

I perfer the term 'rational realist', myself.

==================

Email: village_whisperer@live.ca

Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

Follow the pea

It's the Christmas season and time to navigate the holiday party circuit.

Headlining much of the party chatter angst is every one's favorite topic - real estate.

But this year the fears and trepidation that were all too commonplace this time last year are gone. Replaced by a re-birth in speculative frenzy bordering on religious fervor.

Hobnobbing over eggnog I am amazed at how everyone is convinced that the Village on the Edge of the Rainforest has escaped the market meltdown fate of our American cousins.

R/E defenders trumpet that - despite a near Depression - real estate only suffered a modest drop in prices, prices which have since rebounded.

There is a palpable sense of invincibility growing again, a faith in the manifest destiny of the Vancouver market.

Once again I find myself holding court as the lone naysayer in a room filled with re-born real estate evangelists.

Particularly amazing is how so many have glommed onto the report released by the Federal Reserve Bank of Cleveland titled "Why Didn’t Canada’s Housing Market Go Bust?"

That report concluded that it was primarily the lack of a subprime lending industry in Canada that kept the housing market in this country from imploding. When combined with the oft-repeated mantra of the superior Canadian banking system, it is stunning to see how it has people gushing again about a non-stop, upward trajectory for real estate.

I shake my head.

First of all our vaunted Canadian banks aren't quite as secure as we may like to believe.

Faithful readers have already seen the post on the Sprott Asset Management report which clearly outlines how our Canadian banks barely escaped the 2008 meltdown.

They received $65 billion in liquidity injections from the Insured Mortgage Purchase Program (IMPP) (meaning CMHC purchased insured mortgages from Canadian banks to provide additional liquidity on the asset side of their balance sheets), the Bank of Canada provided them with an additional $45 billion in temporary liquidity facilities and there was also assistance from the Canada Pension Plan (CPP) through the purchase of $4 billion in mortgages prior to the IMPP program for a total government expenditure of $114 billion.

All five Canadian banks are levered at an average of 31:1. According to Sprott this implies that if the Canadian banks’ tangible assets were to drop by 3%, their tangible common equity would effectively be wiped out.

But despite this precarious position, Canadian banks are still facilitating mortgages for both current mortgage holders and eager new buyers whereas in the United States potential buyers struggle for financing and foreclosures reign supreme on current mortgage holders who need to renegotiate.

How can this be?

The Federal Bank of Cleveland says it's all due to the lack of a subprime lending industry in Canada.

Au contraire mon frere!

The only reason our real estate market hasn't tanked like it has in the United States is because of the way our government has intervened in this crisis.

While both countries have slashed interest rates to dirt to stimulate both the economy and the real estate market; in Canada we have also have the CMHC.

The CMHC publicly admitted that it was ordered by the Federal Government to approve as many high risk borrowers as possible to prop up the housing market and keep credit flowing.

• In 2008 some 42% of all high risk applications were approved, a 33% increase over 2007.
• Between the beginning of 2007 and 2009 Canadian Banks increased their total mortgage credit outstanding listed on their books by only 0.01% -- possibly the smallest amount of change in post WWII history.

Because of the way these mortgages are being securitized by CMHC, credit is flowing from our banks into the real estate industry. And all of these mortgages are backed by the Federal Government.

• The Canadian mortgage securitizaton market has grown from $100 billion in 2006 to $295 billion by mid-June 2009.
• CHMC plans to expand securitization of debt to $370 billion by the end of 2009 as per the conservative government request.
• CMHC indicates in its plan that it will insure $813 billion via a combination of mortgage insurance and mortgage-backed securities (MBS) by the end of 2009.
• According to CHMC figures from 2008 and 2007 it is clear that CMHC has drastically exceeded their planned figures. It is expected that $812 billion is more than likely to be a minimum target.
• At these rates of progression the Government of Canada will in effect be insuring well over $500 billion in securitized mortgages and lines of credit by the end of 2010. The Canadian Government will also have issued over $600 billion in outstanding mortgage insurance.

The Canadian real estate market is flourishing while the American real estate market is floundering because credit is flowing to homebuyers in Canada.

In the United States, it is not.

I'll repeat the key statistic again: between the beginning of 2007 and 2009 Canadian Banks increased their total mortgage credit outstanding listed on their books by only 0.01% -- possibly the smallest amount of change in post WWII history.

It means our banks aren't on the hook for all the mortgages that have been issued, the Federal Government is. That's why credit is available for real estate in Canada when it isn't in the United States.

Uncle Sam is too busy bailing out Wall Street instead of Main Street.

The reality is that our so-called 'solid' real estate market exists only because of massive federal government subsidization. The whole industry sits on a precarious foundation of quicksand that is part of an intricate shell game of asset protection being played by the Federal Government.

That's why Bank of Canada Governor Mark Carney 'urges prudence' but won't take action to raise interest rates and why Finance Minister Jim Flaherty won't tighten up mortgage lending requirements as an alternative to BOC action.

I suspect many of my fellow party-goers, those who are all too ready to ooze that elusive 'market confidence' that officials were so desperate to restore last Christmas, will not fully realize what is going on until it is too late.

Classic 'marks' in what to me is clearly a 'confidence' game.

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.