[HN Gopher] "Fake Chinese income" mortgages fuel Toronto real es...
___________________________________________________________________
"Fake Chinese income" mortgages fuel Toronto real estate bubble:
HSBC bank leaks
Author : eswat
Score : 317 points
Date : 2024-02-06 17:52 UTC (5 hours ago)
(HTM) web link (www.thebureau.news)
(TXT) w3m dump (www.thebureau.news)
| Terr_ wrote:
| IANAFinancialInvestigator, but skimming through it sounds like:
|
| 1. Fraudulent applicants come to the bank with crazy stories to
| ask for enormous loans/mortgages toward a Toronto house,
| allegedly to turn hyper-suspicious big piles of cash into a more
| reputable-looking asset.
|
| 2. HSBC goes along with that because they want to suckle on the
| sweet regular payments of suspicious cash, even though they ought
| to damn well _know_ that these customers are just a front for an
| organized crime ring.
|
| 3. As a bonus, this locally-concentrated money-
| laundering/speculative-investment thing screws up the property
| market for Torontonians. The local multimillionaire babysitter is
| willing to buy at almost any price because their secret financial
| goals are very different than yours.
|
| While looking for other articles, I notice it's been ~16 months
| after the end of HSBC 10-year tangle with US regulators over
| their business with Mexican and Columbian drug cartels. [0]
|
| [0] https://www.reuters.com/business/finance/us-fed-
| terminates-e...
| seanmcdirmid wrote:
| A lot of it doesn't even sound like money laundering, just
| fraud. You say you have a job paying you lots of money from
| China, verification is loose, you get the loans, and then try
| to make mortgage payments via Airbnb. The risk is mostly with
| the bank, and if it doesn't blow up you make all the money.
| Terr_ wrote:
| While that may happen too, the article alleges the mortgage
| payments are being made with funds wired from China.
|
| If the borrowers are making the mortgage via rent/Airbnb of
| the properties... then they are somehow keeping it secret
| within Canada and also sending it on an international round-
| trip, which seems like a strange stretch for any small-time
| "lie on the loan application" crook.
| seanmcdirmid wrote:
| The article states more cases than that. One of the
| examples the mortgage payments aren't being made via
| Chinese wires, they are being paid locally and the Chinese
| income doesn't exist at all.
|
| They could be making round trips with Chinese banks but I
| don't see why. You can transfer funds from China into your
| account before your monthly mortgage was due, the mortgage
| provider would never know. You can also put dollars into a
| Chinese bank account and do wires in demand, since it isn't
| R!B there are no controls on it.
| koolba wrote:
| There used to be a thing called a "down payment" that was
| supposed to cover things like this. It would force you to
| have a modicum of equity in the house and give the bank a 20%
| buffer on the price to break even after a short sale.
| quickthrowman wrote:
| I'm not sure why you're using the past tense, you either
| need 20% equity or you need to carry PMI to hedge the
| lender's risk of you defaulting on your mortgage.
|
| It's the same in the US and Canada as far as I can tell.
|
| https://yourequity.ca/blog/types-of-private-mortgage-
| insuran...
| kurthr wrote:
| How could you lose money? RE prices only go up... as long as
| there's a greater fool... oh, wait?!
| opportune wrote:
| Banks these days often don't hold on to those mortgages
| though. They can repackage them as securities like MBS and
| sell them to entities like pension funds. This type of thing
| is _exactly_ how the GFC started
| cm2187 wrote:
| Except that the losses are rarely passed on to investors.
| The issuer (the bank) typically retains first loss (that
| changed after the 2008 crisis). So it's typically more a
| tool to get cheap funding than selling mortgages.
| vondur wrote:
| How many fraud issues has HSBC had over the years? Why are they
| allowed to still do business in the US and Canada?
| raverbashing wrote:
| This is not really news, this is certainly not exclusive to one
| bank or another
|
| I remember some years ago I saw a comment somewhere that, for
| real estate purchases "proceeds from a certain country were
| subject to AML regulations... but not from China"
|
| Really. I can imagine a Canadian banker saying that with a
| straight face.
| causi wrote:
| It's quite bizarre any jurisdiction would allow someone to buy
| housing there when they can't legally live in it.
| slavboj wrote:
| Approximately anyone can buy a US-based REIT, even if they're
| ineligible to enter the country.
| bdcravens wrote:
| This is less of an issue than owning the home, since in an
| REIT, you aren't controlling tenant access.
| alchemist1e9 wrote:
| Why? Should we restrict other investments with similar logic?
| For example should non-residents not be allowed to purchase
| vacation properties and lease them?
|
| The impulse to enlist the government to regulate private
| property and investments is not productive and results in
| endless encroachment of individual liberties and rights to
| governments.
| stormfather wrote:
| Something drastic has to be done about the cost of housing if
| we're to leave a functional society to the next generation.
| Fauntleroy wrote:
| Or if we don't want to watch it collapse during ours.
| gsk22 wrote:
| Sure, but the high cost of housing has little to do with
| non-resident investors, and everything to do with lack of
| supply.
| bdcravens wrote:
| Resident investors are a big part of the problem,
| however.
| alchemist1e9 wrote:
| Blaming foreign investors for a housing crisis is a
| smokescreen. It's not the demand from investors that's the
| issue; it's the government's stifling regulations that
| choke new construction. The mess is because of state
| failure, not market failure. When sellers freely sell their
| homes to foreign buyers, they're making choices that
| benefit them. Why should we deny them that right? The real
| absurdity is ignoring the elephant in the room: a
| bureaucratic quagmire that prevents building enough homes
| to meet demand. Instead of scapegoating investors, slash
| the red tape and let the market work.
| function_seven wrote:
| Yup.
|
| The Power of Pricing is a thing that exists whether you
| want it to or not. Smart policy uses it to great
| advantage. Dumb policy redirects this to hurt those it
| intends to help. Rent control, restrictions on
| production, byzantine zoning and construction rules...
| all contribute to distorting the market in ways that push
| back on the original (or at least, stated) intentions.
|
| You want housing to be cheaper? Increase supply. That's
| it. You don't want foreign investment in your properties?
| Don't make them so damn attractive as pure investment
| vehicles. How? Increase supply.
|
| There's always a boogeyman to be blamed when markets are
| so broken like this.
| alchemist1e9 wrote:
| Absolutely correct. Unfortunately and surprisingly the
| supposedly educated users of HN are overwhelmingly anti-
| capitalists somehow, your opinion and mine are decidedly
| in the minority recently, and that is itself fascinating
| to me, as I can only conclude the education system is
| completely broken and failing to teach both basic
| economics which consists of facts and is scientific and
| also history. I liken it to teaching creationism over
| evolution, preferring fantasy over reality.
| denton-scratch wrote:
| > You want housing to be cheaper? Increase supply.
|
| The USA (and maybe Canada) has large stocks of government
| land. In my country, most land is privately-owned;
| interfering with landowners' property rights is seriously
| destabilising. Property law is the basis of most law.
| seanmcdirmid wrote:
| China doesn't allow non-residents to buy property at all.
| You have to be working in the city you want to buy in for
| a few years with documentation if you don't have hukou
| there.
|
| Maybe the USA and Canada could do something similar? I
| find it ironic that it's primarily Chinese investors who
| want us to keep our property markets open.
| ericmcer wrote:
| USA population has increased ~10% in the last 20 years.
| Why has that small increase in population caused a
| humongous lack of housing? It feels like something else
| is going on other than "we need to increase supply by 10%
| but can't"
| seanmcdirmid wrote:
| Housing supply and demand isn't uniformly distributed
| across the United States. When we say "housing shortage"
| we only mean in popular places to live.
| stormfather wrote:
| So where have housing prices fallen?
| seanmcdirmid wrote:
| Places you don't care about, like Jackson Ms, Detroit,
| Toledo, Gary. Recently, we see falling housing prices in
| Las Vegas and Phoenix, although they are probably ahead
| of where they were before the pandemic.
| vel0city wrote:
| As Sean mentioned, not only have we increased in total
| population we have also changed _where_ we are living.
| Lots of small towns have seen their populations decrease,
| with some completely disappearing. Large neighborhoods of
| cities like Detroit and elsewhere essentially emptied. We
| need more housing _and_ we need to shift housing
| resources to where the demand is.
|
| There are loads of cheap houses in the USA. They're just
| in places where most people don't want to live.
|
| Here's a cheap house:
|
| https://www.zillow.com/homedetails/420-Tyler-St-Gary-
| IN-4640...
|
| The commute to Southern California is pretty killer
| though.
| inglor_cz wrote:
| "Something drastic has to be done about the cost of housing
| if we're to leave a functional society to the next
| generation."
|
| Drastic? Well, then: kill NIMBYism. Just off with its head.
| We know the 18th century in England as the "Gin Craze",
| future generations will look at our period as the "NIMBY
| Craze".
|
| Large-scale construction is absolutely possible. There were
| periods of massive construction booms all around the globe,
| especially after wars (when a lot of housing had to be
| rebuilt immediately). You can absolutely build a lot of
| comfortable middle-class housing in a fairly short time.
| Most German cities were rubble in 1945 and fine again in
| 1960.
|
| But you need density and straightforward approval
| processes. No artificial scarcity caused by one-family home
| zoning and endless environmental reviews that are abused to
| stall developments for decades.
| Fauntleroy wrote:
| There's a little too much "housing is way too incredibly
| expensive for the citizens of the country" going on here for
| us to really care about "fairness of the open market"
| soggybread wrote:
| >For example should non-residents not be allowed to purchase
| vacation properties and lease them?
|
| AirB&B has been a terrible experience, so many people buying
| up houses just to lease them out for a weekend has definitely
| contributed to rising housing costs and over-all cost of
| living
| bdcravens wrote:
| That's an issue absolutely, but it doesn't answer the
| question of whether non-residents should be allowed to do
| what residents can.
| JumpCrisscross wrote:
| > _it doesn 't answer the question of whether non-
| residents should be allowed to do what residents can_
|
| Raise that fence too high and you turn landlords into the
| community's gatekeepers. (How else could a non-resident
| become a resident?)
| alchemist1e9 wrote:
| Don't worry the HN crowd seems to be so far gone from
| reality and understanding free markets that I've
| encountered numerous discussions where landlords are
| categorically evil, which is overwhelmingly empirically
| understood to be extremely beneficial to housing and
| communities to have landlords invest in them! Of course
| given the trend has been to remove all education of
| market fundamentals and inject eduction systems with
| endless collectivist propaganda we should not be
| surprised.
| tslocum wrote:
| Yes. Restricting foreigners from owning domestic assets is
| the beginning. Next comes restricting / heavily taxing
| domestic owners that own more than one home. Sooner or later,
| housing gets closer to being what it's supposed to be
| (shelter and space for people who need it) rather than a
| financial vehicle.
| alchemist1e9 wrote:
| This proposal is a slippery slope to economic disaster.
| First, restricting ownership rights--foreign or domestic--
| distorts the market, disincentivizes investment, and
| ultimately harms those it claims to help by reducing the
| supply of housing. Second, treating homes purely as shelter
| ignores the reality that property is also an investment and
| a key component of individual wealth and economic freedom.
| Imposing heavy taxes on those owning more than one home
| would not only penalize success but also discourage rental
| market contributions, exacerbating the housing shortage.
| The real solution lies in encouraging development and
| reducing bureaucratic barriers to increase housing supply,
| not in draconian measures that trample on property rights
| and stifle economic growth. Let's not replace a market-
| driven approach with a command economy that history has
| repeatedly shown to fail.
