The MSM media is still pushing the story that it was Flaherty's Tights and not our over-valued housing market hitting it's market peak which has resulted in the 6th straight month of slowing housing sales and falling housing prices even as household debt continues to set new records.
You (the peasant) are supposed to believe that everything is under control, and God forbid, don't panic! Don't for a second lose your confidence in our "strong, stable banking system" for then we might have real problems! No, no, everything is fine, just like I told you. However, on the plus side, it would appear I am no longer seemingly the only one asking "well why not just raise interest rates then?"
For instance, a top executive at one of the big banks noted that tighter mortgage underwriting guidelines imposed by the federal banking regulator last year did not apply to provincially regulated credit unions, giving the latter an advantage. If the real goal of policy makers is to raise rates, then the Bank of Canada should raise interest rates, he said.For which there is a very good answer which was first reported here on Canadian Trends and just recently confirmed. But these sorts of questions (and the missing answers) must always be candy coated in tales of the wonders of Flaherty's Tights:
The unprecedented intervention reflects deep concern about residential real-estate prices and debt. The number of home sales has dropped markedly since Mr. Flaherty changed the rules last summer to make it more difficult to obtain mortgages, but house prices have not come down significantly in most areas of the country and debt-to-income levels continue to hit new highs.See how they have to throw that in there? "Flaherty's rules". Because the rest of this scenario totally fits that debt has been reduced due to making it harder to attain debt right? No, I don't think so, I think a country whose growth is slowing, debt is rising, and prices are peaking paints a completely different scenario than our confidence handlers are spouting. Flaherty has intervened in this manor because an official intervention via the raising of interest rates by the Bank of Canada would have a direct market reaction. He's trying to control interest rates "under the table".
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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.
Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.