Canadian housing has nearly tripled in 10 years. A single detached house has gone from about $200K CAD to over $800K CAD.
CMHC has $20B in assets and $946B in liabilities >50:1 leverage
Banks have lent out a trillion dollars in mortgages for hyperinflated crackshacks while removing any risk of default for them by offloading them to the CMHC (mortgage insurer). At one point, the CMHC allowed 40 year mortgages (in 2008 60% of all new mortgages were 40 year terms), with 0% down (cashback mortgages were a thing with 7-10% cashback), and no maximum loan value. In 2008, over 90% of mortgages were insured by the CMHC (read:
>the entire Canadian housing market is subprime
CDIC = FDIC
Insures up to $100K.
CDIC has $3.4B in assets CDIC has $679B in liabilities >200:1 leverage
Both CMHC and CDIC are backstopped by the government.
A 20+% correction would wipe out the CMHC and at least one major Canadian bank as they have uninsured mortgages (already happening with Home Capital, the Canadian CountryWide). A bank being wiped out would wipe out the CDIC.
The CDIC and CMHC being wiped out would require the Canadian government to issue hundreds of billions of loonies in new debt, sending the loonie to sub-50 cents, possibly to 20-30 cents or even hyperinflating.
Harper bailed out the Canadian banks with a $119B secret bailout. The Canadian banks were all insolvent at the time.
Luke Lee
Let it all crash. Everyone is just letting this shit happen because anyone who owns a home is benefits from this right now. It all needs to just crash and restart.
Adrian Long
>What's happening now? The CMHC has been reigned in to a max loan value of $1M, max amortizations of 25 years (from a high of 40), 5% downpayment on the first $500K, 10% on the next $500K (7.5% on $1M).
People have been using "alternative lenders" who loan $2-3M on self-declared income or with fake documents. Now these lenders are blowing up and not making new mortgages, hence prices have stagnated or dropped (as in Van, already down 15% this year).
Once a massive across the board drop occurs, lots of people who are leveraged to the tits with negative/0/5% downpayment 30/35/40 year mortgages will be underwater (they will owe more than they can sell their house for).
>Canadian mortgages are all Adjustable Rate Mortgages (ARMs) that reset every 5 years
When renewal comes up, which is soon for a lot of 2010-2012 mortgages on 40 year terms with negative/0/5% downpayments, they will be forced to come up with hundreds of thousands of cash to bring their mortgage Loan-to-Value back down to 80-95%. 99% of people won't be able to come up with the money, so the bank will write off the mortgage with the CMHC mortgage insurer, who will pay the bank the loan back then take possession of the house and do a fire sale, and then go after the homecuck for the balance which will be hundreds of thousands for life. Bankruptcy can't discharge CMHC debt since it is Crown debt.
In fact, banks can call in mortgages at any time for any reason (lol). So if they see prices dropping, they will pre-emptively call in mortgages and write them off to stay afloat. Once this occurs, it's a race to the bottom as banks are forced to call in more and more mortgages to stay afloat (in order to maintain their Tier 1 capital ratios with marked market values of the houses on their books)
>A significant price drop will put millions of homecucks underwater >Banks call in mortgages >Homecucks can't come up with margin >CMHC bails out banks and dumps toxic houses on market collapsing prices
Adrian Johnson
let it burn
fucking gooks manipulating the market deserve to lose every penny.
Ryan Wright
very informative, but where is this info coming from?
Christopher Gutierrez
Well, mobs get pretty ugly sometimes, you know. Canada, I'm going all out to help in this crisis. I've just guaranteed your banks sufficient funds to meet their needs. They'll close up for a week and then reopen. I may lose a fortune, but I'm willing to guarantee your people, too. Just tell them to bring their shares over here and I will pay fifty cents on the dollar.
Julian Reed
Maybe you shouldn't accept 300k immigrants every year, if you don't have enough houses for everyone. And maybe you shouldn't fill your country with chinks you buy up all the property.
