Beyond.ca

Registration is free! Car Forums - Member Rides Car Forums - Find other members Car Forums - Calendar Car Forums - Frequently Asked Questions Forum Rules and Regulations Car Forums - Search Logout
Beyond.ca - Car Forums : Powered by vBulletin version 2.3.9 Beyond.ca - Car Forums > Lounge > Society / Law / Current Events / Politics > the collapse of Home Capital Group


Author
Thread
Buster
First Gear

Location: Calgary
What I drive: 2012 CTS-V Wagon, 2012 GL350
Posts/Day: 0.13
Trader Rating: (1)
User Rating: 97%


the collapse of Home Capital Group quote:

Some thoughts.

- We're in deep shit in Canada. The housing bubble, finally, looks like it might be ready to tilt.

- There was a large market for depository funds to finance non-bank mortgage lenders. Essentially the "high interest" savings accounts you see advertised are guys seeking equity to lever up into the mortgage market. But like any leverage, if the underlying assets move a bit, then your position moves a lot. If people start pulling their cash (and they are, a lot), then the same psychological phenomenon that creates bubbles works in reverse.

- Canada does not have the policy bullets left to handle a severe mortgage crisis. We either take it on the chin, and allow the correction in Canada to occur fast (ouch), we try to re-flate the bubble with cheap credit (and see CAD go to... 50 cents?), or we see Snowboarder buy up the paper. I think the last is actually quite likely. May god have mercy on our souls.

- Canadians are pretty dumb, on average. But they think they are smart. Which is worse than the average American who probably knows they are dumb.

- Will the shit-show that is the Vancouver and Toronto RE markets kill the other markets, or have we in Calgary already had all the meat flayed from the bones? Probably see a bigger impact than I would like.

- the Canadian banks are going to rip us a new a-hole in the coming years collecting their pound of flesh.

- Home Capital is not the problem, it is a symptom of the problem. Those underlying assets are starting to stank up the joint. But the real problem is the Price to Income ratio for homes in Canada. If the majority of the market can't afford their mortgage payment, then all of the discussion of foreign capital is moot.

Report this post | IP: Logged

Old Post 04-27-2017 04:00 PM
Buster is offline Click Here to See the Profile for Buster Click here to Send Buster a Private Message Find more posts by Buster Edit/Delete Message Reply w/Quote
 
b_t
b_t is a huge fag

Location: Mordhaus
What I drive: FC3S 10AE / Tacoma
Posts/Day: 0.63
Trader Rating: (7)
User Rating: 99%


quote:

are you an economist?

__________________

Report this post | IP: Logged

Old Post 04-27-2017 04:08 PM
b_t is offline Click Here to See the Profile for b_t Click here to Send b_t a Private Message Find more posts by b_t Edit/Delete Message Reply w/Quote
Sentry
Third Gear

Location: Calgary
What I drive: E39 M5, E39 540i wagon
Posts/Day: 0.83
Trader Rating: (20)
User Rating: 98%


quote:

Originally posted by b_t
are you an economist?


Negative, he is a meat popsicle.

__________________

Report this post | IP: Logged

Old Post 04-27-2017 04:12 PM
Sentry is offline Click Here to See the Profile for Sentry Click here to Send Sentry a Private Message Find more posts by Sentry Edit/Delete Message Reply w/Quote
Rarasaurus
Neutral

Location: Calgary
What I drive: Treg/B7
Posts/Day: 0.04
Trader Rating: (1)
User Rating: 99%


quote:

The lenders will be more Leary and may tighten their lending policies. This and interest rate increases may slow the market based on what people qualify for.

Calgary has had a lot of downward pressure already for the last 2 years but stayed remarkably flat in residential RE. We still have highest GDP per capita in Canada and highest wages. The lower Canadian dollar helps our energy sector realise more profits. We are not far off 2000 to 2008 market parameters where Alberta did very well.

I do see a problem with Vancouver and Toronto for sure though.

The crap assets HCG has will be sold off for a loss and their investors are the ones that are hurt. Day to day people will feel little impact.

Report this post | IP: Logged

Old Post 04-27-2017 04:14 PM
Rarasaurus is offline Click Here to See the Profile for Rarasaurus Click here to Send Rarasaurus a Private Message Find more posts by Rarasaurus Edit/Delete Message Reply w/Quote
Buster
First Gear

Location: Calgary
What I drive: 2012 CTS-V Wagon, 2012 GL350
Posts/Day: 0.13
Trader Rating: (1)
User Rating: 97%


quote:

Originally posted by Rarasaurus
The lenders will be more Leary and may tighten their lending policies. This and interest rate increases may slow the market based on what people qualify for.

