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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (108361)	2/16/2010 11:53:19 AM
From: Jim McMannis	6 Recommendations Read Replies (1) \| Respond to of 116555

The cycle fails when the Unions help run a company in the ground yet get the rights to the company after BK. Cough. They should be allowed to fail and if they want to reorganize later then so be it. Public Unions are far more dangerous because they tap taxpayer money. Also when private unions are allowed to tap taxpayer funds.

To: mishedlo who wrote (108361)	2/16/2010 12:45:35 PM
From: Cogito Ergo Sum	Respond to of 116555

Print this Page Flaherty makes it harder to buy homes, tightens mortgage rules * The Canadian Press * 2010/02/16 Federal Finance Minister Jim Flaherty is making it more difficult for people to qualify to buy new homes. He is responding to growing concerns that Canadians may be taking on too much debt, although he stresses that there is no housing bubble in Canada's real-estate market, yet. The finance minister said all borrowers will need to meet stiffer criteria to take out mortgages. He's also raising the downpayment that borrowers must pay for speculative investments and is putting on tighter restrictions on how much money people can borrow against their houses. Economists have advised the minister to be stricter on who can get new mortgages, but they've also warned the government not to put on the brakes too strongly, in order to preserve the fragile economic recovery. The Bank of Canada has been warning for months that homeowners should ensure they can absorb an increase in their floating-rate mortgages once rates start rising, likely as early as this summer. 680news.com Story #2 Financial Post Tuesday, February 16, 2010 Canadian households sinking further into debt: Study Julie Fortier, Financial Post a123.g.akamai.net File OTTAWA - Although the recession may technically be over in Canada, many households sank even further into debt in 2009, creating the highest debt-to-income ratio ever seen in Canada, according to The Vanier Institute of the Family's annual assessment on the Current State of Canadian Family Finances released Tuesday. The study showed the average Canadian household debt climbed to $96,100, creating a debt-to-income ratio of 145 per cent in 2009, the highest it has ever been. "Under this scenario, some 1.3 million households could have a vulnerable or dangerously high debt service load by 2011," the report stated. "The effects of this recession will test the resilience of many Canadian families. While the stock market may be up, the improvement for families will lag behind in terms of employment, increases in income, and a return of net worth," Clarence Lochhead, the Institute's executive director said in a statement. The Institute's report also indicated 59 per cent of respondents said they would be in trouble if their paycheque was delayed by even a week, even though 70 per cent of women with young children and a working spouse said they were working outside the home. Personal debt is an increasing problem, according to the study, with a 50 per cent increase in mortgages running 90 days or more in arrears in 2009 compared to a year before. The number of credit card holders who were behind at least three months in their payments was up 40 per cent during the same period. The report also indicated that there was likely a housing bubble, as housing prices in October and November 2009 increased to about $340,000, or five times the average after-tax incomes of Canadian households. The long-term average is 3.7 times. The report warned "higher interest rates, changes in mortgage terms and the realization that current prices are unsustainable may cause the bubble to burst." It seems that Ottawa is also concerned about the level of debt Canadian households are carrying on their mortgages. Finance Minister Jim Flaherty told a news conference Tuesday that Ottawa would require all borrowers meet standards for a five-year fixed-rate mortgage, even if the buyer wants a variable rate mortgage. Other rule changes unveiled could affect people looking to refinance their mortgages, including lowering the maximum amount that can be withdrawn to 90 per cent from 95 per cent - and place a 20 per cent minimum down payment for government-backed mortgage insurance on non-owner-occupied properties. © 2010 The National Post Company. All rights reserved. Unauthorized distribution, transmission or republication strictly prohibited. financialpost.com