Aiden Richardson
Canadian GPD growth was entirely reliant on international wealth transfer to the housing market. When this crash occurs your country is fucked. Expect a decade of continuous "structural reform" to ease government payments, with subsequent failure of government services
Henry Hill
>NINJA lenders Home Capital Group, the "CountryWide" of Canada that does jumbo ($2-3M) NINJA (No Income No Job or Assets) and liar loans (self-declared income), has a $20B mortgage book.
In 2015, they were forced to cut ties with nearly 50 brokers due to massive fraud (homecucks using forged documents or lying about their income). They estimated $2B in mortgages on their books are fraudulent. They don't know which ones. In fact, the number is likely to be far higher. The Ontario securities regulator recently accused the former CEO/CFO of material fraud by lying to the public (the # of fraudulent mortgages is in fact far higher).
As a result, people have been withdrawing nearly all their savings from Home Capital's High Interest Savings accounts. These are term deposits and must be paid out immediately; the run on Home Capital has resulted in their HISA account going from $2B to under $400M in just under a week. As a result, they obtained a $2B credit line from a government pension fund at 22.5% interest and drew down $1B today to stay afloat.
They are essentially bankrupt. They cannot borrow at 22.5% and loan at 3%. Their stock dropped 65% on Wednesday last week and over 30% today. The Canadian bank regulator (OFSI) is "staging" them (seeing how bad their books are). It's rumoured they are terminal, and the OFSI is forcing them to liquidate. This will result in hundreds of thousands of million+ cuckshacks flooding the market, crashing prices.
Jack Richardson
guys we need to meme that saying "all right" means you're a member of the alt right, like we did with the milk and the okay hand sign.
So we can create a media witch hunt on people who have just randomly said "all right" live on television as suspected members of the alt right, just like the good old days of the red scare. Only superior canadian shitposters can do this.
Nolan Nguyen
It's all public. You can google anything and find lots of information.
CDIC/CMHC is from their latest quarterly results. They're both Crown corps and backstopped by the Federal government. You can google for old articles/pages detailing CMHC changes.
Oliver Cooper
just as an aside, is it possible that the forced muslim immigration is being used to become our scapegoat when everything collapses?
Luke Price
This is actually pretty serious, what flow on effects will be most likely?
Brody Ortiz
What does that mean for a 28 year old male who is entering their 2nd mortgage term? Wife and I are gainfully employed. Why do people keep buying 600k shitboxes when its unsustainable? is it the chinese?
Aiden Kelly
Interesting stuff OP. I decided to take a look at the feds website just now. Looks to me like the fed just re-inflated our housing bubble too.
:(
On a side note: stupid millennials are just lazy! XDDDDDDDDDD
Adam Reyes
How do we make money off of this?
Joshua Harris
Buy high, sell low
Christopher Sullivan
Canada will be bankrupt essentially
Currently 10 year yields on Loonie bonds are 1%, which is hilarious because 10 year US Treasuries pay 2.3%. The Loonie has gone from 1.09 USD to 0.66 USD in just 4 years. It's at around 73 cents now. But if the bubble starts to collapse, capital flows will be intense as investors will pull out, collapsing the loonie.
The Bank of Canada will be forced to go negative as an extreme life-saving CPR measure (Poloz, the Bank of Canada governer already discussed these Negative interest rates (-0.50%) in a Dec 2015 speech when the markets were in dire straits). He also discussed Quantitative Easing (buying up Canadian bonds/debt, increasing it's value, hence decreasing interest rates and making credit cheaper for both the government and the consumer).
Essentially Canada will probably be forced to issue $500B+ in new debt (on top of the $1.5T Canada already has) to bail out the CMHC's liabilities of $947B and the CDIC's liabilities of $679B. This will cause interest rates on Canadian debt to soar, probably to junk level (10%+).
Poloz will go negative, possibly -1 to -2%.
Poloz will print loonies, inflating the money supply, in a desperate attempt to do QE and keep interest rates from soaring.
The Loonie will likely drop extremely low-- 20-30 cents would the very least, possibly 10 cents. Hyperinflation is a very realistic scenario in this case, and may actually be used by the government to wipe out the debts.
>Day of the Rake is real
Angel Hernandez
its all part of the plan goy they need those houses for refugees
Carter Cook
Go long USDCAD
Hudson Flores
So if hyperinflation occurs thats actually a good thing for people with debt right, wages become inflated debt and interest rates stay low right?
