Jim Flaherty Hires Card Shuffler to Gamble Away Our Children's Future

Part of the economic meltdown in the United States was caused by AIG and the government was forced to rescue them or risk total collapse.

"The U.S. government seized control of American International Group Inc. -- one of the world's biggest insurers -- in an $85 billion deal that signaled the intensity of its concerns about the danger a collapse could pose to the financial system."

$85 billion ... we should be so lucky.

Because while Jim Flaherty and Stephen Harper were blustering around suggesting that something like that couldn't happen here, what had really taken place was this:

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.

The new rules encouraged the entry of such U.S. players as American International Group – the world's largest insurance company – and Triad Guarantee Inc. of Winston-Salem, N.C. Former Triad chief executive officer Mark
Tonnesen, who spearheaded his company's aborted push into Canada, said the proliferation of high-risk mortgages could have been mitigated if Ottawa had been more watchful. “There was a lack of regulation around the expansion of increased risk,” he said.

During the 2008 campaign Harper said:

In response to a pessimistic Merrill Lynch report on Canada's housing market, for example, Harper said "We don't have the same situation here with the mortgages as was the case in the U.S. with the subprime mortgages there. So, therefore, I think that our market is in a much stronger position."

But of course he was ... how do I put this delicately? LYING THROUGH HIS FRIGGIN' TEETH!!!!

The thing is, the Harper government is responsible for pushing the envelope on deregulation both domestically and internationally despite cautionary events in the U.S. clearly indicating what could go wrong ... In his first budget as Harper's finance minister, Jim Flaherty invited "new players" -- that is, U.S financial corporations -- into Canada's mortgage insurance market and doubled the amount of government money available to back up private insurers from $100 billion to $200 billion. Flaherty's 2006 budget states that "These changes will result in greater choice and innovation in the market for mortgage insurance, benefiting consumers and promoting home ownership."

New York Times columnist Paul Krugman has observed that "financial innovation" are two words that should henceforth strike terror into the hearts of investors. With the entrance of new private mortgage insurers into Canada after the Flaherty budget, Canada saw a dramatic weakening in the standards for mortgage insurance.

In fact it ended up being $125 billion dollars, making the Canadian Taxpayer the largest lender of sub-prime mortgages in the world. OH well. At least we're first at something.

So with Canada's finances on the brink, Jimmy and Steve must have learned their lesson right? And when an opportunity came along like the Robin Hood tax that took the price of a cup of coffee from the worlds' richest, they'd jump at it right? Nope.

But at least they are no longer going to gamble, right?

Ha, ha, ha, ha, ha, ha. You ain't seen nothing yet. Jimmy and Steve are getting us into derivatives. Yep.

Even the world's most savvy stock-market giants (e.g., Warren E. Buffett) have warned over the past decade that derivatives are the fiscal equivalent of a weapon of mass destruction (WMD) - potentially lethal. And the consequences of such an explosion would make the recent global financial and economic crisis seem like penny ante. But generously lubricated lobbyists for the unrestricted, unsupervised derivatives markets tell congressional committees and government regulators to butt out.

Oh, but it gets better. Remember these guys?

US banks are braced for a massive sell-off of their shares this week, as the fallout of the alleged fraud at industry blue blood Goldman Sachs continues to spook the New York Stock Exchange.

Although the grand old institution of the US banking industry has been embroiled in a number of controversies – bonus rows and claims by the chief executive, Lloyd Blankfein, that Goldman does "God's work", and angering critics by skilfully making money out of the start of the financial crisis in 2007 – few expected that the $45bn-revenue group would ever be accused of a scandal of this magnitude.

Well. Jimmy boy believing that any mess the Americans can get themselves into he can make an even bigger mess, has just hired a Goldman Sachs guy to handle our .... guess what? You got it. OUR DERIVATIVES!!!!!

Just bend over and kiss it goodbye folks.