The Coming Collapse of Canadian Banks and the Canadian Economy

Hi Folks,

First I am truly sorry that the scope of this topic is if very limited nature.
It is not my intention to limit the discussion and I welcome all responses and inputs.

As the title says I am interested in Canadian Economy and it's coming collapse.
I am more specifically worried about the banks.

I my self work in a law firm and my job is to handle all residential real estate transactions for our clients.
Therefore I know first hand how the mortgages ae being approved, how the mortgage brokers are paying off people to value home at much higher prices, how real estate agents are encouraging people to out bid other parties by almost $50,000, how the mortgage brokers and the lenders are giving away mortgages without any income verification, how the client do not understand the mortgage details and how they work and lastly how even most if not all mortgage broker do not know hot the Mortgages work.

From my experience and things I see every day I have come to the conclusion that almost all Canadian banks will be trouble if the home prices have a healthy 5%-10% correction and the following two are the biggest culprits.

1. TD Bank or The Toronto Dominion Bank
2. CIBC

Among Class B lenders

Street Capital
Home Trust
MCAP
The Equitable Trust

However I lack more data one persons experience and the evidence of coming crises is
Not enough to come to a definitive conclusion and this is where I seek your help.

If there are any members who have first hand information on the residential real estate market, I urge you to please
Post here what you see or have experienced.

Now for the spies of the big bankers you by now already know my name and know where to find me
But beware for
I have my Fathers Gun and a scorching case of herpes ready for you.

Thank you.

Be an open book to your loved ones, a mystery to your friends and a terror to your enemies.

Sounds like the late 90s in the US.

unfortunatly,,

Caveat Emptor

but if a Portfolio of Mortgates,,is actually maggot infested,,

well same rule applies.

reply to post by lordvader


Dear lordvader,

Interesting that Canada would do the exact same thing that caused the housing bubble and collapse of the market in the United States, sounds like suicidal tendencies for your politicians too. I recommend that you look at two things as I am not familiar with your housing market. Firstly, research the affordability index (it tells you what percentage of the population can afford what price house). If your population's income does not match the housing market then it is absolute that the market will crash. Secondly, investigate the Austrian School of Economics and see if an inverse yield curve (or inverted yield curve) has occurred in your economy. That happens prior to any depression or recession. Good luck.

reply to post by lordvader


so in addition to illegal Mexicans we Americans should expect illegal Canadians?

my bank the RBC was to my great surprise
one of the TOP TWENTY bailout recipients in the first go round
get that into ya...

sandf OP

PS did I say I have learned to like eating pine tree bark...its nutritious and easy to catch

Originally posted by starwarsisreal
reply to post by lordvader

 

so in addition to illegal Mexicans we Americans should expect illegal Canadians?

Naw ...
we took note of the story last week that said
for the first time since the great depression, Mexican immigrants are DOWN
because the economy in the states is so effed up

Every cloud has a silver lining I guess

reply to post by lordvader


If is does happen you have to wonder how much TD and CIBC got from the $75 billion dollar bailout the Conservative government hid from the Canadian public and what was it used for?

To provide cheap money for mortgages?

...read the following [snippet from a larger article], it's quite interesting....

Canada's 75 Billion Dollar Bank Bailout
The $64 Billion Federal Budget Deficit is intended to Finance Canada's Chartered Banks

By Michel Chossudovsky

Global Research, January 25, 2009

...

The 25 billion dollar allocation was announced four days prior to the elections. Two days following the federal elections, the first mortgage purchase took place leading to an initial cash injection of 5 billion into the coffers of the chartered banks.

Barely a month following the federal election, on November 12 2008, another $50 billion allocation was announced.

It received no news coverage. Moreover, opposition party leaders did not analyze the official statement of the Ministry of Finance.

The likely consequences of the Canada bank bailout on the federal fiscal structure were not the object of discussion or political debate.

The text of the official statement reads as follows:

"The Honourable Jim Flaherty, Minister of Finance, today announced the Government will purchase up to an additional $50 billion of insured mortgage pools by the end of the fiscal year as part of its ongoing efforts to maintain the availability of longer-term credit in Canada.

This action will increase to $75 billion the maximum value of securities purchased through Canada Mortgage and Housing Corporation (CMHC) under this program.

"At a time of considerable uncertainty in global financial markets, this action will provide Canada's financial institutions with significant and stable access to longer-term funding," said Minister Flaherty.(The Main Wire, November 12, 2008, emphasis added).

At the height of the election campaign, Prime Minister Harper stated emphatically that: "this is not a bailout... it will cost the government nothing." (CBC News, October 10, 2008).

