Big shot syndrome (BSS). It afflicts cronies especially. It is a predisposition to Big Shot Syndrome that drives so many toward cronyism after all.
Canadian Finance Minister boasts about Crony Capitalist Bailout of collapsed mortgage lender. But his assumptions might be wrong.
“Just like I said, a back door bailout in Exchange for something down the line. Very very dirty,” tweeted Bay Area short-seller Marc Cohodes in response to Canadian Finance Minister Bill Morneau’s gloating about the government’s role in the bailout of Home Capital Group.
Home Capital Group is Canada’s largest alternative mortgage lender. It focuses on new immigrants and subprime borrowers that have been turned down by the banks. It had been melting down ever since revelations of liar loans surfaced in 2015. Liar loans don’t exist in Canada’s clean housing market. They’re a US thing. By April this year, Home Capital was collapsing as a run on its deposits crushed its funding sources. A very onerous and controversial funding package was arranged in all haste to keep it afloat, as the industry – and as we now know, the Canadian government – worried about contagion.
The Canadian housing bubble is sitting on needles, and everyone knows it.