Media coverage of “consumer debt” and “inflated home values” in Canada has been relentless.   The national newspapers have used up plenty of ink to cover these stories.  There’s been no shortage of so called experts willing to quote on these issue.  Opinions range from mild concern to abject hypocrisy.   Given that the temperature gauge has risen significantly over these issues, I have to assume that the federal government will be forced to respond.  This is not a story with  24 hour life cycle, and the government will want political shelter if the so called experts are right.

 I have a great deal of empathy for the good folks at CMHC.  For some time now they’ve been in cross-hairs.  The press, economists and some within the financial sector have taken liberties as it relates to CMHC’s credibility.  Does anyone really believe that CMHC does not know what it is doing?  That they do not have the required expertise to manage their business?   That they would act recklessly or in some way irresponsibly?  The answer clearly is no.  Yet, there’s been coverage recently about CMHC’S solvency.  Their financial statements clearly show that they have enough capital on hand to withstand market variances.  They continually run stress tests to ensure their financial viability, which equates to being responsible to the tax payer.  Their most recent stress test indicated that insolvency was not an issue, with the following caveat.  Our economy would have to go into  multi-year recessionary period, and unemployment would have to reach 13%.  Who among the so called experts are willing to put their reputations on the line by guaranteeing that dooms day scenario?  I suspect not many.  As for 13% unemployment, could it happen?  Certainly, it reached 13.2% in December of 1982.  Anything can happen but the question is what’s the probability?   That’s what CMHC manages day in and day out, and from where I sit they’re pretty damn effective.

 As for the other favorite target, the Ministry of Finance, I find it fascinating that some within the financial sector are publicly  stating that the government must act now and tighten mortgage rules.  They suggest that we’ve reached a critical stage, consumer debt it too high, home values are inflated.  Really? If that’s the case why don’t they do the responsible thing and act independently.  They could change their credit policies tomorrow.  If they believe that the government should change the mortgage rules  to reflect a maximum 25 year amortization, a minimum down-payment of 10%, and that borrowers should be qualified at the 5 year posted rate, then they should be prepared to lead by example.  If they’re not prepared to lead, and do it on their own, we have to assume that present day circumstances poses no risk to their share holders.  For if it did, they would do the right thing.  Just like the folks at CMHC have been doing.

 Until next time.

 Cheers.

There’s been no shortage of change, news or predictions about the economy, and specifically about the mortgage industry since the beginning of the year.  It’s hard to keep up and to determine what’s vogue.  By all appearances one issue that won’t go away is the call for more changes to the mortgage rules.  That’s the one constant drumbeat in this symphony of industry news.  But if you listen closely you’ll hear something that we’ve rarely ever heard before, banks talking smack and taking dead aim at each other.

Historically speaking the banks have always adhered to their own version of “Marquess of Queensberry” rules.  They battle for profitability and market share supremacy within a pragmatic framework.  The oligopoly has a good thing going and it’s their best interest to play nice.  That’s always been the case, until now.  I heard an ad on the radio today that made me take notice.  The largest bank in Canada is advertising that consumers should be careful of another banks offering.  They didn’t mention the other bank by name but they did refer to a 2.99%, five year mortgage.  Gee, I wonder who that might be.  The consumer is being warned to read the fine print, and not to make a decision in haste when we, Canada’s largest bank, can offer the same rate with all the privileges, minus 12 months of term.  What we have to offer is better than what the guy across street is offering.  There’s no vagueness or ambiguity in the messaging.  Could this form of advertising change the way banks operate and compete in the market place?  If it was to happen it would take some getting used too but in some ways it be refreshing, and I suspect a tad entertaining.  But alas, I believe this is a one off situation.  I think this is a case where the big boy sent a message to one his competitors.  The message? Play nice and let’s all get ours.  If you don’t, we’ll respond in kind.

