Saturday, October 11, 2008
The $25 Billion Not-a-Bailout Bailout
This is a simple question and I pose it because I really don't know the answer.
Where, exactly, is the $25 billion coming from that Flaherty is going to use to buy these mortgages? That's not exactly petty cash, and I don't imagine the Cons account balance at the TD Bank has that many zeroes attached to it, so where is it coming from? Are they simply going to print more money? Borrow it (increasing the national debt)? Go into deficit by tapping into operating expenses?
Somehow, somewhere, Flaherty is coming up with $25 billion and I'd like to know how they are going to do it. Perhaps I can use the same technique to replenish my RRSP after the thrashing it took in the past few weeks.
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Only fitting given that Flaherty is the source of Canada’s 40yr zero down mortages.
http://www.taxpayer.com/main/news.php?news_id=2430
Harper followed Bush’s example and first deregulated credit. June 2006, than again in November 2006 CMHC relaxed its standards. Prior to Harper, government insured mortgage were a prudent maximum of 25 years and with a minimum down payment of 5%. The introduction of dangerous zero down 40yr mortgages fueled already out of control housing prices. Canada is not suffering to the extend the US people are suffering because the Liberals know there is piper to pay and did not follow Bush deregulating credit. Only after Canada felt the growing credit crises did Harper reverse the dangerous zero down 40yr mortgages effective Oct 15 2008 which he earlier introduced in 2006.
http://www.cmhc-schl.gc.ca/en/corp/nero/nere/2006/2006-06-28-1400.cfm
Quote:
Earlier this year, CMHC was the first Canadian mortgage insurer to introduce, on a pilot basis, insurance on loans with extended amortization periods of up to 30 years. Building on the success of this pilot, CMHC is now moving to further facilitate homeownership by making this feature on-going, and is also introducing extended amortization periods of up to 35 years.
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