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blah_blah posted:If you want to do proper Realtor(tm) math, you should note that if you only put 10% down and your house went up in value by 10% a year for 5 years, you will end up with an effective ROI on your down payment of (ignoring selling fees and mortgage interest) 500%. 500% is a total scram though, and 10% is good enough for me since I am not a greedy jerk like the lady that flipped that place down the street.
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Oct 15, 2014 09:09
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I was reading yesterdays Krugman article, and I got to thinking about Canada post correction. Revenge of the Unforgiven Krugman posted:But it has been very hard to get either the policy elite or the public to understand that sometimes debt relief is in everyone’s interest. Instead, the response to poor economic performance has essentially been that the beatings will continue until morale improves. The tl;dr of it is that since so much debt was not forgiven from the GFC, there is really no way for the economy to recover. When this finally blows up in our faces, there are going to be hundreds of thousands of families wiped out by this and buried in debt they will never pay back. They will richly deserve this fate, however Krugman has a good point that debt forgiveness has to happen or the crisis will not end for a generation. Can anyone see how it would be politically possible for such debt forgiveness to occur? It seems like either choice the government could make is basically political suicide. For people that lived within our means, it would a pretty terrible final insult at the end to watch everyone that gorged on debt, walk away from it scot free. However leaving them saddled with it potentially cripples our economy going forward. And while I am a big proponent of spite, I am not so big into facial disfigurement and would like my kids to have a future. Is there anyway we can square this circle? Though I do suspect that it is a moot point since I cannot the Conservatives behaving any differently than every other jurisdiction on the planet when it comes to debt forgiveness. It is fun to think of how big a blast radius CI's head explosion would be, if much of this debt was written off. ocrumsprug fucked around with this message at 16:48 on Oct 15, 2014 |
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Oct 15, 2014 09:32
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ocrumsprug posted:Though I do suspect that it is a moot point since I cannot the Conservatives behaving any differently than every other jurisdiction on the planet when it comes to debt forgiveness. It is fun to think of how big a blast radius CI's head explosion would be, if much of this debt was written off.
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Oct 15, 2014 09:39
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LemonDrizzle posted:Most debt jubilee plans involve giving everyone a certain sum of money, with the proviso that it must be used to pay off debts if you have them. That way you clear the debt without 'unfairly' rewarding those who over-borrowed. maybe I'll get some money even though I didn't go in on any foolish housing scheme ? 
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Oct 15, 2014 10:02
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Is it a common thing where the people selling a house will do the home inspection ahead of time, so the potential buyer feels like they don't have to do one?
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Oct 15, 2014 14:32
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Obviously, proactive bubble management and mitigation is the proper response, so that any debt forgiveness is minimized. This requires very conservative capital reserve requirements for lenders, restricting certain types of lending to specific lender business classes, requiring more stringent borrowing requirements (such as proving you have an income when you get a loan), and eliminating government subsidies for certain borrower classes. Attempting to enact these things is basically political suicide, which is why the Dems in America were able to achieve only a very, very watered-down version of some of them, and subsequently got voted the gently caress out. Citizens in capitalist countries have this bizarre hyprocrisy where they want all the benefits of unencumbered capitalist expansion and speculation, as well as perfect security from the government for their investments, as well as punishment for everyone else's bad investments, and also protection from the collateral damage of punishing the others' bad investments.
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Oct 15, 2014 14:47
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triplexpac posted:My friends who bought a house got a 30 year mortgage, I thought that wasn't a thing anymore? I guess they must have put down a big downpayment. Oh and going back to this... my friends who got their 30-year mortgage put down 5%. They said the bank gave them 30 years cause they have a great credit rating
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Oct 15, 2014 14:58
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I'm a huge Krugman fanboi and I'm actually in favour of debt forgiveness. Everywhere else in the world except Canada. Canadians must be punished because they are profligate scum. That said, there are significant consequences to debt forgiveness. Like runaway inflation. The fact is, a lot of this mortgage debt is guaranteed by the government in the first place. The Tories like to tell this hilarious story about deficit reduction but that lack of government spending has been offset by a ridiculous housing bull market. John Oliver can't shut the gently caress up about how Canada has the richest middle class in the western world and the fallacy of that statement is that it is not true of you subtract mortgage liability from every single middle class family. namaste friends fucked around with this message at 15:08 on Oct 15, 2014 |
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Oct 15, 2014 15:04
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So Canada is juggling a looming housing bubble pop and lovely oil from Alberta, and eventually we're going to drop the balls when either bursts, right? Things are going to suck
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Oct 15, 2014 15:11
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Just gotta keep the balls in the air until the election.
