Juggling Dynamite

Canadian housing has been going up so long this cycle, that people have begun to believe prices can never go down. “How much could they drop?” they ask in disbelief. The answer: a-whole-hell-of-a-lot. Calgary for one, is beginning to get the memo.

Thanks to more than a decade-long credit orgy in Canada, the highest supply of homes are in the 1m+ least-affordable price range, with a small and shrinking pool of capable buyers.

The downturn in the economy means high-end homes are going for bargain prices. Here is a direct video link.

For years we have been hearing breathless reports about wealthy Asians sending a relentless stream of cash into realty markets like Vancouver and Toronto.  This weekend the Globe Report on Business ran with a detailed look at Canadian housing markets including How mortgage fraud is thriving in Canada’s hot housing market and Vancouver’s house-buying frenzy leaves half-empty neighborhoods.

But it turns out that it’s not so much Asian cash that has been flooding into bubbling Canadian realty… but rather cash from Canadian banks backed by little old we Canadian taxpayers.  More bailouts of reckless risk-taking everyone? See: Bank mortgages, not bags of cash, behind mainland Chinese home buys: study:

“…recent reports such as one in August by Macdonald Realty, found buyers with “mainland Chinese sounding names” accounted for 70 per cent of the firm’s 2014 sales of single-family homes, condos and townhouses over $3 million in Vancouver.

Yan describes the neighbourhoods he looked at for this case study as the centre of mainland Chinese buying. But he said he was surprised to find 82 per cent of the homes sales he looked at held a mortgage and that three Canadian banks account for almost 70 per cent of the financing was surprising.

…70 per cent of all sales on the Multiple Listing Service in a recent six-month period, worth more than half a billion dollars, were bought with mortgages extended by just three Canadian banks: CIBC, BMO and HSBC Canada.”

As if the Greek tragedy of Syriza’s thrashing by the European Troika wasn’t enough, we’ve just witnessed direct overrule of a popular vote by the President of Portugal who refuses to accept a resounding public vote for governmental change. “The bondholders must be served!” reflects his declaration and the predicament citizens of the world face in reclaiming control of their money and their governments from Supra-national Finance. This week Ellen talks with Dr.Thomas Marois about how public banking is working despite the anti-democratic developments in other nations of the world and how the future of public banking will depend on social and political movements, and she looks at some of the current monetary issues headlining in the US with co-host Walt McRee. Bernie Sander’s support for postal banking is another headline grabber, as reported by Matt Stannard on the Public Banking Report. Here is a direct audio link.