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http://www.theglobeandmail.com/repo...hboard/follows/quote:The Bank of Canada is raising red flags about the Toronto, Calgary and Vancouver housing markets.
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# ? Oct 22, 2014 18:13 |
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# ? Jun 8, 2024 02:33 |
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http://www.theglobeandmail.com/repo...rticle21180431/quote:
For gently caress's sake. If you're buying a multimillion dollar home and a 2% tax is a loving burden, you shouldn't be buying that loving home. Or a loving 500k home for that matter.
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# ? Oct 22, 2014 19:34 |
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To put that in perspective, the government is forecasting higher revenue from housing sales than it recieves from the entire forest industry, and more than it would from the LNG proposal. Condo speculation is our primary industry, bar none.
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# ? Oct 22, 2014 19:46 |
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Rime posted:To put that in perspective, the government is forecasting higher revenue from housing sales than it recieves from the entire forest industry, and more than it would from the LNG proposal. You mean over and above regular corporate (and personal) income tax rates for entities in those industries right? Royalties or what not? Apologies for the heretofore omission of the promised spreadsheet. Busier week than expected. I haven't forgotten...
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# ? Oct 22, 2014 19:54 |
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Lexicon posted:You mean over and above regular corporate (and personal) income tax rates for entities in those industries right? Royalties or what not? I was basing it off this quote: quote:De Jong said one mid-sized LNG plant will pay about $800 million in taxes annually under the new rules, an amount equivalent to the taxes B.C.'s entire forest industry pays in one year. He said one plant, producing 12-million tonnes of LNG annually, will pay taxes of $8 to $9 billion over 10 years. Not sure how it breaks down. Granted, I missed that the figure was from a single LNG plant and not the entire sector.
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# ? Oct 22, 2014 20:16 |
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quote:“They have frankly been surprised at the underlying strength in housing and consumer spending, and now explicitly tie that to low interest rates,” Mr. Porter said. How is this at all suprising to them? I just. I can't...
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# ? Oct 22, 2014 21:21 |
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melon cat posted:I don't understand how they're "surprised" at the upward movement in housing and consumer spending. Interest rates are at an all-time low, which means that people put debt repayment on the back burner ("Why pay off debt since debt is cheap?" ) and low rates mean that more people will get mortgages since we use current rates as a means of qualifying mortgage applicants. Bro, based on what I know about your profession, if you don't know how these guys operate then
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# ? Oct 22, 2014 21:23 |
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And if interest rates rise, the whole house of cards comes tumbling down, and the entire economy is hosed.
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# ? Oct 22, 2014 21:42 |
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ascendance posted:And if interest rates rise, the whole house of cards comes tumbling down, and the entire economy is hosed. So this is a really interesting question so I went googling. http://blogs.wsj.com/developments/2013/09/20/what-rising-interest-rates-mean-for-home-prices/ quote:
From my layperson's point of view, this totally makes sense. The housing market was batshit insane before interest rates dropped from 3.5 to 1% in 2008. I don't see why the level of sales would taper off IF interest rates are raised slowly enough. And as shown by the US, people are more willing to stick around in their underwater houses than to call it quits and sell them. Because of Pride of Ownership I guess.
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# ? Oct 22, 2014 21:46 |
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Loss aversion makes it hard to sell an underwater house. People just suck it up and live there, Source: Has am aunt who lives in Milton Keynes.
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# ? Oct 22, 2014 21:52 |
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ascendance posted:Loss aversion makes it hard to sell an underwater house. People just suck it up and live there, Sure, but what if you have a massive HELOC as well? And several maxed out credit cards? And ongoing home maintenance? A car loan? Kinda like most canadians right now.
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# ? Oct 22, 2014 21:54 |
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http://www.huffingtonpost.ca/2014/10/21/foreign-investors-housing-canada-cmhc_n_6022378.htmlquote:CMHC: We Don't Know How Many Foreign Investors Are Buying Canadian Homes
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# ? Oct 22, 2014 22:01 |
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Considering the median family income in china is like 9000 USD a year, exactly which mainland chinese investors are buying these condos for investment? Like, if I got rich taking bribes in China, and I wanted to launder my cash in Macau at a baccarat table, would I be buying a 300k condo or would I be buying a million dollar house in vancouver? I don't think small fry mainlanders would have the means to launder their money by putting in massive orders for steel rods and then having the order magically disappear would they?