Calgary has had a lot of downward pressure already for the last 2 years but stayed remarkably flat in residential RE. We still have highest GDP per capita in Canada and highest wages. The lower Canadian dollar helps our energy sector realise more profits. We are not far off 2000 to 2008 market parameters where Alberta did very well.

I do see a problem with Vancouver and Toronto for sure though.

The crap assets HCG has will be sold off for a loss and their investors are the ones that are hurt. Day to day people will feel little impact.



I think this is a rather generous interpretation of what is going on. Although I certainly hope you are right.

I think Calgary's soft landing over the last couple of years is somewhat to do with the same policies that have inflated GTA/GVA prices. (I'm of the view that foreign capital is over-represented as factor in the actual pricing. Not absent, but over-stated.)

Even so, if this is the tip of the iceberg, then Calgarians will be dragged down by the policy decisions, which happen at a national level.

Report this post | IP: Logged

Old Post 04-27-2017 04:21 PM
Buster is offline Click Here to See the Profile for Buster Click here to Send Buster a Private Message Find more posts by Buster Edit/Delete Message Reply w/Quote
Rarasaurus
Neutral

Location: Calgary
What I drive: Treg/B7
Posts/Day: 0.04
Trader Rating: (1)
User Rating: 99%


quote:

For sure on the side of optimistic and agree there is a risk we get dragged down by future national policies.

I do not know what policies inflated the other markets as I only remember policies that have tried to cool the market get imposed the last 2 years.

If oil and Nat Gas can climb a bit more I think Calgary will be in a position to weather it the best country wide. If CAD dollar goes down a bit more to 0.65 this helps us on the corporate profit and GDP side.

Report this post | IP: Logged

Old Post 04-27-2017 04:47 PM
Rarasaurus is offline Click Here to See the Profile for Rarasaurus Click here to Send Rarasaurus a Private Message Find more posts by Rarasaurus Edit/Delete Message Reply w/Quote
roopi
Second Gear

Location: Calgary, AB
What I drive:
Posts/Day: 0.31
Trader Rating: (49)
User Rating: 237%


quote:

Imminent Housing Crash Thread 2.0

Report this post | IP: Logged

Old Post 04-27-2017 05:06 PM
roopi is offline Click Here to See the Profile for roopi Click here to Send roopi a Private Message Find more posts by roopi Edit/Delete Message Reply w/Quote
88CRX
Moderator

Location: 403
What I drive: EP3, S2K & TLX
Posts/Day: 1.07
Trader Rating: (22)
User Rating: 100%


quote:

Originally posted by roopi
Imminent Housing Crash Thread 2.0



No kidding.

Would be great if it would just crash and get it over with. Quit fucking around.

__________________

Report this post | IP: Logged

Old Post 04-27-2017 05:11 PM
88CRX is offline Click Here to See the Profile for 88CRX Click here to Send 88CRX a Private Message Find more posts by 88CRX Edit/Delete Message Reply w/Quote
Swank
Neutral

Location: Secret City, Alberta
What I drive: 2007 Civic Si
Posts/Day: 0.08
Trader Rating: (8)
User Rating: 100%


quote:

Originally posted by roopi
Imminent Housing Crash Thread 2.0

Beat me to it.

__________________

Report this post | IP: Logged

Old Post 04-27-2017 05:12 PM
Swank is offline Click Here to See the Profile for Swank Click here to Send Swank a Private Message Find more posts by Swank Edit/Delete Message Reply w/Quote
ZenOps
Neutral

Location: Calgary
What I drive:
Posts/Day: 0.08
Trader Rating: (0)
User Rating: 99%


quote:

Bubble is relative. Houses tend to be priced in dollars, dollars, yen, yuan and other currencies that are constantly being printed in ever greater quantities.

Now, if you look at it compared to raw dollar printing - the one thing that is in a bubble compared to the 1970's is post secondary education in some parts of the world (like the US)

Rap, rock and country singers along with some football players might also be bubble-ish, but that is a micro economic factor as there are so few of them percentage wise compared to the bulk of the economy.

http://www.sportingintelligence.com...t-wages-200101/

Baller! Compared to 1960, the average wage of a footballer has gone up 1,693x. Now that is what you call wage mobility. If the trend continues in about 50 years a footballer should probably be making about $100 million per week.

