Oh, Canada...


huffingtonpost.ca/2013/01/24 … a-business


Shadows creep over Canada house prices - FT.com - Canada on.ft.com/X44DIg


Toronto Condo Overbuilding Has Reached ‘Ridiculous’ Proportions:

huffingtonpost.ca/2013/02/07 … _hp_ref=tw

all your for 1 million


macrobusiness.com.au/2013/02 … dium=email


Vancouver home sales continue downward spiral - -> business.financialpost.com/2013/ … rd-spiral/


The government tries to keep rates higher without raising them

thespec.com/news/business/ar … e-rate-cut

"Flaherty intervenes to end Manulife mortgage rate cut
Manulife Bank pulled its new discount mortgage rate off the market after hearing the federal finance minister, Jim Flaherty, was unhappy about it, both parties confirmed Tuesday.
Manulife Bank pulled its new discount mortgage rate off the market after hearing the federal finance minister, Jim Flaherty, was unhappy about it, both parties confirmed Tuesday.
Sean Kilpatrick/The Canadian Press

Manulife Bank pulled its new discount mortgage rate off the market after hearing the federal finance minister was unhappy about it, both parties confirmed Tuesday.

The move led opposition critics in Ottawa to accuse federal finance minister Jim Flaherty of interfering in the free market and effectively boosting Canadians borrowing costs.

Flaherty, who has been concerned Canadian households’ record high debt levels, confirmed he was unhappy with Manulife’s rate cut.

“I had one of my staff call them and indicate my displeasure,” Flaherty told reporters in Ottawa.

Manulife had quietly cut the rate on its five-year fixed mortgage to 2.89 per cent from 3.09 per cent starting Monday. It was among the lowest posted rates in the market.

It’s not unusual for banks to offer special promotional rates, especially during the usually busy spring real estate selling season. This year, banks are facing a potentially slower housing market, giving them even more incentive to try to undercut each other to win more market share.

But Manulife reversed its decision Tuesday afternoon “after consulting the department of finance,” the company said in a statement.

“Our government has taken action several times to make sure the housing market remains sound,” Flaherty said in a statement emailed to the Star on Tuesday.

“As for decisions by individual banks, as I have said repeatedly before, my expectation is that they will engage in prudent lending — not the type of ‘race to the bottom’ practices that led to a mortgage crisis in the United States,” the minister also said in the statement.

Liberal interim leader Bob Rae called the minister’s actions “ridiculous,” according to Canadian Press reports Tuesday.

“Either we have a market or we don’t,” Rae said. “The banks have huge profits. The idea that they shouldn’t be able to give a break to consumers is ridiculous and the idea that the minister of finance would basically be trying to create some kind of a cartel among the banks and the financial institutions as to what they can offer consumers by way of interest rates is I think completely inappropriate, completely wrong actually.”

“That’s ‘banana republic’ behaviour,” said NDP Leader Tom Mulcair, who added the minister has no business interfering with the free marketplace.

“It’s inappropriate for the minister of finance to basically engage in price regulation and price setting,” said Ian Lee, a professor at Carleton University’s Sprott School of Business. “That’s not the role of the government of Canada.”

“The difference between 3.09 and 2.89 is the price of a cup of Tim Horton’s coffee,” Lee added. “Anyone who thinks the mortgage market is going to tip over the cliff for the price of a cup of coffee can’t count.”

Flaherty said he did the same thing when Bank of Montreal announced it was lowering its five-year fixed rate to 2.99 per cent, except with BMO he placed the call himself.

BMO stuck with the rate cut.

No other banks have followed BMO’s lead, saying they’re already competitive in the market.

Their posted five-year fixed mortgage rates are as high as 5.14 per cent, but several have special offers in the market.

Scotiabank, for example, has been offering a 3.09 per cent rate since Feb. 12 on a Special Flex Value five year closed mortgage, according to its website.

TD has a special offer on a 10-year fixed rate mortgage at 3.69 per cent, according to its website.

CIBC and Royal Bank are encouraging borrowers to call to discuss special offers on their five-year rates.

Meanwhile, mortgage brokers say they’ve been able to get rates as low as 2.89 per cent for some time, including from major banks.

“When BMO came out with the announcement a couple of weeks ago, we were somewhat puzzled because we’d been at 2.89 for some weeks” from major banks, said Joe Sammut, a broker with Mortgage Architects, in Toronto.

Only some major banks use the mortgage broker channel.

BMO has said its 2.99 per cent mortgage meets Flaherty’s objectives by allowing Canadians to pay off their debt loads sooner.

The federal finance department has acted four times in the last few years to tighten mortgage lending rules in a bid to dampen borrowing, including shortening the amortization period from 40 years to 25 years.

Mortgage lending has slowed in recent months, along with house sales and prices.

With files from Canadian Press

Toronto Star"


Looks like the bail-in template is spreading worldwide. First Cyprus, then New Zealand and now Canada

Canada Includes Depositor Haircut Bail-In Provision For Systemically Important Banks in 2013 Budget! -> budget.gc.ca/2013/doc/plan/b … 13-eng.pdf


Daily chart: Americans and Britons have pared back their levels of debt since the financial crisis, but in Canada it has grown. Today’s videographic reveals that Canada’s share of household debt to disposable income is now approaching the same level as America’s and Britain’s before the fall. Watch our live chart: econ.st/13RZCrX



This is actually a very positive development.