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# ? Oct 22, 2014 22:07 |
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Cultural Imperial posted:Considering the median family income in china is like 9000 USD a year, exactly which mainland chinese investors are buying these condos for investment? Like, if I got rich taking bribes in China, and I wanted to launder my cash in Macau at a baccarat table, would I be buying a 300k condo or would I be buying a million dollar house in vancouver? I don't think small fry mainlanders would have the means to launder their money by putting in massive orders for steel rods and then having the order magically disappear would they? Come on, you're smarter than this. There's more than enough lovely, innumerate arguments on the bull side; let's not bring them over to this side of the house. You can argue your thesis without respect to the median of a very wide statistical distribution.
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# ? Oct 22, 2014 22:30 |
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Cultural Imperial posted:Considering the median family income in china is like 9000 USD a year, exactly which mainland chinese investors are buying these condos for investment? Like, if I got rich taking bribes in China, and I wanted to launder my cash in Macau at a baccarat table, would I be buying a 300k condo or would I be buying a million dollar house in vancouver? I don't think small fry mainlanders would have the means to launder their money by putting in massive orders for steel rods and then having the order magically disappear would they? Also, you dont need $300k... You need 5% down amd some chucklehead willing to loan you the rest in the form of a mortgage. Meanwhile, you are absolutely necessary to the developer because they dont start building until 80% of the units are sold.
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# ? Oct 22, 2014 22:38 |
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Lexicon posted:Come on, you're smarter than this. There's more than enough lovely, innumerate arguments on the bull side; let's not bring them over to this side of the house. You can argue your thesis without respect to the median of a very wide statistical distribution. Whatever, 9k, 90k, 900k, 9mil. Think of my question more as a lack of understanding of how money laundering works, specifically the tools that are available to people who don't have shitloads of money.
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# ? Oct 22, 2014 22:49 |
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ascendance posted:New lending requirements saying that you need to put 20% down on properties over $1 million definitely means the $300k condo is a better buy. also way easier to flip. If I were laundering money why would I take out a mortgage? Wouldn't that mean more paperwork making me more culpable?
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# ? Oct 22, 2014 22:50 |
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Cultural Imperial posted:If I were laundering money why would I take out a mortgage? Wouldn't that mean more paperwork making me more culpable?
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# ? Oct 22, 2014 22:56 |
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Cultural Imperial posted:Whatever, 9k, 90k, 900k, 9mil. Think of my question more as a lack of understanding of how money laundering works, specifically the tools that are available to people who don't have shitloads of money. I might be misunderstanding, but I think Lexicon's point is that China's median income is irrelevant and it's only those with shitloads of money who are in question.
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# ? Oct 23, 2014 10:36 |
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The thing about China is that even if only the top 1% have that kind of money, that's still a full third of Canada's population. China needs its lebensraum, especially after imperialists stripped poor China of its rightful territory. Also, it should be possible to make a good estimate of Chinese home ownership based on foreign investment numbers. Those are pretty good at recording flows of currency and capital, although obviously it would be a country by country breakdown. on the left fucked around with this message at 10:48 on Oct 23, 2014 |
# ? Oct 23, 2014 10:45 |
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http://business.financialpost.com/2014/10/23/canadians-may-be-buying-too-much-car-moodys-sounds-alarm-on-bank-auto-loans/quote:Bank auto lending has grown at a compounded annual rate of 20% since 2007, “significantly outpacing” the growth of even red-hot mortgages, credit cards, and lines of credit., according to the ratings agency report released Thursday. In seven years, vehicle loans have jumped fro $16.2-billion to $64-billion. How am I supposed to signal to my peers that I'm a Successful Person if I don't buy an 80k car?
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# ? Oct 23, 2014 15:08 |
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Cultural Imperial posted:http://business.financialpost.com/2014/10/23/canadians-may-be-buying-too-much-car-moodys-sounds-alarm-on-bank-auto-loans/ Man, forget getting the car, it'll be amazing to see if the banks can even get the cars back when people default.
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# ? Oct 23, 2014 16:19 |
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Ceciltron posted:Man, forget getting the car, it'll be amazing to see if the banks can even get the cars back when people default. Luxury cars also depreciate like a motherfucker, so realistically having a luxury car as security against a loan to buy that luxury car, without at least a 60-70% downpayment, is pretty stupid.