| IncreasePosts wrote:
| How about an ultimatum? Either people can only own one
| house without huge tax consequences, OR we open up
| restrictions on building so we can build a lot more
| housing stock than we currently do.
| denton-scratch wrote:
| > treating homes purely as shelter ignores the reality
| that property is also an investment
|
| But that's the problem, isn't it? The basic necessities
| of life shouldn't become a vehicle for speculation.
|
| FTR, all of my wealth is in two homes.
| alchemist1e9 wrote:
| Asserting that housing--or any basic necessity--shouldn't
| be an investment is a dangerously naive stance that flies
| in the face of economic reality and human history.
| Consider food, water, healthcare--all necessities, yet
| all benefit from private investment and innovation. The
| collectivist dream to strip away the investment aspect of
| housing is a recipe for disaster, leading to shortages,
| degradation, and inefficiency. Your stance isn't just
| misguided; it's empirically proven to fail, fostering
| misery under the guise of equality. Housing, like any
| resource, flourishes under conditions of freedom, not
| under the heavy hand of state control. To suggest
| otherwise is to ignore the lessons of history and to
| jeopardize the very foundations of prosperity and
| freedom.
| denton-scratch wrote:
| > Consider food, water, healthcare--all necessities, yet
| all benefit from private investment and innovation.
|
| I live beside the river Thames, which private
| "investment" has transformed into a sewer. My access to
| food has shrunk; I used to have access to butchers,
| greengrocers and so on. Now all my food comes from
| supermarkets. The health system I depend on has been
| gradually privatized, and it is now at breaking point.
|
| > the lessons of history
|
| History is squishy stuff; we mould it to support the
| conclusions we want to draw.
|
| [Edit] I'm interested that you didn't challenge my
| equating of investment with speculation, because I didn't
| mention investment. Obviously, without capital
| investment, you don't get capital assets like houses. But
| my neighbourhood is blighted by absentee landlords; one
| neighbour is an AirBnB, the other has been empty for 5
| years. Both are owned by absentee landlords, one living
| 2,000Km away. That's not investment; that's speculation.
| alchemist1e9 wrote:
| Blaming private investment for pollution and housing
| issues ignores the core role of government in regulating
| externalities and protecting property rights. The Thames'
| state isn't due to market failure but government
| inaction, a prime example of state failure. Moreover, the
| economic decline witnessed in the UK isn't caused by
| capitalism but by anti-market policies stifling
| competitiveness. The real issue is the collectivist
| delusion that more state control is the solution,
| ignoring that such approaches have consistently led to
| further decline. Misplacing blame on capitalism and
| pining for socialism only exacerbates the problems,
| diverting us from the proven path to prosperity: free
| markets and effective, limited government intervention.
|
| Lamenting the rise of supermarkets as a death knell for
| local butchers and greengrocers is a misplaced nostalgia
| that ignores consumer choice and market efficiency.
| Supermarkets thrive because they offer what consumers
| demand: variety, convenience, and affordability. To decry
| this as a market failure is to advocate for a return to
| less efficient, more costly ways of living, under the
| guise of preserving tradition. It's an affront to
| consumer sovereignty and a free market that naturally
| evolves to meet changing societal needs. Yearning for a
| past that restricts choice and elevates prices is a
| backward step, not progress.
|
| Criticizing absentee landlords as mere speculators
| ignores the benefits they bring: paying property taxes
| and injecting capital into the economy. This isn't about
| speculation; it's about fulfilling market demand and
| facilitating economic activity. The real issue lies in
| state-imposed barriers that prevent adequate housing
| supply, not in the actions of individual investors.
| Blaming investors for taking advantage of market
| opportunities is misguided and diverts attention from
| necessary reforms to increase housing availability and
| affordability.
|
| The collectivist dismissal of history as "squishy" is a
| deliberate evasion of undeniable truths. History is
| replete with the failures of socialism and the triumphs
| of capitalism. To mold it to fit a narrative that
| justifies state control and collectivism is
| intellectually dishonest and dangerously naive. The
| empirical evidence is clear: wherever socialism has been
| tried, it has led to economic stagnation, misery, and the
| erosion of freedoms. Capitalism has lifted billions out
| of poverty and spurred innovation and prosperity
| unmatched by any collectivist scheme. Ignoring these
| facts is not just an error in judgment; it's a willful
| blindness to the lessons that history has painstakingly
| taught us about the superiority of market freedom over
| state control.
|
| Whenever the cry of "market failure" echoes, a closer
| inspection often reveals the true culprit: state failure.
| "If someone considers that there is a market failure, I
| would suggest that they check to see if there is state
| intervention involved. And if they find that that's not
| the case, I would suggest that they check again, because
| obviously there's a mistake." This wisdom holds true
| across the spectrum of economic grievances. Time and
| again, what is hastily labeled as a failure of capitalism
| turns out to be the unintended consequences of excessive
| regulation, misguided policies, or government overreach.
| The path to prosperity is not paved by increasing state
| control but by unleashing the creative and productive
| powers of the free market.
| JumpCrisscross wrote:
| > _bizarre any jurisdiction would allow someone to buy housing
| there when they can 't legally live in it_
|
| Foreign-owned homes are a problem for asset acquirers. Vacant
| homes are a problem for anyone who needs housing. The former
| seems to get a lot of visibilty when concerns around the latter
| get raised.
| alchemist1e9 wrote:
| > Vacant homes are a problem for anyone who needs housing.
|
| But they pay taxes without demanding any services and the
| seller assessed they had better use of the capital, they
| could buy or build a more suitable home.
|
| If I lived in a location with 50% vacant homes all paying
| property taxes then wouldn't my schools and streets and all
| local government services be extremely well funded?
| JumpCrisscross wrote:
| > _If I lived in a location with 50% vacant homes all
| paying property taxes then wouldn't my schools and streets
| and all local government services be extremely well funded_
|
| If the polity is smart, yes.
|
| It looks like British Columbia gets about 15% of its
| revenue from property taxes and transfers [1]. So you'd
| need adjustments to make up for the personal, corporate,
| sales, fuel, carbon, tobacco and insurance premium (?)
| revenues the vacant homeowner isn't paying.
|
| [1] https://www2.gov.bc.ca/assets/gov/british-columbians-
| our-gov... _Table 2.3_
| causi wrote:
| Kind of by definition you can't pay more in taxes than you
| contribute to the economy, therefore unoccupied housing is
| a drain on the local economy.
| alchemist1e9 wrote:
| Your assertion flips economic principles on their head.
| Vacant homes paying taxes without drawing on local
| services represent a net gain, not a drain. Taxes paid on
| these properties directly fund public services, enhancing
| the community's infrastructure without additional burden.
| Furthermore, the investment in property contributes to
| the economy through construction, maintenance, and
| property management industries. To claim that unoccupied
| housing harms the local economy is not logical.
|
| Austrian economics teaches us that restricting foreign
| investment misinterprets how markets work. Vacant homes
| signal opportunities for builders, not losses for
| workers. Investment flows where it's valued, stimulating
| demand and construction, not stifling growth.
| Misallocating housing due to artificial constraints only
| distorts the market, harming those you aim to help. Let's
| not forget, economic growth comes from creating value,
| not redistributing scarcity.
| caseysoftware wrote:
| In the US, banks issue mortgages to illegal immigrants all the
| time. Last fall, the Biden Administration went as far as
| threatening banks who had refused.
|
| > _"This guidance reminds lenders that denying someone access
| to credit based solely on their actual or perceived immigrant
| status may violate federal law."_
|
| Ref: https://www.justice.gov/opa/pr/justice-department-and-
| consum...
| mytailorisrich wrote:
| Most governments would do anything for foreign direct
| investment.
|
| From many points of view, having foreign investors buy property
| without immigrating is a best case scenario for governments.
| ericmcer wrote:
| In the long run (30+ years from now)? Or just for the few
| years they are in office?
| mytailorisrich wrote:
| I think probably in the long run because, all in all, net
| inbound capital into the economy is positive in the long
| run. What can cause problems is bubbles and 'over-heating',
| meaning too much over a too short period, which is when
| 'less' inbound capital may be sought. But overall best to
| keep the flow positive.
| toast0 wrote:
| It seems like a waste of limited government ability to act to
| try to deny this when it's quite simple for an interested
| foreign investor to form or invest in a domestic corporation
| that buys housing it doesn't live in, or find a domestic
| partner to make straw purchases of housing the partner doesn't
| live in.
| ericmcer wrote:
| It feels like selling the next generations future for cash now.
| michael1999 wrote:
| The historical Canadian project, like all anglo settler
| projects, is structurally about early arrivals to the frontier
| making money selling to later arrivals. The idea that housing
| is primarily for locals is a newer idea.
| asah wrote:
| There's "housing" and then there's $5+MM manhattan apartments,
| which are so inflated above their value as functional housing
| as to effectively be NFTs. People whine about the pencil shaped
| buildings but they shutup fast when they see that it causes
| zero inflation to lower-end housing prices and a big help to
| city budgets.
|
| Also, strategically, having powerful people own expensive real
| estate influences them to visit and maybe not bomb it... at
| least, it's better than them never having stepped foot there.
| The famous example is Kyoto not being nuked because an American
| leader had seen it firsthand[1]. The Nazis spared Paris was
| apparently spared for similar reasons[2].
|
| The counterexample is NYC which everybody loves to crap on
| (Gerald Ford "drop dead", 1993 bombing, 9/11, and lots of
| failed terrorist attacks since), presumably as a symbol of
| American greed and excess, but also as a symbol of urban chaos,
| rot and violence.
|
| [1] https://collider.com/oppenheimer-improvised-line-kyoto/
|
| [2] https://www.google.com/search?q=Nazis+spared+Paris
| downrightmike wrote:
| HSBC DOING SHADY SHIT? Business as usual, remember when they took
| in all that drug cartel money? They shouldn't exist.
| cjbgkagh wrote:
| HSBC was created to deal with opium money following the opium
| wars because other banks would not.
| hef19898 wrote:
| At least they value tradition, values and mission. Sounds
| like a stable bank in more than one sense.
|
| Agree so, there shoupd have been a bunch of jail sentences
| for laundering cartel money. But then financial crimes at
| that scale rarely get punished.
| neilv wrote:
| > _But more than a year later, D.M. was so dissatisfied with the
| bank's response that_
|
| I only recognize the HSBC name from scandals in the news:
| https://en.wikipedia.org/wiki/HSBC#Controversies
| saiya-jin wrote:
| Look at any wiki article on any major global bank, the chapter
| about 'controversies and legal issues' is always a thick list,
| HSBC ain't worse or better than others.
|
| There are no good guys there, that's not why the business was
| set up and corresponding folks were/are hired. If you want more
| controls, enforce more regulations, they do work if well
| defined.
| JumpCrisscross wrote:
| > _HSBC ain 't worse or better than others_
|
| Money laundering does seem to be their choice in poisons.
| emmanuel_1234 wrote:
| That's because they are one of the most global bank,
| therefore a prime choice when it comes to moving money from
| countries to countries. Most bank have a much smaller
| global footprint and can't be used as such.
|
| Banks don't benefit from their customer laundering money
| just like landlords don't benefit from drug trafficking in
| their building: it's a hindrance and it costs a lot to do
| anything about it.
|
| Source: I work on AML in a global bank.
