… In Toronto, urban sales are now down 13% year-over-year, while in Vancouver sales have plunged by 17% over the same period, and are now at lows not seen since 1998. The end is near.
This brings us to the second factor: the made-for-collapse manner in which Canada’s housing market Ponzi-scheme has been constructed. Here two people merit 100% of the blame: Canadian Prime Minister Stephen Harper, and the man he appointed to run Canada’s central bank – Mark Carney.
As an ardent admirer of all things “American”; Stephen Harper wasn’t content with having just an ordinary housing bubble in Canada’s housing market. He wanted a Canadian bubble of epic proportions, just like Uncle Sam’s. Consequently, Harper’s Conservative government has totally unshackled Canada’s banks, and allowed them to run wild with reckless lending; exactly as occurred in the U.S. just before its own bubble burst (for the first time).
Only three short years ago; Canada’s financial system was the envy of the entire world. Today its financial sector is just another bankers’ Ponzi-scheme. At precisely the same time that the U.S. is belatedly dismantling (fraud-ridden) Fannie Mae, Harper’s government has been rapidly building Canada’s own “Fannie Mae”: the Canada Mortgage and Housing Corporation.
The CMHC has been buying-up mortgages so fast that the Harper government has had to raise its legal borrowing limit twice just since the Conservatives took power, and will soon raise it a third time as it nears its new limit of $600 billion. In proportionate terms it is now larger than Fannie Mae (at its peak), and this occurs as a Euro Pacific Capital report reveals that, “Once small, Canada’s sub-prime mortgage industry is now booming.” It goes on to report that there are now $500 billion in “high-risk mortgages” in Canada’s housing market – nearly half of the entire mortgage market.
Meanwhile, the obscene “home equity” loan market has also exploded in Canada. These “HELOC” loans (once known as “second mortgages”) have exploded by more than 170% in Canada over the past decade. This massive increase in needless debt inevitably and substantially increases the magnitude of any housing sector implosion.
Mission accomplished, Stephen Harper!
One might ask how the Harper government has been able to engage in this massive program of sabotage of the entire Canadian financial system – while the Canadian people remain fast asleep. It’s very simple: the mainstream media lies for the Conservatives. Canada’s largest newspaper recently described the Conservative’s banking policies as representing “an ultra conservative financial system.”
What the Globe & Mail should have written was that this is an “ultra Conservative” financial system: a totally parasitic system dedicated to serving Canada’s Big Banks at the expense of everyone else. But this still leaves one question unanswered.
Why would the Conservative government take the world’s strongest, safest financial system and turn it into a U.S.-style, house-of-cards? Why would Canada’s “strong, safe” banks destroy themselves by amassing massive portfolios of Ponzi-mortgages? Because Stephen Harper and Canada’s Big Banks have now set themselves up for the same “too big to fail” Orgy of Mooching which took place in the U.S. in 2008.
The same banks which deliberately took on all of these made-to-fail mortgages, in a grossly over-heated housing market will all go scurrying to the government in mock “surprise” when the Ponzi-scheme they intentionally constructed implodes. And Stephen “Blank Cheque” Harper will be waiting.
Those Canadians with functional memories will recall that as Canada’s economy crumbled in 2008 that Stephen Harper did nothing but fiddle – and stuff vast amounts of money into the vaults of the world’s strongest, safest banks. It wasn’t until 2009 that the Harper government actually took notice of the remainder of Canada’s economy, the last major government to announce a stimulus program.
If Stephen Harper was happy to stuff money into the vaults of Canada’s Big Banks when they didn’t need a penny, what will he do when they need $100’s of billions to avoid drowning in their own financial feces? That’s right: lots and lots of blank cheques.
While most would not believe it (including myself); at least the U.S. government could pretend that it didn’t actively aid-and-abet the U.S. banking cabal in constructing the world’s largest housing bubble. The Harper government cannot possibly engage in similar pretension. It has duplicated the blueprint for the U.S. housing-bubble – and deliberately done so after the U.S. bubble had already burst.
This goes far beyond any possible claims of negligence or incompetence. This is an intentional betrayal of the Canadian people, which will inevitably lead to a massive, taxpayer-funded bail-out of Canada’s “too big to fail” Bank Oligarchs. Standing by, eager to print-up as much paper as necessary is Goldman Sachs Alumnus (and Bank of Canada Governor) Mark Carney. …