Harper/Flaherty And Our $25B: For Our Banks Or U.S. Ones?

I told you so yesterday. Here's the proof today:

Flaherty announces measures to stabilize lending industry

The federal government plans to buy $25 billion in Canadian mortgage-backed securities in a bid to ease a growing credit crunch faced by the country's banks and other financial institutions, Ottawa announced Friday.

Finance Minister Jim Flaherty said the government's plan is to buy the securities through the Canada Housing and Mortgage Corporation and provide much-needed cash to financial institutions that sell the so-called "National Housing Act mortgage-backed securities."

Flaherty announced the new measures in an attempt to assuage concerns over the burgeoning global financial crisis and defuse criticism that the Harper government was ignoring the spreading lending crisis.

(...) The specialized housing securities, both in Canada and the United States, generate cash based upon the stream of payments from the underlying mortgages. High default rates mean these bonds cannot produce a sufficient amount of cash for investors.

That was what caused the asset-backed market in United States to collapse.

Canada does not face the same problem, Flaherty insisted.

Instead, the country's financial companies are having trouble getting money to borrow because banks and other lenders in other countries are not offering up enough money — a classic credit crunch.

(...) Under the government's proposal, the $25 billion will flow back to the banks and other institutions as a way of injecting cash into the country's mortgage market.

The federal government anticipates that few of these mortgages will default and most are guaranteed by the CMHC. Thus, Ottawa actually expects to earn a profit from its holdings of these securities.

"This program is an efficient cost-effective and safe way to support lending in Canada that comes at no fiscal cost to taxpayers," he said.

Flaherty said the action would "make loans and mortgages more available and more affordable for ordinary Canadians and businesses."

I still call it a bailout rescue measure at our taxpaying expense.

Regardless of that good-old mendacious double-talk from our little neocons.

Oh - and I don't expect us to have our money back anytime soon.

Harper and his Harpies have gone from denying the problem to grudgingly acknowledging it somewhat, to now trying to do something about it (apparently) - through it all contradicting themselves while tripping over their own mendacious double-talk.

Strangely, this announcement of Harper/Flaherty's "plan" comes on the heels of this little bit of news.

Coincidence? I think not.

I strongly suspect that the dynamic at work here is "one hand giveth" and "the other hand passeth it along".

Hence, I think I know where our $25 Billions are going folks: south of the border.

With essentially the rest of us none the wiser.

Because them conservatives/republicans/neocons can so be trusted with our monies, right?

Again - I told you so.

How I wish I get to be proven flatly wrong on this ...

As an aside - some bit of good news for a change with regards to our economy.


(Cross-posted at NetRoots)