Petr Message Board
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Crack shack or Mansion? Canadian housing bubble
Some here have suggested running to the Canadian dollar as a haven of safety. The truth is that Canada has a bigger housing bubble than the U.S. ever had and has banks that were even more leveraged.
That the Canadian dollar is trading 1:1 versus the U.S. dollar is a sad joke. But it is hard to demonstrate the housing bubble in words.
So someone set up this brilliant web site: Crack shack or Mansion to describe the Vancouver housing market:http://www.crackshackormansion.com/
(BTW, I got 14 out of 16 right. Anyone does better please post it so you can have bragging rights.)
For the trolls who post, "what's this have to do with PBR?" The answer is that it shows how dumb the fall of the U.S. dollar has been.
The rise in oil and emerging market stocks like PBR has been entirely due to money flowing out of dollars. As the dollar gets stronger, which IMO obviously is going to happen, PBR stands to get killed.-
Fun game Doc, but you be full of baloney here.
<<truth is that Canada has a bigger housing bubble than the U.S.>>
Truth? According to who?
Any facts or data to back that up other than heresay?
Seen any delinquency numbers in Canada that supports such a conclusion or you just going by gut feel?
We know about delinquencty rates in the US.
In Canada, I have heard of no delinquency numbers like in the US.
In the US, the housing bubble was ready to implode, no matter what happened to the economy.
In fact, it was the leading reason for all the financial trouble and would have lead to a recession irregardless of what Wall Street was doing with derivatives etc.
the derivatives just put icing on the cake and allowed for a plundering of people's retirement nest eggs along with a more efficient means of socializing of Wall Street's losses.
In Canada, there might well be a housing correction but it will take a recession to bring it on.
Big difference.
And the losses to Canadian financial institutions will be much less because they were no where near as levered.
And you know why there's such a difference?
A clue...it has to do with the difference in the quality of mortgage originations. IOW, buyers were forced to qualify under more rigorous standards....not based on mortgage affordabilty based on some teaser rate ....or fictional income. Duh.
<<Canada .... has banks that were even more leveraged.>>
Again, where do you come up with this stuff?
You still taking US fnancial statements in the US at face value?
The US banks are for all practical purposes insolvent... or would be in serious breach of capital ratio reqirenments if not for accounting gimmickry.
Let the US banks MTM and see what the leverage really is.
But financial innovation in the US is the way to the promised land.
According to recent numbers, WS banks and financial institutions had close to 30% of total US corporate profits, all while the economy sputtered.
Hmmm
Heck, there are some that probably think that the banks can be the future engine of growth for the whole economomy... yee ha.
A little more innovation please....Mr Postman.
(Good title for a song?)
So lets focus on the banks to pull us out of this mess.
Lets sedate the patient so he/she doesn't feel the parasites anymore.
Lets keep focusing on letting the banks have more of the pie and while we are at it, lets let them assemble and bake it too.
No sense in making a bigger pie now because the ingredients going in now are so much better.
More hedonic adjustments makes it all taste good!
MM good.
Wins- 1 Reply to winsabokk
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Besides all that, I don't know what the Canadian dollar has to do with the Brazilian Real.
"In the US, the housing bubble was ready to implode, no matter what happened to the economy.
In fact, it was the leading reason for all the financial trouble and would have lead to a recession irregardless of what Wall Street was doing with derivatives etc."
You mean derivatives could not cause people to default on their mortgages? Astounding!!!
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