Thursday, December 29, 2011

No Kidding!

The CMHC came out and warned about the huge debt load of Canadians. No kidding!? And who helped them get into such a morass of debt and obligations??

The CMHC for one!

Of course we have been screaming on the bear blogs about the huge debt load of Canadians for years, and now- late to the party- Carney, Flaherty, the Banks and even the CMHC are jumping on board.

Of course none of us bloggers can do diddly squat about it- only the four mentioned about can AND THEY WON'T.

No point shouting 'FIRE' while you keep pouring gasoline on the flames!

The first part will make you laugh. The CMHC says that the debt situation warrants closer monitoring by 'the authorities' and yet the IMF says the CMHC needs closer monitoring by 'the authorities'. What a joke!

OTTAWA (Dow Jones)--Canadians' record level of household debt is a "serious issue" that merits closer monitoring by authorities in the years ahead, Canada Mortgage and Housing Corp. (CMH.YY) said.

In a year-end publication released Thursday, CMHC - the government-owned provider of mortgage insurance in Canada - said mortgage debt accounts for 68% of total household debt, by far the largest contributor. The agency, which is Canada's largest mortgage insurer and benefits from explicit government backing, said personal lines of credit have surged in recent years, increasing at higher growth rates than any other sub-component of household debt held by chartered banks.

"It is important that consumers and stakeholders continue to be vigilant in monitoring both the magnitude as well as the composition of household debt and take appropriate action," CMHC said.

The major risk in the mortgage market, it added, is the emergence of another, deep recession that sparks a series of job losses that would affect households' ability to pay their mortgages. Still, "most Canadian households have the capacity to deal with adverse economic conditions, due to the high quality of mortgage credit in Canada, the substantial equity position of most Canadian homeowners with a mortgage, and households' ability to adapt their discretionary spending."

Canada's ratio of household credit market debt to disposable income stood at 150.8% as of the third quarter, prompting warnings this month from the International Monetary Fund. The IMF said further "vigilance" is required by Canadian policymakers, including the possibility of increased supervision of CMHC, which the Washington-based body said has emerged as a key financial institution in Canada.

Federal Finance Minister Jim Flaherty has repeatedly warned - as lately as two weeks ago - that Canadians need to exercise caution in taking on additional mortgage and consumer-loan debt. Under his watch, the Conservative government has tightened mortgage-lending rules three times in an effort to avoid a U.S.-style housing bust.

-By Paul Vieira, Dow Jones Newswires: 613-237-0669;