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Canadian Economy Getting Pounded

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Re: Canadian Economy Getting Pounded

Unread postby the48thronin » Sun 19 Oct 2008, 19:07:17

Several Canadian drivers I know have bought homes in the last 10 years... I asked each and every one of them and seem to have a consensus that "all mortgages are for 5 years" and then have to be redone?

This is much like Aussie mortgages that are all period of time then refinance or ARM?

I don't think "if this is true" that Canada's future looks all that bright when the interest rates zoom to pay for the bailouts coming.

Did I just find an entire group of sub primes or is this the way it is up there?
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Re: Canadian Economy Getting Pounded

Unread postby oiless » Sun 19 Oct 2008, 19:43:21

That's the way it is, there are variable, or fixed to a maximum five year term.
Also, the bank bailouts have started, although our glorious leader says our banks are sound, and don't really need to be bailed out.link

In fact he insists that it is not a bailout.
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Re: Canadian Economy Getting Pounded

Unread postby threadbear » Sun 19 Oct 2008, 20:59:57

$this->bbcode_second_pass_quote('the48thronin', 'S')everal Canadian drivers I know have bought homes in the last 10 years... I asked each and every one of them and seem to have a consensus that "all mortgages are for 5 years" and then have to be redone? This is much like Aussie mortgages that are all period of time then refinance or ARM?
I don't think "if this is true" that Canada's future looks all that bright when the interest rates zoom to pay for the bailouts coming. Did I just find an entire group of sub primes or is this the way it is up there?

True. Most people have 5 year term mortgages, which makes nearly all Canadian mortgages adjustable rate. If this isn't almost as bad as what has happened in the US I'll be surprised. What if interest rates head way up, and they could? Canadians are pretty smug, and unnecessarily so.
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Re: Canadian Economy Getting Pounded

Unread postby emeraldg40 » Sun 19 Oct 2008, 22:11:49

$this->bbcode_second_pass_quote('threadbear', '')$this->bbcode_second_pass_quote('the48thronin', 'S')everal Canadian drivers I know have bought homes in the last 10 years... I asked each and every one of them and seem to have a consensus that "all mortgages are for 5 years" and then have to be redone? This is much like Aussie mortgages that are all period of time then refinance or ARM?
I don't think "if this is true" that Canada's future looks all that bright when the interest rates zoom to pay for the bailouts coming. Did I just find an entire group of sub primes or is this the way it is up there?
True. Most people have 5 year term mortgages, which makes nearly all Canadian mortgages adjustable rate. If this isn't almost as bad as what has happened in the US I'll be surprised. What if interest rates head way up, and they could? Canadians are pretty smug, and unnecessarily so.

There will be a huge sub prime bust in Canada. Spoke with a man in the financial field in Toronto this summer. We had no idea that there was a secondary mortgage market gone amuck there. Hated to hear the news. McMansions are being built, and now the prices are sliding as they are in US. There are also 50 year notes being offered there. Didnt know about the 5 year note you are speaking of. Thats awful. We were there in July and we would have been told we were crazy, but we knew and here it goes. My bro in law trucking firm is flat out dead....steel hauling. Its hard to watch great men lose.
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Re: Canadian Economy Getting Pounded

Unread postby the48thronin » Sun 19 Oct 2008, 22:17:23

So the Canadian economy which depends on SALES to the USA to survive ( apparently) is so separate? At least all of us down here don't have readjustable mortgages. Nor do I know anyone who depends on sales to Canadians to make a living.

I often wonder how the smugness started, was it because Canadians thought they had the Empire to save them? ( didn't they notice how often they were being called on to save the kingdom?)

Oh well... I guess we are all about to find out how self sufficient we really are.. Is there a Canadian car maker that can survive the fall of the big 3 here? Will Ontario invite the Koreans to invest in auto making so that some non imported autos will exist for those few left able to afford them? Where will all those unemployed Canadians get the credit to refinance in 4 years?


