They are drooling over Jim Flaherty's promises to balance the books, something no self-respecting neocon would ever do.
Record deficits are a dream come true.
Today someone sent me an article that is a few months old, but again points to the disaster that Flaherty has created in our once sound banking system.
Now don't worry; our actual banks are not at risk. Jimmy made sure of that. It's the Canadian taxpayer who will wear this mess. The banks were too smart to enter into this nightmare.
And David Dodge, head of the Bank of Canada is already sounding the alarm on this risky venture.
So to refresh your memory:
In May I posted this: Did Jim Flaherty Put Canadian Mortgage Industry at Risk?
In the first half of this year, as the subprime mortgage crisis was exploding in the United States, a contagion of U.S.-style lending practices quietly crossed the border and infected Canada's previously prudent mortgage regime.
The mushrooming of a Canadian version of subprime mortgages has gone largely unnoticed. The Conservative government finally banned the practice last summer, after repeated warnings from frustrated senior officials and bankers that the country's financial system was being exposed to far too much risk as the housing market weakened.
Just yesterday, Finance Minister Jim Flaherty repeated the mantra that the government acted early to get rid of risky mortgages. What he and Prime Minister Stephen Harper do not explain, however, is that the expansion of zero-down, 40-year mortgages began with measures contained in the first Conservative budget in May of 2006.
In June I posted this: Has Jim Flaherty's Poor Judgement Come Back to Haunt Us?
Michael Gregory, a senior economist at BMO Capital Markets said it was likely more than 150,000 households in Canada were experiencing some degree of stress in meeting consumer debt repayments." ... Mortgage delinquencies have also risen.
In October I posted this: Has Jim Flaherty Put Us on the Brink of Collapse?
What do the mid-recession housing boom and the Harper Conservatives' rise in the polls have in common? Answer: the Canada Mortgage and Housing Corporation's massive sub-prime mortgage scheme that is keeping up the appearance of an economic recovery ... But what few Canadians realize is that the housing market has avoided collapse because the Harper Conservatives directed the CMHC to change the mortgage rules to effectively make the Canadian government the biggest sub-prime lender in the world.
What's almost as alarming as this reckless policy is that no one in the financial media is talking about it, even though everyone knows the facts. ... The facts are that over 90 per cent of existing mortgages in Canada are "securitized." That is the practice of pooling mortgages (or other assets) and then issuing new securities backed by the pool ... That's what happened with the sub-prime mortgages in the U.S.
Credit is still tight in the U.S. because no private investor has the stomach for such risky MBSs. That's because those losses were private and not back-stopped by any government. "In order to find buyers for securitized mortgage pools, the government of Canada has put guarantees on them" by directing CMHC to guarantee all Canadian mortgages.
By the end of 2007 there were $138 billion in NHA securitized pools outstanding and guaranteed by CMHC --17.8 per cent of all outstanding mortgages. By June 30, 2009, that figure was $290 billion, a figure Lepoidevin (David Lepoidevin, a financial advisor with National Bank Financial) says, "exceeds the total value of mortgages offered by CMHC in its 57 years of existence!"
And I also posted this: More on Jim Flaherty's Secretive Bailout of Our Financial Sector
The federal government has quietly given Canada Mortgage and Housing Corp. more financial muscle, raising concerns the multibillion-dollar agency is expanding at an unprecedented pace with little oversight.
For the second time since the beginning of 2008, Ottawa has raised the amount of mortgage insurance CMHC can have outstanding. The increase moves the cap to $600-billion, up from $450-billion and nearly double the $350-billion limit in place at the end of 2007.
CMHC is by far the largest provider in Canada of default insurance on mortgages, which home buyers are legally required to have if their down payment is smaller than 20 per cent. As home prices rise and smaller down payments become the norm, CMHC is selling more insurance each year.
And Now From the November's Financial Post: Canada's (Sub-Prime) Mortgage Market - Causing Concern for the Bank of Canada?
Part of the responsibility for this trend is being put at the feet of the Canadian Mortgage and Housing Corp. (CMHC). This government entity is considered by critics to be the Canadian equivalent of Fannie Mae in that its practices are thought to be provoking a rise in lending that could spell trouble for the Canadian real estate market in the future.
This practice was brought about in part by the directive of the federal government to CMHC to effectively "hit the gas" and ensure that mortgage credit was accessible. The theory goes something like this: banks can continue making extended amortization loans to provide prospective homeowners the ability to get into an overheated Canadian housing market because the default risk is being transferred to the CMHC (taxpayers) since it acts as a guarantor for the mortgage market.
We have got to get Flaherty's hands off our money before it's too late. This government has not piloted us through the recession, but instead has put us all aboard the Titanic.