Last Thursday the Bank of Canada warned against the obvious: condos are overpriced and this poses a risk to the whole economy. The BoC singled out the Toronto market, noting that the country’s largest city also hosts the largest number
Housing Bubble
Krugman’s Call for a Housing Bubble
Reprinted from Mises.org In 2009, Lew Rockwell posted this quote of Paul Krugman’s from a 2002 New York Times editorial: To fight this recession the Fed needs…soaring household spending to offset moribund business investment. [So] Alan Greenspan needs to create
Canada’s Banking System Exposed
Despite what is commonly understood, the Canadian banking system is NOT as strong and resilient as most people might assume. According to the World Economic Forum, Canada is ranked #1 in the world for “the most sound banking system in
The Role Value At Risk (VaR) Played in the 2008 Financial Crisis
What is Value At Risk? In the aftermath of the 2008 financial crisis, a myriad of factors leading to the calamity were extensively examined by various public and private entities. It became apparent that some factors had played more of
The Mess the Bank Made… and Denies
Back in April, I reviewed a document called the “Financial System Reviewâ€, published semi-annually by the Bank of Canada. Due to the dire warnings contained therein, I thought it necessary to produce a more user-friendly summary of the information the
Central Banking: What Is It Good For?
While the failure of fiscal policy is widely recognized, monetary policy still enjoys credibility, not only among policy makers but also with professional economists. Yet deeper investigation shows that monetary policy is like shooting in a dark room. Disaggregating the
A Portrait of the 2011 CMHC
Dear readers, it’s happened again. The federal government is once again revising its rules on mortgage lenders. The new revisions are mostly a repeat of the changes they made back in January 2011, and that I reported on in a
Printing More Money Won’t Solve World’s Economic Problems
This appeared today at TroyMedia.com TORONTO, ON, Jul 6, 2012/ Troy Media/ – These days, the casual reader can’t go far without hearing about a lack of money in the world. And no, I am not referring to crippling poverty
Austrian Economics and the Financial Crisis
The following has been adapted from a slideshow presentation given at a symposium on Marginal Revolutionaries: The Mainstream Economics Crisis and Heterodox Approaches  held at the Canadian Economics Association annual meeting in Calgary, Alberta on Friday, June 8, 2012. Good
Mark Carney Kicks the Can
Bank of Canada Governor Mark Carney takes a lot of cues from his U.S. equivalent and fellow central banker Ben Bernanke. Both took interest rates to anorexic levels in light of the financial crisis in 2008. Both used their positions
Conventional Thinking and Denial
A term that everyone, especially in the investment world, should get familiar with is “normalcy biasâ€. Described succinctly, it’s the state of mind where people think that because something hasn’t happened that it never will. People suffering from normalcy bias
U.S. Housing Prices Back to Their 2002 Levels
Chalk up another failure for Federal Reserve Chairman Ben Bernanke. More than three years after pumping an unprecedented amount of liquidity into the global financial system (read: print money), Bernanke’s wild experimentation in monetary policy has failed to bring the
The Canadian Housing Bubble: its Cause and Conclusion
Before the financial panic in the United States the Bank of Canada’s target overnight lending rate was 3%. At the height of the financial crisis, by May of 2009 the Bank reduced the target to 0.25%. Today the target sits
Forecloser Settlement in U.S.- The Proper Course of Action?
After years of litigation, the United States government, along with the governments representing the fifty states, has reached a joint settlement with the country’s five major banks and mortgage lenders over their questionable practices of mortgage foreclosure. Via Financial Times:
More Evidence That The Housing Bubble Has Yet to Be Liquidated
Government interference with the present state of banking affairs could be justified if its aim were to liquidate the unsatisfactory conditions by preventing or at least seriously restricting any further credit expansion. In fact the chief objective of present day
Sanjay Paul- Central Banking Apologist
The following is a piece I wrote as a response to an editorial written in the Harrisburg Patriot News by Elizabethtown College economics professor Sanjay Paul. The piece, unfortunately, didn’t get picked up so I will reproduce it here. It’s
Mark Carney- A Success or Lucky?
That is the question implied by Jay Bryan of the Montreal Gazette today who praises Bank of Canada head Mark Carney for guiding the country through the Great Recession with just a printing press. It’s really hard to manage a
What a Property Bubble Looks Like
Though this video is well over a year old, it’s still pertinent today as it demonstrates the sheer amount of resources that become dedicated to a central bank fueled frenzy. Behold, a 30 story hotel completed in just 15 days
Did Repealing Glass-Steagal Really Matter?
More than three years have passed since the financial crisis hit the United States like a speeding semi-trailer hits a Mini Cooper. Economic growth remains depressed while the unemployment rate stays elevated above 8% despite massive government spending and monetary
Paul Krugman On China
Keynesian champion Paul Krugman finally weighed in on China’s imploding property bubble in his New York Times article today. Let me just say, it’s better late than never. Reports on China’s ghost cities and looming bust have been floating around
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