Skip to main content

Im loosing some confidence here Mr. Flaherty

A deregulated US financial sector issued high risk mortgages that perpetuated a US housing bubble which increased housing starts and the price of real estate. As the price of real estate went up the financial institutions expanded their high risk investment into commercial financing ventures.

The mortgage and financing portfolios were then sold by brokers to other financial institutions, including foreign institutions along with assurance policies to counter any losses.

Then the bubble broke.

For the last six months, US, Canadian and other foreign governments have responded by propping up the financial sectors in their perspective countries by injecting money into stocks, bonds and guarantees.
With the pending defaults, the US government moved in and has either bought or allowed the disposal of the leading perpetrators of the schemes and is now proposing to clean up the balance sheets of the their remaining financial institutions that hold these over financed properties in their books.

The $700 billion corporate welfare plan will be used to buy these over valued assets and then over the next two years sell them off at expected bargain basement pricing.
Canada’s financial institutions along with other foreign institutions are now at risk as the value of assets that they will now share in ownership with the US government will be reduced in value.
Although the Federal Reserve has proposed to include foreign institutions operating in the US, the US Senate Banking Committee is balking by demanding that the foreign governments participate in the bail out to cover their own institutions.
The US has now asked the other members of the G7 to to remove illiquid assets that are destabilizing financial institutions in their countries or in other words participate in the bail out.

In commenting to the Financial Post yesterday on the G7 call our finance minister said:
“There is no secret that the U.S. would like other jurisdictions to emulate their course of conduct -- that is to remove illiquid assets that are destabilizing financial institutions in those countries where that is the case. That is not the case in Canada.
However according to another Financial Post article, Canadian institutions share between them billions of dollars in credit exposures that could be impacted by the scope of the bailout and they have been lobbying the U.S. Congress to approve the inclusion of "foreign-flagged" firms in a historic U.S. plan.
The lobbyists representing Canadian firms including TD Financial Group, Bank of Montreal, Royal Bank of Canada and Manulife Financial Corp. were part of an industry-wide effort that won the support of Henry Paulson, U.S. Treasury Secretary, over the weekend to allow foreign-headquartered institutions to sell assets to the government.

But the plan met with resistance yesterday on Capitol Hill, where members of Congress said they were reluctant to sign off on extending to foreign firms a US$700-billion bailout underwritten by U.S. taxpayers.
Somehow I think our finance minister is refusing to tell us the truth about the problem or does not have a plan to address the problem or in the worst case, is not aware that there is a problem.

Which is it Jim?


Popular posts from this blog

PizzaGate explained

Never heard Bernie speak until after the US election, saw the debates and thought Hillary cleaned Trump's clock. Knew Trump was a prick and couldn't understand how any sane person would vote for him, yet for some reason, I called myself a Bernie guy, didn't trust Hillary and had no idea why.

But, at least I didn't take my gun to a pizza joint to break up a pedophilia ring in the basement and end up getting four years in prison, like Ed Welch from North Carolina.

RollingStone in partnership with the Investigative Fund and the Centre for Investigative Reporting along with five other journalists tracked down the origins and methodologies used to propagate the most successful fake news story of the past election,

A good twenty minute read here.

Boys are not allowed to hit girls

Don't do much anymore except make breakfast for one of my grandkids, a seven year old boy, walking him to school, picking him up and then having philosophical conversations about his day. Living in the basement of my daughter's house, I really try, to not interfere with their parenting, but what the hell, right now he spends as much time with me during the week, than he does with them.

The other day my daughter who came home early and ended up eavesdropping on our conversation about when to fight and when to walk away. Apparently it was one of those days in the school yard.

"Look, it is really simple" I started, "there are only two rules about fighting.The first rule is, you don't start the fight, but if a boy hits you, hit him back, as hard and as fast as you can and don't stop until he runs away." He liked that part and demonstated how he would punch. "In other other words," I continued "you will only be in trouble if you started the …

Election close call, Omar, Bob and move over Warren

Wow that was a close one:
With the NDP leading in the polls at the beginning of September, I started to prepare myself, for the very first time in my life, to vote for the NDP. Mulcair looked good enough for me, with some of the best lines about Harper's Government during most of his interviews, except that he would always add the phrase, "just like the liberals" to the end of it and I thought, if I'm one of those Harper hating, Liberal voters that you probably need to vote for you, why the hell are you insulting me with this partisan bullshit.