| JumpCrisscross wrote:
| > _they are one of the most global bank_
|
| By what metric? I'd argue the driving factor is their
| proximity to dirty money. Same with Russian banks. Then
| other people notice you're used to looking the other way
| and you get word-of-mouth network effects. With money
| launderers.
| jacquesm wrote:
| HSBC seems worse than many others. When I moved to Canada my
| immigration lawyer explicitly advised to stay away from HSBC,
| this was in 2000 or so and they already had a pretty bad rep.
| The various scandals since then haven't improved that
| reputation. TD, CT and RB have their own problems but none of
| them have received even close to the total fines that HSBC
| has (to the best of my knowledge).
|
| I agree there are no good guys here, but there are shades.
| neom wrote:
| I've been using HSBC in Canada and the USA for 15 years,
| they're great for exactly the reasons they shouldn't be.
| Their tooling basically lets you do whatever you want with
| no oversight. It's kinda weird, but I liked it. Sad they
| sold their Canadian business to RBC (even though they sold
| their USA business to Citizen Bank, they allowed high net
| worths to stay but the Canadian arm did not, wondering if
| this news is the reason for their exit)
| hiatus wrote:
| > Their tooling basically lets you do whatever you want
| with no oversight
|
| What do you mean by this? Maybe some examples would help
| to clarify.
| radicaldreamer wrote:
| They started off as an opium bank, that heritage and
| culture still pervades their business practices.
|
| If you want to read more about this:
| https://philebersole.com/2013/02/15/hsbcs-history-and-the-
| or...
| darth_avocado wrote:
| > making him a minority among mostly Chinese-Canadian co-workers
| at the Aurora branch.
|
| Not trying to point fingers on whether the branch workers were in
| on the whole thing, but maybe it was easier to perpetuate the
| fraud because of cultural familiarity?
| readthenotes1 wrote:
| Your fingers aren't required, only the whistleblower's:
|
| "and possibly some employees benefited from the fraud,
| financially pocketing thousands of dollars, which I call the
| proceeds of crime."
| inSenCite wrote:
| HSBC soon to be RBC. This is not very surprising, a lot of this
| also gets facilitated by the independent mortgage brokers who get
| ppl through the system with some 'creative coaching'.
| fakedang wrote:
| Lol no. HSBC has always had a much worse reputation than RBC,
| or any other bank for that matter. HSBC and Standard Chartered
| are amongst the worst international offenders when it comes to
| fraud and money laundering.
| wisemang wrote:
| Probably referring to the fact RBC is set to acquire HSBC's
| Canadian business.
| fallat wrote:
| Brings to question: did RBC know? How did they not know?
| emmanuel_1234 wrote:
| RBC probably indulges in this as well. HSBC just has way
| more ties to Hong Kong and China than RBC does.
| peterleiser wrote:
| Exactly. HSBC was laundering money for Mexican and Colombian
| drug cartels and fined $1.9 billion by the US government,
| which is one of the largest penalties ever imposed on a bank
| for breaking U.S. law.
|
| Deutsche Bank fires pretty high on the fraud meter as well.
| contingencies wrote:
| Not only Canada.
|
| In Australia this became pervasive across all banks for the last
| 25 years. It got to the point where, around 5-10 years ago, new
| national rules were mandated that foreign income could only be
| assessed at some minor percentage of its evidenced volume under
| the epithet "loan serviceability criteria". At the face of it,
| these rules appear to have the public's best interests at heart.
| But in reality, they simply lock out anyone that isn't a locally
| registered card-carrying commuter wageslave (eg. cross-border
| entrepreneurs, immigrants, etc.).
|
| So the new scam - from multiple independent sources - is
| apparently people from Singapore taking out loans in Chinese Yuan
| Reminbi denominations for Australian property against Singapore
| or Hong Kong banks, then coming to the Australian banks and
| having them "transferred" (internationally, and across
| currencies!) which allegedly sidesteps the local restrictions.
| The fact that I know this simply from talking to bank staff as a
| stranger shows how extremely pervasive these sorts of things are.
| secondcoming wrote:
| > "Bank statements can be verified directly with the foreign
| banks or use a reputable third party to verify," he suggested.
|
| Is that even possible with Chinese bank accounts?
|
| Anyway, the presence of Chinese Funny Money in property has been
| known about for years, not just in Canada either.
| maxglute wrote:
| >The whistleblower, whomThe Bureau is calling D.M., immigrated to
| Canada as an international student from India, making him a
| minority among mostly Chinese-Canadian co-workers at the Aurora
| branch.
|
| I mean it's real Chinese income backed by fake paperwork. There's
| PRC capital controls, rich PRC national who buy RE abroad are
| going to do it via laundering services and has been for decade+.
| Banks are fine with this and have dedicated branches in diasphora
| area to handle because the money is good and reliable. Sometimes
| rich Chinese immigrants also do odd jobs to fill time, bored
| aunties with multi million dollar mansions in Richmond working
| shifts at River Rock Casino. It's a bizarre world.
| seanmcdirmid wrote:
| It could be real Chinese income backed by fake paper work
| (money laundering) or fake income backed by fake paper work
| (fraud). You can take out $50k per year, a lot more via
| exemptions, so you don't need money laundering to get money out
| of china into the USA (I had to move a few hundred K before,
| all the paper work was legit).
| maxglute wrote:
| I presume you were foreign national with more options.
| Options for diasphora Chinese, many who illegally hold dual
| citizenship and relies on PRC nationality to do
| transactions/capital flight in PRC is different.
|
| I highlighted the original quote where branch is mostly
| Chinese-Canadian for context. Aurora is 20% Chinese, it's a
| big diasphora neighbourhood. There isn't some big "fake
| chinese income" conspiracy, it's the entire (proven) business
| plan (money laundering) with occasional fraud. I think pretty
| much everyone knew Chinese are buying million+ propertiers
| with laundered money, and it fuels the bubble as much as any
| other foreign buyer.
| seanmcdirmid wrote:
| Ya, foreign nationals are allowed to export their earnings.
| But even Chinese citizens can also pool those $50k yearly
| allocations, it doesn't take a lot of friends and family to
| do that.
|
| I'm not really sure what is happening among the rich, but
| among the middle class, it isn't so much money laundering
| but having lots of savings with no good investment options,
| or just wanting to make money while someone else takes on
| the risk. They don't have access to money that needs
| laundering.
| jabbany wrote:
| > But even Chinese citizens can also pool those $50k
| yearly allocations, it doesn't take a lot of friends and
| family to do that.
|
| So as an observer of this, you will see money coming out
| of one place, spread to many accounts, wired overseas to
| different recipients, then re-aggregated...
|
| What do you think that looks like...? Surely not money
| laundering?
| maxglute wrote:
| Not on Canada's end, it's a bunch of people using legal
| capital controls to get money into Canada. On PRC end,
| it's evading capital controls, which depending on your
| geopolitical alignment, can be illegal activity. But if
| you're in the west, you want that Chinese money. Free
| money from competitotrs as good as brain drain from
| competitors.
| seanmcdirmid wrote:
| Capital controls have bad intentions anyways, I have no
| qualm with PRC citizens trying to avoid them. Not
| everyone in the west wants or likes Chinese money. It
| does lead to them basically exporting their bubble
| abroad, but Japan did the same in the 80s before their
| big bust.
| jabbany wrote:
| Yup. Hence the capital control (less money leaking out
| means an easier recovery after the bust).
|
| Of course, as is rational in capitalism, this just makes
| it even more urgent to skirt the capital control, lest
| you be caught with the burden of the bust. This was also
| why crypto was even an option for doing this, for a short
| while at least.
| maxglute wrote:
| It happens, it can be more annoying than one thinks since
| people with wealth to exfiltrate correlated with other
| family members who also have wealth to exfiltrate, graft
| is family business. Nephew/niece studying abroad? That's
| 100k gone per year for next 4-5 years. Meanwhile living
| well is expensive, annoying to be dependant on personal
| capital flight group. And post crackdown, it's more risky
| to drag family/friends into pooling. Especially if
| they're public sector/public sector adjacent. Frequently,
| it's easier to pay someone commission to move money for
| you.
|
| In my experience, middle class aren't buying million+ RE,
| they pool together savings to send kids abroad, and maybe
| put a down payment on a condo that the kid pays off once
| they get decent job in west. And by middle class we
| really mean upper flat out highincome top %5-10 relative
| to all PRC house holds who are middle class tier1/2
| regions.
|
| But agreed, domestic non gov investment ecosystem pretty
| trash, hard to beat investing in your kid(s) and saving
| for retirement until a mature system develops. Which IMO
| hard goal since focus isn't to further wide wealth
| disparity by giving that 5-10% more
| consumption/investment abilities but to bring up the next
| quantiles of households - the actual middle class. This
| is where my assessment departs from most, I think "common
| prosperity" for PRC is getting more households richer,
| but at PRC development levels, that diminishes the
| households with enough savings to retire and surplus to
| invest. And this has all sorts of implications on
| inflation/FX rate.
| jabbany wrote:
| > You can take out $50k per year
|
| Try buying a house with 50k a year... This is exactly what
| the "scheme" solves. You have new immigrants who have (in
| many cases) legitimate money (e.g. by selling property back
| in china) but cannot move it out of the country quickly due
| to capital controls on the chinese side.
|
| Since mortgages are meant to spread out costs over time, it's
| the perfect solution. However, banks (understandably) care
| about income rather than existing capital. So you have a lot
| of "safe" customers who are unlikely to default and less
| sensitive to interest rates (compared to the local borrower
| pool), and banks looking for customers amidst high interest
| rates... You can see how something like this can easily arise
| from these conditions...
|
| > you don't need money laundering to get money out of china
| into the USA
|
| I cannot comment on what your situation was (maybe through a
| business?), but AFAIK it is very hard to move capital out for
| regular individuals. Your realistic options to wire out
| capital are just "education" and "tourism". While technically
| you can claim "investment", it will almost always not be
| approved and cause a watch to be put on all your accounts.
|
| That being said, usually documentation of the funds outside
| of china is completely legitimate and above board. There is
| no need to fake this. The only paperwork magic that needs to
| happen is towards the chines government... However, it still
| _looks_ like money laundering because you can only wire $50k
| a year, so many need to resort to wiring from accounts of
| different individuals (friends and family) to different
| individuals, despite the funds already being fully documented
| and reported outside china.
| seanmcdirmid wrote:
| Foreigners on Z visas can wire out whatever they earn, so
| for me it wasn't an issue. There are even foreigners who
| rent out some of their allocations since you always have
| PRC expenses, but this is of course illegal.
|
| I used my wife's $50k allocation once because I was held up
| by some paper work (you need a lot of paper work,
| notarized, etc...). They didn't ask any questions about
| what it would be used for, but this was 2016, and they
| changed the rules a few months later.
| jabbany wrote:
| Foreigners are not fully exposed to the local market
| though, so there's no need to do capital controls.
| _Income_ is never an issue, as there are taxes to cover
| that. The main thing being cracked down on is people
| moving accumulated _wealth_ out.
|
| Also, things have changed _considerably_ since 2016 (as
| these things tend to do). Indeed, nobody --- foreign or
| domestic --- needed to document use as long as you stayed
| within the $50k (you would be asked to if you went above
| that). Later it became a mandatory question, but wasn't
| enforced. These days it is enforced rather strictly. If
| you claim education, you need to provide statements of
| tuition and housing etc. For tourism there's similar
| requirements, and usually they limit discretionary
| spending budgets to ~$10k.
| huhtenberg wrote:
| > has been for decade+
|
| Try 25 years. Started right after the Hong Kong transition from
| under the British rule.
