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A note to broadcasters looking for pundits


 

I’ll say No if you call to ask me on your show. I’m really busy and that won’t change before the election. Sorry, but there’s dozens better than me anyway.


 
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A note to broadcasters looking for pundits

  1. Even to Paiken?

  2. I’ll be on his show on Wednesday.

  3. You’ll be awake Wednesday?

  4. What? There aren’t better pundits. Everybody else just blathers on. You’re the only one who makes actual points!

    At least do Newman’s show!!

  5. Nonsense Paul. You’ve been missed on At Issue.

  6. Duffy?

  7. Are you going to be making any predictions prior to the election on Tuesday?

  8. comment by Sean S. on Friday, October 10, 2008 at 3:17 pm:

    Duffy?

    Only if Potter gets bumped…

  9. Predictions? Holy no way.

  10. A Note To Broadcasters

    I don’t think there are dozens of pundits better than Wells but I do think there are dozens of pundits better than who you have on regularly now. Except for the CBC, surprisingly, because their pundit panel is pretty good.

    Especially Newman’s broaadcaaast who I know will always provide me with a comprehensive view of what Lib insiders are thinking while entirely excluding everyone else.

  11. Paul,

    If not a prediction, how about an endorsement? Tories or Libs as the next government? I’d very interested to hear who you would endorse?

  12. Mr. Wells – you mean – Newman hasn’t been rattling your chains to join the team now Susan Delacourt is on sabbatical and Greg Weston is wandering in the wilderness not knowing whether he’s a Con or Lib these days…

  13. I forgot to add The National after CBC and I know Newman’s show is also on CBC before anyone decides to become outraged.

  14. If only this method worked with in-law thanksgiving table appearances.

  15. Does Kody have a show? You’d do that one, wouldn’t you?

  16. Okay, I know this is way off-topic but I can’t find a thread that is discussing this.

    So, if I heard correctly, Flaherty is spending 25 billion of our dollars to buy mortgages. I presume from our banks–except that doesn’t make any sense because our banks are just fine thank you very much.

    I know he’s not buying my mother’s mortgage and I can’t believe he’s found enough other people with mortgage trouble to spend 25 billion on it, in this short a time. (I’ll say since Wednesday, the last time I personally heard a Conservative tell me our banks were just fine.)

    And he IS at the G7 meeting today. I see Reuters is quoting him as saying, “”This is a systemic crisis and we need a systemic way to handle it. The G7 needs to find an unified approach to handle the crisis. Banks need to be recapitalized,” Canadian Finance Minister Jim Flaherty told reporters.”

    So am I to conclude from all of the above that Finance Minister Flaherty is spending 25 billion of MY money in buying up even more bad mortgages from U.S. banks? After the 700 billion the Americans coughed up?

    Alternatively, are our banks not as fine as I’d been led to believe?

    Please someone, while I still have hair left, shed some light on this story for me!

  17. $25 billion to the banks (semantics about buying mortgages aside) certainly flies in the face of ‘fundamentals are sound’ and that their plan has been in place for two years.

    Also, shouldn’t an expenditure of this magnitude go before the house?

  18. Jenn: They simply swapped cash for the actual mortgages held by the banks that CMHC already has ensured. This has nothing to do with the US and the government isn’t taking on any additional risk. Now I’m sure the banks will be trying to offload their most risky mortgages, but again, the government was already on the hook for these so it’s a matter of giving the banks their payout early.

  19. Oh. Well. That’s great. Certainly doesn’t sound like anything is wrong then. Perfect. Must be just a silly coinkidink.

  20. The government was already on the hook for these because of the money the Bank of Canada put in earlier in the week?

  21. Oh! Sorry, I missed a step. So the government was already on the hook because of course the CMHC is the government, right?

    So then what was the billions ‘released’ by the Bank of Canada earlier in the week supposed to do?

  22. Jenn:- The theory is that the banks will use the cash obtained from the mortgage sale to ease the “credit crunch” by making it available for loans.
    And thereby establish the “confidence” that the risk-takers of the world seem to need. Theory.

    Personally, I’ve always thought there’s nothing more risky or confidence-shattering than waking up in the morning when you’re a single mother on welfare. It’s amazing they can muddle through.

  23. No, CMHC is a government agency that provides mortgage insurance. If you go to a bank and don’t have 20% of the home value for a deposit, Canadian banks require you buy insurance that protects the banks. CMHC is the main supplier of this insurance. It generally costs 3-4% of the mortgage value. So if a mortgage goes into default, the bank is paid out by CMHC, or in effect, the government.

    The $25b is simply the government taking the mortgages off the bank’s hands in order to inject cash into the banking system to hopefully free up the credit situation. Agree with that action or not, there really isn’t any extra risk here since they would have to pay out any defaults regardless.

  24. I will listen, and thanks for that Pete. If I understand you correctly, the government is on the hook for these bad mortgages because at least 80% of them are insured by CMHC (government agency) and the other 20% deposit insurance? No, that’s only for money deposited INTO banks, not money borrowed from them. Okay, no, I don’t understand how the government is on the hook for the remaining 20% anyway.

    I guess my immediate question, then, is what was the difference between the Bank of Canada money of earlier in the week, and Flaherty’s announcement of 25 billion to buy mortgages?

  25. Man, my brain kicks in right after I hit post. Yes, the mortgage is say 95% of the value, so the entire 95% (or whatever amount over 80%) is insured by CMHC, not just to the 80% mark.

  26. guess my immediate question, then, is what

    Jenn, FYI, I answered this in the “Shaking” thread. Hope it makes sense!