One thing I learned over the years is that you don’t go around poking a bear in the eyes.  It doesn’t matter if you have the will or disposition to battle.  When the odds are stacked in the other sides favour, you act wisely.  It’s been my experience that the bear will eventually regain full vision, and respond by kicking you in a region of your body which is due south of your eyes.

Until next time.

Cheers.

We love our home in Florida.  It’s a great place to go to decompress and leave the real world behind.  I’m not suggesting the real world doesn’t follow us, technology and commitments see to that.  However, when we’re away we’re not slaves to our blackberry and telephone.  It’s a great place do as little as possible, and that’s great unless you bring your 10 year old along.  Our home in Florida is in an established neighborhood.  We’re in a gated community, right on a golf course, an adult play ground.  But it can be a little challenging if you’re trying to keep a 10 year old occupied. (more…)

Another March break is upon us and in our household that means it’s Florida time.  Canadians migrate to Florida this time of year with the same enthusiasm as a fat kid  attacking a bag of Smarties.  Got to get it all in, now!

Family vacations in Florida can be a whirlwind, especially for families that make the pilgrimage for one week.  It’s not easy fitting in Bush Gardens, Universal Studios, Cape Canaveral, Lego Land and the number one attraction in Florida, Disney World, all in one week.  Ah Disney World, where dreams come to life, and spankings become a reality because the kids have been rotten &#$@’s for the entire day.  I’m just kidding, everyone knows that spanking is yesterday’s discipline.  (more…)

Courage – that’s a word often used to describe hockey players.  When I think of NHL hockey players the following words come to mind – grace, sandpaper, skill, grinder, speed, aggression, artistry and violence.  As fans we’ve come to accept and cherish the juxtaposition that is hockey.  We cheer the poetic grace of a magnificent goal and yet we’re equally comfortable getting out of our seats to witness two players attempting to rearrange each others face with their fists.  Hockey fans are a different breed and at times the sport resembles no other.  Two teams can be engaged in a brutal seven game playoff series,  (we’re not familiar with that in Toronto) and when it’s over both teams will line up at center ice to shake hands.  No other team sport does that.  To me that’s what makes the game and players special.  We can now add other words to describe NHL hockey players – social conscious.

You may have heard by now that NHL players filmed a PSA (Public Service Announcement) entitled “You Can Play”.  If you haven’t heard about it, the PSA is about creating a level playing field in hockey, regardless of sexual orientation.    The man behind the PSA is Patrick Burke, a scout for the Philadelphia Flyers and the son of Brian Burke, general manager for the Toronto Maple Leafs.  Patrick and Brian are honoring Brendan Burke, who was openly gay and tragically killed in an auto accident at the age of 21.  The Burke’s lost a family member, and now they turned to their extended family for help, professional hockey players.

I was blown away when I first saw the PSA.  To have some of the biggest names in the sport supporting the cause and lending their voice to the issue is an act of courage.  No other sport has come close to doing anything like this and they probably never will. I could never see the NFL, NBA or MLB doing this.  Those athletes just aren’t wired the way hockey players are.  There are some nasty and tough players in the NFL.  They’re rip your head off tough – but tough enough to say it doesn’t matter if you’re gay, you’re still my team mate?  I just can’t see it.  Which is probably what caused the ‘wow’ factor for me when I first saw the PSA.  Of all sports only hockey players would do this.

If I take part in a hockey pool next year I will pick the following players, Rick Nash of the Columbus Blue Jackets, Duncan Keith of the Chicago Blackhawks, Brian Boyle  of the New York Rangers, Matt Moulson of the New York Islanders, Joffery Lupol of the Toronto Maple Leafs, Claude Giroux of the Philadelphia Flyers, Daniel Alferdson of the Ottawa Senators, Scott Hartnel of the Philadelphia Flyers, Corey Perry  of the Anaheim Ducks, Andy Greene of the New Jersey Devils, Dion Phaneuf of the Toronto Maple Leafs and Henrik Lundqist of the New York Rangers. 

These guys are tough, and they’ve got courage.  If you want proof, watch the video.

Until next time.

Cheers.