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Home Capital crisis not a sign of ‘roach motel’ in Canada’s mortgage market
business briefing
Michael Babad

This article was published more than 6 years ago. Some information may no longer be current.

Briefing highlights

  • Home Capital crisis no sign of ‘roach motel’
  • Finds buyer for Home Trust mortgages
  • Valeant swings to quarterly profit
  • George Weston raises dividend
“Canada's Minsky moment? No, it's complicated.”
Deutsche Bank

Observers are telling the short-Canada crowd in no uncertain terms that the crisis at Home Capital Group Inc. is not a Minsky moment.

Or, as Deutsche Bank put it, there’s no “undiscovered roach motel lurking” in Canada’s mortgage market.

“I find that some global accounts are in search of evidence that the problems that plagued non-traditional or non-bank players in markets like the U.K. and U.S. before the global financial crisis are becoming evident in Canada,” said Derek Holt, Bank of Nova Scotia’s head of capital markets economics.

“This is motivating a next-big-short mentality that has been hanging over the Canadian market for weeks now.”

This comes as the company said today it has found a buyer for Home Trust mortgages, extending a lifeline and boosting its stock.

First and foremost, there is no broad threat in Canada, said Mr. Holt and others, noting the differences between the country’s mortgage market and those of other countries.

But C