Wow and we thought we had been hoodwinked by our banks and elite.
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Re: Canadian Economy Getting Pounded

Unread postby Snowrunner » Sun 19 Oct 2008, 22:29:02

$this->bbcode_second_pass_quote('the48thronin', 'S')o the Canadian economy which depends on SALES to the USA to survive ( apparently) is so separate? At least all of us down here don't have readjustable mortgages. Nor do I know anyone who depends on sales to Canadians to make a living.

I think something about ~70% of the exports go to the US, though overall it makes up "only" ~30% (exports in total) of the GDP.
$this->bbcode_second_pass_quote('', 'I') often wonder how the smugness started, was it because Canadians thought they had the Empire to save them? ( didn't they notice how often they were being called on to save the kingdom?)

I think today's Canada is nothing like the "old one" pre-'82 Canada. The "smugness" in a lot of ways originates actually out West in a lot of ways, as they have over the last five years or so found their footing again with the high prices in raw materials and it was easy to forget where all of this was going.

Ontario (Toronto mainly) had some smugness too, people in Toronto mainly made their money in the capital markets and service industry, the people in the "905" belt were mostly aware (I gathered) where their exports went.

The problem was (and is) that it just worked very well, the news was pointing Canada out as the "best place" to live and very few people ever looked closer at how it all worked.

Canada HAD enough chances to diversify but neglected it, SW Ontario because they are so close to the US that really nothing else made sense and Alberta and BC because of similar reasons. At least AB was (is?) convinced that they could sell their oil to anybody who wants it, US or not.
$this->bbcode_second_pass_quote('', 'O')h well. I guess we are all about to find out how self sufficient we really are. Is there a Canadian car maker that can survive the fall of the big 3 here? Will Ontario invite the Koreans to invest in auto making so that some non imported autos will exist for those few left able to afford them? Where will all those unemployed Canadians get the credit to refinance in 4 years

The Japanese automakers have already put a stake into the ground in Ontario, there is no Canadian car maker (any longer), I guess the closest thing to that would be Bombardier, but they are very far away from making cars or motorcycles.

The knowledge does exist, but I don't think anybody would invest in it, should the Big Three go the way of the Dodo, then that's it for a large part of the SW Ontario Manufacturing market, look at the Rustbelt to get an idea how it will look, with Toronto stuck somewhere in there, but how long the service and financial markets can keep things going in the ever growing sprawl is a different question.
$this->bbcode_second_pass_quote('', 'W')ow and we thought we had been hoodwinked by our banks and elite.

NAFTA, in the long run, has done more harm than good to Canada. Instead of looking at other markets, the concentration was on the US market.
It will be an interesting time.
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Re: Canadian Economy Getting Pounded

Unread postby the48thronin » Sun 19 Oct 2008, 22:41:47

$this->bbcode_second_pass_quote('emeraldg40', 'T')here will be a huge sub prime bust in Canada. Spoke with a man in the finacial field in Toronto this summer. We had no idea that there was a secondary mortgage market gone amuck there. Hated to hear the news. McMansions are being built, and now the prices are sliding as they are in US. There are also 50 year notes being offered there. Didnt know about the 5 year note you are speaking of. Thats awful. We were there in July and we would have been told we were crazy, but we knew and here it goes. My bro in law trucking firm is flat out dead...steel hauling. Its hard to watch great men lose.

I have been working with several Canadian truckers both self employed and from small companies showing them how to develop less than truck load back hauls to Canada (it is illegal for them to haul something from one place to another here, they can only haul back across the border.)

There is this "cabotage" law that keeps their truck load rates depressed because shippers know Canadian trucks have to load all the way back north of the border. Rather than (as many do) illegally hauling loads that unload on this side of the border (which pay more), they can haul many small part loads and get better rates because no one I know wants to cross that border and freight forwarders are very expensive.

Many of my customers have small shipments they constantly offer me that go north of the border, and putting several of them on a trailer makes a good business for someone wanting to go that far north.

Back to the subject of the Canadian economy. in the non auto part world Canada makes many truckloads of product other than building materials (a dead industry right now), that can not compete if they have to pay the trucker to come all the way back to Canada empty.

