Canada’s Reckless Banks Inflate House Price Bubble

The whole issue of the housing bubble, its extent and whether there will be a soft landing as predicted by many wishful thinkers has resulted in many interesting headlines in recent weeks – including some high on the delusional scale. One suggested that house prices are a mere 20% overvalued (if you believe that, I have a bridge to sell you). Another that Marc Carney, having solved the housing bubble issue, was now moving on to an allegedly different issue: economic growth. Into this mix rode the cowboy of the big Canadian banks, the Bank of Montreal (BMO), with a replay of its irresponsible low interest rate of 2.99% for a five year mortgage. The last time it did this, for a couple of months in early 2012, it scooped $7 billion in mortgage business.