Distortion. The people who seek to inject religious dogma and doctrine into the political sphere are considered extremists-- or, rather, reactionaries.

What part did deregulation play in the present current economic condition of our country?

Now.... if the above scenario does indeed play out.... who should I be most dissapointed with? The oil companies? The banks? Or... just maybe... my government?

your conservative government of course.

They are the ones who made the rule changes. And yes, many are going to lose their homes. The housing bubble will burst here in Canada in about 2 years and what is Harper going to do then?

My definition of a Liberal has always been: "someone who does not believe in the law of cause and effect".

My definition of a Conservative is: "someone with morals , common sense and business sense."

But that's just my opinion.

Not limited to or by established, traditional, orthodox, or authoritarian attitudes, views, or dogmas; free from bigotry.
Favoring proposals for reform, open to new ideas for progress, and tolerant of the ideas and behavior of others; broad-minded.
Of, relating to, or characteristic of liberalism.
Liberal Of, designating, or characteristic of a political party founded on or associated with principles of social and political liberalism, especially in Great Britain, Canada, and the United States.

Canada's sub-prime mortgage time bomb
By Murray Dobbin
| October 22, 2009

What do the mid-recession housing boom and the Harper Conservatives’ rise in the polls have in common? Answer: the Canada Mortgage and Housing Corporation’s massive sub-prime mortgage scheme that is keeping up the appearance of an economic recovery.

Reading the newspapers these days you have to wonder whether Canada was on another planet when the global credit crisis hit. House prices have actually increased in some provinces and now there is a shortage of houses for sale in southern Ontario. Credit is flowing everywhere.

Ottawa: The biggest sub-prime lender in the world

But what few Canadians realize is that the housing market has avoided collapse (prices are down 32 per cent in the U.S.) because the Harper Conservatives directed the CMHC to change the mortgage rules to effectively make the Canadian government the biggest sub-prime lender in the world. What’s almost as alarming as this reckless policy is that no one in the financial media is talking about it, even though everyone knows the facts. I was alerted to the scandal by David Lepoidevin, a financial advisor with National Bank Financial, in a warning letter to his clients. (Blogger Jonathon Tonge has all the CMHC charts and graphs on his blog.)

The facts are that over 90 per cent of existing mortgages in Canada are “securitized” -- that’s the practice of pooling mortgages (or other assets) and then issuing new securities backed by the pool -- MBSs, or Mortgage Backed Securities. That’s what happened with the sub-prime mortgages in the U.S. which (because the whole pool was so diversified) received triple A ratings by the rating agencies. Losses around the world amounted to hundred of billions of dollars.

Credit is still tight in the U.S. because no private investor has the stomach for such risky MBSs. That’s because those losses were private and not back-stopped by any government. In Canada, mortgages have been securitized for years. The Canadian-issued securitizations are called National Housing Act, Mortgage-Backed Securities. Unlike the failed U.S. pools, says Lepoidevin, “In order to find buyers for securitized mortgage pools, the Government of Canada has put guarantees on them” by directing CMHC to guarantee all Canadian mortgages.

So long as borrowing requirements were tight, the percentage of loans that were securitized remained modest. But in 2007 the Harper government allowed the CMHC to dramatically change its rules: it dropped the down payment requirement to zero percent and extended the amortization period to 40 years. In light of the mortgage meltdown in the US, Finance Minister Flaherty moderated those rules in August 2008 (it’s now 5 per cent down and 35 years). But these are still relatively very loose requirements and securitization has taken off.

By the end of 2007 there were $138 billion in NHA securitized pools outstanding and guaranteed by CMHC -- 17.8 per cent of all outstanding mortgages. By June 30, 2009, that figure was $290 billion, a figure Lepoidevin says “…exceeds the total value of mortgages offered by CMHC in its 57 years of existence!” CMHC’s stated goal was to guarantee $340 billion by the end of this year and is on track to reach $500 billion by the end of 2010. Total mortgage credit in Canada will grow by 12-14 per cent of GDP in 2009.
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Keeping credit flowing: At what cost?

In an effort to prop up the real estate market in 2008 (when affordability nosedived) the Harper government directed the CMHC to approve as many high-risk borrowers as possible and to keep credit flowing. CMHC described these risky loans as “…high ratio homeowner units approved to address less-served markets and/or to serve specific government priorities.” The approval rate for these risky loans went from 33 per cent in 2007 to 42 per cent in 2008. By mid-2007 average equity as a share of home value was down to 6 per cent -- from 48 per cent in 2003. At the peak of the U.S. housing bubble, just before it burst, house prices were five times the average American income; in Canada today that ratio is 7.4:1 almost 50 per cent higher.

This high-risk policy actually prevents the natural playing out of the recession -- that is, the purging of the excesses of the previous boom period. CMHC’s easy-money resulted in a 9.3 per cent increase in Canadian household debt between June 2008 and June 2009.

Even bank economists admit to being concerned about a housing bubble. In a September research note, Scotiabank economists Derek Holt and Karen Cordes said, “…lenders have been scrambling to get enough product to put into the federal government’s Insured Mortgage Purchase Program over the months, and that may have translated into excessively generous financing terms.” Holt suggested that in two or three years -- or whenever the Bank of Canada increases interest rates -- many of these mortgages would be at risk.

The banks themselves have taken on virtually no new risk. According to CMHC numbers in the two years from the beginning of 2007 to January 2009 Canadian banks increased their total mortgage credit outstanding by only 0.01 per cent. Fully 90.5 per cent of all growth in total Canadian mortgage credit outstanding since 2007 has been accounted for by Mortgage Backed Securities. Of course, the banks have no interest in saying no if you have qualified for a securitized CMHC loan -- because they bear no risk if you default.