My interest in the style of mortgages was sparked when several of my Canadian friends were talking together about their (yes 50 years) long mortgages that had to be refinanced every 5 years or their interest rates would rise based on the LIBOR rate, some prime rate, & etc. All of them have houses similar to mine that cost them $200K+

My house is on a 20 year fixed note, and I have 4 years to go. The interest rate (10%) is actually higher than rates most everyone else has, but my payments are lower because I paid less in the first place, and won't change. Of course I built my house at $68k 16 years ago with 20 percent down. (I furnished that in paid for land 2 acres).

My mortgage company tried to entice me into refinance several times with rates as low as 5% but they always wanted a 30 year note etc. I was never even tempted.

With home building almost a dead industry the next few years, I cannot imagine what those Canadian drivers hauling building materials south are going to do for a living.
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Re: Canadian Economy Getting Pounded

Unread postby emeraldg40 » Sun 19 Oct 2008, 22:46:15

Big Pharma is doing well in Toronto. And we Americans love us some drugs now. Im uping my inventory of activated charcoal as I see our attempted suicide rate go up as of late. Stress up, drug use up. Im hoping all those SW Ontario farmers make out like bandits :)
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Re: Canadian Economy Getting Pounded

Unread postby oiless » Sun 19 Oct 2008, 22:57:45

I haven't heard of 50 year mortgages here, doesn't mean they don't exist though.
40 year was pretty common, but was regulated out of existence recently. (Government closing the barn door after the horse left.)

In any case 5 year is the term.

Someone I work with bought a house this summer, pretty much at the peak of the bubble. 0 down 40 year am. (For some reason people could not see the writing, even though all they have to do is look south to see the future.)
No sub-prime in Canada, no sir.
We can't deduct our mortgage interest from our taxes either, which I believe you can in the states.
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Re: Canadian Economy Getting Pounded

Unread postby emeraldg40 » Sun 19 Oct 2008, 23:12:35

$this->bbcode_second_pass_quote('oiless', 'I') haven't heard of 50 year mortgages here, doesn't mean they don't exist though. 40 year was pretty common, but was regulated out of existence recently. (Government closing the barn door after the horse left.)
In any case 5 year is the term.
Someone I work with bought a house this summer, pretty much at the peak of the bubble. 0 down 40 year am. (For some reason people could not see the writing, even though all they have to do is look south to see the future.) No sub-prime in Canada, no sir. We can't deduct our mortgage interest from our taxes either, which I believe you can in the states.

Yes we can, but we have to sell the farm to pay for the hospital. So it kinda evens out , ya know?
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Re: Canadian Economy Getting Pounded

Unread postby Snowrunner » Sun 19 Oct 2008, 23:19:42

$this->bbcode_second_pass_quote('oiless', 'I')n any case 5 year is the term. Someone I work with bought a house this summer, pretty much at the peak of the bubble. 0 down 40 year am. (For some reason people could not see the writing, even though all they have to do is look south to see the future.) No sub-prime in Canada, no sir. We can't deduct our mortgage interest from our taxes either, which I believe you can in the states.

Reminds me: Five years or so ago I was contemplating buying something, so I talked with the banks, none was willing to offer anything beyond a seven year mortgage, the way they tried to sell it to me was that "when the interest rate goes down you safe money", as if on such a long term investment saving money would be the prime incentive really (if you can afford it in the first place).

Also, around a year or so ago one of the banks came up with a new "way" to lure people in: You could split your mortgage, half adjusting (as the prime flows) and one fixed for the term of the mortgage, again, they emphasized in all their advertising that it would save you money, it also could end up costing you a lot more, but that little piece of info was never mentioned.

As for people seeing the writing on the wall: Most people don't look that close. It's the "thing you do" in this society so people buy things. Nobody I know ever really did the math, it's just the "renting is for losers, buying is for winners".

