Mortgage debt in Canada has ballooned to more than $2 trillion. According to a new study, the banks are largely to blame
Canada’s political and media class has spent years chasing convenient villains to blame for the housing crisis, pointing the finger at foreign buyers, immigrants, supply shortages, zoning rules, or an overheated market.
But these diversions obscure the real engine of the disaster: a banking system that has spent decades pumping cheap credit into housing with reckless abandon, inflating a bubble that ensures Canadians, not lenders, will be left holding the bag.
According to a new report by The Shift, an international housing rights organization, Canada’s “Big Six” banks—RBC, TD, BMO, Scotiabank, CIBC, and National Bank—are chiefly responsible for engineering this debt-fuelled bubble. Their lending practices are actively creating the high price of housing, and feeding a national cycle of extreme indebtedness.
I'm coming to DEFCON! On FRIDAY (Aug 9), I'm emceeing the EFF POKER TOURNAMENT (noon at the Horseshoe Poker Room), and appearing on the BRICKED AND ABANDONED panel (5PM, LVCC - L1 - HW1–11–01). On SATURDAY (Aug 10), I'm giving a keynote called "DISENSHITTIFY OR DIE! How hackers can seize the means of computation and build a new, good internet that is hardened against our asshole bosses' insatiable horniness for enshittification" (noon, LVCC - L1 - HW1–11–01).
Here's an open secret: the confusing jargon of finance is not the product of some inherent complexity that requires a whole new vocabulary. Rather, finance-talk is all obfuscation, because if we called finance tactics by their plain-language names, it would be obvious that the sector exists to defraud the public and loot the real economy.
Take "leveraged buyout," a polite name for stealing a whole goddamned company:
Identify a company that owns valuable assets that are required for its continued operation, such as the real-estate occupied by its outlets, or even its lines of credit with suppliers;
Approach lenders (usually banks) and ask for money to buy the company, offering the company itself (which you don't own!) as collateral on the loan;
Offer some of those loaned funds to shareholders of the company and convince a key block of those shareholders (for example, executives with large stock grants, or speculators who've acquired large positions in the company, or people who've inherited shares from early investors but are disengaged from the operation of the firm) to demand that the company be sold to the looters;
Call a vote on selling the company at the promised price, counting on the fact that many investors will not participate in that vote (for example, the big index funds like Vanguard almost never vote on motions like this), which means that a minority of shareholders can force the sale;
Once you own the company, start to strip-mine its assets: sell its real-estate, start stiffing suppliers, fire masses of workers, all in the name of "repaying the debts" that you took on to buy the company.
This process has its own euphemistic jargon, for example, "rightsizing" for layoffs, or "introducing efficiencies" for stiffing suppliers or selling key assets and leasing them back. The looters – usually organized as private equity funds or hedge funds – will extract all the liquid capital – and give it to themselves as a "special dividend." Increasingly, there's also a "divi recap," which is a euphemism for borrowing even more money backed by the company's assets and then handing it to the private equity fund:
If you're a Sopranos fan, this will all sound familiar, because when the (comparatively honest) mafia does this to a business, it's called a "bust-out":
https://en.wikipedia.org/wiki/Bust_Out
The mafia destroys businesses on a onesy-twosey, retail scale; but private equity and hedge funds do their plunder wholesale.
Now, you can't demolish that much of the US productive economy without attracting some negative attention, so the looter spin-machine has perfected some talking points to hand-wave away the criticism that borrowing money using something you don't own as collateral in order to buy it and wreck it is obviously a dishonest (and potentially criminal) destructive practice.
The most common one is that borrowing money against an asset you don't own is just like getting a mortgage. This is such a badly flawed analogy that it is really a testament to the efficacy of the baffle-em-with-bullshit gambit to convince us all that we're too stupid to understand how finance works.
Sure: if I put an offer on your house, I will go to my credit union and ask the for a mortgage that uses your house as collateral. But the difference here is that you own your house, and the only way I can buy it – the only way I can actually get that mortgage – is if you agree to sell it to me.
Owner-occupied homes typically have uncomplicated ownership structures. Typically, they're owned by an individual or a couple. Sometimes they're the property of an estate that's divided up among multiple heirs, whose relationship is mediated by a will and a probate court. Title can be contested through a divorce, where disputes are settled by a divorce court. At the outer edge of complexity, you get things like polycules or lifelong roommates who've formed an LLC s they can own a house among several parties, but the LLC will have bylaws, and typically all those co-owners will be fully engaged in any sale process.
Leveraged buyouts don't target companies with simple ownership structures. They depend on firms whose equity is split among many parties, some of whom will be utterly disengaged from the firm's daily operations – say, the kids of an early employee who got a big stock grant but left before the company grew up. The looter needs to convince a few of these "owners" to force a vote on the acquisition, and then rely on the idea that many of the other shareholders will simply abstain from a vote. Asset managers are ubiquitous absentee owners who own large stakes in literally every major firm in the economy. The big funds – Vanguard, Blackrock, State Street – "buy the whole market" (a big share in every top-capitalized firm on a given stock exchange) and then seek to deliver returns equal to the overall performance of the market. If the market goes up by 5%, the index funds need to grow by 5%. If the market goes down by 5%, then so do those funds. The managers of those funds are trying to match the performance of the market, not improve on it (by voting on corporate governance decisions, say), or to beat it (by only buying stocks of companies they judge to be good bets):
Your family home is nothing like one of these companies. It doesn't have a bunch of minority shareholders who can force a vote, or a large block of disengaged "owners" who won't show up when that vote is called. There isn't a class of senior managers – Chief Kitchen Officer! – who have been granted large blocks of options that let them have a say in whether you will become homeless.
