It's Probably Nothing

Buckle up!

Boy, these Moody's guys are awfully temperamental...

One of the best things about SDA recently has been the addition of the zero-hedge links and my new awareness of the worldly financial ongoings.

I found this comment today at G&M by poster cleverusername with regards to the new rules on mortgages introduced by Carney and Ottawa today.

Old rules example:
$100K gross income
Max GDS 32%
$32000 annually / $2666.66 monthly
Less $250 / month for property tax
Less $100 / month for heat
__________________________
Max monthly payment $2316.66

Using this payment, your max mortgage amount on a 30 year amortization is $531,000

* * *

New rules example:
$100K gross income
Max GDS 39%
$39000 annually / $3250 monthly
Less $250 / month for property tax
Less $100 / month for heat
__________________________
Max monthly payment $2900

Using this payment, your max mortgage amount on a 25 year amortization is $594,000

So how does this help reduce the risk of residential debt overruns? Sure, you're paying a little more principal every month, but you can qualify for even more total debt.

***

Using 3.5% interest both cases

Here is link to article

http://tinyurl.com/d6k5pyo

Since it is their business to tell how things are, these ratings agencies will eventually have to tell how things are. Or go out of business.

Moody's, the gangsters who rated student loans made to diversities, many of whom who were already in prison, as being AAA+.

The banking system is totally corrupt.
Top to Bottom.
Left to Right.
Inside and Out.

d optimist,were you on lunch break when Pelosi and Reid forced the banks to make those loans? Banks follow GOVT rules and making loans to dead beats was one of them.!

Moodys! Baahhh! What a bunch of idiots.

I mean, those are the fools who had the temerity to downgrade Ontario's credit rating. You know, Dildo McDinkyland: where the sun always shines and the genterating winds always blow.

Doom has come, and it's wearing pink slippers and has a fuzzy robe. Ignore the man wearing the fuzzy robe. ALL IS FINE!

Yeah this isn't going to be pretty.

spike 1: Were you on lunch break when the banks decided to use leverage levels of 90% and higher?

The rumor seems to be valid. TSX down 350, DJ 250
at the close.

Johnpeg,banks ARE regulated by the govt.If they could leverage at 90% the US govt. approved it.Canadian banks cant because the govt.wont let them.Pelosi and Read used threats and intimidation to FORCE banks to make loans to people to buy homes,some didnt even have a job.TO tell you how bad it is in some parts of the USA,I know of a person that bought a multi million dollar home in Oregon for two hundred thousand dollars.

Things are going as expected - these central banks in Europe and the US all expanded their credit risks and money supply past all reasonable limits and now have devalued inflated currency and unrecoverable loans - combine this with the derivatives bomb that is hissing away on the back birner and we coming closer to the day when it will be a showdown between the banks and the populations stuck using their crappy depreciating currency and shoddy/shakey banking services.

The first shot in this kleptonomic war was the banks petitioning politicians to use your money (in account, attached assets and tax money) to underwrite their loss (the too big to fail myth/scare). The proper response would be for the govrnment to remind them that economic law is much like natural law - survival of the fitest - thatthey should write off unrecoverable debt and restabilize currency with hard asset backing and take bear the consequences of their bad management themselves. Some will fail other won't. In the morning we will still have the ability to run our own currency systems and economies with out dysfunctional croney banking interests

This will be a Darwinian epoch in bank failures as governments, investors drain their accounts according to the trust they have in that bank to cover its obligations. This is a Financial/economic cleansing that is long over due - the apocalypse of the zombie banking cartels.

When the smoke clears I hope nations have the sense to regain government control over the issue of debt free currncy and let banks play the private sector investment capital markets and get out of the debt currency/fractional reserve credit rackets.

Occam:

Naw. History will repeat itself and we will all be under dictatorships, since humanity has evidently squandered their opportunity under democracy.

@set you free:

Was telling a friend today that in our crazy city, you get the government you vote for or tolerate.

As Kate always says, all we need is democracy with a totalitarian party to vote for.

Democracy is over rated because more than half the population is composed of idiots and the overwhelming majority are selfish bastards.

A veterans democracy a la Heinlein won't work because any outz can join and serve in the military, although on average it would be an improvement until more leftists joined.

Turning us into a corporate state would at least remove the illusion of government capture.

A Republic needs stronger laws than our Constitution to keep us free. It didn't take long to trash our most fundamental principles.

Where is the benevolent dictator when we need him?

No, , a Republic merely needs to mind Jefferson's words:

"The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants."

Those who have committed treason must pay the piper. And there is NO law strong enough to stop the treasonous. All that will work against them are heads. On pikes. Permanently displayed in appropriate locations.

Royal Bank Of Canada was downgraded as well. So...................

And we would hail the downgrading of The Royal Bank of Canada as?
The tightening of the mortgage regulations here in Canada expresses the the mindset that it is those who have mortgage loans who are not responsible when it is the banks, the IMF, the Fed who have made loans and bailouts that threaten the entire global banking system.
Obviously, that now includes Canada.
IF they were really interested in reigning in the bailouts and theft of our money on a global scale they would not be going about it as they are.
This latest signals a downward slide whose level is anyone's guess.
This is mass re-distribution bigger than we have ever seen before.
I just hope Stephen Harper has his finger in the dike.
Make that his whole self.
Royal Bank of Canada's downgrade is the crack in the wall.
Let's hope Canada can withstand.
I have heard it said the TSX will go at least to 10,800, if not lower, and there will be QE lll.
(Eventually)

Gotta say I'm dissappointed with the tin-foil hat crowd here this evening. The pullback today was totally predictable (and predicted) and a sign of a healthy market.

Yep, a lot here cry wolf but remain silent when it doesn't blow up.