I have often railed on here about how depositors share at least a portion of the responsibility of how the bank they are funding conducts its business.

Now if depositors see their bank engaging in unsustainable lending, or running weak capital margins, they simply move bank, leaving the bank with less ability to fund its activities.

The Cyprus ‘bail-in’ was actually a very clever precedent to set in my opinion. When I first heard what was being suggested I said they were stage-managing something.

It is the best type of regulation you could put on a bank. Not to mention how taxpayers are removed from the equation.

A brave and inspired move by the European apparatchiks!


It will just mean that depositors will flee when things start to go sour thereby exacerbation or triggering banking crises.


It seems that this would exponentially speed up a bank run and destroy deposit:loan ratio really quickly thereby costing more in the end!

IMO it would work if implemented after a big bust but it is not a constructive idea at the end of a bubble run-up, in fact it looks counter productive.


I think my base assumptions are very different to most peoples’. In my defence I have thought carefully about these assumptions, and have some direct experience too.

Assumption 1: The resources being thrown at the problem of how to fix this crisis in Europe are of the highest order. ie. The best brains, the most advanced science, and incredible resources of manpower and software and other tools at their disposal. Far beyond what the average layman can conceive of.

Assumption 2: Aside from capabilities, the intentions of those who work for bodies like the ECB, EU, IMF are of a fairly noble character as far as they are trying their best to do their best for the greatest number of people.

Now, what is implicit in the above, is that 99% of the comment made about the crisis and the efforts to resolve it, is made in ignorance of a large part of the information that in fact is held by those tasked with resolving it. It is also biased.

But, to take an example, if I put myself into the shoes of those tasked with resolving this crisis, one thing that I would want to do is to exercise control over banks that are not doing what they are supposed to.

How would I do that? Possibly by weakening their deposit base, so that they were much more reliant on ECB provided liquidity.

The other aspect is that is is an absolutely critical part of resolving this crisis is to remove sovereigns and taxpayers from having responsibility for their banks. It is far preferable that depositers are put forward ahead of these entities. Now how might I go about gently putting that in train…?

I read that article about Draighi saying the ‘bail-in’ was “not smart to say the least”. And that the ECB, the European Commission and the IMF were not a part of making the proposal.

However, I find what he is saying totally unbelievable. Making ‘errors’ like that is not how such organisations work in my experience. Errors in long term strategy, perhaps. But not day to day errors like that, at that level. Secondly, it is totally unbelievable that the Troika were not a part of those proposals.

It is far more logical to assume that they are stage-managing public reaction, opinions and behaviour. Of course, they react to public reaction and economic behaviour. It is a continual game of feedback and back and forth to achieve desired behaviour.

Those ‘feedbacks’ are really significant in this crisis. They make this crisis much much different to what has gone before. For example, in the early years of this millennium, I was tangentially involved with a project in another country, a project done through mainly military resources, developing software to monitor, and reveal meaningful data, and ‘mark’ transactions of note, on ALL electronic cash transactions going out and coming in to the country. I have no doubt but that all countries now have this facility, and much more.

The principle is simple. - A stimulus is applied (to the economic ‘population’). That stimulus is one generated either by external events, and/or by design by those responsible for the economic system… and the result is tracked. Then depending on information gathered, other designed stimulus are applied to bring result back within desired parameters.

I really really find it hard to believe that ALL that happened around ‘bail-in’ of depositers was not very carefully planned and executed.

You cannot assume that news and truth are synonymous. They are very different things. The function of news is to create a picture of reality in the mind of the public. Most often this picture bears little resemblance to the truth. This is just as true for news on the internet as for the traditional sources.

It must be acknowledged that the perception of those tasked with dealing with public affairs is that the economic population at large are largely ignorant about issues, policies, and other public matters, and they lack the competence to participate in public life. (They are unfortunately largely correct imo. My held politics revolves around how this state of affairs might be changed btw.)

You cannot just take the ‘news’ you hear in a straightforward manner. You MUST try to look behind the shadows cast. This whole “bail-in” thing is a strong example of this.

We are being played like a fiddle.


Canada Unexpectedly Sheds 54,500 Jobs in March; Worst Job Loss in 4 Years; Canadian Dollar Tumbles -> globaleconomicanalysis.blogspot. … bs-in.html


House prices continue to rise despite less houses being sold
cbc.ca/news/canada/story/201 … march.html

The average house price in Canada has reached $378k (€283k)…sounds like average house price Ireland circa 2007?
Montreal $332k
Toronto $508k
Calgary $435k
Vancouver $731k


We had four persons from our place of employment go to Canada:
#1 - November 2011 - Vancouver - Two job offers within about three weeks.
#2 - February 2012 - Toronto - Three job offers within about three weeks.
#3 - May 2012 - Vancouver - - A job offer within about three weeks.
#4 - January 2013 - Toronto - No job yet.
Anyone else know of folks finding it harder - Is the docket beaten?


Hardly statistical, but I guess that’s why you’re asking for more info.

What sector(s) were those folks in?





Where have I heard that sound before?


The smart ballsy guys are buying all round them now