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Canadian Housing Bubble Nears Implosion

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I am far from the first writer to report that Canada’s housing-bubble is nearing some dramatic rupture. Indeed, I may be the last writer to have covered this topic – despite being based in Canada.

Why have I been the last scribe to jump on the media’s “bubble-mania” bandwagon concerning Canada’s housing market? Because there has been little to report here other than soaring debt-levels, which also exist throughout the Canadian economy; and, indeed, throughout all Western economies. The building bubble itself has not been even slightly newsworthy.

Lost in the mainstream media’s disjointed reporting on individual markets is a simple truth. As long as the West’s psychopathic banking cabal continues their policy of insane, destructive, near-zero interest rates; every housing market of every Western economy will be in a perpetual cycle of building bubbles or bursting bubbles. Period. Thus reporting that a “Canadian housing bubble” had formed had all the “news value” of announcing that the Sun had risen again in the morning.

What has finally caused me to jump into this topic are two factors. First of all we have very strong evidence that “the end is near.” Secondly, there is the entirely suicidal manner in which Canada’s current government has (deliberately) constructed this housing-bubble.

Regarding the former point, almost always an asset-bubble will telegraph to the market when it is about to burst with an unequivocal signal: falling sales. To understand why this is such an obvious warning-sign requires at least a rudimentary understanding of the mania which fuels such asset-bubbles.

In the case of housing-bubbles, that “mania” is composed of a mixture of the greedy and the fearful. For the greedy, the soaring prices which characterize any/all asset-bubbles are like a clarion call: “get rich quick.” For the fearful, soaring housing prices cause an anxiety attack: if they don’t “buy now”, they will never be able to afford to make a purchase. Allowing emotions to enter into one’s important financial decisions is an inevitable recipe for disaster.

What falling sales tell us is that the mania is over, and a point of “capitulation” has been reached. This occurs when both the greedy and the fearful say to themselves “too expensive” – the death-knell of any/every bubble. In Canada’s housing market, two of the largest urban markets (Toronto and Vancouver) are reporting dramatic drops in sales.

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.

As the architect of Canada’s near-zero interest rates, Mark Carney can be thought of as the man pouring gasoline all over the dry tinder. Even B.S. Bernanke had belatedly begun raising U.S. interest rates to try to cool off the U.S. housing market before its manufactured bubble collapsed.

Not Mark Carney. It’s “pedal to the metal” all the way…all the way until he and Stephen Harper have driven Canada’s economy off of a cliff. And all this destruction and misery being inflicted on Canada’s entire population is solely to facilitate a heinous looting of the Canadian Treasury by a handful of Big Banks.

In any other time, a betrayal of this magnitude would have been branded as “treason.” Welcome to the 21st century!

 

 


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Comments (6)Add Comment
Jeff Nielson
...
written by Jeff Nielson, November 26, 2012
Well, Carney is to head up the Bank of England from next year. Both the Chancellor and the Opposition have been saying what a great choice he is! Professor Blanchflower (now of The Economist) thinks it is great news because Carney will go for lots of QE which, according to Blanchflower, Mervyn King was always resisting.
So is this good news for the UK, or better news for Canada??????


Lol Norbull!!

Obviously the UK (corporate) media who are singing Carney's praises have never read any of my OWN writing about our "Loonie Assassin." However, with Carney now on his way to London I'll never be able to call him THAT again.

How does "Mark the Ripper" sound...?
Norbull
...
written by Graham, November 26, 2012
Well, Carney is to head up the Bank of England from next year. Both the Chancellor and the Opposition have been saying what a great choice he is! Professor Blanchflower (now of The Economist) thinks it is great news because Carney will go for lots of QE which, according to Blanchflower, Mervyn King was always resisting.
So is this good news for the UK, or better news for Canada??????
Jeff Nielson
...
written by Jeff Nielson, October 26, 2012
I agree that Stephen Harper is not perfect but this article sounds like the NDP are writing this article. I think that politics should stay out of economics, or is this a political essay?
Personally, I think that we had better be happy we have Harper instead of Obama!!
Let's focus on the issues and not on the political parties that are in power. We all have to work together to get us out of this world mess!!


Raapster, whenever someone defends the record of Stephen Harper, my response is simple: name one aspect of his performance where he could have POSSIBLY done worse?

He (along with HIS appointee, Mark Carney) have totally destroyed the Canadian economy. His government has been plagued by scandals since Day One. The FIRST thing he did upon getting elected was to back-track on his PROMISE not to touch income trusts.

He showed utter contempt for democracy for when he (illegally) suspended Parliament to prevent the other three parties from throwing him out of office. And he has ruined Canada's international reputation as a "peacekeeper" by not only tagging along with each/every new war started by the West -- but in using our PEACEKEEPERS in offensive roles.

In comparison, even the reprehensible Brian Mulroney doesn't look that bad...


Raapster
...
written by Bill Raap, October 26, 2012
I agree that Stephen Harper is not perfect but this article sounds like the NDP are writing this article. I think that politics should stay out of economics, or is this a political essay?
Personally, I think that we had better be happy we have Harper instead of Obama!!
Let's focus on the issues and not on the political parties that are in power. We all have to work together to get us out of this world mess!!
Jeff Nielson
...
written by Jeff Nielson, September 06, 2012
RandyRocker, I certainly share your political concerns AND the fear that simply changing political parties may not represent any kind of "automatic solution".

I generally condemn all Western governments (and parties) with my writing, since it's been quite a few years since we've seen any government (outside Iceland) actually working FOR its own people.
Randyrocker
...
written by Randy, September 06, 2012
The only logical reason is that Stephen Harper has signed and committed Canada to the North American Union arranged deal with the United States and Mexico. He has signed a compact with the United States that allows the US to enter into Canada and have full control through their Homeland Security and NSA to patrol and enforce US law within our Canadian borders. He's looking to commit our country into a New World Order arrangement with the United Nations taking the leading control, a United Nations may I remind you, that didn't even recognize or offer Canada a seat inside of the United Nations itself. This explosion of spending the country into an economic disaster is all part of the larger game plan, to dismantle the nation state and bring all nations into a single controlling body that will make all financial decisions for their ideal of a New World Order, destroying all national sovereignties in the process, giving up and giving over the sovereignty of our blessed land Canada to a higher authority. Collapsing on purpose the world's economies for a newer economic state control. Any individual nation will either have to live exclusively within its means or sellout to this controlling body. Those hurt by these moves will be in the millions, there will be those starving, those dying and those dispossessed from their valuables and in some cases their loved ones. This Prime Minister Stephen Harper is doing all measure of damage to the country he's supposed to lead and protect. He is a traitor in the full reality of what that term means and represents, and from his actions he's engaging in treason. Stephen Harper isn't the first treasonous traitor to ever run a country, but from the manner and the way he' been governing this country he certainly is deserving of the title. Paul Martin was the first PM in Canada to create the traitorous act of selling out Canada, when in secret he and the President V Fox of Mexico and GW Bush of the United States signed an agreement to commit their respective countries into creating a North American Union, where each nation's sovereignty was to be turned over to the larger cause of a North American Union with a new currency called the Amero to compete with the Euro and the European Union, eventually to consolidate into the New World Order UN controlled governing body.
All of this is being done without the people's involvement, and as a result all of the people opposed will have no say in the manner, but be enslaved by it. Vote Stephen Harper out of 24 Sussex and make sure the likes of an anti-Canadian Prime Minister never ever happens again. Canadians wake up, there's still some time left to put a stop to this, but the doors are fast closing on all of us. To start with, get yourselves out of debt.

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