Joseph Turner
Can you sustain a margin call when prices drop?
Jonathan Murphy
why they don't rise interest rates ? it's rather obviousness move to cut the lending
Ryder Cox
>Go long USDCAD Checked
Evan Allen
Most indebted people will have had their house seized by the bank before this would occur. But if it starts suddenly you would get your house for free. But everyone else's wealth would be wiped out. It's basically a wealth transfer from savers to debtors.
In Yugoslavia when hyperinflation hit people would pay off their mortgages with a carton of eggs
Nicholas Perez
If so it sounds like a win win tbqfhf
Logan Smith
Then you fuck anyone that might be counting on price inflation, which happens to be all banks, home owners and the government.
It's impossible to properly deflate a housing crisis, you just let the prices rise below average inflation for some 20y. This is very difficult so a crash is coming for sure.
Jaxson Walker
Hey thanks for the replies m8, whats your background? You seem pretty switched on to this.
And I'm asking this as Australia in certain places (melbourne, sydney) is currently experiencing this shit and I'm curious to see if this will spook everyone over here and pop the bubble
Jonathan Cox
>They cannot borrow at 22.5% and loan at 3% Maybe they can make it up in volume?
Ryan Butler
A first mortgage wasn't enough? You really like debt, don't you?
Aaron Thompson
...
Juan Mitchell
They would have to borrow more money to lend out.
Were fucked, completely and totally fucked. Anyone who got a mortgage in the last 5 years will b fucked, and anyone who doesn't have one will be fucked for the next 10 waiting for the Looney to rebound.
Sebastian Sanders
The faggot who caused all this is now the governor of the BoE.
Grayson Lopez
Not really. Wages never keep up with inflation. Credit in general dries up. Find ways of doing things without resorting to the money economy. Start doing it now.
Samuel Perry
Ironically a Wall St mortgage banker pre-2008 who securitized mortgages into CDOs....
Australia is fucked too.
Alexander Stewart
Great thread yesterday m8
here it is
Leo Kelly
Ironically your housing started to inflate just when he came in. He's a housing bubble connoisseur
Carter Miller
Hyperinflation wipes out your savings. Everything you've worked for becomes worthless.
Levi Mitchell
Also what would be a safe lvr (loan to value ratio) to have in a event like you just described so you dont end up getting your shit repossessed, asking on behalf of everyone that currently has a mortgage in Canada
Josiah Torres
0
Brody Nelson
Thx leaf
Nathaniel Young
Lol shoulda seen that coming, currently in the process of paying down my debts. Currently positive geared, but i have a feeling shit is getting outta hand here.
Thanks for all your replies!
Eli Martin
How would you make money off of this scenario if you were highly liquid?
Juan Watson
The global economy is on the precipice of collapse. The global stock market is in a bubble and overvalued by almost 200%. America's housing bubble is worse, to top that off the american government is reaching their debt ceiling and debt will freeze by june causing a government shutdown so they can figure out what the fuck they're supposed to do. Chinese housing bubble, 200-250% overvalued. Australias property is in a housing bubble thats overvalued 200%. Car loan bubble in america, people not paying back their car loans. Student debt bubble. Hyperinflation is just around the corner. The fed has said it will raise its interest rates 3 more times this year. The world economy will tank by July. Its going to look like Venezuela everywhere in the world. There are so many economic events occurring within the next few months i dont have the time to list all the fucked up shit that is about to happen.
I work as an investment banker. I cannot stress to you how bad things really are on a global scare. This is going to be worse than the great depression. Every country is going to default. This is how they pave the way for a 1 world government. Im not fucking kidding. Please for the love of god stock up on essential supplies, it may mean the difference between life and death for your family. Godspeed and good luck everyone.
Brandon Parker
...
Gavin Diaz
Seconding this. Is there some kind of option out there for this?
Landon Green
I want to believe you for the happening factor but that flag...
