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Irish Finance Minister Michael Noonan A Laughing Stock

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Would you trust this head to run your country’s finances ?

Its hard not to laugh when the Irish Minster for Finance (Michael Noonan) turns around over the weekend and says

“I’m powerless to tackle bankers’ pay and perks”

especially when you consider the state owns one of the pillar banks and has a stake in the other. This man has a history of lying to the Irish people, as he backtracked on every promise he made before the election.

The Sunday Independent has also learned that 15 of the most senior figures in Anglo Irish Bank from the time of the September 2008 crash are still employed at the institution, on salaries believed to be in excess of €150,000.

…..

Colm Doherty, who was paid €3m for less than 11 months’ work, will receive an annual pension of €300,000 when he turns 65, again paid for with taxpayers’ money. Despite the outcry over what he called the “controversial pensions” paid to Mr Sheehy and the €866,000 salary package paid to Irish Bank Resolution Corporation (formerly Anglo) boss Mike Aynsley last year, Mr Noonan is unable to tackle them because of contractual obligations.

…..

it was also revealed that the former Anglo Irish Bank, which has received more than €34bn of taxpayers’ money to date, is the only defined benefit pension scheme in the country which is fully funded.

You can’t blame Max Keiser and Stacey Herbert for having a laugh at the minister, but as usual, there is no reaction from the sheeple. Get your vaseline ready for the budget 😉

Just change the damn law Noonan, bring in a new 100% tax rate for employees of banks earning over 100k, DO SOMETHING !!! HELLO !!!!

Source: Irish Independent

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Canada’s Housing Bubble Bigger Than US – But Dont Worry, Its Different This Time

Comments Off on Canada’s Housing Bubble Bigger Than US – But Dont Worry, Its Different This Time

Every bubble bursts, but when the danger signs are telling you that you have a large housing bubble on your hands you don’t turn around and say

don’t worry there is room to go even higher“.

That’s what CIBC is telling Canadians despite the fact that Canada’s debt to income ratio is now higher than the US experienced in 2006.

Then there is always the “soft landing” mantra that’s trotted out, much like Ireland heard from its bankers before the property crash made it the world’s largest debtor nation. The amazing fact about the Canadian banks is the amount of money in the banks vaults is only $4 billion yet they managed to loan out over $1.5 trillion.  Everyone is else has been taken out by the bankers, its soon to be Canada’s turn.

According to this article, CIBC thinks the huge amount of household debt in Canada and the beginning cracks in the housing bubble are nothing to worry about. The main reason for this benign assessment seems to be that there have been a few other credit and real estate bubbles in the world that have grown even bigger than the US one before it burst. What a relief.

“The news out of Canada’s real estate market isn’t good, but the country will avoid a U.S.-style real estate meltdown, CIBC said Tuesday.

Economist Benjamin Tal said in a report that even recently released data about high levels of Canadian consumer debt isn’t proof that there will be a sudden, big drop in home prices.

“To be sure, house prices in Canada will probably fall in the coming year or two, but any comparison to the American market of 2006 reflects deep misunderstanding of the credit landscapes of the pre-crash environment in the U.S. and today’s Canadian market,” he wrote.

Tal noted that Canada’s debt-to-income ratio has just broken the U.S. record set in 2006, but said other countries have had even higher levels without a crash.

[…]

Tal said home prices in large cities like Vancouver and Toronto are overshooting their fundamentals and will likely slip as sales fall.

“But the Canada of today is very different than a pre-recession U.S., namely as far as borrower profiles are concerned,” he wrote.

“Therefore, when it comes to jitters regarding a U.S.-type meltdown here at home, the only thing we have to fear is fear itself.”

“This time its different!”

It is actually fairly typical to find this type of thinking near the top of a bubble. The people living inside it cannot believe that it could possibly crash. Of course Canada’s economic situation is in many respects ‘different’ from the US economic situation, but that is the case with every slice of economic history. Not one of them can possibly be exactly the same. Nevertheless, one can come to some general conclusions about credit expansion-induced bubbles. Economic laws will be operative whether or not the precise historical circumstances are similar. When Japan reached the height of its bubble in the late 1980’s, it was also widely argued that the overvaluation of stocks and real estate was no reason to worry because Japan was allegedly ‘different’.

