Global Village :  The Official GrahamHancock.com forums
For good-natured and mutually-respectful discussions of politics and current affairs. Soap-boxing and the promotion of extremist causes motivated by hate will not be tolerated by our moderators. 
Welcome! Log InRegister
Never mind the two hundred bucks: Frostbacks in the major real-estate markets were so moist with house-lust that they bought absolutely as much house as they could possibly service the debt for, during a time of historically low interest rates.

As a proud American citizen you're saying, "What on earth could be wrong with that?" After all, aren't all Canadian mortgages government insured? Sure, the banks are insured--but not the debt-holders.

All Canadian mortgages re-set at least every five years. There's no such thing as a '25-year mortgage'. Sure, it's calculated as though it were being paid over 25 years, but the banks re-set your rates like clockwork.

Let's assume you were a moronic house-horny Frostback. You and your spousesicle made just enough money to pay the nut on a $1.5 million McMansion in Vancouver or Toronto. Then, as RE values rose, you did the Frozen North thing and got a Home Equity Line of Credit, because hey, presto! You're a paper millionaire!

Time passes. Now the Gummint changes mortgage rules because they're suddenly aware that most of the Canadian economy is being driven by speculative RE values and they're in pants-pissing territory, with house-moist Frostmonkeys carrying two trillion dollars in personal debt, or a buck seventy for every buck they earn. Woot!

And suddenly the USA decides inflation is going to be an issue and starts raising rates. Canada's Central Wankers have to raise rates in step or the Canadian Loonie plunges to zero in under a year. So they hike as gingerly as they can, but make no mistake, it's gonna be in lockstep with the Yankee dollarmongers. As rates rise, property values drop, sales slow and RE demand goes way down.

Endgame. Mr. and Mrs Iceballs from Toronto, Calgary or Vangoofer go in to Maple Syrup Savings and Loan to renew.

"Hmm," says The Nice Lady At The Bank, "Your house was originally mortgaged for 1.4 million with your dinky-ass little down payment. You've take out a $500,000 HELOC against the rising value of the home, and made no payments, so your total obligation to the bank is $1.9 million. Sadly, the market has dropped and your house is now worth only $1.1 million. In order for us to re-issue you a mortgage based on the value of the property, you must give us $800,000 right now, or get out of OUR house."

"By the way, your income is no longer enough to pay the new rate, which is 2% higher than previous. With the new government mortgage rule changes, you must also be able to service the debt you take on at a rate a full 2% higher than you're actually signing on for, in order to prevent nasty surprises when you renew in 5 years. So you only qualify for a mortgage of $700,000, and you're gonna need to cough up an extra $400,000 for a total of $1.2 million, or get the fuck out of our house."

Canada is so utterly, utterly screwed. They're going to hit the dirt like a K-T extinction event meteoroid.

Here endeth the lesson on how badly Canada has goofed up. I'll be taking questions in the lobby.



Edited 1 time(s). Last edit at 22-Jan-19 10:34 by Jock.

