Friday, September 26, 2008

Weekend Open Thread

Sorry for no posting during the week. Some discussion starters:
- Merrill says what we have all known for last several years and says Canadian housing is overvalued by quite a bit. Scotiabank, fully aware of the mortgage junk it has loaded in its balance sheet during the last several years, denies it vehemently. Most Canadians, in our great tradition of smugness agree.
-From, "but Canada is an Island" category, SunLife says it has just a quarter of billion dollars of exposure to Wamu bonds.
-A personal anecdote: I think we are light years away from any fear or panic, even in the US. A friend of mine who just got a job with WAMU(yes, this is a different epoch, companies about to go bankrupt are hiring. After all, what's a small overhead like employee salary when you have spent billions in gambling over housing prices) bought a huge $600k home in Seattle with just 5% down(Yes, countrywide is still making these loans, which means they are still selling more rope to hang themselves with).
I strongly advised him not to do so given the precarious state of WAMU and the Seattle housing market which has to go down quite a bit. I talked to him last night to see if he was okay after the WAMU seizure but he wasn't even aware of it. When I told him, he was overjoyed that WAMU was "bought". I guess before this is all over, people will be once again afraid, something that has eluded the credit drunkards.

Your thoughts....
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