__________________
Hi! I like shorts! They're comfy and easy to wear!

Last edited by ZenOps on 04-27-2017 at 05:33 PM

Report this post | IP: Logged

Old Post 04-27-2017 05:17 PM
ZenOps is online now Click Here to See the Profile for ZenOps Click here to Send ZenOps a Private Message Find more posts by ZenOps Edit/Delete Message Reply w/Quote
revelations
Third Gear

Location: calgary
What I drive: 2g Eclipse / EP3
Posts/Day: 0.99
Trader Rating: (5)
User Rating: 98%


quote:

Canadian mortgage default numbers are rising somewhat, but not at their peak of the past 10 years. We were at 0.28% back in February - down from the peak of 0.45% of Feb 2010.

http://www.cba.ca/Assets/CBA/Files/...ge_db050_en.pdf


The collapse of a a lender due to loss of liquidity - how does that affect the rest of the PRESENT mortgage holders through other institutions?

__________________

Last edited by revelations on 04-27-2017 at 05:23 PM

Report this post | IP: Logged

Old Post 04-27-2017 05:19 PM
revelations is offline Click Here to See the Profile for revelations Click here to Send revelations a Private Message Find more posts by revelations Edit/Delete Message Reply w/Quote
Manhattan
Neutral

Location: The C
What I drive:
Posts/Day: 0.04
Trader Rating: (5)
User Rating: 97%


quote:

Talk about fear mongering.

Home Capital is tanking because of allegations of fraud in their lending practices and loss of trust in their management. Not because their home loans are going bad. Their deposits were being cashed out at a high rate because of the scandal and they were more or less forced to take on some very burdensome financing.

Report this post | IP: Logged

Old Post 04-27-2017 05:37 PM
Manhattan is offline Click Here to See the Profile for Manhattan Click here to Send Manhattan a Private Message Find more posts by Manhattan Edit/Delete Message Reply w/Quote
ercchry
Fifth Gear

Location: calgary.ab.ca
What I drive: E90M3 510 Wagon
Posts/Day: 1.51
Trader Rating: (6)
User Rating: 99%


quote:

Rules are already way tighter than they use to be... don't believe me? Go try and shop around for a mortgage for a purchase price of over $1.5m with ONLY 20% down

It's amazing how tight lenders get when they actually need to have the loan on the balance sheet and can't insurance and sell it off

Between that and the new qualifying rules for regular high ratio, I think we are being very proactive for any crash van or Toronto may see

__________________

Report this post | IP: Logged

Old Post 04-27-2017 05:50 PM
ercchry is offline Click Here to See the Profile for ercchry Click here to Send ercchry a Private Message Visit ercchry's homepage! Find more posts by ercchry Edit/Delete Message Reply w/Quote
Buster
First Gear

Location: Calgary
What I drive: 2012 CTS-V Wagon, 2012 GL350
Posts/Day: 0.13
Trader Rating: (1)
User Rating: 97%


quote:

A bubble isn't really relative. If you look at simply a bubble as it relates to the value of a currency (ie inflation), then you would presume that asset prices would correlate to other areas - labour, etc. This isn't happening. Personal cash-flow to price ratio is more important than simply nominal home prices inflating.

What is happening with HCG is less important than why it is happening. If it is an indicator in a turn of confidence...well confidence goes down just as fast as it goes up. This is very similar to the US mortgage crisis in that respect. With people saying almost identical things in response to the New Century crisis.

Report this post | IP: Logged

Old Post 04-27-2017 05:55 PM
Buster is offline Click Here to See the Profile for Buster Click here to Send Buster a Private Message Find more posts by Buster Edit/Delete Message Reply w/Quote
suntan
First Gear

Location: Calgary, AB
What I drive:
Posts/Day: 0.24
Trader Rating: (0)
User Rating: 97%


quote:

HCG has $20 billion in mortgages. Wow, that's a lot!

The total mortgage market in Canada is...








$1 TRILLION.

This like if your house burned down to the ground and people then said Calgary's housing market is going to shit.

Report this post | IP: Logged

Old Post 04-27-2017 05:57 PM
suntan is offline Click Here to See the Profile for suntan Click here to Send suntan a Private Message Find more posts by suntan Edit/Delete Message Reply w/Quote
Hallowed_point
Third Gear

Location: Da Hood
What I drive: J35Y2
Posts/Day: 1.26
Trader Rating: (1)
User Rating: 99%


quote:

Originally posted by ercchry
Rules are already way tighter than they use to be... don't believe me? Go try and shop around for a mortgage for a purchase price of over $1.5m with ONLY 20% down

It's amazing how tight lenders get when they actually need to have the loan on the balance sheet and can't insurance and sell it off

Between that and the new qualifying rules for regular high ratio, I think we are being very proactive for any crash van or Toronto may see



Agree strongly.