According to Finance Minister Jim Flaherty: "This program is an efficient, cost-effective and safe way to support lending in Canada that comes at no fiscal cost to taxpayers."(Ibid)

for the full article see www.globalresearch.ca...

edit to add:

Both CMHC and the Federal government are not in the business of holding real estate. So the question has to be asked "when will CMHC unload the $75 billion worth of mortgages and at what cost?" [more than likely at a substantial loss]. PLUS guess who is administering those mortgages?

The banks that originally held those mortgages. Yes, they are being paid to administer them!!!

reply to post by lordvader


Complete rubbish.
I have been in the industry for decades and you haven't got a clue what you are talking about.
Debt levels are high, yes. But mortgages are not approved the same way they were in the States.
The Canadian banking system is the envy of the world due to its tightly regulated practices.
You're spouting complete drivel.

Never mind sorry for interupting

Sorry

Being a Certified Financial Planner, I have to totally disagree with you. Canada has never been stronger, has never made smarter decisions, was hardly impacted by the meltdown in 2008. Our banks are leading the way around the world. Mark Carney has done the right job as minister. He even predicted that Jamie Dimon would loose out! Our insurance companies are making headlines internationally, without using the negative concepts of US insurance companies, The Real Estate sector has been strong, not overly, just well in place. Our government while not the best has done an incredible job throughout the whole fiscal crisis.

I don't know what type of law, your firm litigates I am assuming real estate,however there is little chance of a full blown real-estate collapse here, circa 2008 sub prime collapse, I am not going to list all of the requirements that a person has to meet in order to qualify for a mortgage ,but I will say the Canadian Housing and Mortgage Association plays a big role in the approvals of home buyers.
Most Canadian banks had exposure to the sub-prime crisis but thanks to government [asset relief] they came out okay,there is little chance of a collapse [unless there is a global crisis which is very possible even probable]
but if our banking industry can be summarized in a few words ,they would be cheap ,no risk ,no leverage make your profits on guaranteed lending .
As far as the real estate markets being overpriced only a few provinces can make that claim BC ,Alberta and Ontario,but really that's a no brainer any large metropolitan area that has a constant supply of new immigrants has that dilemma,and if there is a correction ,by then the USA and Europe will have a full blown collapse at that point anyway,and Canada will be f*****ed its like the old adage "Everything that sits in the sun day after day will eventually spoil no matter how healthy it is" I believe we are witnessing a geo- political global correction, in short ,"nobody walks away from this one"

reply to post by eNaR


CMHC does not hold the mortgages.
They insure the lender against default.
Do your homework about the way things work, and get off your soap box long enough to get a clue please.

But beware for I have my father's gun

....

Elton....

.... is that you?




I'd likw to know where the river boat sails tonight.

Toronto braces for deflating condo bubble

“Everyone is uncertain about what is going to happen in the condo market in the next few years,” said Steve Gagro, a senior manager at Laurentian Bank of Canada who specializes in lending to real estate developers.

With 325 condominium projects on the market and another 173 towers under construction, Toronto’s skyline is spiking with condo units and cranes, with more new buildings underway than in any other city in North America.

The building boom and 15 years of rising prices have stirred worries about a real estate bubble in Canada’s largest city, where historically low interest rates have encouraged buyers to take on more household debt than ever.

Industry stakeholders stress that the potential for a crash is slight, and most of the talk at the Queen’s University seminar was about the strengths of the market.

Well look at this.. This does seem to be of some slight interest in the discussion here. It seems as though they are expecting a little bubble burst in toronto.

Ottawa has taken a number of steps this year to slow what it believes is an overheated housing market. In April, the federal government made the Canada Mortgage and Housing Corp., a key component of Canada’s mortgage market, subject to direct regulatory oversight by the Office of the Superintendent of Financial Institutions.

OSFI itself proposed major changes to the way banks handle mortgages and other real estate debt to reduce the fallout of what some fear is a looming housing bubble. Following consultation with the industry, OSFI softened some of those proposals.

^^Link

Another bit of information.

canadabubble.com
Financial post
CBC
GlobeAndMail[/url ]

Need i go on? Why would there be so much media coverage (though you know, corporate media) be coming out about it now hm? They're preparing people for it. While spouting that our banking system is one of the best in the world. It's not. It's just as bad as the next one. Take a look at these videos for reference.

Income inequality in Canada has increased over the past 20 years.

The richest group of Canadians increased its share of total national income between 1993 and 2008, while the poorest group lost share. Middle-income Canadians also lost share.

Although the gap between the rich and poor widened, Canadians in the poorest income group still saw their income levels rise, albeit minimally.