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Oct 15, 2014 15:16
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ocrumsprug posted:
I really liked your analysis. In terms of squaring this circle, I think our best option is to quit pussy-footing around and start tightening lending rules today. Change the qualifying interest rates for mortgage applications, and reduce the Total Debt Servicing Ratios that we currently allow in credit applications. Sure, it won't fix the bad lending decisions of the past, but it'll reduce the severity of the inevitable correction that'll happen when interest rates start to go up. The federal government needs to grow a pair of balls and stop hiding from this conversation (they're obviously keeping quiet about it until after next year's election). And I'm going to say "No" to debt forgiveness. If we do that, Canadians will start to think that it's okay to rack of tens of thousands of debt because Mr. Federal Government will bail them out. And we'll find ourselves in the same predicament 10-15 years from now. We need to fix this country's bad financial habits. triplexpac posted:Oh and going back to this... my friends who got their 30-year mortgage put down 5%. They said the bank gave them 30 years cause they have a great credit rating melon cat fucked around with this message at 20:01 on Oct 15, 2014 |
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Oct 15, 2014 15:36
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melon cat posted:I really liked your analysis. In terms of squaring this circle, I think our best option is to quit pussy-footing around and start tightening lending rules today. Change the qualifying interest rates for mortgage applications, and reduce the Total Debt Servicing Ratios that we currently allow in credit applications. Sure, it won't fix the bad lending decisions of the past, but it'll reduce the severity of the inevitable correction that'll happen when interest rates start to go up. The federal government needs to grow a pair of balls and stop hiding from this conversation (they're obviously keeping quiet about it until after next year's election). I'm not sure, but does the same limit apply if they received the mortgage insurance from one of the private insurers?
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Oct 15, 2014 15:52
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You can get really hosed up mortgages from the shadier mortgage brokers. A 30 year mortgage with 5% down is really quite conservative for these assholes.
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Oct 15, 2014 16:17
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Stock markets are tanking you guys. If you'd just bought house this not hap
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Oct 15, 2014 16:23
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https://businessincanada.com/2014/10/15/canada-september-home-sales-and-prices-housing-bubble-real-estate-market/quote:Canadian home sales snapped a seven-month streak of gains in September, according to the Canadian Real Estate Association (CREA).  quote:“Early fall looks like it was favourable for Canada’s housing market, as sales perked up through much of the country,” wrote Bank of Montreal senior economist Benjamin Reitzes ahead of this release. “Low mortgage rates, still-favourable demographics, and a lack of supply in some cities continue to drive sales and prices.”
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Oct 15, 2014 16:28
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A quick and dirty solution to the problem of "punishment" in debt forgiveness is that anyone who takes it is permanently barred from any form of credit for the remainder of their lives. No loans, no lines, not even a cash-guaranteed credit card with a $500 limit on it. People who weren't idiots can maintain their feeling of superiority, and the idiots will be reminded of their financial catastrophe every time they want to buy something on Amazon but cannot. Tl;Dr: Treat them not like criminals, but as the irresponsible children which they are. 
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Oct 15, 2014 16:40
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that would be a remarkably good way to crater consumer spending and ensure that social services are quickly overloaded.
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Oct 15, 2014 16:45
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Agreed, however Rime's suggestion is likely going to be a tame response when it comes right down to it. I can easily imagine my rage if the government just washed it away, and I actually think it should happen. Of course even if a government could be persuaded to take this approach, it would require that credit would need to be tightened up beforehand, or with it. This would require the government to acknowledge that their economic policies are hot air, and that there is a problem to fix, and willing to risk that the fix would precipitate the pop. There is no chance that happens before the election, and little enough after it either.
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Oct 15, 2014 17:02
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JawKnee posted:that would be a remarkably good way to crater consumer spending and ensure that social services are quickly overloaded. If your economy is so weak that it simply cannot exist without people paying for goods and services using what amounts to an IOU, then it has much bigger problems that no amount of leniency towards debtors is going to fix. Our social services are already functionally useless and all but impossible to leverage, at least in BC, so this would have negligible effect on them.
