The Coming Collapse of Canadian Banks and the Canadian Economy

Originally posted by Cynic
reply to post by eNaR

 

Enar
the Investors (the purchasers of the Mortgage Backed Securities (MBS)

THAT is who owns the debt.
CMHC "facilitated" the transaction.
You better go back to the accounting department, your comprehension skills suck.
So do your politics, it's obvious you are a leftist whack-job.

T

My comprehension skills suck? You're not answering my question, muddying the waters by stating the obvious which is.... the investors are the ones who hold the debt... and that my comprehension skills suck and that I'm a whack-job...

You don't need to tell me the investors hold the debt because that's what I was saying right from the beginning.

Absolutely CMHC is involved, though not by facilitating the sale but by insuing a guarantee as is required in all MBS transactions, so that the investor (in this "specific" case, the government of Canada) receives timely payments of P&I.

So yes, I'm sure everyone understands that the "investors hold the debt" but I asked you to specify who the investors were. You are avoiding saying who those investors were as I pointed out it was CMHC and you said no it wasn't held by CMHC and further told me to get a clue and and to get off my soap box and implied that I was "employed" but did not necessarily "work" while employed at CMHC.

btw, CMHC being the housing arm of the Canadian government holds that debt (residential) on behalf of the federal government who by law and statute cannot do so.

btw, I'm a Conservative. All I was pointing out was the fact that the Canadian government "bailed out*" the banks (*or whatever you would call purchasing the debt of those mortgages that were in that MBS pool).

Just because one is a conservative doesn't mean they have to believe what the Conservatives say (in this case the exchange of cash for debt is not a bailout). And what is wrong with me saying that, because both CMHC and the Ferderal government are not generally in the business of holding residential mortgages, when these mortgages are sold back to the banks they could be sold at a loss.

Now don't say "of course they'll be sold for less because of principal reduction". I'm saying that regardless of and or taking depreciation (principal reduction) into account the mortgages "could" be sold for a loss due to the value, of the residences on which those mortgages are held, dropping. And don't say that's the risk investors take; the government took that risk because that's exactly what could happen and the banks did / do not want to be in that position if it does. Thus a bailout....

Ball in your court....

reply to post by eNaR


All I was pointing out was the fact that the Canadian government "bailed out*" the banks (*or whatever you would call purchasing the debt of those mortgages that were in that MBS pool).
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They no more bailed out the banks than I did, because our banks are well capitalised. The MBS pool was not at risk since the vast majority of the mortgages are A paper to begin with. Since you worked at CMHC, you will understand their underwriting practices and the debt to equity ratios as well as income criteria that a prospective borrower must meet before the loan can be issued,
So please go back into retirement, you must have better things to do than waste everyone's time.

Just because one is a conservative doesn't mean they have to believe what the Conservatives say ... there is wisdom in these words.

Canada is a resource based economy, unlike the USA - Canada relys on Raw Materials, So for the Candian Economy to crash - first this would have to be a equities market - and since this is a Comodities Bullish and Equities Bearish world economy - I would bet on Canada to out last the USA in a world Depression.

reply to post by 1BornPatriot


We haven't yet explored the resources in the melting Arctic.

Originally posted by Cynic
reply to post by eNaR

 

All I was pointing out was the fact that the Canadian government "bailed out*" the banks (*or whatever you would call purchasing the debt of those mortgages that were in that MBS pool).
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They no more bailed out the banks than I did, because our banks are well capitalised. The MBS pool was not at risk since the vast majority of the mortgages are A paper to begin with. Since you worked at CMHC, you will understand their underwriting practices and the debt to equity ratios as well as income criteria that a prospective borrower must meet before the loan can be issued,
So please go back into retirement, you must have better things to do than waste everyone's time.

edit on 17-6-2012 by Cynic because: (no reason given)

But why would the banks want to get rid of A type loans and keep less desirable ones? And thus one more reason for the bailout - to take on "some" of the risk that CMHC created through 35 and 40 year mortgages to people who really shouldn't have been buying houses in the first place or were buying with 5% down, or buying over-priced homes due to the bidding wars real estate agents love so much..... Hey who cares the $hit will hit the fan if and when the rates go up...

Oh and for your comment I must have better things to do than waste "everyone's time. I've had no replies other than yours..... So it's safe to presume that few people find our conversation so riveting as to get involved OR they're waiting for the movie to come out (they'll have Jean Chretien play me)....

Look I'm not out to beat up on you or prove you're wrong, whatever..... If you believe I don't know what I'm talking about so be it. You believe what you want or need to believe and so will I....

Take care, and remember, if you let things like this work you up into a frenzy it won't do you any good in the long term.....

reply to post by eNaR


You are not wasting my time eNar.

Originally posted by InTheLight
reply to post by eNaR

 

You are not wasting my time eNar.

Thanks.....

reply to post by eNaR


It's all Grade A, prime, whatever you want to call it until interest rates go back to normal and most of these "great" loans go belly up.

Your posts on this subject have been spot on!