Josiah Collins
Okay, lets say i buy a house in Vancouver for 1 mil.(500kmortage 40 years) Then after some time the bubble pops. Ill just be stuck with a piece of shit house thats worth 100k but im paying a 500k mortage right? If i take a solid variabel(lets say2%) on the mortage i still have to pay what i agreed on an not more right? I just lost the 500k i put in, so its just lost value.
Lincoln Allen
invest in alternative currency, synereo is one to look out for, its like ETH but fixes infrastructure issues and basically paves the way for decentralized internet.
Put your money into tangible assets as well.
Ryder Garcia
I am seriously not shit posting. I shit post a lot. This is not a fucking shit post. You can go look at the figures for yourself. The global economy is actually fucked and I cannot stress to fragile everything is at the moment. People keep posting about north korea happenings or antifa. Do you want to know what the real happening is? The global economy is beginning to collapse, we're past the point of no return, and no one on here is paying attention.
Joseph Cooper
Thanks for the heads up, but what can we realistically do at this point? My parents have been in their house for ~20 years, and I'm lurking in the basement while I go to school.
If I'm following you, you're saying that the banks have utilized the CMHC in order to protect themselves from subprime mortgages, and due to the fact that not enough houses are being sold to prop up the market, those who bought near the high mark are going to be stuck with houses that have mortgages for more than they are worth. Once those 2010/2012 mortgages come up for renewal, people are going to have to hand over money to the bank in order to bring their loan-to-value back down > I don't quite understand this, why would they have to do that? Is it required by law? If these people can't come up with the money, the bank calls in their CMHC insurance, the CMHC takes possession, dumps the property onto the market at ridiculously low prices (crashing the market) and proceed to go after the homeowner, while the bank walks away with the insurance pay out.
And somehow Home Capital Group is tied into this? They've been giving mortgages to people who can't afford them? How much of the market do these subprime mortgages represent?
If I'm understand you correctly, you're predicting that if there is a crash in the housing market, investors will withdraw their capital, > but why would that cause the loonie to collapse? And why is that important? at which point the government imposes negative interest rates (so taking money from people's saving accounts?)
stockpile your cash so that you can purchase cheap real estate when prices are at the bottom
Christopher Butler
I'm a currency trader and I can vouch for this fucker right here. We are fucked, but you know the thing is now it is not comparable to any historic event or time. What central banks are doing is absolutely unheard of and my problem now is, how long can they keep this up? I hope a few years because I've got some shit to do I am not yet settled.
And as a side note, man I fucking hate the CAD.
Christian Rivera
Give some reading please. I remember reading doom and gloom about deutsche bank last year, but it never came to anything - I assume because of international jewery.
Nolan Campbell
I actually dont like cryto currencies but synereo is worth it only because they have protocols that can handle heavy media being hosted on the block chain, creating a giant decentralized cloud internet. It combines this with aspects of mesh networking and basically is the perfect replacement for centralized internet.
ETH tried this but failed this because they're inept autists and they caused a hard fork fairly early on and therefore have to compete AGAINST THEIR ON RETARDED CURRENCY.
Aaron Johnson
Ill put together a list for you. Give me a little while.
Cameron Jones
No because you have no patience. People suck at timing these things. And people always want the full swing. If you trade these type of things, you build a position and be risk-free position before it all goes to shit, so you don't take a hit when you're wrong.
Please, if you don't know shit about how to deal with this, you won't make money. So either take a few months to dig into this, or stay out, you'll only lose money.
Gavin Gomez
Yes but it's highly, highly speculative. Napster was the next big thing once upon a time as well.
Connor Scott
Thanks user Nigga please, I just want stuff to read about all of this, I'm not trying to be a filthy kike.
Jaxson Barnes
Short HCG/EQB/etc outright but the loan rate is skyhigh at the moment. Some brokers quoting 70%+
Shorting USDCAD outright. You would borrow Canadian dollars at 0.5% and buy USD earning 0.75%, or higher if you stick it into treasuries. If CAD inflates significantly, or hyperinflates, you would make a very high return.
Another option is options. Bearish plays on CAD could be buying outright puts on CAD futures on NYBOT, bear put spreads if you want to reduce risk, you can sell calls on CAD futures, sell call spreads, etc.