| jacquesm wrote:
| HSBC has been part of plenty of scandals. Here is one example:
|
| https://www.investopedia.com/stock-analysis/2013/investing-n...
| dade_ wrote:
| HSBC Canada is in the process of being sold to RBC. As employees
| will no longer work for HSBC in March and possibly unemployed
| through the new found efficiencies by RBC, this creates an
| interesting situation for virtually no risk whistle-blowing.
|
| I hadn't thought of this possibility when the exit was announced.
| eswat wrote:
| > _this creates an interesting situation for virtually no risk
| whistle-blowing_
|
| Not so risk-free unfortunately
|
| > _A June 2023 email from the bank's personnel department says
| "we hereby demand that you [the whistleblower] immediately and
| permanently delete any and all HSBC information on any personal
| email accounts."_
|
| > _"If you do not comply with these obligations," the email
| warns, "HSBC also reserves the right to bring this matter to
| the attention of relevant law enforcement agencies."_
| ThisIsMyAltAcct wrote:
| > The whistleblower, whom The Bureau is calling D.M., immigrated
| to Canada as an international student from India, making him a
| minority among mostly Chinese-Canadian co-workers at the Aurora
| branch.
|
| > "I am going to reveal potential mortgage fraud at HSBC Bank
| Canada and possibly some employees benefited from the fraud,
| financially pocketing thousands of dollars, which I call the
| proceeds of crime."
|
| > FINTRAC's study doesn't say that Canadian banks knowingly
| issued fake-income mortgages to Chinese diaspora buyers in
| Toronto. But in an interview, D.M. said banking staff are trained
| to guard against fraud, and the loan application packages he
| reviewed in Aurora beggared belief.
|
| > The Bureau's review of HSBC Canada emails and D.M.'s text
| messages, shows he came to believe numerous employees at the
| Aurora branch had direct knowledge of faked Chinese income
| mortgages, and a veteran manager with oversight of more than 10
| Greater Toronto branches knew about broad and questionable
| mortgage lending for Chinese diaspora clients.
|
| > Pointing to specific examples, D.M. claimed that another branch
| colleague had admitted processing numerous loan applications
| without meeting his clients, because a branch manager delivered
| her subordinates foreign income client applications so "they did
| not have to get sales themselves."
|
| > "She said yes, she knows specially in Mainland China there is a
| team who would even answer emails and phone calls verifying
| [Chinese income] but it's a sophisticated and well organised
| scam," D.M. 's email to HSBC Canada managers says. [...] "When I
| asked for such a serious issue if she raised a HSBC confidential
| [complaint] or not she evaded my question," D.M. wrote. "Now we
| all love numbers, but I don't think the bank will like these
| kinds of numbers achieved through this way."
|
| Sounds like that branch is compromised
| radicaldreamer wrote:
| Are US banks just a lot more strict about source of income than
| Canadian banks?
| mistrial9 wrote:
| a non-trivial portion of residential real estate transactions
| across the USA never apply for a loan. In certain areas it is
| more so. When real estate retail value rises fast, money
| appears from everywhere -- hint, not from first time home
| buyers.
|
| The USA Federal system of mortgage loan gurantees has been
| gamed seriously, over and over since the 80s. It is a whack-
| a-mole for enforcement. All the parties close to the
| transactions have exactly the wrong incentives, most of the
| time. One of the defendants in a recent "pay cash to get your
| kid into elite school via fake sports" scandal was a mortgage
| broker in San Diego County. The Judge after reviewing
| evidence, reportedly told the man on the record "you are a
| thief." etc
| JumpCrisscross wrote:
| > _Are US banks just a lot more strict about source of income
| than Canadian banks?_
|
| American financial regulators are much more comfortable
| letting banks fail than their Canadian or European
| counterparts. (In part this is because of the sheer diversity
| of banks we have.) Being fined out of existence is a real
| possibility for an American bank. That shapes behavior.
| cbsmith wrote:
| Short answer: no.
| dghlsakjg wrote:
| Total conjecture: 1. US banks do not face nearly as diverse a
| set of applicants, and 2. are only required to hold the loan
| for 5 years.
|
| 1. It is very common in Canada for a person with wealth
| acquired outside the country to apply for a home loan. At the
| time I was approved as a guarantor for a home loan for over
| half a million CAD, I had only been in the country for 2
| years, and had no credit history with any Canadian
| institution (out of laziness I just was added to my wife's
| accounts as a signer and cardholder when I moved). They
| accepted copies of my American credit history and bank
| statements, but had no real way to verify their truth. In the
| US, I don't think that (relatively) wealthy immigrants
| wanting a home loan are nearly as common. Richmond, BC is a
| great example of this: avg home price is 1.5mm and 60% of the
| residents are immigrants.
|
| 2. Canadian mortgages are refinanced every five years,
| traditionally (it is possible to get a longer term, but very
| uncommon). Combine this with the fact that Canadian real
| estate has ALWAYS gone up (until now), and financing a home
| really wasn't a risky thing. If a bank didn't like a
| customer, they could refuse to refinance after 5 years. If a
| bank foreclosed, they were basically guaranteed to be made
| whole.
| raydev wrote:
| > They accepted copies of my American credit history and
| bank statements, but had no real way to verify their truth
|
| I'm skeptical here, given how closely the US and Canada
| work together, both US and Canadian banks share an
| incredible amount of info with each other and not solely
| because of cross-border commerce. There is also a non-
| trivial number of US citizens living and working in Canada
| so there are services available to them given their special
| tax requirements.
| dghlsakjg wrote:
| If you have information that contradicts what multiple
| banks have told me I would love to know it, since it
| would be very nice to have that information available to
| my Canadian bankers.
|
| In the 3 banks I've worked with in Canada, all were
| completely unable to access my American credit history.
|
| The governments do share tax data, but AFAIK the banks
| have no way to link "John Smith SSN:123-45-6789" to "John
| Smith SIN:098-76-54321". They even have my US SSN number
| since Canadian banks report to the IRS.
|
| Edit: here's experian explaining it:
| https://www.experian.com/blogs/ask-experian/u-s-credit-
| histo...
| seanmcdirmid wrote:
| I got the feeling that the HSBC in Bellevue Washington
| catered primarily to overseas Chinese clients looking to
| buy homes in the Seattle area. Most of the employees spoke
| some dialect of Chinese. I have no idea about the loan
| officers, however.
| bonestamp2 wrote:
| No. I've purchased homes in both countries and from what I've
| seen, US banks are far less strict. Policies, procedures, and
| operations are very undisciplined at many US banks (compared
| to Canadian banks). I have noticed some are starting to
| become more strict in the past 5 years though.
| topspin wrote:
| > Sounds like that branch is compromised
|
| "Since 2015, the whistleblower concluded, more than 10 Toronto-
| area HSBC branches had issued at least $500-million"
|
| It's not _a_ branch. It 's the whole bank. And you can safely
| infer it's not the _only_ bank.
| bonestamp2 wrote:
| Don't get me wrong, it's definitely a problem, and something
| needs to be done, but lets also try to keep it in
| perspective... $500 million could well be 500 mortgages in
| Toronto. That would be about 0.02% of the private dwellings
| in Toronto.
| hnthrowaway0328 wrote:
| I think I know a bit about these stuffs, just a bit.
|
| These loans are fraudulent probably, but they are safer than most
| other mortgage loans.
| ugh123 wrote:
| Such is money laundering
| hnthrowaway0328 wrote:
| Yep, greedy bank managers are willing to take any business
| they can grab. Many loan officers earn like 500k and up.
| user3939382 wrote:
| HSBC funneled $1B (that we know about) for cartels, it came out
| as 100% knowingly committed, and no one went to jail. Basically
| the government asked for their cut. Why wouldn't do they this
| again and again? They are above the law, they are the law.
| realusername wrote:
| It's HSBC being HSBC, I can't say that I'm surprised. Drug
| cartels and money laundering are at the core of their brand
| value.
| eYrKEC2 wrote:
| Hopefully Canadian citizens are the "lender of last resort",
| just like we Americans are the "lender of last resort".
|
| The bankers must be made whole -- nothing else matters.
| thriftwy wrote:
| "The reason we can say space pirates does not exist is that
| HSBC does not have a subdivision dedicated to catering to
| such clients"
| opportune wrote:
| Ignorant American here. Isn't Hong Kong supposed to be the
| HQ/money exit point for Chinese organized crime? And HSBC is
| the main bank there, but headquartered in the UK?
|
| If I had to guess they are heavily involved with spooks and
| foreign assets operating in China (and if so, why not use
| them for non-Chinese intelligence-financial shenanigans?) and
| a lot of their "illegal" activity is unofficially blessed by
| foreign intelligence.
| realusername wrote:
| From their past history I'd say they are in global
| organized crime, regardless of the country.
| mikeyouse wrote:
| "The government asked for their cut" actually means that for
| laundering that $881 million in cartel money - they were fined
| $1.9 billion and then had to pay an additional $665 million in
| other civil penalties.
|
| They wouldn't do it again and again because they don't earn
| $880 million when accepting $880 million in dirty money -
| remember that bank deposits are _liabilities_ to the bank -
| they only earn money from interest on that -- and it cost them
| billions in fines to do so...
| jszymborski wrote:
| Also, HSBC is selling off all of its consumer banking in
| Canada largely as a result of the gov't fines and tattered
| reputation among Canadians.
| denton-scratch wrote:
| > tattered reputation among Canadians
|
| Hardly just Canadians; I first started hearing tales of
| huge HSBC corruption 20 years ago.
|
| FTR: I bank with First Direct, which is an online banking
| service of HSBC in the UK.
| Teever wrote:
| Is that enough though?
|
| It seems pretty clear that putting people who commit crimes
| in jail definitely reduces their chances of commuting crime
| at least while they're in jail.
|
| White collar crime is the root of all evil in our society and
| we should be putting white collar criminals in jail.
| user3939382 wrote:
| I'd be very surprised if the $880M was the extent of the
| crime. The government not jailing anyone involved in the
| scheme is completely inexcusable and in my view makes the
| government complicit in the crime, in which case my trust
| that the public information about this case is accurate is 0.
| mikeyouse wrote:
| The "scheme" was bank tellers in Mexico, working for a
| recently acquired local bank, accepting boxes full of cash
| and lying about the origin. HSBC was fined for looking the
| other way and having shitty controls about suspect funds --
| their AML teams were understaffed and they didn't do any
| real due diligence on the Mexican banking firm they had
| purchased. The entire executive team was forced out, they
| clawed back bonuses for everyone in the chain who profited
| off the shitty controls.
|
| So who would you jail in this case? The bank tellers
| interfacing with cartel? They're in Mexico anyway. Some
| overworked compliance manager in the US who ignored the
| suspicious transactions? Some C-Level exec person who
| didn't know about the suspicious origin of a billion
| dollars into a bank with something like 2.5 trillion in
| assets?
|
| What specific crime do you think they committed?
|
| Nobody likes these global banks, they're run by absolute
| psychopaths but remember, the optimal amount of fraud is
| non-zero. All of the mirror image complaints about banks
| not wanting to touch Crypto or proceeds from gambling/porn
| sites is downstream from settlements like these.
|
| https://www.bitsaboutmoney.com/archive/optimal-amount-of-
| fra...
| user3939382 wrote:
| This isn't accurate. HSBC management trained their
| employees on how to encode transfers for the cartel
| organizations to evade the government's detection
| mechanisms (by inserting punctuation). So there was more
| to this scheme than you're describing.