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Oct 15, 2014 19:05
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Rime posted:If your economy is so weak that it simply cannot exist without people paying for goods and services using what amounts to an IOU, then it has much bigger problems that no amount of leniency towards debtors is going to fix. This is pretty much exactly why I'm skeptical of many Keynesian arguments I hear. It seems to basically amount to burning the furniture; i.e. a pretty good short-term fix coupled with far more profound long-term consequences.
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Oct 15, 2014 19:30
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Gorau posted:I'm not sure, but does the same limit apply if they received the mortgage insurance from one of the private insurers? Rime posted:Tl;Dr: Treat them not like criminals, but as the irresponsible children which they are. That's the funny thing about Canadians and credit. If you turn them down for credit, they flip. Their. poo poo. I'm not sure if it's a feeling of entitlement to credit, pride, or straight up addiction. But the Canadian attitude towards credit is something that needs to be re-examined. melon cat fucked around with this message at 04:27 on Mar 16, 2019 |
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Oct 15, 2014 20:08
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melon cat posted:I'm not sure if it's a feeling of entitlement to credit, pride, or straight up addiction. But the Canadian attitude towards credit is something that needs to be re-examined. Fair to say this is a relatively recent phenomenon? It sure feels that way to me.
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Oct 15, 2014 20:23
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Banks are not innocent in feeding this. I had to fight to get multiple non-solicitation notices put on my account at TD, as the tellers would pester me incessantly to up the limit on my visa from $1500 to $30,000. I don't need thirty thousand dollars on a credit card. Nobody in this country needs that. What's really loving messed up is that my salary is only $36k annually, yet their automated system is still saying to force that credit down my throat like I'm some sort of consumer fois-gras dish.  Plenty of people are not as fiscally responsible as I am, take those credit "upgrades" without a second thought, and that's how we have the largest personal debt bubble in the developed world. Rime fucked around with this message at 20:37 on Oct 15, 2014 |
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Oct 15, 2014 20:34
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Rime posted:Banks are not innocent in feeding this. I had to fight to get multiple non-solicitation notices put on my account at TD, as the tellers would pester me incessantly to up the limit on my visa from $1500 to $30,000. I've noticed the "offers" tapering off for the past year (at least for me). Maybe I just hit their limit though, Right now I'm sitting at around 15k available on my credit card and another 15k line of credit that I've never touched.
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Oct 15, 2014 20:37
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Rime posted:Plenty of people are not as fiscally responsible as I am, take those credit "upgrades" without a second thought, and that's how we have the largest personal debt bubble in the developed world. Not quite. It's using that credit irresponsibly that puts us in that position, merely having it isn't harmful (and, if you are responsible with it, is in fact a benefit in our current system).
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Oct 15, 2014 20:40
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Only sort of related to housing, but here are two Victoria tech luminaries getting fleeced by a bitcoin scam. These are the people who are supposed to be building our tech-sector and we need to bend over backwards to incubate and support. https://docs.google.com/document/d/1aL_b_Eq6WKv_u_ZKiPNPBXz5UbuMhi2Xm1AjdsgVER4/pub Why yes this $20,000 bitcoin machine seems like a great investment!
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Oct 15, 2014 20:43
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Rime posted:Banks are not innocent in feeding this. I had to fight to get multiple non-solicitation notices put on my account at TD, as the tellers would pester me incessantly to up the limit on my visa from $1500 to $30,000. When I was at the bank a few months ago they told me that I automatically qualified to have my credit card limit doubled and were a bit taken back when I said "no". People who have access to $6000 spend $6000 in my mind, just as people who have access to $12000 spend $12000. Works for the bank, but not for me.
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Oct 15, 2014 20:49
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I don't think I've ever hit my limit on any credit card or even come close, I still, today, haven't come close to hitting my original $1000 limit that my first card had.
