Three Odd Comments

Vancouver House Prices:

It was reported on Monday that Vancouver residential real estate is among the least affordable among the major cities of the world. The reason is obvious to any one who has the least familiarity with the city. While the number of properties, particularly in higher price range, being purchased by absentee citizens of Asian origin is not insignificant and helps to raise the prices, the main reason is the size of drug trade. The unreported income from local and international drug traffic impacts on calculated affordability in two ways: it is not included in the income in statistics making the affordability factor lower than it really is and much of drug trade income is invested in housing pushing its price up. It is a similar situation to many Italians owning luxury cars and residences while reporting paltry incomes to avoid the taxes. It makes the life of honest Vancouverites harder but one may consider it a just punishment for tolerating, even supporting, the drug trade.

Banks and Risky Ventures:

Mark Carney, Governor of Bank of Canada, has expressed reservation on several occasions about the proposed law south of the border restricting the banks from indulging in risky trades. It is this kind of activity that caused the banking to freeze in 2008 globally and cost hundreds of billions of dollars to activate it again. Mr. Carney argues that banks are needed to trade government bonds because there is no other agency to ‘make the market’ in government bonds particularly when the risks are high and without it the cost of borrowing by the governments will rise. The argument is simplistic and its three components have easy answers. First, the main reason for restricting banks from such activity is that their actions have impact on all aspects of our lives and no one can afford for them to fail by indulging in risky ventures which sometimes turn sour. Second, if the banks are forbidden to do it, the slack will be picked up by large investment funds who would not freeze all business activity if they failed and would not need to be bailed out. Third and most important, if the governments have to pay a premium to prevent the repeat of 2008 crisis, it is not a great burden considering the value of the insurance. Surely, the Governor of the Bank of Canada realizes that the problems in Europe have been exacerbated by the large holdings of risky bonds acquired by the European banks, no doubt, because of their higher yields, without thoroughly evaluating the ability of the governments to repay them. If banks were restricted by law to stay away from risky ventures, governments of Greece and other troubled countries would have been forced to mend their finances when it could have been done instead of borrowing money to bribe the electorate and delaying the outcome till it may be too late.

Why Second Marriages Succeed?

The second marriage of two people who had messy divorces is often happier than most lasting marriages at their later stage. I am not a psychologist and I am known for not having any Emotional Intelligence. Therefore, I should not be expressing an opinion on the issue but I can’t resist being an undisciplined person that I am. After years of demanding jobs and daily chore of bringing up the kids, each partner has a memory bank of events during their time together. Human nature being what it is, pleasant memories are pushed to the back; at least the contribution of the partner to make them pleasant does. On the other hand, the role of the partner in unhappy recollections is at the front of the stage and each time there is a disagreement the movie of them all is replayed in the mind multiplying the grief caused by the event itself and drowning all other pleasantness in life. For a new couple with not much history behind them an unpleasant episode is just one bother. There is no load of accumulated misery of past years to bring forth and it is forgotten as soon as something good happens as it most often does.