| creato wrote:
| HSBC probably got a few percent of that $880M in
| fees/interest/whatever. So unless they were laundering
| ~100x more than that, the fines absolutely did make all of
| that crime (even if it wasn't the full extent of it) net
| negative for the bank, and probably by a lot.
| godelski wrote:
| That comes out of the company's wallet, but does it come out
| of a person's? Persons responsible for committing crimes, not
| customers or other third party members. HSBC has trillions in
| holding, so those numbers might not be as big as they appear.
| mikeyouse wrote:
| They literally clawed back bonuses from all of the
| executives involved in the compliance failures.
| soco wrote:
| Credit Suisse finally sunk because of such business and more,
| so there is (very very little, I know) hope.
| beiller wrote:
| All sounds very plausible, but where are the effects of this? We
| should be seeing many people holding mortgages at HSBC not able
| to pay. Are there no public stats showing how many lack of
| payments being made to HSBC? Is HSBC going to hold on to these
| properties taking massive losses? For how long? It has definitely
| helped the run up of prices here. It will also help the collapse
| of prices as well, either that or the collapse of HSBC. Maybe the
| effects take a very long time to manifest. Lets hope it's not too
| long :)
| cm2187 wrote:
| I think that's what a lot of people here are not realising (or
| perhaps they haven't read the article). In this case the main
| victim is HSBC if these loans were made to individuals who are
| speculating on foreign real estate without the income to cover
| the loan. This doesn't look like originate and distribute, i.e.
| HSBC shareholders will bear the losses.
| empath-nirvana wrote:
| No, they won't. It's money laundering. They'll pay the
| mortgages.
| oldgradstudent wrote:
| - "A rolling loan gathers no loss."
|
| As long as real estate prices continue to rise, you won't see
| large scale missed payments because they will be able to sell
| the assets, refinance the loan, or even successfully rent it
| out.
|
| We've seen this dynamic in 2008 and in the S&L crisis before.
| Bad loans drive the bubble, the expanding bubble hides the bad
| loans, but when the bubble stops, there is a massive large
| scale loan failure.
| timr wrote:
| The article suggests this is money laundering. It would make
| sense to have fake borrowers with fake incomes as part of a
| layering operation.
|
| Someone wants to get $large_sum out of China. They can't do
| this without raising lots of flags in both countries. So they
| set up an army of fake borrowers, have them take out fraudulent
| mortgages on real properties in Canada, pay down the mortgages,
| and sell the property to obtain clean money on the other end.
|
| All the better if the property rises in value in the meantime
| due to enormous fraud.
| stevenwoo wrote:
| Not Canada, but before the pandemic caused rural housing
| prices to go up, there was a crime syndicate buying houses
| for marijuana grow operations and having the house pay for
| itself essentially until they got caught.
| https://www.cbsnews.com/losangeles/news/doj-raid-
| marijuana-g...
| avidiax wrote:
| The article doesn't seem to suggest that the mortgage holders
| are actually straw purchasers, but the facts seem to suggest
| this is at least sometimes true. How can a hairdresser
| service several mortgages without "income" from China?
| timr wrote:
| > The article doesn't seem to suggest that the mortgage
| holders are actually straw purchasers, but the facts seem
| to suggest this is at least sometimes true. How can a
| hairdresser service several mortgages without "income" from
| China?
|
| The article explicitly says that the purpose is laundering
| via professional operators -- see the flowchart diagram
| toward the bottom of the piece.
| ABCLAW wrote:
| > We should be seeing many people holding mortgages at HSBC not
| able to pay.
|
| Not really. Lying about the source of cashflow doesn't mean the
| cashflow isn't real.
|
| The end objective for a lot of these frauds isn't to sink the
| bank with fake loans. It's to launder money.
| beiller wrote:
| Makes sense I wasn't thinking about the full on laundering
| aspects. But even so, if the real estate is used in
| laundering, it will eventually have to be sold to get back
| clean money. This should still run up prices at the start,
| and run them down in the end. So I think the majority of the
| point still stands: there should be an uptick in sales (which
| there is not). They could be speculating on top of
| laundering, in which case they are taking some losses. We are
| -20% from peak. The time will come when they (the launderers)
| will need liquidity and sell which has not come. Will it ever
| come?
| bostonsre wrote:
| I think they want to get their money out of china and
| parked into a safe place. If they pay off their mortgage,
| they don't want to find a new place to park their money,
| they can just keep the house as an asset. I think a lot of
| investing in china is real estate based and is part of the
| reason that market is struggling over there so much now. It
| would make sense for them to continue to follow that
| investing model when exporting their wealth to other
| countries.
| avidiax wrote:
| They can get clean money from the start if they structure
| things right.
|
| Have other mules or partners purchase crappy properties at
| a low price. "Flip" the properties, having another mule
| purchase at a greatly increased price and service the
| mortgage with more laundered money.
|
| So you get the capital gains immediately, and they are
| apparently completely clean. If the crappy house continues
| to appreciate naturally, that's also a bonus, but if not,
| you can eventually default the mortgage or short-sale.
| faluzure wrote:
| Assuming these mortgages are insured through CMHC, would HSBC
| be on the hook or the insurance system when some of these
| mortgages fail?
|
| Canadians are certainly paying for social services used by
| folks who earn income abroad and pay little to no income tax in
| Canada, and folks who want to buy their first house are harmed
| by inflated housing prices.
|
| My currently overseas landlord for some reason needed to travel
| to Canada to give birth, and was very eager to get their health
| card / banking documents sent to our rental despite it being
| rented out for several years prior to us arriving...
| crustaceansoup wrote:
| CMHC doesn't insure mortgages where the property value is
| equal to greater than $1 million, which in the Greater
| Toronto Area essentially limits it to condo purchases.
| flamedoge wrote:
| HSBC Canada is sold to RBC
| forinti wrote:
| Just the other day I read that "to shanghai" is to kidnap or
| trick someone into working for you. I immediately thought of
| HSBC.
| denton-scratch wrote:
| > kidnap or trick
|
| I thought it meant kidnap, specifically to kidnap a sailor in
| port and make him work aboard ship; as in "press gang",
| "pressed man".
| whoswho wrote:
| Yes. Downtown Toronto is full of store-fronts.
| SunlightEdge wrote:
| To maybe offer a different perspective: I think the Canadian
| mortgages linked to Chinese accounts will likely all be paid.
| What may be happening is that there is a lot of underground
| chinese financial activity that is not recorded in Canada and
| part of this 'network' is utilized to get money out of china.
| silent_cal wrote:
| It's still fraud
| jabbany wrote:
| You can label it however you want, if both the lender and
| borrower are willing participants, it will be difficult to
| prevent this from happening.
|
| Like mentioned in the article, often times the material is
| very obviously suspicious and banks probably know this and
| still turn a blind eye to it because these borrowers are low
| risk and much less sensitive to the high/rising interest
| rates of today...
| ak217 wrote:
| It's not _that_ difficult. You just appoint an auditor and
| make the bank pay progressively higher fines until they
| figure it out.
|
| American banks learned to be much better at it after 2008.
| And given 2008 and the MBS balance sheets at central banks
| and the municipal budgets propped up by property values and
| national mortgage programs intended to encourage
| homeownership, this is by no means just a matter between
| the bank and its clients, even if you put aside the money
| laundering angle. Mortgage fraud destabilizes economies.
| topspin wrote:
| > if both the lender and borrower are willing participants
|
| Eventually this behavior goes overboard and everything
| crashes. In the meantime, law-abiding people are screwed by
| the bubble. Then they are made to pay for the clean up.
|
| Fraud is costly, and rationalizing it contributes to the
| problem.
| jabbany wrote:
| > this behavior goes overboard and everything crashes
|
| Maybe... but you need to keep in mind most of these
| people are not really building a bubble. Unlike the
| subprime mortgage crisis, where things were built on
| inflated valuations, many borrowers in this "scheme" do
| have more than enough funds to cover the entire mortgage.
| It's just that their capital is relatively illiquid. This
| is also why the high interest rates have not
| significantly affected this.
|
| The effects on housing cost is because of natural market
| merging where chinese properties are "overvalued"
| domestically. This is actually not new, and happened with
| Japan at some point as well.
|
| That being said, the main risk for this is actually
| geopolitical... Should capital controls tighten (or,
| like, if war were to occur etc.) then there is a much
| bigger risk, but many are banking on the fact that, at
| least given the signs today, that is still unlikely.
| maxglute wrote:
| But the "fraud" is slowing the bubble. Without capita
| controls, PRC buyers would operate like any other
| international buyer, except there would be a shit load
| more of them who would do more cash purchases and outbit
| everyone else. This fraud to circumvent capital controls
| is why wealthy PRC buyers who liquidated their extra
| multi million dollar tier1 units only bought 1 house in
| Canada instead of 3.
| JumpCrisscross wrote:
| > _You can label it however you want, if both the lender
| and borrower are willing participants, it will be difficult
| to prevent this from happening_
|
| These aren't purely private transactions. If HSBC Canada
| fails, Ottawa is on the hook. The defrauded party here is
| the public. (And possibly the bank's lenders and
| shareholders.)
| jabbany wrote:
| This is somewhat counterintuitive but... the fraudulent
| mortgages are not more risky, they are often times more
| stable than other local borrowers.
|
| I think what many people are imagining is the subprime
| mortgage situation of yore. But in this case, a lot of
| the "fraud" is the result of knock on effects from
| capital controls in the PRC. Many (new and aspiring
| immigrants) have capital from sales of their property in
| China, but due to capital controls, cannot get it out
| quickly. They have to do it in $50k/year chunks.
|
| Usually a loan or mortgage is the solution for this, but
| those depend on _income_ rather than _wealth_, so
| normally these people can't take out as much as they need
| to, even though they could easily back actual value of
| the mortgage. So there's a little collusion between banks
| and mortgage brokers to get in on this market gap
| (probably more so now that interest rates are high, which
| these borrowers are much less sensitive to).
|
| Of course, there are risks, but those risks are tied to
| more geopolitical circumstances and less market-driven,
| and apparently banks are more willing to take their
| chances on that.
| JumpCrisscross wrote:
| > _the fraudulent mortgages are not more risky, they are
| often times more stable than other local borrowers_
|
| You don't know. The paperwork's fraudulent.
|
| > _Many (new and aspiring immigrants) have capital from
| sales of their property in China, but due to capital
| controls, cannot get it out quickly_
|
| The Chinese property market is in freefall. And capital
| controls can get tightened. Either condition will result
| in default.
| logicchains wrote:
| It's a small wrong to right the much bigger wrong of the
| tyrannical Chinese government preventing people from taking
| their money out of the country.
| cm2187 wrote:
| I won't throw a stone at anyone trying to circumvent chinese
| capital controls. Though Canada isn't the place I would go to
| escape financial repression.
| mtalantikite wrote:
| Tangentially related, there was an undercover Vice News report
| on the connections between Chinese Triads and the Mexico/US
| fentanyl trade a couple months ago [1]. I also wouldn't be
| surprised if there were underground networks of capital in
| Canada that were related to these mortgages.
|
| [1] https://www.youtube.com/watch?v=E8wEGVIPJ_4
| uLogMicheal wrote:
| It's not a matter of if they get paid, it's the unfair
| advantage this gives in an already competitive market. 2/3 of
| these properties are probably rented out at inflated prices and
| the two probably pay the mortgage of the third owners live in.
| This is a free money glitch, aka fraud.