  27. Duffy says you stutter.

  28. Darren, from the Shaking thread:
    “The Bank of Canada injected money into the overnight lending system. Usually banks move money between themselves, as well as borrow from the BoC, overnight to square accounts. With banks unwilling to part with their capital overnight, the BoC made more money available in the overnight market.”

    Okay. So, I’m a chartered bank. I write mortgages in the amount of 80 million today, but I only have 60 million on hand to cover it. So, I need to borrow 20 million. Normally I’d go to other banks, but they’re not willing to give up their cash. So, I go to the Bank of Canada. Surely I would have to put up something for security. ? But I suppose I could sell the 60 million worth of mortgages I’ve paid (covered) myself, and use the 20 million as security for the 20 million I borrowed. Is that it? Do I get it now?

  29. Wells says….

    “I’ll say No if you call to ask me on your show. I’m really busy and that won’t change before the election. Sorry, but there’s dozens better than me anyway.”

    No doubt..

    Macleans hs no cred regardless of what the outcome if this elction…

    PS:yes I know Wells, Harper is mean and has no “Empathy”…

    PPS:

  30. Duffy’s fawning over these non-PC Regressive Conservatives is sad to watch, indeed. He’s being used for their mean-spirited, questionable shenanigans.

  31. Jenn’

    I don’t think so. Banks lend to each other short-term, with no collateral, to cover temporary mismatches in accounts that come up during the course of business. There’s no relation to the mortgages they hold. This operation isn’t about covering the mortgages – buying the mortgages (or bonds based on mortgages) seems to be the best way to get cash into the banking system. It also has the advantage of taking risky assets off the banks’ balance sheets (these bonds wouldn’t normally be risky, but given current global conditions and the fact the crisis began with similar bonds in the US, it makes sense to take them onto the government books now).

  32. “I’ll say No if you call to ask me on your show. ”

    Yes, and I’ll have the Grey Poupon with my Caviar, as a side for my Stuffed Quail please…

  33. Style,

    I believe they are actually buying the mortgage. Even a CMHC insured mortgage sits on the Banks books as an asset but they put the another asset (cash on hand) to obtain it. The cash may have come from a depositor (your deposit is a liability to the bank. banking generally is about managing the matching between those liabilities (your deposits) and those assets (mtg’s car loans credit cards etc)

    Govt buying the CMHC motgage releives the bank of an asset (the mortgage) and they obtain cash for it, the cahs they originally put out.

    The government risk profile doesnt change, but I am going to assume that the government is obtaining some of the interest charged on the mortgage or all of it and it will pay an admin fee back to the bank for managing the asset. If true then the government picks up some small amount of upside, the interest, on the money it is lending out.

    Summary: Bank gets back the cash it originally loaned out so it can loan it out again, given that they might be short on available cash or that they are probably beginning to get to a point of needing to ration where they deploy their assets and guard against redemptions.

    My suspicion is the Mutual Fund arms are beginning to ask mama bank for money because their customers are redeeming and/or their customers are beginning to get margin calls becasue of the stock price fall….so cash calls are being made on individuals and companies. Lots of virtuous and vice circles that exist in banking.

    Oh on the overnight loans, to make it more real let me tell a story from an old bank manager that I used to work for. This was in Brantford, small town, all the banks in a couple of block area. End of each night they would all gather in one branch or another and bring their bags of cheques for sorted for each other. They would exchange them and net the differences and then cut a BANK cheque to make up the difference that day. The cheques were effectively loans between each other, a cheque being a for of credit.

    To bring it to today, the banks fear of the others is that the cheque will bounce….one potential solution is that the government certify all those cheques (guarantee them) so that cheques are accepted and any bad ones go back to the government. Without that the clearing system, which includes credit cards, debit cards, payroll etc grinds to a halt.

    I do not believe this has been explained to the public well, Canadian, American or otherwise.

    Sorry for the length of the pos, I hope it provides some illumination on these issues. This of course has nothing to do with Mr Wells not being available for punditry….hmm I guess I better say something witty and on topic….darn can’t think of anything, sorry.

  34. These pre-election shows are a bit banal. They should invite a few libbots & conbots on for a huge pillowfight. I guarantee that would attract an audience. In the middle of it Mike Duffy shows up ringside, in a full-on Batman costume, and just pile-drives the crowd. Then there’s a Celine Dion song, and then we cut back to “At Issue.” A looser format, basically.

    Another idea, more edgy, more late-night: you take 16 trolls at random from these blogs, and you make them fight to the death, mano a mano. Round-of-16, quarter-finals, semis, then the Ultimate Troll Smackdown in which (owing to their physical exhaustion from prior rounds) they each get to use a razor blade. Peter Mansbridge awards the trophy, the winning troll is made Speaker of the House of Commons, and CBC turns over a new leaf. If that isn’t civic-minded TV programming I don’t know what is.

  35. Style, a quick note: you said, “Banks lend to each other short-term, with no collateral, to cover temporary mismatches in accounts that come up during the course of business.”

    This is in fact not happening at the moment in many situations, because banks don’t trust each other to not implode from day to day. Hence the central banks needing to step in with unprecedented measures. Related information from IHT here.

  36. Thanks very much to everyone who provided some clarity on this banking issue.

    I guess the only problem I still have is that the banks, in spite of the generosity of the Canadian government (i.e., us) in improving their balance sheet and financial position, chose not to pass the entire interest rate drop onto the public (i.e., us). I think I’d like a do-over such that the interest rate drop is tied to the mortgage buys. Like, you can’t get one without giving the whole of the other.

  37. Jenn, that is essentially what has happened. The government bought the mortgages,and all the banks have now made a half point (or close to it) rate cut.

  38. you take 16 trolls at random from these blogs, and you make them fight to the death

    100 quatloos on the troll king, T-guy..to lose big.

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