Jim Flaherty Says Oops! The Sky Really is Falling

I've been sounding the alarm since May, over Jim Flaherty's reckless handling of our economy.

To give the impression that we were rebounding, he simply bought up all the high risk mortgages he allowed to infiltrate our once sound banking sector.

In October, Murray Dobbin wrote:

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.

Recently, former Bank of Canada president, David Dodge, has begun sounding the alarm, that Canada's housing bubble is about to burst.

The former head of the Bank of Canada has jumped into the debate over the housing market, warning that prices have reached a point where they are almost unsustainable.

“One would have to say that the relation of house prices to Canadians’ income is right at the high end of what one would think would likely be sustainable over time,” David Dodge told Business News Network on Wednesday.

It would appear that Flaherty can no longer hide the errors of his ways, and has gone into panic mode, trying to fix the mortgage system he weakened.

OTTAWA – Finance Minister Jim Flaherty’s announcement today of new mortgage regulations is simply a continuation of his attempts to fix the mistakes he made by opening up the Canadian mortgage market to riskier American mortgage practices in 2006, said Liberal Finance Critic John McCallum.

“It’s this Minister who put us on a reckless path in the first place,” said Mr. McCallum. “Forty-year mortgages with no down-payment requirements are a recipe for financial disaster for many Canadians. Fully half of the mortgages taken out in the first half of 2008 were for 40 years.

With our unemployment situation in crisis, despite right-wing media headlines, and 500,000 people about to be dropped from the EI rolls, this government is back pedaling like hell. A little too late for that I'm afraid.

No wonder Harper looked like a deer in the headlights and spoke barely above a whisper at a businessman's round table in Calgary. He knew that everything that came out of his mouth was pure garbage.

He took a 2 1/2 month break, hoping something would turn around, but I'm afraid he's got a lot of explaining to do come March.