You can do volatility plays once shit hits the fan by going long vol via options, but that's very sophisticated (((financial engineering))).
If you want the absolute maximum leverage, buy knock-in puts or sell knock-out calls (exotic options).
Anthony Nelson
If want to know more about the subject as a whole, you need to be submerged in it. At the start it might look like a lot, but you roll in to it. Everything starts to make sense. Just dive into the world of finance and it'll work out soon enough. If you're smart, logical, analytic you'll have no problem making sense of it. But what takes time is to connect the dots and look beyond the bullshit. Keep an open mind.
Colton Reyes
Its a loan based economy. Money is created when a bank approves a loan. Each third world immigrant is a new customer who the state will put in debt to create more money and allow the scheme to continue.
Josiah Cox
These two faggots are missing the biggest two risks to the global economy:
China and Europe.
Europe is teetering on the verge of collapse. Deutsche is the clearing house for the entire European banking system. The ECB are finally running simulations of Italian banks failing etc.
China has added more credit that any other country over the last 10 years. Masses and masses of debt added to the global economy.
That's one of the largest reasons for the property bubbles in places like:
-Canada -Australia -London (UK) -New York City
It is going to get bad lads. Going into 2018 it's all about survival. We haven't had a sovereign debt crisis like this since the 1930s and 1940s.
Then you also have issues with Turkey, Brazil, Venezuela, S. Africa (niggers nigging more than ever) etc.
Sebastian Butler
I will be ready to buy within a year, hoping this crash comes soon
Camden Smith
No. In Canada mortgages are callable (bank can call in a mortgage at any time). You also have to renew every 5 years on average, and if you're underwater, you will be foreclosed and wiped out, plus the debt will haunt you forever. It's crown debt so it can't be wiped in bankruptcy.
It's not like in the US where if you make your payments you're fine for the entire 30 years.
Jackson Hughes
Is there an online resource you can direct me to that you trust for analysis/latest projections/speculation
Jayden Perry
Cont..
Not to mention the Japs who have basically QE'd themselves into a cul de sac - whereby their central bank is actually hitting the limits of asset purchase. Their country has over 200% Sov Debt:GDP. It is an abomination.
Isaiah Baker
Given there might be a fair bit of security involved similar to US 2006-7 bubble. I'd say invest in your country's VIX or similar. Gold if there isn't
Nicholas King
This is what will lead to a depression which will then leads towards a third World War
When the elites know the world is crashing they'll pull the plug on the entire shitstorm. Just be prepared for false flag attacks and major civil unrests that lead to martial law or coups
Jacob Campbell
Wtf. Why is that system allowed. Thats just plain thievery.
We've been a test bed for the Jews since the late 60's
Gavin Taylor
see I don't quite understand the situation
Henry Lee
Thank you sir, appreciate it
Brody Cook
>Then you also have issues with Turkey, Brazil,
Nigga what are you talking about. Brazilian banking is very insulated from world shocks nowadays. Just don't try to make money here, Brazilian stocks are crazy and only for pros
Zachary Howard
These are not the best sources, Im just trying to get as much information ASAP for you to get stuck into to give you an idea of whats happening in the global economy.
getting more sources currently
Aiden Butler
The banks have to ensure the LTV is within a certain range for CMHC insurance. Otherwise the CMHC won't insure it every 5 years.
LTV is also important of the way banks are capitalized. If at any time liabilities exceed assets banks are instantly bankrupt.
HCG has $20B in mortgages-- several hundred thousand houses. Nobody knows what's on their books except them. Subprime is defined as a loan that's below a certain investment grade, when the risk warrants a higher interest rate. Consumers purchase CMHC insurance to remove the risk for the banks so they get prime interest rates. In other words, most mortgages at the Big 6 are subprime. Most of Canada is subprime.
The Housing Crash will decimate the economy. People will go broke and stop spending. Housing valuations having been driving Canada's economy for a good decade now.
NIRP = government PAYING you to borrow money. It's the opposite of paying interest to borrow money.
