- Joined
- Dec 16, 2008
- Messages
- 1,005
Canadian banks are constantly being reported about how strong they are, that there is very little risk of any sort of collapse, and that thanks to institutions, like CMHC (Canadian Mortgage and Housing Corporation), banks lending policies are now regulated by the federal government! What they don't report, is how the CMHC is an unfunded liability, it exists as a shell, or a shield, to protect private banks from any risk of mortgage default. Since CMHC has no real capital backing behind its $600 billion in insured mortgages, all it really exists to do, is shift the risk of a default onto the Canadian taxpayer. The central government has socialized the Canadian mortgage market. No wonder Canadian banks are quoted as being so strong, when they make nothing but billions in profit, lending to Canada's riskiest borrowers, and stand to lose absolutely nothing if and when these mortgages collapse! Apparently in Canada, we believe our real estate market to be so special, and we believe so strongly that these prices are justified (because Canada is awesome!) that we are actually willing to take the risk OURSELVES (as taxpayers) and publicly insure our mortgages. I am proud to be Canadian, but I am also realistic, we have the highest real estate prices in the world, and it is impossible for anybody to invest for a profit at these levels in the major urban city markets. We are in a bubble, and we best accept it, and plan our exit strategy.