Options: ReplyQuote


Subject Views Written By Posted
Nearly half of Canadians come within $200 of bankruptcy: survey 721 Eddie Larry 21-Jan-19 16:26
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 133 drrayeye 21-Jan-19 20:19
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 115 Eddie Larry 21-Jan-19 20:55
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 105 drrayeye 22-Jan-19 03:36
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 101 Archaic 22-Jan-19 16:53
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 101 drrayeye 22-Jan-19 18:26
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 145 Eddie Larry 22-Jan-19 19:00
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 105 drrayeye 23-Jan-19 16:22
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 100 Eddie Larry 23-Jan-19 16:38
Canadian railways ration space as commodity congestion problems worsen 107 Eddie Larry 22-Jan-19 05:35
Fiscally, Canadians are idiots 132 Jock 22-Jan-19 09:02
Re: Fiscally, Canadians are idiots 113 Jock 22-Jan-19 09:06
Re: Fiscally, Canadians are idiots 114 Eddie Larry 22-Jan-19 16:19
within $200... 116 Racho 22-Jan-19 16:22
Re: within $200... 141 Eddie Larry 22-Jan-19 16:31
Higher taxes aren't good for anyone 92 Racho 24-Jan-19 17:14
Re: Higher taxes aren't good for anyone 88 WhoWeird 24-Jan-19 17:34
Re: Higher taxes aren't good for anyone 91 Racho 24-Jan-19 17:43
Re: Higher taxes aren't good for anyone 109 WhoWeird 24-Jan-19 17:54
Re: Higher taxes aren't good for anyone 87 Racho 24-Jan-19 19:20
Re: Higher taxes aren't good for anyone 86 WhoWeird 24-Jan-19 19:29
Re: Higher taxes aren't good for anyone 105 Racho 24-Jan-19 19:31
Re: Higher taxes aren't good for anyone 90 WhoWeird 24-Jan-19 19:33
Re: Higher taxes aren't good for anyone 91 Eddie Larry 24-Jan-19 20:39
Re: Higher taxes aren't good for anyone 96 Racho 25-Jan-19 06:15
Re: Higher taxes aren't good for anyone 88 Eddie Larry 25-Jan-19 15:33
Re: Fiscally, Canadians are idiots 107 Poster Boy 25-Jan-19 05:16
Re: Fiscally, Canadians are idiots 89 Jock 25-Jan-19 05:30
Re: Fiscally, Canadians are idiots 97 Poster Boy 25-Jan-19 05:40
Re: Fiscally, Canadians are idiots 103 Jock 25-Jan-19 07:24
Jock : idiot 97 Poster Boy 25-Jan-19 15:08
Re: Jock : idiot 108 Jock 25-Jan-19 18:05
Re: Jock : idiot 122 Poster Boy 25-Jan-19 19:14
Re: Jock : idiot 103 Jock 25-Jan-19 22:10
Re: Poster Boy : idiot 94 Jock 28-Jan-19 21:10
Re: Poster Boy : idiot 161 Poster Boy 29-Jan-19 02:05
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 112 Archaic 22-Jan-19 16:55
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 121 Eddie Larry 22-Jan-19 18:14
Trudeau on track to become highest spending PM outside of war or recession 99 Eddie Larry 23-Jan-19 18:28
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 134 Notinham 23-Jan-19 21:52
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 159 Eddie Larry 23-Jan-19 22:03
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 102 Jock 24-Jan-19 12:40
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 101 Eddie Larry 24-Jan-19 14:32
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 112 Notinham 24-Jan-19 15:14
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 106 Eddie Larry 24-Jan-19 15:32
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 122 Notinham 24-Jan-19 16:28
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 96 Eddie Larry 24-Jan-19 20:41
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 111 Notinham 25-Jan-19 01:11
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 106 Warwick 25-Jan-19 01:32
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 109 Notinham 25-Jan-19 03:41
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 105 Poster Boy 25-Jan-19 15:21
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 93 Poster Boy 25-Jan-19 16:14
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 93 Eddie Larry 25-Jan-19 17:54
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 100 Poster Boy 25-Jan-19 18:02
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 86 Jock 04-Feb-19 06:03
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 97 Eddie Larry 04-Feb-19 12:36
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 108 Jock 05-Feb-19 07:28
economic reality 80 Warwick 05-Feb-19 19:48
Re: economic reality 85 Eddie Larry 05-Feb-19 23:48
Re: economic reality 79 Jock 06-Feb-19 03:10
Re: economic reality 85 Eddie Larry 06-Feb-19 04:08
Re: economic reality 78 Jock 06-Feb-19 03:14
And here is where the rubber meets the slippery, slippery road 88 Jock 06-Feb-19 22:02
Re: And here is where the rubber meets the slippery, slippery road 139 Jock 08-Feb-19 07:52


Sorry, only registered users may post in this forum.