James Nelson
looks like my ETH will do nicely Goyim
Jaxon Reed
Currently third year economic major, took all the finance classes I can, but got into this one Austrian Econ History. He is of same opinion as with our sources and books, all those listed maladies are indeed very real threats however the least optimistic projection puts us past Nov 2017. Also, similar to 08 buyout of Toxic assets, Canadian Central can simply buy up securities and assets, increase Ms and have the economy limp along for maybe a few more years.
I need more data. Finals week for me. No time to mine.
Aaron Harris
Haha, hating the loonie
It's a POS currency. Kill it, rip it's fucking face off and make the Greenback Guerilla take the Loon out back
Cooper Hill
I can't wait to buy a house for pennies on the dollar. Sitting on lots of cash now. Going to be a rental property since all these mortgage holders credit will be so bad they'll be lucky to own a car let alone a house. Its getting me hard Sup Forums except your freaking me out with this apocalypse talk.
Owen Wright
Europe is filled with commies and refugees. They're not gonna fight for their country since they despise their governments but rather cause anarchy to the point where they burn the urban cities to the ground and people flee to rural areas for protection.
Its pretty much Escape From New York
Ethan Williams
Political risk in Brazil. And no part of the global banking system is isolated from what is coming. Believe.
A global sov. debt crisis with 70-90% of countries in default will see many banks shoah'd. OR massive inflation.
Brandon Wilson
How can we get a hold of those sweet CDS swaps? Because that's ultimately whose holding the bag.
Goldman? AES? Whose got em? Because no banker worth his salt hasn't hedged the shit out of this. It's just a matter of timing.
Ian Adams
All Canadian banks were bankrupt is assets were marked-to-market in 2008. Harper bailed them with over $100B by taking toxic mortgages off their books
This time the play is to get the fuck out of the financial system and into the real economy. There is no "big short" because we risk total monetary collapse.
>"At some point during the crisis, three of Canada's banks — CIBC, BMO, and Scotiabank — were completely under water, with government support exceeding the market value of the company," Macdonald said.
Nathaniel Smith
>buy a house for pennies on the dollar. Sitting on lots of cash now
You're the kind of idiot who will have his savings wiped out.
Sitting on cash. Not invested. Not diversified. You're losing money right now not combatting inflation and it'll be much worse by the time houses are down that much.
The ones who will make out like bandits are those who invested in housing pre-bubble, have the sense to get out about now, then diversify their gains into investments, perhaps even foreign currency as inflation control.
Owen Cox
good luck initiating a swap line with a canadian bank. >What counterparty risk?
James Cook
Nothing. But if you want to short the market sell your house and rent until the crash
Grayson Fisher
I'm very interested in reading more about this?
Have any advice on where to start?
What do you mean by past the point of no return?
Logan King
To prop up the economy the fed would need to be lowering rates, not raising them, raising them is how they're going to crash the fuckign economy, all the debt that needs to be paid back and isnt being paid back is going to need collecting in the next couple months. Yes banks can buy up houses, but thats temporary, once they do, they're left with a bunch of assets that dont make them money, they will then proceed to sell the houses, correcting the housing market but also leaving a lot of people bankrupt and without housing.
There cant be a buyback of nontangible assets that were bought with debt, like student loans and education.
When the stock market corrects itself, no one will want to prop it up by buying stocks because it will be in free fall, investors have no faith in the american market or even the american petrodollar. Trust me when i say this, there is no way to prop up the economy to have it limp along for a few more years with faith in the american market in in its current state.
All of this combined with a stagnating economy and inflation rising faster and faster due to government debt + interest rate rises makes for the perfect fucking storm. This is just america as well, these exact same problems are replicated essentially world wide.
Connor Hill
Bernanke did so as well three times. 2008,10, 11? where the two latter where hardly advertised and were of equal size compared to the 08 one. What I meant was, could they do it again. If answer was yes. Why would Congress squabble (republican house&senate) on july debt ceiling cause the crash? What halts the debt auctions? Hell from what I learn in finance US Treasuries are considered 0 risk components of portfolios that should rise in demand when shit hits fan.
Owen Baker
this is a very poor explanation of the perfect storm thats coming, i apologise, i havent slept, i hope you at least kind of get the gist of what im saying.
