BoC warns of possible mass home foreclosures

[Alta4ever]

It is ultimately up to the consumer... but it is such a good offer that people buy into it.

Quit making excuses, no matter what the offer is waste is waste, and conusmers who buy into a good deal, for only that reason deserve what they get. Have a little self control and will power.

[-VMG-]

Quit making excuses, no matter what the offer is waste is waste, and conusmers who buy into a good deal, for only that reason deserve what they get. Have a little self control and will power.

It's more than just good deals... that's a simple example.

I could get into how people who don't make a lot of money can use their credit to allow them to live life a bit easier and are likely getting screwed.

But there doesn't seem to be much compassion or consideration for anything on these forums and that it is not black and white.

[Michael Hardner]

VMG

We have a lot of interest in things that are not black and white - for example politics itself.

But easy answers like the gold standard solving economic problems are in fact pretty easy to shoot down.

Except that there are things that affect supply and things that effect demand.

To simply say it was supply and demand is an incredibly vague statement.

The supply of oil is why the oil price went down....

Actually, it's likely that speculation had a role in the increase and decrease in prices.

Also:

Would you agree though that economic output and labour can fluctuate by a lot? I suppose that would create a more dynamic and realistic economic scene... but it doesn't seem like it would be very stable (which is what people want).

Stability is one goal of an economic system but not the only one. Growth itself is instability, and causes losses in some sectors of the economy in return for gains in another sector. The keys to the kingdom are, as they always have been, a mix of intelligence, discussion, analysis, co-operation, restraint, and everything else required to captain our economic ship.

There is no easy way to do this, which is why mistakes happen from time to time.

[Mr.Canada]

If people cannot afford to buy a home they shouldn't. The government should not be bailing people who are poor money managers.

What's next? Someone cannot pay their auto payments so the government will pick up the tab. No thanks.

I work damned hard as do many others. I work hard I get to buy things. I pay my bills on time, my credit is good. Why should this change?

This isn't a communist country where everyone gets a house and car if they do nothing to better themselves.

[Renegade]

It is ultimately up to the consumer... but it is such a good offer that people buy into it.

It does, but at the same time a lot of companies offer things through credit you can't recieve through cash... which makes it all the more enticing..

I do blame the consumer... but i wouldn't blame it ALL on the consumer.

That's like saying the rapist isn't completly to blame because the victim looked so damn good.

Do you actually think that lenders benefit when consumers can't pay the bills and default? Lenders suffer if they extend too much credit and cannot recover the money they hae lent. Consumers suffer if they take on debt they cannot repay. To some extent their interests are aligned. There however is a margin where a cconsumer will suffer where the lender will not. (For example when a consumer loses his house to foreclosure, and the lender can sell the house to completely cover the amount owing. The consumer loses his equity, the lender suffers no losses). In those cases it is because has accurately guaged how much it can lend but the consumer has misjudged how much he can borrow.

[Alta4ever]

That's like saying the rapist isn't completly to blame because the victim looked so damn good.

Do you actually think that lenders benefit when consumers can't pay the bills and default? Lenders suffer if they extend too much credit and cannot recover the money they hae lent. Consumers suffer if they take on debt they cannot repay. To some extent their interests are aligned. There however is a margin where a cconsumer will suffer where the lender will not. (For example when a consumer loses his house to foreclosure, and the lender can sell the house to completely cover the amount owing. The consumer loses his equity, the lender suffers no losses). In those cases it is because has accurately guaged how much it can lend but the consumer has misjudged how much he can borrow.

There are too many idoits out their that think the amount that the bank will lend them is always within thier budget. They all fail to realize that onus of budgeting and knowing what can be afforded is up to the customer not the bank.

[August1991]

A pretty scary result if true.

Scary? Something obviously went wrong between the Bank of Canada report and the CTV version. The Bank should be more careful about these kinds of statements.

After having been stable at historically low levels for the past three and a half years, the proportion of mortgages in arrears rose to 0.26 per cent in the second quarter of 2008 but remains below the average level since 1997 of 0.38 per cent. Personal bankruptcies are also slightly higher than they were in 2007, although they remain well below the peak reached in the late 1990s.

Overall, despite a modest deterioration, the financial position of the Canadian household sector remains relatively positive.

Link

IOW, about 1/4 of one percent of mortgages are in arrears and while growing, this is still below the average since 1997.

I think that the Bank was looking at various scenarios, including the worst one, and that was what CTV picked up on.

----

I don't want to argue that everything is fine and there is no economic downturn occurring. I am just intrigued why the bad news obtains more attention.

[guyser]

Do you actually think that lenders benefit when consumers can't pay the bills and default? Lenders suffer if they extend too much credit and cannot recover the money they hae lent.

They sure do. But not how you put it.

They benefit by having plenty more who pay than those who dont. A numbers game.