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# ? Oct 23, 2014 16:38 |
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Ceciltron posted:Man, forget getting the car, it'll be amazing to see if the banks can even get the cars back when people default. In the US they are starting to put immobilizers in cars and turning them off when people are delinquent. Look for that trend to continue. Also, how exposed are banks in Canada to new auto loans really? I'm sure there's some, but it cannot be that significant. I get my banks best rate for everything, and when I was looking at an auto loan for a new car a few years back the bank could not come close to beating the rate the car manufacturer's financing wing offered me. I mean there was something close to a 4% spread in favour of the manufacturer. With cheap cars they often offer 0% financing, which the bank will never do. It's hard to imagine a lot of people taking a bank loan, at least on new luxury or mid range cars.
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# ? Oct 23, 2014 17:52 |
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Yeah the financing for my car was 0.9% or a measly $500 cash back if you pay cash. Took the .9% and made 2k off the cash I was going to use. Manufacturer financing is crazy and I assume done at a loss to move cars. I wonder though if the banks got directly involved in development if you'd see poo poo like that? Like if RBC was directly building a ton of condos in Toronto or a huge sprawl in Calgary would they offer crazy low rates to get people to buy their development rather than move into TD-Town.
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# ? Oct 23, 2014 17:59 |
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Saltin posted:In the US they are starting to put immobilizers in cars and turning them off when people are delinquent. Look for that trend to continue. Also, how exposed are banks in Canada to new auto loans really? I'm sure there's some, but it cannot be that significant. I get my banks best rate for everything, and when I was looking at an auto loan for a new car a few years back the bank could not come close to beating the rate the car manufacturer's financing wing offered me. I mean there was something close to a 4% spread in favour of the manufacturer. With cheap cars they often offer 0% financing, which the bank will never do. It's hard to imagine a lot of people taking a bank loan, at least on new luxury or mid range cars. The manufacturer rate isn't a true cost of financing though of course. It's basically one big voodoo operation to hide the cost of capital in the vehicle price or vice versa. It doesn't invalidate your argument, other than to point out that the 4% spread only exists because it's an apples to oranges comparison.
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# ? Oct 23, 2014 18:02 |
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Lexicon posted:The manufacturer rate isn't a true cost of financing though of course. It's basically one big voodoo operation to hide the cost of capital in the vehicle price or vice versa. It doesn't invalidate your argument, other than to point out that the 4% spread only exists because it's an apples to oranges comparison. Sure, I know this, but what I'm saying is people will always prefer oranges in this context so exposure to the traditional apple loans from the big banks are likely smaller than you would imagine - i.e they aren't exposed to the majority of new car loans in Canada.
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# ? Oct 23, 2014 18:07 |
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Saltin posted:Sure, I know this, but what I'm saying is people will always prefer oranges in this context so exposure to the traditional apple loans from the big banks are likely smaller than you would imagine - i.e they aren't exposed to the majority of new car loans in Canada. Just had a thought: where is the manufacturer's capital for their loans coming from? Presumably not in-house. So maybe the banks are exposed more than it seems, if they're the ones lending to the auto companies so they can do their voodoo loans?
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# ? Oct 23, 2014 18:18 |
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Robert Skidelsky on the inevitable (imo) debt jubilee. Always good to see the "status quo" slowly coming to terms with reality asserting itself. The Moral Economy of Debt From the article: quote:The truth of the matter, as David Graeber points out in his majestic Debt: The First 5,000 Years, is that that the creditor-debtor relationship embodies no iron law of morality; rather, it is a social relationship that always must be negotiated. When quantitative precision and an unyielding approach to debt obligations are the rule, conflict and penury soon follow. Majestic is an understatement, anyone who has trouble imagining a world where debt jubilee is a thing needs to read that book or wait it out and see it irl
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# ? Oct 23, 2014 18:23 |
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Lexicon posted:Just had a thought: where is the manufacturer's capital for their loans coming from? Presumably not in-house. I considered this as well, but honestly I have no idea. The banks are obviously involved in all sorts of things, but I do know the financing wing of all major manufacturers is huge and generally international with local subsids
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# ? Oct 23, 2014 18:23 |
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Mexplosivo posted:Robert Skidelsky on the inevitable (imo) debt jubilee. Always good to see the "status quo" slowly coming to terms with reality asserting itself. LOL that they're quoting the irish. It seems they learned nothing as their housing market is shooting up again. quote:Morality, however, has not been entirely on the side of the creditor. In New Testament Greek, debt means “sin.” But, though it might be sinful to go into debt, Matthew 6:12 supports absolution: “forgive us our debts, as we also have forgiven our debtors.” Widespread social resistance to creditors’ claims on debtors’ property for non-payment has meant that “foreclosure” has rarely been carried to extremes. Indeed.
