David Dodge Takes Aim at CMHC

From Reuters. “Bank of Canada Governor David Dodge rapped the government housing agency last summer for fueling inflation with new mortgage insurance products, according to a letter released by the central bank on Monday.”

“Dodge told CMHC President Karen Kinsley he was dismayed with a June press release announcing the agency was offering mortgage insurance for interest-only loans and for amortizations of up to 35 years. ‘At a time when the housing market is already overheated, further fuelling demand through CMHC actions would only put further upward pressure on prices and thus make housing less, not more, affordable for Canadians,’ Dodge said in the letter.”

“The central bank explicitly said high housing prices were a key risk to its inflation outlook in July, when it updated its monetary policy report.”

“CMHC’s press release also hinted it would look for ways to reduce the cost of accessing financing for house buyers, a development Dodge said would be ‘very unhelpful’ at a time when housing prices are rising faster than all other items in the consumer price index. Dodge’s concerns dissipated after meeting with Kinsley, central bank and CMHC officials said.”

Dow 12,000 Perspective

As the markets celebrate the record Dow at 12,000, perhaps some perspective is needed to determine where we've been and how long it has take to get here since the prior peaks in the market.



A comparison of the U.S. markets to world markets is also a useful exercise.



graphics courtesy of NYT