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  #1  
Old 01-05-2009, 04:31 PM
trent trent is offline
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Default Flaherty pressures banks to lend

The Canadian Finance Minister Jim Flaherty tried to pressure Canadian banks to lend to both businesses and consumers last month and will hold meetings with the CEOs of big Canadian banks this month to discuss credit availability.

Does this sound familiar to you? Wasn't that what happened down in the US a few years ago when the Congress pressured US banks to extend credit to borrowers with poor credit in attempt to put everybody in a home even if they would never be able to pay for it?

One thing that politicians do not understand is that Canadian consumers are up to their eyeballs in debt, and they cannot take on more debt.
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Old 01-05-2009, 05:18 PM
Canadian Canadian is offline
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Quote:
Originally Posted by trent View Post
The Canadian Finance Minister Jim Flaherty tried to pressure Canadian banks to lend to both businesses and consumers last month and will hold meetings with the CEOs of big Canadian banks this month to discuss credit availability.

Does this sound familiar to you? Wasn't that what happened down in the US a few years ago when the Congress pressured US banks to extend credit to borrowers with poor credit in attempt to put everybody in a home even if they would never be able to pay for it?

One thing that politicians do not understand is that Canadian consumers are up to their eyeballs in debt, and they cannot take on more debt.
I don't think that all Canadians are tapped-out as far as credit is concerned, and many people with savings will be able to afford buying a house at reduced prices very soon.
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Old 01-06-2009, 04:08 PM
Steven Steven is offline
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I hope that we don't have US style banking crisis, and that our Canadian banks continue to lend prudently to credit-worthy borrowers.
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  #4  
Old 01-07-2009, 02:42 PM
sunshine sunshine is offline
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Politicians may urge the banks to lend but it is a different story if the banks will do it. I don't see how this will solve the problem. We will have to go through foreclosures and bankruptcies and when all this easy credit is cleaned up (in a couple of years) everything will come back to place.
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Old 01-08-2009, 03:14 PM
bullish bullish is offline
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I don't think will have many foreclosures here in Canada. The lending standards of Canadian banks were stricter compared to US banks, and we almost don't have subprime mortgages.
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Old 01-09-2009, 04:37 PM
trent trent is offline
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I don't think will have many foreclosures here in Canada. The lending standards of Canadian banks were stricter compared to US banks, and we almost don't have subprime mortgages.
How is giving mortgages with 40 years with less than 5% down a strict lending? You have proved once again that you are a moron.

The idea that the subprime segment of the real estate market is solely responsible for the current real estate crash in US and Canada is simply flawed. The real problem is excessive leverage and credit, and even a borrower with pristine credit can borrow too much and go in foreclosure/bankruptcy because they are unable to service the excessive debt.
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Old 01-12-2009, 03:01 PM
Canadian Canadian is offline
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I agree with Trent, that even if we don't have as many subprime mortgages here in Canada, our real estate will still be in trouble in the next few years.
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Old 01-13-2009, 05:47 PM
trent trent is offline
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One thing that most home owners are missing is that if house prices recover after they hit bottom in a few year, then the recovery will be largely in depreciated dollars. This means that in real terms (purchasing power), we won't see a recovery for a very long time.
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Old 01-14-2009, 03:14 PM
bullish bullish is offline
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Quote:
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One thing that most home owners are missing is that if house prices recover after they hit bottom in a few year, then the recovery will be largely in depreciated dollars. This means that in real terms (purchasing power), we won't see a recovery for a very long time.
How do you know that the Canadian dollar will lose value in the next few years? From what I see it might actually gain value.
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  #10  
Old 01-15-2009, 03:43 PM
trent trent is offline
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How do you know that the Canadian dollar will lose value in the next few years? From what I see it might actually gain value.
Let me give you a lesson in economics. When you increase the money supply, which all western central banks are doing right now in earnest, you dilute the value of the currency. When you dilute the value of the official money, their purchasing power goes down and they can buy less.

Is that simple enough to understand for you?
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