| jeffbee wrote:
| If the market will bear the rent, why does changing the
| nationality of the owner improve anything?
| uLogMicheal wrote:
| This has nothing to do with nationality and everything to
| do with fraud. If other nations are doing this, it should
| stop too. Telling lies to acquire loans is illegal and
| inflates prices for everyone working legitimately.
| jeffbee wrote:
| Yeah but you seem to be suggested that without this
| yellow peril, the tenants would be, for some reason,
| getting a better deal. As if the problem is actually that
| Chinese people are better at price finding.
| rybosworld wrote:
| The market's not bearing rent so much as existing property
| owners are colluding to prevent new construction.
|
| If new construction wasn't so aggressively blocked in some
| major cities (San Francisco, Boston, all of Canada it
| seems), then the rents would not be nearly as high as they
| are.
|
| Wealthy property owners are behaving a lot like a cartel in
| many places.
| jeffbee wrote:
| Exactly. The discourse about foreign buyers of homes in
| Canada is centered on the morally bankrupt notion that it
| is only wrong if that race exploits the system. If a good
| old white guy exploits the same system it is not worth
| mentioning. What I am saying, and you seem to concur, is
| that the system itself is the problem. The identity of
| the person exploiting it is irrelevant unless you are a
| racist.
| JumpCrisscross wrote:
| > _think the Canadian mortgages linked to Chinese accounts will
| likely all be paid_
|
| Out of curiosity, why? China's stock market is melting down in
| the midst of persistent deflation. A lot of people who thought
| they had liquidity may not anymore. Beijing could open the
| taps, but then that puts pressure on the currency.
| cbsmith wrote:
| > Out of curiosity, why? China's stock market is melting down
| in the midst of persistent deflation. A lot of people who
| thought they had liquidity may not anymore. Beijing could
| open the taps, but then that puts pressure on the currency.
|
| The whole point of the money laundering operation is to get
| the money out of the country. China going to pot only
| accelerates it.
| JumpCrisscross wrote:
| > _China going to pot only accelerates it_
|
| You have to have money to launder it. Also, if the currency
| keeps getting hammered, Beijing will crack down on the exit
| channels.
| avidiax wrote:
| > I think the Canadian mortgages linked to Chinese accounts
| will likely all be paid.
|
| This is a "heads, I win", "tails, you lose" type of scam. The
| mortgage holders are all judgement proof. They have no income
| or assets to go after. So if the housing market crashes, the
| banks have no recourse.
|
| It's the same as taking out a mortgage and instead of buying a
| house, you go to the casino and bet double or nothing. Sure,
| the intention to pay back is there. But it is contingent on the
| investment performing, and the bank is taking on unknown risks.
| gscott wrote:
| There is probably an unlimited number of people in China
| would would like to own Canada real estate. As long as you
| don't block those sales it can continue forever.
| raydev wrote:
| > So if the housing market crashes, the banks have no
| recourse
|
| The housing market must first crash before the problem is
| tangible, and there's no sign of that happening.
| ilrwbwrkhv wrote:
| I have said this over and over again: Canada is the most
| overrated of all the developed countries.
|
| The whole country is a gigantic house of cards propped up by real
| estate, with horrible service quality, terrible healthcare, no
| jobs, ZERO innovation, risk taking and entrepreneurship.
|
| Having lived and travelled extensively, most Canadians want a
| house somewhere in the woods instead of doing something
| meaningful with their lives or try and innovate to build
| something.
|
| All of this is propped up by rampant levels of immigration from
| China and India. Where US got the best talent from India, Canada
| got the worst, the ones who scam their way here and take the
| lowest level jobs.
|
| Now all of this is coming home to roost. The next decade will be
| Canada's worst and if they do not learn that risk taking and
| entrepreneurship is the only way out of the mess they find
| themselves in, they will become a third world country in another
| decade.
| LegitShady wrote:
| as a canadian, you're not wrong.
| hnarn wrote:
| > The whole country is a gigantic house of cards propped up by
| real estate
|
| That's quite the statement, I assume you have quite the source
| for it.
|
| The price-to-rent ratio isn't that far off from the US, for
| example.
| hnav wrote:
| but incomes are generally much lower
| lifeisgood99 wrote:
| That's tech bias. The pay for random office jobs or trade
| jobs are similar.
| ysofunny wrote:
| there's a tiktoker that compares real states prices in Canada
| and in various parts of Europe
|
| it's funny to see dozens of examples of european castles
| (buildings with tens of rooms and bathrooms, plus huge
| gardens) whose cost is in the same ballpark as 2 or 3 bedroom
| houses in random (but well [sub]urbanized) parts of Canada
| JumpCrisscross wrote:
| > _dozens of examples of european castles (buildings with
| tens of rooms and bathrooms, plus huge gardens) whose cost
| is in the same ballpark as 2 or 3 bedroom houses_
|
| Castles are a bit of a scam. The old aristocratic families
| that still own them, _e.g._ in Germany, tend to have a
| state subsidy for maintainance. If you didn 't have the
| luck of being born into those families, you get all of the
| joys of Medieval engineering twinned to modern historic
| preservation bureuacracy.
| cycrutchfield wrote:
| Wait until you see the maintenance and heating costs for
| those castles, or any old building in general. The sticker
| price isn't the whole story.
| raydev wrote:
| > The price-to-rent ratio isn't that far off from the US, for
| example.
|
| I'd love to see the numbers that back this up that also don't
| include SF, LA, NYC, Miami, or Seattle.
| nimbius wrote:
| >most Canadians want a house somewhere in the woods instead of
| doing something meaningful with their lives or try and innovate
| to build something.
|
| to be fair most Canadians were promised this as part of their
| countries stratospheric growth under neoliberalist policies.
| that they are not capable of it is no fault of their own. that
| they want this is at all is not a bane.
|
| > Where US got the best talent from India, Canada got the
| worst, the ones who scam their way here and take the lowest
| level jobs.
|
| dividing immigrants into "good ones" and "bad ones" is pretty
| vile, but as an american i must acquiesce we've played that
| game for a long time. before hispanics it was asians, before
| asians it was europeans (the irish particularly.) turns out
| blaming immigration is a fools errand to distract from domestic
| class warfare.
|
| the real question for Canada now is not "how do we punish the
| immigrant" but what do elected leaders in the political class
| do to affect meaningful restitution and corrective action in
| the face of what is a national crisis. Either they see clearly
| and will reform their own cash cow, or they will blindly ride
| it off a cliff in the hopes that through their own profit they
| can weather the coming storm.
| Archelaos wrote:
| > dividing immigrants into "good ones" and "bad ones" is
| pretty vile
|
| Isn't that the case everywhere where immigration is
| restricted?
| throwaway894345 wrote:
| It seems the parent is trying to imply that the grandparent
| is arguing that some immigrant races are good and others
| bad (hence his reference to US hispanics, asians,
| europeans, etc) even though the grandparent is very
| explicitly arguing that the best immigrants from India and
| China respectively go to the USA while the mediocre
| immigrants from those countries go to Canada (I'm not
| arguing for or against that claim, but I can understand how
| it is different than what the parent alleges).
| maxglute wrote:
| >dividing immigrants into "good ones" and "bad ones" is
| pretty vile
|
| TBF that's the inherent insinuation in points / skill based
| immigration. The goal of immigration driven growth to is to
| maximize return potential via brain drain and wealth drain
| from other countries who foot the bill for talent
| development, or to extract wealth via foreign elites who
| accumulated wealth in host countries. When crisis reach
| critcal levels when it obviously becomes a class warfare
| issue, the solution is going to be punish the immigrants,
| before them become PRs or citizens. It's not the immigrants
| fault for policy failures, but until they get right to vote
| they are escape goats for bad politics.
| nyolfen wrote:
| > turns out blaming immigration is a fools errand to distract
| from domestic class warfare
|
| our post-hart-cellar immigration policy is a tool of class
| warfare via wage suppression. real wages have remained flat
| while productivity gains have steadily persisted, due to
| several systemic changes since the crisis of 1973, among them
| flinging the doors open to dilute the cost of american labor;
| this and outsourcing and globalizing supply chains also go
| hand-in-hand with breaking union power
| dxbydt wrote:
| > > Where US got the best talent from India, Canada got the
| worst,
|
| In India when we graduated our professors would say - you are
| really good, you should go to the usa. you are quite
| mediocre, go try your luck in canada. and you, you are a C
| student, even canada won't take you in. go get married to
| some indian lady, get a nice fat dowry, raise two kids and
| send them to college here, maybe they will get better grades
| than you.
|
| It was perhaps said in jest, but like everything else, there
| was an element of truth to it. For quite a while, the word
| canada itself became a pejorative. Many south indian films
| have a scene where the hero returns after studying abroad &
| wants to get married, & the heroine's father generally wants
| to make sure he is a good student & not a scamster from
| canada.
| ncann wrote:
| > the heroine's father generally wants to make sure he is a
| good student & not a scamster from canada.
|
| That sounds hilarious, do you have some example films that
| I can check out?
| filoleg wrote:
| > dividing immigrants into "good ones" and "bad ones" is
| pretty vile, but as an american i must acquiesce we've played
| that game for a long time. before hispanics it was asians,
| before asians it was europeans (the irish particularly.)
|
| This is just an entirely incorrect reading of what the
| grandparent comment said.
|
| They are not saying that immigrants from some places are
| good, and immigrants from some other places are bad (or
| immigrants of one ethnicity vs. another). Regardless of
| whether you agree with them or not (which is a very valid
| thing to disagree with, if that's how you feel), they
| explicitly said that the US gets "good" immigrants from those
| groups, while Canada gets more "mediocre" immigrants from
| those exact same groups.
|
| There is no classification or separation by
| nationality/ethnicity going on in the grandparent comment,
| despite you treating it like there is.
| evilfred wrote:
| the US divides immigrants into good and bad due to its racist
| Green Card country queues
| guidedlight wrote:
| Everything you write is also true if you replace Canada with
| Australia.
| robocat wrote:
| New Zealander here: much the same.
|
| New Zealanders definitely hate entrepreneurship - one
| political party wanted to introduce a wealth tax if you had
| more than $1 million equity. Median house price in Auckland
| is just over $1 million! Auckland has about 30% of the
| population, and house affordability (price compared to
| income) is similar as bad as Sydney or San Francisco.
|
| I have done okay for myself founding a software business and
| I notice the tall poppy syndrome from friends. Plus the
| relentless attack on my hard earned savings by a grifter
| government. And shit support for businesses to start-up or
| function (government incentives are mostly negative, and the
| positive incentives are incredibly badly run).
|
| Fortunately we are building more houses in New Zealand (low
| single digit percentage growth) but unfortunately immigration
| is exceeding supply. We need the immigrants because we aren't
| breeding enough New Zealanders.
|
| My experience of our government healthcare system is mostly
| positive.
|
| I don't understand it: we should want people to save for
| their retirement but all the incentives to save are negative.
| The main taxation incentive is to gear up and borrow money
| for property. Then that blows up of course.
|
| Even our right leaning government seems to want to consider a
| capital-gains-tax. The existing taxes screw any reason to
| invest in the stock market.
|
| I'm whinging: I think it is a good place to live but I feel a
| comfortable retirement is becoming an unacheivable dream.
| quink wrote:
| Guardian, December 2023:
|
| > The wealth tax contemplated by New Zealand Labour would
| have required couples to pay an annual levy of 1.5% on any
| assets they held over a $10m threshold. The estimated
| $3.8bn in revenue would have funded income-tax cuts for the
| vast majority of Kiwis. Labour's potential coalition
| partners, the Greens and the indigenous-led Te Pati Maori,
| ran on similar platforms.