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# ? Oct 23, 2014 18:46 |
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Buskas posted:I might be misunderstanding, but I think Lexicon's point is that China's median income is irrelevant and it's only those with shitloads of money who are in question. Exactly. To depart from housing for a moment, it would be profoundly stupid to say: Apple shouldn't bother selling iPhones in China - the median income is only $9000, after all Summary statistics like means or medians rarely have any applicability in any discussion about a segment of a frequency distribution.
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# ? Oct 23, 2014 18:50 |
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Mexplosivo posted:Majestic is an understatement, anyone who has trouble imagining a world where debt jubilee is a thing needs to read that book or wait it out and see it irl this thread would take a major turn for the awesome if overleveraged homeowners suddenly had their debts zeroed out while getting to keep their houses
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# ? Oct 23, 2014 19:01 |
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LemonDrizzle posted:this thread would take a major turn for the awesome if overleveraged homeowners suddenly had their debts zeroed out while getting to keep their houses So what would happen if some significant portion of almost a trillion dollars of mortgage debt was forgiven? Is canada going to be more like another argentina or another mexico?
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# ? Oct 23, 2014 19:04 |
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The Mexican tequila crisis is a textbook bailout (and its social consequences too!) before they were called that. The Argentinian default, either one of them, is about as far from a debt jubilee as you can get. Mexplosivo fucked around with this message at 19:41 on Oct 23, 2014 |
# ? Oct 23, 2014 19:15 |
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Lexicon posted:Just had a thought: where is the manufacturer's capital for their loans coming from? Presumably not in-house. I work in the retail auto industry, and I've answered this a few times, but there are specific institutions that deal with auto loans. First, you have "the banks". Retail auto lending is held by a separate arm of BMO, TD, and ScotiaBank. They're arms-length from retail banking, but there is exposure. Then you have captive finance companies like Ford Credit and Toyota Financial Services. These are actually lending institutions exclusive to the manufacturer. The last time poo poo hit the fan in auto industry, it was the captive finance companies that went tits up, not the banks that were heavy into auto loans. As mentioned before, 0% or below prime financing is a marketing gimmick for dealers and manufacturers. It's called a sub-vented rate. The cost of borrowing is built into the vehicles pricing. The manufacturer will buy down the rate shown to the consumer with its own cash before approval.
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# ? Oct 23, 2014 19:25 |
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Cultural Imperial posted:So what would happen if some significant portion of almost a trillion dollars of mortgage debt was forgiven? Banks would become immediately insolvent, I think. Banks use mortgages they own as assets to borrow and lend against so forgiving the debt without paying the banks would cause significant collapse. You'd have to pay the banks back for the mortgages at the very least. In effect, you'd be taxing everyone to pay off the gambler's debts. A better way to do it would be to write everyone a check for X amount and then let people walk away from their presumably underwater homes and then make the banks whole at the time of sale of the house (so they can't claim it as worthless, recoup full value and then sell it afterwards).
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# ? Oct 23, 2014 20:02 |
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MickeyFinn posted:A better way to do it would be to write everyone a check for X amount and then let people walk away This sounds remarkably like lowering interest rates to increase the amount of cheap credit available
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# ? Oct 23, 2014 20:16 |
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JawKnee posted:This sounds remarkably like lowering interest rates to increase the amount of cheap credit available Sorta, except it would be occurring after housing prices collapsed and people were stuck with assets that will never be worth what they owe on them. If the real rate of return wants to be below zero, you gotta spend instead of screwing with the interest rates. At any rate, you probably shouldn't read in to my statement too much, lots of assumptions in there.
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# ? Oct 23, 2014 20:25 |
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# ? Jun 8, 2024 02:33 |
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Rhobot Mk. II posted:Ford Credit and Toyota Financial Services How do these folks raise the capital for the loans?
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# ? Oct 23, 2014 20:43 |