Canada Income Inequality

So now it all comes into play. A widening financial gap between the rich and everyone else. A bubbling housing market(if they dont stop it). Next we'll start seeing mass foreclosures like in the states..

Originally posted by Cynic
reply to post by eNaR

 

CMHC does not hold the mortgages.
They insure the lender against default.
Do your homework about the way things work, and get off your soap box long enough to get a clue please.

edit on 14-6-2012 by Cynic because: (no reason given)

I worked my entire adult life working for CMHC (36 years in virtually every department except inspections and market analysis but including and not limited to underwriting, default management, real estate and appraisal (both residential and multiple) - I was a certified appraiser but let it lapse as I'm retired) so don't tell me what they do or how they do it. Did you read the article in the link I provided or are you so knowledgeable that you know how everything works and reading it would have been an inconvenience?

And if you read the article the government of Canada gave the banks $75 billion dollars cash through CMHC and the banks turned over $75 billion worth of mortgages. And if in those cases CMHC does not hold the mortgage what would they have recieved from the banks for the $75 billion?

btw, you adding "get off your soap box" (what soap box would that be?) and especially "get a clue" shows what a moron you are !

reply to post by AzureSky


Give your head a shake buddy you will never see a US style housing collapse here,equity leveraging at 20;1does not occur up here ,Paul Martin saw to that when he refused to deregulate Canadian banks years ago,unlike the Hollywood actor slash president Ronnie [on the run] Reagan ,
Do yourself a favour research credit default swaps and collateralized debt obligations ,you will see Canadian banks don't package up mickey mouse mortgages and sell them to Iceland and teachers pension funds in Mississippi .
Dont get me wrong ,I despise the chartered banking system ,they kill you with service fees "death from a thousand cuts"but they are the most conservative in the world.

WIKIPEDIA
Banking in Canada is widely considered the most efficient and safest banking system in the world,[1] ranking as the world's soundest banking system for the past three years according to reports by the World Economic Forum.[2] Released at October 2010, Global Finance magazine put Royal Bank of Canada at number 10 among the world's safest bank and Toronto-Dominion Bank at number 15.[3]

Having said all that if the world Geo -political situation starts to destabilize even more ,than its lights out for everyone no matter what your credit sore is according to Standard and Poors

reply to post by QUEEQUEG


Agreed....we're all screwed if things get any worse, no matter what.

I just have to say that everyone thought Fannie and Freddie were issuing mortgages at a high standard also. It wasn't until well into the crisis, that it was apparent they let their standards lapse. The OP says this is now happening in Canada as well. I would say that in oder to materialize $75 billion in new mortagges quickly, some corners were probably cut. Leveraged at 10 to 1 a 10% drop wipes you out.

Originally posted by misfitofscience
Sorry

Being a Certified Financial Planner, I have to totally disagree with you. Canada has never been stronger, has never made smarter decisions, was hardly impacted by the meltdown in 2008. Our banks are leading the way around the world. Mark Carney has done the right job as minister. He even predicted that Jamie Dimon would loose out! Our insurance companies are making headlines internationally, without using the negative concepts of US insurance companies, The Real Estate sector has been strong, not overly, just well in place. Our government while not the best has done an incredible job throughout the whole fiscal crisis.

My cousin is a certified financial planner for London Life, yeah, he took a one month course, wow, I am so impressed, I think I better throw away my PhD and 38 years in research and become a financial planner.

If our banks have never been stronger, are not mismanaged or partake in criminal malfeasance and fraud, and we have roughly 10% of the population of the US, they why I ask, did the Canadian government through the CHMC bailout our banks in 2008 to the tune of $75 billion, or roughly 10% of the amount of the TARP bailout in the US?

Not a very tricky question, since everything there is a fact. But I'll tell you why, the banks (who basically control the government) wanted to reduce their "present" risk so they could entertain new risk and gather unearned value (wealth transfer), by dumping their present risk on the taxpayers (stooges). Of course the government went along with scam, after all, the government is just a bunch of meat puppets and revenue canada is the collection agency for the banks since literally the entire federal tax scheme is used to pay the interest on servicing the debt to the banks. FFS, the bank of canada isn't even controlled by canada, it's controlled by the IMF through former goldman sachs and other international banking affiliates. The story the government trots out that BOC governors are selected by the canadian government is patent BS. The government is "allowed" to select governors from a pre-approved IMF list of potential candidates. The whole thing is smoke and e'fing mirrors.

Damn, let's not mix your fiction with a trifling taste of reality huh?

Everyone should stop paying taxes, period! Force these parasitic scumbags out into the open so we can round them up, charge them with treason and see where the heads roll, literally or metaphorically.

Cheers - Dave