What is this - good cop, bad cop?
They run 'money porn' adds saying your are richer than you think (huh didn't you just say I was over-indebted?) and showing folks taking money out of their home equity to go on exotic beach holidays.
The message is simple - do not deny yourself anything. Do not build savings or equity in house, just borrow and spend. You can pay it off, or someone can. Banks have become crack pushers.
The latest in this series of bank inducements to spend is the Bank of Montreal's, lowest ever mortgages. 2.99% for five years. Lets get the last few folks who cannot afford to buy these over-priced bricks and timber into debt and then we can sink the whole ship.
Now I know that mortgage rates usually follow Canada bonds, and Canada bonds have been going down as money tries to find a safe home. However it also depends on many other factors including how easy it is to access money by banks and their risk tolerance and forecasts for the asset they are lending on.
If they have room to play with rates, how about giving more than the near zero % they are giving savers in their deposit accounts. They are basically stealing the savers net returns and giving it to the borrowers.
Where is the fairness in that?
Mark Carney wants us to save more...and do what with it? Put it into a savings account or a bond and LOSE 2% a year to inflation! Or throw it into the stock-market and hope for the best or what exactly.... just save it so Carney can feel better and point to a graph showing higher savings so he can garner another international job.
How about increasing rates to match inflation and then see what happens.
In fact why don't we just get rid of the dorks that run the Central Banks and just allow a computer program to set interest rate policy. Some economists have run models and have shown that it would work better than the emotional and often wrong-but-worshipped suits like Greenspan or Bernanke or Carney who respond to crises in knee jerk ways, setting the stage for the next even bigger crisis and bubble.
I think that the stealing from savers inherent in the ultra low interest rate policy being followed by the central banks is a very serious issue that is not being tackled by the MSM to the degree it deserves. The ramifications of the policy are potentially huge but few are willing to question the "wisdom" of incentivizing debt.
ReplyDeletethey are all jerks believing in "not under my control" and "saving their asses". Hey Fishy, could you care to post Surrey / FV numbers since out there at those forums nobody seems to be bothered abt us burbers :-(.
ReplyDeleteAnon- I care.
ReplyDelete1513 SFH on the market in North Surrey, Surrey and Surrey White Rock.
Sales so far this year = 19.
Now listings are real time, whereas sales are lagging, and we are coming out of the holiday period- nevertheless that is pretty slow.
If we dont get a big jump in the second half the month the MOI will be catastrophic.
Sunshine Coast is sitting at 2 sales so far this year with well over 400 SFH for sale.
Like I said too early to say too much. Lets see what the next two weeks bring.
not a computer program. just let people with savings decide what rates and conditions to charge for lending to people who would like to borrow.
ReplyDeletethanks Fish for Surrey numbers. They look pathetic. Any idea how they compare to last year. even if it adds another 100, its still pathetic. keeping fingers crossed.
ReplyDeleteNo Anon- no easy way for me to check last year's numbers. However if you remind me I will update them weekly, plus any other areas you are interested in.
ReplyDeletesure, i will remind you every week. thanks
ReplyDeleteAt first read, your post made me think how unfair it is to compare schizophrenics to banksters. But then I looked up the symptoms of schizophrenia and found a questionnaire. It's eery...:
ReplyDelete1. I feel that others control what I think and feel. (Shareholders, yacht salesman & wife)
2. I hear or see things that others do not hear or see. (The Canadian taxpayer will bail me out)
3. I feel it is very difficult for me to express myself in words that others can understand. (Here's our quarterly report...)
4. I feel I share absolutely nothing in common with others. (Savers, taxpayers & renters to be precise).
5. I believe in more than one thing about reality and the world around me that nobody else seems to believe in.
(I should be able to build a boat that can withstand all storms, my clients? Not so much.)