Report this post | IP: Logged

Old Post 04-27-2017 06:00 PM
Hallowed_point is offline Click Here to See the Profile for Hallowed_point Click here to Send Hallowed_point a Private Message Find more posts by Hallowed_point Edit/Delete Message Reply w/Quote
ercchry
Fifth Gear

Location: calgary.ab.ca
What I drive: E90M3 510 Wagon
Posts/Day: 1.51
Trader Rating: (6)
User Rating: 99%


quote:

Not to mention HCG is already rebounding and have access to a new $2b balance sheet...

And genworth claims that HCG actually has less defaults than average

https://www.google.ca/amp/business....e-of-credit/amp

__________________

Report this post | IP: Logged

Old Post 04-27-2017 06:07 PM
ercchry is offline Click Here to See the Profile for ercchry Click here to Send ercchry a Private Message Visit ercchry's homepage! Find more posts by ercchry Edit/Delete Message Reply w/Quote
Xtrema
Sixth Gear

Location: Calgary, Alberta
What I drive: 2016 MB C450
Posts/Day: 1.54
Trader Rating: (4)
User Rating: 95%


quote:

Originally posted by suntan
This like if your house burned down to the ground and people then said Calgary's housing market is going to shit.



The question is nobody knows how deep this goes and whose money is tied up in this.
click for larger version
» Click image for larger version

Last edited by Xtrema on 04-27-2017 at 06:26 PM

Report this post | IP: Logged

Old Post 04-27-2017 06:15 PM
Xtrema is offline Click Here to See the Profile for Xtrema Click here to Send Xtrema a Private Message Find more posts by Xtrema Edit/Delete Message Reply w/Quote
Buster
First Gear

Location: Calgary
What I drive: 2012 CTS-V Wagon, 2012 GL350
Posts/Day: 0.13
Trader Rating: (1)
User Rating: 97%


quote:

Originally posted by ercchry
Not to mention HCG is already rebounding and have access to a new $2b balance sheet...

And genworth claims that HCG actually has less defaults than average

https://www.google.ca/amp/business....e-of-credit/amp



Their "rescue package" is of a nature it looks to me like they are trading the remaining value of their assets for an opportunity for insiders to get out.

Report this post | IP: Logged

Old Post 04-27-2017 06:15 PM
Buster is offline Click Here to See the Profile for Buster Click here to Send Buster a Private Message Find more posts by Buster Edit/Delete Message Reply w/Quote
Buster
First Gear

Location: Calgary
What I drive: 2012 CTS-V Wagon, 2012 GL350
Posts/Day: 0.13
Trader Rating: (1)
User Rating: 97%


quote:

Originally posted by suntan
HCG has $20 billion in mortgages. Wow, that's a lot!

The total mortgage market in Canada is...








$1 TRILLION.

This like if your house burned down to the ground and people then said Calgary's housing market is going to shit.



You're making an argument that this is an isolated incident, with an isolated company, and that systemic issues in the RE market and the residential mortgage market had nothing to do with it. fine. I'll listen to that argument.

But this isn't a situation in isolation. there is plenty of data to support the notion that this is a symptom of greater systemic issues.

Look at it another way. If there WERE issues with the RE market and home mortgage market in Canada, and those issues were to bubble to the surface at the head of various serious issues....it would look exactly like this at the start. If you were to play a thought experiment about what a mortgage/RE crisis in Canada would look like in its nascence....you might dream up this scenario.

Report this post | IP: Logged

Old Post 04-27-2017 06:20 PM
Buster is offline Click Here to See the Profile for Buster Click here to Send Buster a Private Message Find more posts by Buster Edit/Delete Message Reply w/Quote
The time now is 04:10 PM (GMT) Post New Thread   
 
Last Thread   Next Thread
Beyond.ca - Car Forums : Powered by vBulletin version 2.3.9 Beyond.ca - Car Forums > Lounge > Society / Law / Current Events / Politics > the collapse of Home Capital Group



Show Printable Version | Email this Page | Subscribe to this Thread


Forum Rules:
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is OFF
vB code is ON
Smilies are ON
[IMG] code is ON
 

Google
 
Web beyond.ca

Terms of Use - Contact Us - Advertising Info - Archives - Car Blog

Powered by: vBulletin Version 2.3.9
Copyright ©2009 Jelsoft Enterprises Limited.

Bringing Car Enthusiasts together in discussion on our car forums

Page Statistics : Page generated in 0.09894609 seconds (73.85% PHP - 26.15% MySQL) with 41 queries.