*shrug*. There will be a lot of rude awakenings.
Last edited by Snowrunner on Mon 20 Oct 2008, 00:50:29, edited 1 time in total.
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Re: Canadian Economy Getting Pounded

Unread postby emeraldg40 » Sun 19 Oct 2008, 23:51:26

$this->bbcode_second_pass_quote('Snowrunner', '')$this->bbcode_second_pass_quote('oiless', 'I')n any case 5 year is the term. Someone I work with bought a house this summer, pretty much at the peak of the bubble. 0 down 40 year am. (For some reason people could not see the writing, even though all they have to do is look south to see the future.) No sub-prime in Canada, no sir. We can't deduct our mortgage interest from our taxes either, which I believe you can in the states.
Reminds me: Five years or so ago I was contemplating buying something, so I talked with the banks, none was willing to offer anything beyond a seven year mortgage, the way they tried to sell it to me was that "when the interest rate goes down you safe money", as if on such a long term investment saving money would be the prime incentive really (if you can afford it in the first place).
Also, around a year or so ago one of the banks came up with a new "way" to lure people in: You could split your mortgage, half adjusting (as the prime flows) and one fixed for the term of the mortgage, again, they emphasized in all their advertising that it would save you money, it also could you a lot more, but that little piece of info was never mentioned.
As for people seeing the writing on the wall: Most people don't look that close. It's the "thing you do" in this society so people buy things. Nobody I know ever really did the math, it's just the "renting is for losers, buying is for winners". *shrug*. There will be a lot of rude awakenings.

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Re: Canadian Economy Getting Pounded

Unread postby Koyaanisqatsi » Mon 20 Oct 2008, 03:05:43

$this->bbcode_second_pass_quote('the48thronin', 'S')everal Canadian drivers I know have bought homes in the last 10 years... I asked each and every one of them and seem to have a consensus that "all mortgages are for 5 years" and then have to be redone?
This is much like Aussie mortgages that are all period of time then refinance or ARM? I don't think "if this is true" that Canada's future looks all that bright when the interest rates zoom to pay for the bailouts coming. Did I just find an entire group of sub primes or is this the way it is up there?

In fact it is possible to get a 25 year fixed rate mortgage here, although no one in Canada seems to know about it.
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Re: Canadian Economy Getting Pounded

Unread postby Nickel » Mon 20 Oct 2008, 08:55:43

$this->bbcode_second_pass_quote('perdition79', 'I')t's not that Capitalism is bad, it's that America sucks at Socialism.

It's not that the US sucks at socialism; what do you think the world's largest military budget is?

No, what the US sucks at is keeping capitalists accountable, that's what.
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Re: Canadian Economy Getting Pounded

Unread postby Nickel » Mon 20 Oct 2008, 09:09:09

$this->bbcode_second_pass_quote('canuckinczech', 'B')oth the EU and the feds have considered the Krown a reserve currency. Nice consideration for a country of 10 million!

Sorry, but there's no way a country of only 10 million could produce enough currency for it to be held in reserve except by the countries who routinely trade with it, and even then, they wouldn't need much. How much can the Czech Republic produce and export? A currency isn't held in reserve unless people need to use it, and that implies a very large economy with a foreign trade of worldwide significance. Small economies can't afford to have too much of thier currency vanish into bank vaults; it causes a credit crisis and/or inflation by requiring the government to print more currency. Even Canada couldn't hope to see its dollar a significant reserve currency. Really, you're looking at US dollars, euros, pounds, and yen.

It would be kind of silly to stock up on the Czech koruna for another reason: it's slated to melt into the euro. The official date isn't set, but they're required by accession to the EU to do so as soon as feasible. There's not much point stocking up on a currency that, more likely than not, within a decade will disappear, and be just a euro-fixed-rate transition mechanism before that. The float is temporary.
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Re: Canadian Economy Getting Pounded

Unread postby Nickel » Mon 20 Oct 2008, 09:13:43

$this->bbcode_second_pass_quote('pedalling_faster', 'C')anada has so much water & natural resources. they're in good position compared to the US - their government is running a surplus.

For the moment. It just takes a couple of poorly-conceived tax cuts to put us back in the red again, or give us a Third World social services net just so rich guys can sail a slightly bigger yacht through the Trent-Severin next summer.
$this->bbcode_second_pass_quote('pedalling_faster', 'n')ot to say it's a picnic, there's still an odd amount of violence news coming out of Canada. some guy that cut someone's head off on a public bus in some Canadian city

One out-of-the-ordinary murder that you can remember qualifies as "an odd amount of violence news"? In a country of 33 million?
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