The government has taken steps to curb prices but this will only hasten the fall.

Canada’s housing market has begun to cool markedly. As is usually the case, the first sign of trouble is a sharp drop-off in transaction volumes. Existing home sales in Canada were down by 15.1% in September year-on-year. This seems to be the result measures recently introduced by the government that are aimed at slowing down or reversing house price increases. Prices will no doubt eventually follow transaction volumes.

50% or $500 billion of the housing market is at high risk. It doesn’t help that the Government owned CMHC has insured most of the mortgages against default which leaves the taxpayer on the hook.

It is generally held that Canada’s banking system is in ruddy health and not in danger from the extended credit and real estate bubble, mainly because a government-owned organization, Canadian Mortgage Housing Corp. (CMHC)  insures most of the mortgages with down payments of 20% or less. The company also helps fund mortgages by issuing debt and buying mortgage backed securities with the proceeds. 

This kind of thinking has things exactly the wrong way around. It is precisely because such a state-owned guarantor of mortgages exists that the vaunted lending standards of Canada’s banks have increasingly gone out of the window as the bubble has grown. Today some $500 billion, or 50% of Canada’s outstanding mortgages are considered ‘high risk’ according to the Financial Post. Moreover, HELOCs (‘home equity lines of credit’, i.e., the use of homes as ATMs) have grown like wildfire, at loan-to-value rates of up to 80%.

Through CMHC and government guarantees for privately held mortgage insurers Genworth Capital and Canada Guarantee, Canadian tax payers are on the hook for more than C$1 trillion in mortgages.

Source: ZeroHedge

Prop37: Is California About To Give Big Business A Kicking Over GMO?

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There is hope after all. California gets to vote on GMO labelling (Prop 37) and overwhelming public support for the move, will hopefully strike a blow for the public against big business, which clearly has a vested interest in the public not knowing whats in its food supply.

The clip below is a humorous look at the vote from the side of the corporates.

For more see voteyes37.org

$36 Trillion of Stock Certificates Potentially Destroyed By Hurrucane Sandy

Comments Off on $36 Trillion of Stock Certificates Potentially Destroyed By Hurrucane Sandy

The DTCC (Depository Trust & Clearing Corp) owned by the FED, is the clearing house for Wall Street that is responsible for storing over £36 trillion work of share certificates. These paper certificates unfortunately are stored in a vault in lower Manhattan which is currently submerged after Hurricane Sandy. Who knows when the water will be pumped out and how many share certificates are damaged.

Trillions of dollars worth of stock certificates and other paper securities that were stored in a vault in lower Manhattan may have suffered water damage from Superstorm Sandy.

The Depository Trust & Clearing Corp., an industry-run clearing house for Wall Street, said the contents of its vault “are likely damaged,” after its building at 55 Water Street “sustained significant water damage” from the storm that battered New York City’s financial district earlier this week.

The vault contains certificates registered to Cede & Co., a subsidiary of DTCC, as well as “custody certificates” in sealed envelopes that belong to clients.

The DTCC provides “custody and asset servicing” for more than 3.6 million securities worth an estimated $36.5 trillion, according to its website.

“At this point, it is premature to make an accurate assessment as to the full impact of the water damage nor would it be helpful to project on what specific actions need to be taken with respect to our vault,” said DTCC Chief Executive Michael Bodson in a statement. “We are aggressively working on this situation to minimize disruption to our clients and will provide additional updates as more information becomes available.”

Bodson said the DTCC’s computer records are intact and that the corporation has “detailed inventory files of the contents of the vault.”

The building remains inaccessible, but the lower floors are believed to be flooded. The full extent of the damage cannot be assessed until power is restored and the building is deemed safe to enter.

The DTCC has been operating from remote facilities since the onset of the storm and has maintained clearing, settlement and other services that are crucial to the functioning of Wall Street, according to Bodson.

Bodson said the DTCC is working with couriers to ensure that all deliveries are rerouted to a facility in Brooklyn, and the group expects all other services related to physical securities processing to resume “in the next several days,” he added.

 

Source: CNN

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