|
| > Plus the relentless attack on my hard earned savings by a
| grifter government.
|
| $150,000 a year if you own $20 million, $0 if they somehow
| attacked you all the way to a pitiful $10 million, and in
| return tax cuts for those doing worse than you, and they
| did not get elected.
|
| I'm not seeing the problem.
| christkv wrote:
| What leads to is no willingness to invest in anything
| other than bonds to ensure you have enough money to pay
| the tax.
| xcrunner529 wrote:
| 150k from 20m of assets? Really? Lmao
| robocat wrote:
| > I'm not seeing the problem.
|
| The problem is what is the incentive to keep working once
| you've earned a house and bach? Why bother save for
| retirement if your savings are to be taken from you at a
| significant percentage per year? A few percent is a
| _huge_ penalty (see index funds versus mutual funds), and
| the wealth tax is on top of taxation of salary and
| dividends. assets over $1m - a threshold
| the party thought would hit the wealthiest 6 per cent of
| New Zealanders. The higher [$2m] threshold means only the
| wealthiest 0.7 per cent of households will be targeted.
| The $2m threshold is a net figure, meaning people with
| mortgages and other debts would need $2m of equity before
| they began paying the tax.
|
| I'm not talking about Labour, I'm talking about the
| Green's 2.5% wealth tax 2023:
| https://www.nzherald.co.nz/nz/politics/wealth-tax-hikes-
| will...
|
| And incentive is to borrow money on property which is
| whacko, and then next thing CGT will also be added.
|
| Houses should be for living in, not financial
| instruments.
| xcrunner529 wrote:
| lol what? That's the same old tax argument over again. I
| thought you all were motivated by things other than
| money? You know, that entrepreneurial spirit?
|
| The incentive is it's still a fuckton more money. You're
| not taxed at 100% and in turn you live in a country with
| better services. The amount of money wasted by the rich
| is hilarious when combined with this take.
| robocat wrote:
| The whole point of a business is to make a profit: I
| worked hard because I am middle aged and had no
| retirement savings - my other choice was FIRE or to suck
| on the government's teat. Running a "business" for status
| is defined as a hobby.
|
| 1 in 10 businesses survive. Why bother starting one if
| you don't get your 10x return? If you've got one, why
| bother trying to be a serial entrepreneur if it's all
| gonna be taxed? Do you think New Zealand should leave the
| entrepreneurship to the USA and we can just buy what we
| need from US multinationals?
|
| > The incentive is it's still a fuckton more money.
|
| It just isn't. The people I know earning way more than I
| don't have anything significantly better. Mostly a nice
| house and a nice car and if they're lucky a bach.
|
| Marginal incentives matter. Over 50% of my personal
| income goes on taxes including GST.
|
| My life is similar to most any professional worker. I
| have never owned a new car. I know solo-mums that didn't
| work for over a decade with more equity in their home
| than me. My biggest expense is tax, my second biggest is
| my mortgage.
|
| > The amount of money wasted by the rich
|
| Just the rich eh? Everybody else is so much more careful!
| Watch out with your stereotypes - I'm guessing you don't
| like them applied to yourself?
| xcrunner529 wrote:
| Because your business doesn't just start earning 20m and
| that's still only 150000. Are you arguing against fake
| numbers?
| speg wrote:
| As a Canadian who has ideas of building an off grid cabin in
| the woods, what would be a more meaningful life?
|
| The stereotypical poor American working menial jobs into their
| senior years without affordable healthcare doesn't sound much
| better...
| randomdata wrote:
| Also as a Canadian currently living in an urban area, I want
| to move to the woods so I have the room _to build things and
| innovate_ regularly. I don 't have enough land for a workshop
| here. Outside of maybe software that you can pack onto a
| personal computer, you're not going to be able to do much
| innovating without much space.
| yieldcrv wrote:
| its a discussion about the economy, not the quality of life
| and the accuracy of the aspirations
| m3kw9 wrote:
| Despite what you have "heard" the heath care system is quite
| nice
| canadiantim wrote:
| I'd like to strongly disagree with you. Parts of the health
| care system are quite nice, but other parts have completely
| collapsed causing multi year delays for basic healthcare
| services or even finding a family doctor, which is not quite
| so nice.
| m3kw9 wrote:
| What is your experience in finding a doc?
| raydev wrote:
| How quickly can you book an appointment with your family
| doctor? How did you acquire your family doctor?
| m3kw9 wrote:
| Most times you can do walk ins same day, but finding a
| family doctor depends on location so my experience can be
| different
| evilfred wrote:
| 1 million British Columbians who can't find a family doctor,
| and thousands who have to wait 6+ months for cancer treatment
| , disagree with you
| 98codes wrote:
| > most Canadians want a house somewhere in the woods
|
| As opposed to most Americans, at least those that have been in
| the industry for a decade or more, who would rather be as far
| from tech as possible, in whatever direction.
|
| See also: https://imgur.com/vbFNbON
| penguin_booze wrote:
| > Now all of this is coming home to roost
|
| This could be true of any country that's accepting immigrants.
| Inviting countries must be selecive of whom the let in, what
| they bring with them, and whether and how well the inbound
| population assimilate, thus retaining the essence of its extant
| values. When a country has no control of its immigration
| (whether by choice or otherwise), or is lax about it, all kinds
| of birds come home to roost. Some birds lay eggs; others just
| poop.
| ysofunny wrote:
| at least now that the king of england has cancer they can
| somehow negotiate their way out of having to reprint all their
| money? that should be more cost effective than exiting the
| commonwealth? ahahah
| vizzier wrote:
| Why would they need to reprint money, old monarch's faces are
| still perfectly valid currency.
| ysofunny wrote:
| hmmm, so if the current king wants to see their face on
| money they gotta pay for it themselves? I guess this isn't
| that important given that governments want to push a
| cashless economy now
| mgbmtl wrote:
| I'm surprised that you didn't mention the role of petrol in
| Alberta and hydro power in Quebec. They play a key role to
| sustaining the economy and social services. It's not just that
| though.
|
| People are definitely less risk-taking, workaholics, despite
| having a social safety net, or maybe because of it. It's just
| maybe less in our culture to "go big or go home". Having a
| cabin in the woods and free time to live your life is nice.
|
| Maybe because I live in Quebec, and language is definitely a
| barrier (requires immigrants to be trilingual), but I haven't
| met many shady people from China or India, on the contrary. My
| ancestors came here by accident from different countries,
| taking a random boat in a port, worked hard and made it. I hope
| we can give that opportunity to others too.
| JumpCrisscross wrote:
| > _Canada is the most overrated of all the developed countries_
|
| You're also a politically stable energy and resource exporter
| bang next to a global economic superpower and security
| guarantor. Oh, and access to two oceans and soon a third.
|
| Canada has plenty of problems. But it's also tremendously
| blessed.
| acchow wrote:
| Likely the reason it doesn't need to accomplish much more to
| be a good place to live
| gspetr wrote:
| What's funny is that if we substitute Canada with Russia in
| your comment, every word of it still holds true.
|
| I suppose "stable" and "stagnant" are two sides of the same
| coin.
| edgyquant wrote:
| Yeah, Russia is Chinas Canada
| _Parfait_ wrote:
| What an insane take
| throwawaymaths wrote:
| The US does not make a cultural claim to any part of
| Canada, except possibly jokingly Alberta, which might
| actually be "Alberta jokingly makes a threat to secede to
| the US" (the US does not really want alberta and its
| disgustingly sulfurous oil).
|
| China is constantly threatening to invade the Russian far
| east and retake haishenwai
| dgfitz wrote:
| That is the tragic part about Russia. They don't need to be
| Chinas Canada. They have all the protentional in the world
| play nice in the world sandbox and prosper.
| csdreamer7 wrote:
| Calling China Russia's security guarantor is a stretch at
| best. The military difference between the two, while
| growing, is no where near the difference between the USA
| and Canada.
|
| I would argue Russia's nuclear arsenal is a far more
| reliable guarantor of their security then China would ever
| be.
| unsupp0rted wrote:
| Also has China ever claimed to be Russia's security
| guarantor?
|
| The US and Canada, if nothing else, are both in NATO.
| seanmcdirmid wrote:
| Russia are frenemies at best. They are allies today, but
| they have fought border skirmishes in recent times, and
| they are worried about Chinese moving to and eventually
| taking over the Russian Far East
| diego_moita wrote:
| As an immigrant into Canada: even if that description were
| true, it still would make it a lot better than the majority of
| other countries in the world.
|
| Luckily, Canada is a lot better than your description.
| ashconnor wrote:
| The comment is complete hyperbole and isn't even correct.
| Real estate is bigger in the US than Canada.
|
| Every developed country is running into immigration and
| housing issues. Canada isn't alone and isn't even the worst
| case.
| tharmas wrote:
| Yes, but there's Canada's climate. If you try to live in a
| tent outdoors in Canada you will likely die.
| seanmcdirmid wrote:
| You can do it Vancouver. Seattle and Vancouver's
| homelessness problem are remarkably similar, only
| differing in how Canada handles it better than the
| Americans do.
| xcrunner529 wrote:
| Isn't allowing everyone and essentially recruiting
| immigrants a major cause of the housing crisis and expenses
| in Toronto?
| ashconnor wrote:
| Sure and immigration should be stemmed, short-term, until
| housing reforms can be implemented.
|
| They've already announced measures to reduce student
| visas which were uncapped previously.
|
| https://www.ft.com/content/085cda38-9060-4da1-8532-1a3af9
| cd7...
|
| Still. This isn't going to solve the issue. They need to
| build far more than they currently are doing. They need
| to strip local government of its veto over housing. They
| need to definancialize real estate.
| xcrunner529 wrote:
| Yep. It's such a cancer in the US too. So many NIMBY's.
| Toronto when I went was so odd like a mix of dense and
| then houses.
| swat535 wrote:
| OP is comparing Canada to other developed nations. Canada is
| pretty subpar compared to most places in EU or US on all
| fronts: weather, housing, quality of life, innovation and
| salaries.
|
| We have people renting a single bed in the same room for
| 600$/mo in Toronto.
|
| I suppose that however if you are an immigrant from a war
| torn country or a developing country, Canada would look like
| heaven.
| yibg wrote:
| Weather: Canada's weather certainly isn't the best, but not
| really worse than other northern climate countries.
|
| Housing: Large cities like Toronto and Vancouver are
| unaffordable, but so are other large cities like London,
| New York etc. Just like most other countries, if you want
| to pay less for housing, go to a smaller city
|
| Quality of life: how are you measuring this? By most
| measures (life expectancy, crime etc) Canada is well ahead
| of the US.
|
| Innovation and salaries: Innovation is a bit hard to
| define, but salaries are definitely lower than the US. But
| here the US is also an outlier (at least for high earners)
| compared to most other countries. Tech salaries in Canada
| for example aren't lower than most European countries.
| thisisnico wrote:
| As a Canadian, living in Southern Ontario, I couldn't agree
| more with your assessment. Somehow we are ranking #1 on so many
| charts for quality of life etc. I'm starting to believe these
| sites and reviews of Canada are paid for.
|
| We were an incredible country before Trudeau took office. His
| aggressive immigration policy, no economic policy or plan, and
| creation of infighting on social issues, not tackling any of
| the core issues we face as a country, until absolutely forced
| to do so (in this case unlikely re-election).