If that sounds like sub-prime mortgages, it should. Sub prime is any loan below prime. If a bank refuses you a loan, and CMHC gives you one, the loan is sub-prime. As Lepoidevin says in his warning letter, “Every single U.S. lender specializing in sub-prime has gone bankrupt. The largest sub-prime lender in the world is now the Canadian government.”

The high price of political cowardice

This is the ticking time bomb Prime Minister Stephen Harper has tossed at the Canadian taxpayer. Why? So that he can maintain the fiction that he is a good economic manager and win a majority in the next election.

The problem is no opposition political party wants to expose the looming disaster and risk being responsible for a dramatic fall in house prices. As Liberal finance critic John McCallum told the Globe and Mail: “I don't think we want the government to be rationing Canadian home-buying.”

The price of political cowardice will be very high. And in the end the housing bubble will burst anyway, putting taxpayers on the hook for tens of billions of dollars in defaulted mortgages.

"Conservatives are not necessarily stupid,but most stupid people are conservatives."
John Stuart Mill
(1806 - 1873)

427cammer,

Take a read of this and say what?

The bubble hasn't burst yet but it will.

I remember the recession in early 80's and how many in Alberta and BC lost their homes and the shirts off their backs. I lived in Calgary at that time and it was horrible. The oil companies were raking in huge profits all the while saying they were in the hole.

Liberals see the Constitution as an archaic document that has little relevance in the world today. After all it was written by some old white guys whose views don't represent the people of color, minorities. Liberals feel they know better than the founders what is best for the country.

They view it as an ever changeable document to suit the "needs" of our time without following the requirement to pass amendments.

Conservatives view the Constitution as the highest law in the land, that is timeless in it's wisdom. It was, is and will be relevant for all generations of Americans. They view the founding fathers as perhaps the most fortuitous gathering of wise men in the history of the world.

They view it as a sacred document whose ideas and ideals need to be preserved and only changed carefully using due diligence utilizing the constitutionally prescribed amendment process.

Stating that the main source of opposition to gay marriage would be Christian extremists from the right is misleading.

largely IGNORING what the constitution SAYS about the relationship between church and state

largely IGNORING what the constitution SAYS about the relationship between church and state

I don't know if you meant that business about a separation of church and state. The first amendment does not state that.

Amendment I

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

BTW, where does the constitution support the government taking over the banks, auto companies, and the health care industry?

That is an example of the difference between conservatives and liberals. Liberals will do whatever they want, disregarding the constitution.

Please don't paraphrase me and CHANGE what I say in the process.

One of the problems in having these kinds of discussions is that many people (of the FOX-viewing ilk) insist on complaining about things that they don't really know anything about

If you look at the historical writings of the founders the general welfare clause pertained to national defense, not health care. That is a fact.

Please don't paraphrase me and CHANGE what I say in the process.

I asked you a question period. There is not call for denigration.

Here is a prime example of a difference between liberals and conservatives. Liberals believe that having a moment of silence in schools IS ESTABLISHING a religion. Conservatives think that it does not.

If you look at the historical writings of the founders the general welfare clause pertained to national defense, not health care. That is a fact.

You know, stating things emphatically doesn't make them so. The provision is for the Common Defence AND the General Welfare. If it was all about the common defence, the second part wouldn't really be in there now would it?

As for the government take over of businesses being unconstitutional, where do you stand on the govt dictating the salaries of executives? Where do you stand on the govt dictating that GM sell their Hummer division to the Chinese.?

YOU are accusing "liberals" of disregarding the constitution, and yet when faced with an actual constitutional clause you immediately resort to claims involving NOT the constitution itself, but "writings" by whatever "founders" SEPARATE from the constitution itself. In this you are committing the same error than I described when it comes to people trying to "prove" that the founders envisaged the US as a "Christian" state. If you want us to take your constitutional principles seriously, then you need to prove your case using THAT document....not by some vague reference to "historical writings."

As for your argument that we should not put the constitution into the context of their writings for understanding jefferson himself wrote:

"On every question of construction carry ourselves back to the time when the Constitution was adopted, recollect the spirit manifested in the debates and instead of trying what meaning may be squeezed out of the text or invented against it, conform to the probable one in which it was passed." --Thomas Jefferson to William Johnson, 1823.

The fact is that the founding fathers themselves never proposed govt run health care. Neither did anyone else for over 150 years. They were capitalists not socialists.

The fact is that the powers of the Federal Govt are specifically delineated in the constitution. It would follow that any General Welfare would be limited to those areas. Otherwise it is within the realm of the States or The People.

My definition of a Liberal has always been: "someone who does not believe in the law of cause and effect".

My definition of a Conservative is: "someone with morals , common sense and business sense."

But that's just my opinion

over 122 people just because they don't have health insurance

At a time when there were not any public schools a great many of the funding fathers did not want public education.

Not limited to or by established, traditional, orthodox, or authoritarian attitudes, views, or dogmas; free from bigotry.
Favoring proposals for reform, open to new ideas for progress, and tolerant of the ideas and behavior of others; broad-minded.
Of, relating to, or characteristic of liberalism.
Liberal Of, designating, or characteristic of a political party founded on or associated with principles of social and political liberalism, especially in Great Britain, Canada, and the United States.

Generally, most liberals only appear to be open to and tolerant of ideas and behaviors of people more liberal than themselves.

I never thought of either conservatives or liberals in those terms, but after thinking about it for awhile, it made a lot of sense to me. What do you think of his synopsis of either conservative or liberals?