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Oct 15, 2014 20:52
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Rime posted:Banks are not innocent in feeding this. I had to fight to get multiple non-solicitation notices put on my account at TD, as the tellers would pester me incessantly to up the limit on my visa from $1500 to $30,000. ScotiaBank is in my mind one of the worst offenders for promoting this attitude. Their slogan "you're richer than you think" does a very good job at making people believe that they can pull money out of thin air without having to work hard for it. A friend of mine applied for his fourth credit card and was pissed off that while he makes more than I do that the amount of credit he got was something like 1/3rd that I got for the very same card. Except the difference between him and I is that I only have two and the one he and I both share is being used by me for work-related expenses because I cannot be bothered to mix my personal and work finances--also raking in points from work expenses is absolutely awesome. His mentality is a bit weird though because he started saving for a home at 16 and amassed enough money that by the time he was 26, he bought his first condo in Vancouver with something like 40% down on a 25-year mortgage. Meanwhile I call up my credit card issuer to tell them to cut the maximum on my personal credit card and they start to raise a stink.
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Oct 15, 2014 20:53
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Professor Shark posted:When I was at the bank a few months ago they told me that I automatically qualified to have my credit card limit doubled and were a bit taken back when I said "no". It really depends on how you use it. I could buy a new car with my credit card if I wanted. I don't, instead I use it for my monthly purchases and it gets paid off in full every month. Do I need a super high limit? Not usually. But on the other hand I've used it several times for work and so forth and it is useful.
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Oct 15, 2014 20:59
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WHY IS EVERYONE BUYING CONDOS ON SPEC??? HOW CAN YOU THINK SPENDING 300K+ ON SOMETHING YOU HAVEN'T SEEN IS A GOOD IDEA???? Is it me? Am I the crazy one?
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Oct 15, 2014 21:51
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peter banana posted:WHY IS EVERYONE BUYING CONDOS ON SPEC??? HOW CAN YOU THINK SPENDING 300K+ ON SOMETHING YOU HAVEN'T SEEN IS A GOOD IDEA???? If you don't go for the presale now it will be 320k when it's done, or sold out, and you'll have to wait for the next project and that same unit size will probably be 350k. If you don't start building equity now you'll be priced out. Imagine how you'll feel being the only one of your peers still renting? Imagine how you'll feel 30 years from now watching all your friends sell their condos for millions while you have no money to retire on because you threw it all away renting. Don't miss the boat! Also if you buy pre-construction you can customize your unit!!!
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Oct 15, 2014 21:56
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peter banana posted:WHY IS EVERYONE BUYING CONDOS ON SPEC??? HOW CAN YOU THINK SPENDING 300K+ ON SOMETHING YOU HAVEN'T SEEN IS A GOOD IDEA???? I've long wondered this, and it still makes absolutely no loving sense to me.
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Oct 15, 2014 22:09
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I feel a sense of extreme risk just buying clothes online without trying them on first. 
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Oct 15, 2014 22:11
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Baronjutter posted:If you don't go for the presale now it will be 320k when it's done, or sold out, and you'll have to wait for the next project and that same unit size will probably be 350k. If you don't start building equity now you'll be priced out. Imagine how you'll feel being the only one of your peers still renting? Imagine how you'll feel 30 years from now watching all your friends sell their condos for millions while you have no money to retire on because you threw it all away renting. Don't miss the boat! Also if you buy pre-construction you can customize your unit!!! Basically this. Memories are short, marketing/propaganda is pervasive, and not going along with the group has a short to medium term cost that can be huge, even if you are better off in the long term. People speculating on the bubble or taking their newly found equity out of their properties are making lots of money. It's also similar to finance in the US in the time preceding the most recent crash - people who take excessive risks are constantly rewarded due to the economic environment, which means they are promoted and are seen as being successful by comparison to those who are more sane and see the bubble for what it is. Over time more and more people are dragged in since the bubble hasn't popped, as they start to believe what they have been told, until eventually the bubble outstrips it's support and all reason and finally bursts when there's enough of a scare to cause people to try to take their profit out of the market, causing a rapid correction. We (Americans in D&D) spent years (~2005-2007) talking about our housing bubble, without really being able to tell when things would finally go under, and without easily being able to tell just how it was continuing as it was. A lot of the details were there, but the whole picture wasn't clear. I'd guess you guys are in a similar place, and fairly soon with oil prices coming down and general worldwide issues things will come to a head. It certainly can't go on forever. There was also a massive tendency for people in our bubble to justify to themselves that it wasn't a bubble (similar to your "but we aren't as dumb as those folks south of us"). They want to believe that they will be rich, and that they deserve it, that they are smart, etc. Even afterwards there's a large part of our (US) population who wants to believe the market crash was not because of overall conditions, but because those people got mortgages they didn't deserve. It wasn't that they made bad decisions or that there house shouldn't have been worth whatever, it was because the government did something and thus the crash happened.
