Canada’s housing debt
There is little doubt first-time home buyers — primarily today’s Generation Y, aka the Millennial Generation — won’t be sending federal Finance Jim Flaherty an invitation to their house-warming party.
But they should, and they should also enclose a personal thank-you note.
No text messages. No Tweets. Just a nice, handwritten note on some fancy paper.
Make him feel that you mean it.
By reducing the maximum amortization period for new mortgages to 25 years from 30, and lowering the amount of equity that can be borrowed on a home from 85 percent to 80 percent, Flaherty is saving many of these young people from themselves.
But if first-time home buyers want to risk rushing to get over their heads in debt, they have until July 9 before the new regulations kick in.
Just don’t come running to us when your ends no longer meet and creditors have you on their speed dial.
Because the recession is still being fought, interest rates at our banks and lending institutions remain so low that the money being borrowed almost seems free.
That’s the problem. The average Canadian’s personal debt load has soared to almost unimaginable heights, a level so high that for each dollar earned $1.52 is owed.
This is courting disaster.
While it might not send a chill down Canada’s hot housing market, it may throw some cold water on first-time buyers and force them to buy a home they can actually afford rather than the home they want.
It may stop them from overextending themselves, and at least delay one of the leading causes for divorce in this country.
And that’s money.
The Ottawa (Ontario) Sun
It took longer than anticipated, but there is finally a victor in Egypt’s first truly competitive presidential elections. Mohamed Morsi, the candidate of the Muslim Brotherhood, prevailed over former Gen. Ahmed Shafik. The outcome is symbolic on many levels, but most significantly because it is not clear if Morsi is president in any real sense. Egypt’s old order is waging a battle behind the scenes — and under cover of the judiciary — to strip the new administration of any real power.
The new president’s powers are uncertain; the interim constitution vests all authority over legislation and the budget, as well as control over the prime minister, in the military council, although Mr. Morsi has the power to appoint the Cabinet. The military claims that it will oversee the drafting of yet another constitution and that a new parliament will be elected. But the fact remains that Egypt has a new, democratically elected president, and he and the people who elected him expect him to govern.
Unfortunately, distrust of the Muslim Brotherhood runs deep in Egypt. The organization has existed for 84 years as a secret society and is considered by many, in Egypt and elsewhere, to be a front for radical Islamists who seek to impose a fundamentalist state.
The challenge now is to find a way for the military to return to the barracks without losing face or undermining the nascent democracy in Egypt.
Pressure must be kept on the generals to honor the intent of the revolution and the majority of voters who chose Morsi. Egypt’s politicians can look to Turkey for ways to enshrine democratic principles in a new constitution that would shield the country from creeping Islamic fundamentalism and prevent the military from exercising a veto over politics.
The Japan Times, Tokyo