And before you jump all over me, think VISA etc. If the system is still the same as it was, then the bank manager gets a lil somtin' for putting the new mark with VISA.

[Huston]

It has nothing to do with ideology (or it shouldn't). It has to do with trying to keep the economy moving...something everyone should be working at.

Umm.. that is ideology... keeping the economy moving. FFS! This is the perfect opportunity to restructure the economy... i guess none of the experts actually have any solutions.

[Smallc]

Umm.. that is ideology... keeping the economy moving. FFS! This is the perfect opportunity to restructure the economy... i guess none of the experts actually have any solutions.

Restructure it? Why? Why would we completely change the system that we operate under just because it has one dip?

[Huston]

There are too many idoits out their that think the amount that the bank will lend them is always within thier budget. They all fail to realize that onus of budgeting and knowing what can be afforded is up to the customer not the bank.

Gee, architects are liable for false information on services rendered. Why not bankers? Such flawed reasoning is behind corporation running away with corruption.. just like the banks.

[Huston]

Restructure it? Why? Why would we completely change the system that we operate under just because it has one dip?

One dip? You haven't paid attention to history. The economy is mainly flawed along the financial market, and the financial market has botten away with some bogus fraud right now and in the past.

[Smallc]

One dip? You haven't paid attention to history.

I know its had more than one dip, but overall its worked pretty good for most.

[jdobbin]

Yay! More left leaning government intervention!

Um, that could also be a tax cut. Is that a left leaning intervention?

[guyser]

Gee, architects are liable for false information on services rendered. Why not bankers?

They are also liable. Its called fraud. Call the SEC.

[Mr.Canada]

Um, that could also be a tax cut. Is that a left leaning intervention?

Ah but they don't want to cut taxes....no. The coalition wants to raise corporate taxes to pay for the $30 Billion deficit they would bring in.

[Huston]

So does gold. More even...

http://goldprice.org/30-year-gold-price-history.html

I don't understand what you are trying to show here. This shows the instability of money as the money inflates and deflates.

[Huston]

I know its had more than one dip, but overall its worked pretty good for most.

LOL! For the rich!

[jdobbin]

Scary? Something obviously went wrong between the Bank of Canada report and the CTV version. The Bank should be more careful about these kinds of statements.

You think? It sent the market down after it was released.

I don't want to argue that everything is fine and there is no economic downturn occurring. I am just intrigued why the bad news obtains more attention.

I guess we get all the good news from Flaherty so it is sometimes interesting to hear a more independent source.

Edited December 12, 2008 by jdobbin

[Huston]

They are also liable. Its called fraud. Call the SEC.

Umm yeah.. if other people have known this, then why are the current U.S. Bankers getting bailed out for their fraud. It wasn't just Lehman Brothers.

[Smallc]

LOL! For the rich!

Oh, I don't know about that. I think its worked quite well for many. Of course there are improvements to be done, but most people over here live quite comfortable lives.

[Huston]

Oh, I don't know about that. I think its worked quite well for many. Of course there are improvements to be done, but most people over here live quite comfortable lives.

Whatever it means by comfortable. A lot of people live comfortable, even though they are in massive debt. A lot of poor people live in comfort, of course that all comes down to content levels.

[Slim MacSquinty]

Pretty loose statement by the BoC and even looser exaggerated reporting. We do not have a real estate bubble happening like in the US therefore the underlying value remains in the asset and people are far less likely to forfeit on their mortgages .

From what I see, just like recessions before, most folks just sit on their wallets until they figure prices have bottomed, then when suitable conviced they get back to spending. So what we need to here is we've reached the bottom lets get going.

It looks to me like the stock market bottomed about three weeks ago, house prices will likely do the same before spring time. So with the slightest bit of good news we could start to come out of this next fall.

I finally agree with Dobbin on something, recessions are really about economic confidence in the economy.

[Huston]

Pretty loose statement by the BoC and even looser exaggerated reporting. We do not have a real estate bubble happening like in the US therefore the underlying value remains in the asset and people are far less likely to forfeit on their mortgages.

My links to the housing industry must be different than yours.

[Sir Bandelot]

I told you guys this would be next... when we argued about the "un-bailout" in Canada, I told you it was a pre-emptive bailout becuase they know whats coming. Once again our government makes darn sure the bankers and the elite class is protected, before the first sign of trouble even shows itself.

This is a transfer of money and land wealth, increasing the separation of rich and poor. They will get your real estate for dirt cheap when the market collapses... then all we can do is rent, if you're lucky. The rest can live in parks and in cardboard boxes under bridges.

This is the transfer of federal money and credit ratings, values based on the government and the people of Canada, to banks and big businesses, who can spend frivolously without any concern because we the people are a bottomless pit of tax money and labour to prop them up.

The thin end of the wedge is in... bend over

Edited December 12, 2008 by Sir Bandelot