Timeline - 14th of September the venerable firm Merrill Lynch gets into unthinkable trouble – they fail. Not really – they got saved in a fire sale. Still ugly for such a long standing giant.

10 days later – Local Merrill Lynch economists - David Wolf & Carolyn Kwan, predict a mortgage meltdown will whack the Canadian real estate market, the magnitude of which would equal the events in the US.

Now on a sunny day, I’m told I can see far enough to find the storm clouds. I call it forward looking radar. What Msr Wolf and Mdm Kwan did was either a sour grape approach to their new, or as yet, undetermined employment, or just plain trying to join an alarmist bandwagon a tad too late.

Silly goofs, while I think we here in La-Belle Canada think ourselves too invincible, David & Carolyn fail to understand that the mortgage meltdown was precipitated by Money Traders – the poor homeowners fell into the soup after.

Not to replay the facts, stats or arguments here, just only to say – hey David, hey Carolyn – did you see the fundamental differences?
If risk had been priced in, the economy could have handled Homeowners that got whacked. BUT the economy could not handle the FI’s that leveraged, derivatized, swapped and put 125% of the face value of mortgage pools out at bonused rates “cause it was just so damned attractive”. And the math, if it ever could be figured out, which I’m sure won’t happen, then it’s likely a good bet that the economists wrote solid opinions as to why a bundle of 100 million of mortgage backed securities ended up selling for 150 or even 200 million due to what? Salesmanship, confusion or just being too tired to care.

Yes the Canadian market will likely have price adjustments –but not of the magnitude you unhappy birds suggest. The trigger to our local markets will be as in the rest of the world – general consumer confidence. The driver could be employment levels – and if they take a hit, well then it won’t be mortgage meltdown – it would’ve been economic.

To be fair, its been tough to see days ahead, never mind months, but David and Carolyn are late, late in the game and wrong side of the 49th.