Last week I posted an article from the National Post Flaherty Watching for Signs of a Bubble. At the end I predicted that this was just a ploy to try and cool the market via good old fashioned scare tactics.
After several discussion this last week however, the banking industry seems to be at a consensus that the next six months are going to be extremely busy as Flaherty’s threat may do the opposite of what was intended, it may push the market to new highs. Unfortunately, Flaherty thinks he can bully the market in whatever direction he desires. No one man however, can make a market, and when one trys – situations like what happened in the US economy occur.
My questions to you are as follows. Do you think Flaherty is right to even talk about this issue publicly? What do you think would happen to the housing market if he did change the down payment and amortization requirements? Post your comments on Twitter, Facebook, or the comments section below. The winner will be entered to win an Ipod Touch.
#180
I think Flaherty talks to much, and that’s a bad thing for the economy. You would think given the fact that Harper has a Masters in Economics, he would keep Flaherty on a little bit tighter leash!
Nolan, couldn’t agree more. What a disaster. If Flaherty doesn’t shut up then his “threats” will become a self fulfilling prophecy which means he may “have” to do what he was merely threatening to do. Scary for the market.
When will these people learn, that government intervention in well functioning markets is often the wrong thing.
Our market today is likely not bubbling, it has fast cruised through a balanced market to a sellers market, BUT this is understandable. Given the year we had in mid 2008 to mid 2009 the market had no where to go but up.
What many i think are not considering is that the price rise is all about lac of supply NOT overheated demand. During a terribly painful recession it would be understandable and predictable tat supply would be down as move up buyers are going no where. This market was fuelled by pent-up demand and low supply period.
With rates edging up in early 2010 and the fact that much of the pent up demand is satisfied the market will level itself, but Flaherty has to shut up or more people will flock to the market to get in before the changes hit thereby not cooling demand as it should
Cheers,
Greg
Completely agree Greg – Flaherty is going to make this problem worse. I went over to Garth Turner’s blog to see what he had to say, and he is blaming Flaherty for the bubble in the first place, saying they wanted it to happen. Then he took a couple of swipes at Benjamin Tal. I’d be interested to hear what he had to say in response to the prediction that Flaherty is going to further inflate the bubble.
Garth? Are you out there? Care to comment?
BTW – I have a tendency to think Garth Turner has a little bit of a creeping determinism problem. He seems to predict the worst and then takes credit for seeing things perfectly clear in hindsight.
I once went to a seminar with Garth Turner where he advised a financial plan of action using your home equity… wow, I would have been slaughtered had I followed his advice. I simply don’t trust him to see anything but the past and, even then, his hindsight is not with perfect clarity.
Hi DS,
Thanks for commenting!
Garth Turner definitely gets under my skin. He is in my mind Canada’s equivalent to Michael Moore, an absolute fear monger. He twists facts and misleads his readers on a regular basis. I guess that’s the politician and journalist in him. Thank god he isn’t still a journalist, we can do without his story fabrication.
That being said, I guess someone needs to stand far on the other side of every argument. If Garth wants to be that guy, then who am I to argue.
Kind regards,
Nolan Matthias
BTW – I left a comment over at Frugal Traders site about getting involved in your Stock Picking contest for 2010. If you have room for a tenth, I would love to get involved!
Cheers,
Nolan