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Oct 15, 2014 22:30
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Professor Shark posted:When I was at the bank a few months ago they told me that I automatically qualified to have my credit card limit doubled and were a bit taken back when I said "no". I have a credit card with an $18,000 limit and I don't think I've ever gone over 10k on it, and that was after spending tons of cash on a trip, which I paid off when the balance came due so never paid any interest on it. Just because in your mind people who have access to that money spend it doesn't make it true. I also have like three Amex charge cards with literally no limit.
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Oct 15, 2014 22:34
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Pervis posted:We (Americans in D&D) spent years (~2005-2007) talking about our housing bubble, without really being able to tell when things would finally go under, and without easily being able to tell just how it was continuing as it was. A lot of the details were there, but the whole picture wasn't clear. I'd guess you guys are in a similar place, and fairly soon with oil prices coming down and general worldwide issues things will come to a head. It certainly can't go on forever. What was the chatting pre 2008 in the US? Were there threads exactly like this absolutely predicting and laying it all out other than the exact "when" date?
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Oct 15, 2014 22:49
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Pervis posted:Basically this. Memories are short, marketing/propaganda is pervasive, and not going along with the group has a short to medium term cost that can be huge, even if you are better off in the long term. People speculating on the bubble or taking their newly found equity out of their properties are making lots of money. It's also similar to finance in the US in the time preceding the most recent crash - people who take excessive risks are constantly rewarded due to the economic environment, which means they are promoted and are seen as being successful by comparison to those who are more sane and see the bubble for what it is. Over time more and more people are dragged in since the bubble hasn't popped, as they start to believe what they have been told, until eventually the bubble outstrips it's support and all reason and finally bursts when there's enough of a scare to cause people to try to take their profit out of the market, causing a rapid correction. Pro post. Moving back to Canada (first Ottawa in 2008, then Vancouver in 2010) from New York, I could see what was happening immediately, and I was constantly astounded that nobody was willing to look across the border and see what happens when you pump endless credit into the mortgage markets. Working at the Vancouver real estate board between 2010 and 2012 was particularly fun; everyone was absolutely convinced that the brief downturn experiences in 2008/2009 was the "Vancouver recession" and that nothing more would come of it. 
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Oct 15, 2014 23:08
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Baronjutter posted:What was the chatting pre 2008 in the US? Were there threads exactly like this absolutely predicting and laying it all out other than the exact "when" date? I think there was a dedicated thread for a long while, attempting to understand it, and talking a lot about the visible bits and pieces, like Countrywide, sub-prime mortgages, home equity lines of credit, rampant speculation and a bit about Fannie and Freddie being involved eventually. I don't recall seeing all that much of things like the intricacies and obfuscation of derivatives and the opaqueness (and complete lack of regulation) of the derivatives market (MBS, CDO, and CDS), MERS, the ratings agencies complete and intentional ineptness regarding ratings on MBS (our model says house prices never go down!). There was an incomplete picture, and only later did it become clear. The idea that ratings agencies would actually _want_ to mark most/all MBS as AAA in order to continue getting business from banks was certainly something that was mind-boggling and wouldn't have been taken seriously. Obviously our media also had things calling for a plateau or a slow correction, just like Canada. The predictions started even in 2005ish timeframe, as certain markets went absolutely crazy; my area almost doubled, and then dropped by nearly 75% by the bottom, and is now back to parity of 2004. Pervis fucked around with this message at 23:38 on Oct 15, 2014 |
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Oct 15, 2014 23:35
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Baronjutter posted:What was the chatting pre 2008 in the US? Were there threads exactly like this absolutely predicting and laying it all out other than the exact "when" date? I couldn't find a housing bubble thread but a meltdown thread started when Lehman collapsed. And the award for worst prediction goes to... 
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Oct 15, 2014 23:44
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