|
| We need to stop fighting over social issues and start being
| productive towards a stronger, healthier, and happier Canada.
| Social issues can't fixed if people can't afford shelter and
| food.
| onlyrealcuzzo wrote:
| Look at sites that don't take QoL based on neoliberal
| metrics?
| maxglute wrote:
| Canada is Australia, an relatively affluent bureaucracy that
| sells rocks and houses. We have too many people to be Norway,
| where less people, a few high tier sectors and plundering the
| land for other markets can sustain developed QoL. But we could
| do ok on that model if we keep population down and build up a
| few strategic sectors. Except or interests are more subsumed by
| US foreign policy so we can't sell all the rocks we want. See
| the foreign NGO meddling that repeately killed Canada fossil
| expansion plans. Meanwhile US gets first dibs on global English
| talent, and Canadian English talent. And ultimately Canadian
| giants get cut down to size - Nortel, Bombardier due to
| sheninangans. But being US neighbour/sphere is better starting
| condition than most, but it's still hard map to play on.
| cbsmith wrote:
| > The whole country is a gigantic house of cards propped up by
| real estate, with horrible service quality, terrible
| healthcare, no jobs, ZERO innovation, risk taking and
| entrepreneurship.
|
| Canada has generally had a more conservative financial
| industry, which is a large part of why they were able to escape
| the 2008 mortgage crisis, and that, in turn, has lead to a
| stronger real estate market. Additionally, the recent post
| COVID-19 influx of immigrants has driven up demand for housing
| like crazy. There's not a lot of question that the real estate
| market is hot. But...
|
| ...I'd point out that considering it's population, Canada has
| had an impressive number of innovative companies just in the
| tech sector over the years. Alias & Softimage in 3D rendering.
| Shopify in e-commerce. Research in Motion in mobile phones.
| Ecobee in the smart homes/IOT space. Certicom in cryptography.
| Going farther back, Corel was a software giant. There's
| relative newcomers to with Hopper, Imagia, etc. I don't think
| it's fair to say there's no innovation, risk taking, or
| entrepreneurship.
|
| > All of this is propped up by rampant levels of immigration
| from China and India. Where US got the best talent from India,
| Canada got the worst, the ones who scam their way here and take
| the lowest level jobs.
|
| I'm not sure where you get that from. Canada's immigration
| policies have historically been _more_ oriented towards merit
| /highly skilled immigrants than the US.
|
| > Now all of this is coming home to roost. The next decade will
| be Canada's worst and if they do not learn that risk taking and
| entrepreneurship is the only way out of the mess they find
| themselves in, they will become a third world country in
| another decade.
|
| I'm not sure what is fueling your perspective, but there is a
| lot of concern about Canada's economic policy coming out of
| COVID-19, in particular, the big deficits and explosive
| immigration are putting a strain on the economy. However,
| there's a very credible possibility that these will prove to be
| effective "investments" that pay off in the long run.
| Ironically, given your criticisms, Canada is taking on a lot of
| risk!
| faeriechangling wrote:
| I think the conservatism of Canada is overstated and in fact
| Canada is one of the most leveraged countries in the world.
| canucker2016 wrote:
| It's also hard when you're spending money educating your
| citizens for those high paying tech jobs and over half of
| them go to the USA [1] [2] [3] [4].
|
| That and lack of venture capital/funding and, I've heard,
| increased government barriers compared to the USA, reduce the
| number of local tech companies.
|
| The one bright spot in the past decade are the AI hubs in
| Toronto and Montreal - but they seem to be mainly satellite
| offices for USA companies.
|
| [1] https://sexxis.github.io/classprofile/ , 2021 UWaterloo
| SWEng profile
|
| [2] https://uw-se-2020-class-profile.github.io/profile.pdf ,
| 2020 UWaterloo SWEng profile
|
| [3] https://krishn.me/syde-2018-profile.pdf, 2018 UWaterloo
| SysDesEng profile
|
| [4] https://joeyloi.com/SYDE2017classprofile.pdf, 2017
| UWaterloo SysDesEng profile
| calf wrote:
| Canada is the way it is _because_ it is next to the U.S. The
| Canadian brain drain was never entirely the fault of Canada;
| the gravitational pull of U.S. neoliberal capitalism (what you
| uncritically and a-historically call 'risk taking') is a
| nontrivial factor. Canadian protectionism would not go over
| well with its world power neighbour, which seeks to exploit
| intellectual and social capital.
| preommr wrote:
| > The whole country is a gigantic house of cards propped up by
| real estate, with horrible service quality, terrible
| healthcare, no jobs, ZERO innovation, risk taking and
| entrepreneurship.
|
| This is so true it hurts.
|
| And while there's some numbers that outsiders can look at and
| gasp[0] at how absurd it's become, there's a whole lot that
| isn't being tracked or documented. Official immigration numbers
| are ~0.5mn for 2023, but (and I've seen it elsewhere, but I
| can't find it right now) if you use a common sense definition
| that includes all inflow (e.g. asylum seekers, tfw, foreign
| students, etc) then it's 1mn+. It's insane for a country of
| <40mn, with highly socialized services.
|
| The quality of life in Canada is horrid in a way that's not
| comparable to anywhere else other than maybe australia.
| Everything is silly expensive, with low salaries, and it's not
| like in europe where you can travel 3 hours to go somwehere
| with cheaper services. It's crazy. Or what about crime, the
| right wing, tough on crime party leader yesterday said that if
| someone has 3 convictions for car theft that it should mean 3
| years. It's no wonder that I know some crazy personal stories
| about people getting their cars stolen and the police doing
| nothing.
|
| Anyways, I don't want to rant even more, all I can hope is that
| for younger people in Canada to realize that the best thing
| they can do is hop to the US or something.
|
| [0] https://www.financialsamurai.com/what-if-the-u-s-housing-
| mar...
| tasuki wrote:
| I worked with an Indian migrant to Canada. He was very good at
| his job, a great team player, and overall an amazing guy.
|
| Your description is unfair.
| ranger_danger wrote:
| > terrible healthcare
|
| that's funny because they sure love to rub their free
| healthcare in Americans' faces often
| onlyrealcuzzo wrote:
| > Where US got the best talent from India, Canada got the
| worst, the ones who scam their way here and take the lowest
| level jobs.
|
| Source?
|
| I haven't heard this claim before.
| vexna wrote:
| Canada currently has an issue with handing out way too many
| student visas to students going to strip mall diploma mills.
| I believe the federal government has just enforced a cap for
| the next 2 years.
| boringg wrote:
| It's annoying that the top comment isn't related to the article
| but just a self-hating Canadian ranting about the current woes
| of the country. It's also classic Canadian behavior.
| EasyMark wrote:
| I would posit that the US is headed down a similar road with
| christofascism in the red states. They seem to be in a race to
| the bottom when it comes to freedom and prosperity. Texas once
| moderated that but no more, I'm due to move out of this in a
| couple of months and probably in a nick of time. So Canada
| might not be alone.
| faeriechangling wrote:
| Those christofascist states have been seeing immigration
| inflows, are recently leading economically, and generally
| aren't as screwed up reproductively where families are
| treated as expendable resources to be exploited for labour
| until they burn out like in blue states and Canada.
|
| The left has done many nice things to ensure human rights and
| hedonism (not saying that negatively) but in the process all
| the values and traditions they deemed unimportant in the name
| of progress are catching up with them and I only seeing this
| intensify over time unless blue states and Canada have a
| serious come to Jesus moment. The current reality of blue
| states is they can ONLY exist in a world where places even
| more regressive than the red states exist and supply them
| with a constant supply of population to burn through and
| oddly nobody on the left seems to be all that concerned with
| this even though it will collapse blue state values and
| economics in less than a century as global population
| plateaus.
|
| The American red states don't strike me as a paragon of
| morality but they do strike me as one of the most relatively
| sustainable and affluent and "normal" cultures in the
| developed world, and affluent goes a long way.
|
| If you're expecting Canada to be a refuge from a conservative
| wave you're likely to be disappointed because it and the blue
| states have much of the same systemic problems and it will be
| pressured to reform in much the same way.
| __loam wrote:
| > Having lived and travelled extensively, most Canadians want a
| house somewhere in the woods instead of doing something
| meaningful with their lives or try and innovate to build
| something.
|
| Do you ever think about what you're writing and think "I'm an
| ass hole"?
| dang wrote:
| Ok, but please don't take HN threads on generic flamewar
| tangents. This is in the site guidelines:
| https://news.ycombinator.com/newsguidelines.html.
|
| Edit: looks like we had to ask you exactly this before:
| https://news.ycombinator.com/item?id=34844518, about exactly
| the same topic. Can you please not do this on HN? It's not what
| this site is for, and destroys what it is for.
| lawrenceyan wrote:
| Nah, have you seen what comes out of Waterloo and University of
| Toronto? Canada will be fine.
| Finnucane wrote:
| "HSBC is at the forefront of efforts to identify, prevent and
| deter financial crime ... We will not do business with
| individuals or entities we believe are engaged in illicit
| conduct."
|
| Much Lol.
| 29athrowaway wrote:
| Thanks to fractional reserve banking, most money is already fake
| anyways.
| gnatman wrote:
| Sounds familiar!
|
| https://www.nytimes.com/2015/02/13/upshot/how-mortgage-fraud...
|
| https://www.justice.gov/opa/pr/wells-fargo-agrees-pay-209-bi...
| m3kw9 wrote:
| All you need to know " The official noted that other nations
| require tax agencies to verify incomes for mortgages, which isn't
| the case in Canada."
| rafaelero wrote:
| If only there was a better store-of-value asset in the world than
| real-estate. The pressure over rents and houses would be much
| improved.
| frozenport wrote:
| Those banks effectively issued sub-prime mortgages, in part due
| to obvious fraud.
|
| Will Canadians let them fail?
| Ericson2314 wrote:
| Canada needs more housing supply. Blaming foreigners' mortgage
| applications, sketchy or otherwise, is just cope.
| cbsmith wrote:
| Canada does need more housing supply, and ironically an influx
| of fraudulent real estate money like this helps to fuel more
| growth in the supply.
|
| Still, fraud is fraud. Stopping it won't fix Canada's housing
| problems, but that's not a reason to stand idly by.
| Ericson2314 wrote:
| I would say land value tax makes mortgage fraud a lot less
| enticing ;)
|
| Sapping demand for the crime is the most effective
| enforcement! (Like Semaglutide is probably the best silver
| bullet yet to "win the drug war"...)
| stainablesteel wrote:
| real estate in canada is so expensive that i think it will
| ironically cause the jobs to become worthless, and this is the
| only comeuppance that will bring the housing prices back down is
| when people give up on living there
| cloudedcordial wrote:
| The issue is not new. I am of East Asian heritage and live in
| Canada. Several people asked me causally why I went to school and
| had a regular job. They explained that with the "Chinese money" I
| should not compete for jobs with folks who really needed the
| money.
|
| Smh...
| bonestamp2 wrote:
| > during the Covid-19 pandemic, because Canadian casinos were
| closed, Chinese underground banking schemes evolved
|
| Hang on, what... I want to hear more about the Chinese
| underground casino stuff.
| msie wrote:
| Sam Cooper makes a living with China xenophobia. He was fired
| from his stint at Global for accusing a Canadian MP of colluding
| with China according to "sources". That MP sued Global who fired
| Cooper. So I take his articles with a huge grain of salt.
| canadiantim wrote:
| Well atleast we know where you stand tho
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