RE:RE:LiquidityI love it how people think Canada is immune to its own financial crisis and that the real estate market is only going to keep going up. The default rates might be a little low now only because it's a sellers market for the most part. If people get into trouble now they can easily sell and problem resolved. Once this changes look out below. Subprime lenders like HCG will disappear very quickly.
tadig wrote: Comparing this to Lehman is disingenious. There are no falling house prices (at least precipitously, like they were in the US), and we have a fairly stable employment picture.
They can rebrand, exonerate themselves with the OSC to ensure no wrongdoing (key step in rebuilding trust and why I presume they brought in ex-OSC types on the board), and perhaps sell some of their perfectly fine assets. Why not reduce their balance sheet and regrow from a position of strength instead of further giving up control?
The narrative here seems to be that they lied, but if you consider the regulations on continuous disclosure.... does a few bad apples in the mortgage barrel constitute a material change to the nature of the business, operations or capital of the issuer? I think not.
This is, as noted, a witch hunt by a bunch of clueless buffoons who are trying to set an example to other lenders not to be wishy-washy with the rules. The intent was to punish, not kill. I see this as short exuberance and a good long from these levels.