Now, there are homes that fit this description, and they're a fucking disaster. These are the "heirs property" homes, generally owned by the Black descendants of enslaved people who were given the proverbial 40 acres and a mule. Many prosperous majority Black settlements in the American South are composed of these kinds of lots.
Given the historical context – illiterate ex-slaves getting property as reparations or as reward for fighting with the Union Army – the titles for these lands are often muddy, with informal transfers from parents to kids sorted out with handshakes and not memorialized by hiring lawyers to update the deeds. This has created an irresistible opportunity for a certain kind of scammer, who will pull the deeds, hire genealogists to map the family trees of the original owners, and locate distant descendants with homeopathically small claims on the property. These descendants don't even know they own these claims, don't even know about these ancestors, and when they're offered a few thousand bucks for their claim, they naturally take it.
Now, armed with a claim on the property, the heirs property scammers force an auction of it, keeping the process under wraps until the last instant. If they're really lucky, they're the only bidder and they can buy the entire property for pennies on the dollar and then evict the family that has lived on it since Reconstruction. Sometimes, the family will get wind of the scam and show up to bid against the scammer, but the scammer has deep capital reserves and can easily win the auction, with the same result:
https://www.propublica.org/series/dispossessed
A similar outrage has been playing out for years in Hawai'i, where indigenous familial claims on ancestral lands have been diffused through descendants who don't even know they're co-owner of a place where their distant cousins have lived since pre-colonial times. These descendants are offered small sums to part with their stakes, which allows the speculator to force a sale and kick the indigenous Hawai'ians off their family lands so they can be turned into condos or hotels. Mark Zuckerberg used this "quiet title and partition" scam to dispossess hundreds of Hawai'ian families:
https://archive.is/g1YZ4
Heirs property and quiet title and partition are a much better analogy to a leveraged buyout than a mortgage is, because they're ways of stealing something valuable from people who depend on it and maintain it, and smashing it and selling it off.
Strip away all the jargon, and private equity is just another scam, albeit one with pretensions to respectability. Its practitioners are ripoff artists. You know the notorious "carried interest loophole" that politicians periodically discover and decry? "Carried interest" has nothing to do with the interest on a loan. The "carried interest" rule dates back to 16th century sea-captains, and it refers to the "interest" they had in the cargo they "carried":
Private equity managers are like sea captains in exactly the same way that leveraged buyouts are like mortgages: not at all.
And it's not like private equity is good to its investors: scams like "continuation funds" allow PE looters to steal all the money they made from strip mining valuable companies, so they show no profits on paper when it comes time to pay their investors:
Those investors are just as bamboozled as we are, which is why they keep giving more money to PE funds. Today, the "dry powder" (uninvested money) that PE holds has reached an all-time record high of $2.62 trillion – money from pension funds and rich people and sovereign wealth funds, stockpiled in anticipation of buying and destroying even more profitable, productive, useful businesses:
The practices of PE are crooked as hell, and it's only the fact that they use euphemisms and deceptive analogies to home mortgages that keeps them from being shut down. The more we strip away the bullshit, the faster we'll be able to kill this cancer, and the more of the real economy we'll be able to preserve.
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
Whether it's investing in haunted real estate or finding out your boss is a literal witch, these are our favorite horror movies about money.
5 Horror Movies About Money to Terrify You This Spooktober
Just in time for Halloween, we’re here to pitch five of our favorite horror movies about money. We just noticed it’s been far too long since we wrote something unabashedly silly. Forgive us!
You may not know this about us, but we Bitches are high-key obsessed with scary movies. If we’re hanging out together, odds are high we’ll throw on something with ghosts, ghouls, werewolves, or axe-wielding serial killers. There are three main reasons this genre appeals to us:
Horror movies are creative. They often have tiny budgets, which forces filmmakers to work with what they have and hone in on what matters. Many household names got their start in the proving grounds of horror. It’s a chance to see fascinating examples of undiscovered genius.
Horror movies expose uncomfortable truths about life and society. All great spooky films are about something real. The surface-level scares of a zombie horde are symbolically linked to our deepest anxieties about other people. The vampire is the unknown outsider; the werewolf the uncontrollable id. The horror genre boldly leaps into subjects where comedies and dramas fear to tread.
Adrenaline is a helluva drug. We’re too old to know where to get good drugs. We have to make them the old fashioned way: by abusing our endocrine systems. With art!
And really, isn’t that what’s interesting about money, too? Our ~*whole deal*~ is trying to make the best, most values-aligned decisions we can with limited funds. This article is extremely on-brand and aligned with our core mission. DO NOT try to tell us otherwise!
Today, we’re plugging a few of our favorite horror movies with a financial twist. The terrifying root of each one is something related to money and the power it brings.
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Making home loans even longer, to 50 years, sounds to me like a good way for profiteering, and more severe debt chains on people. We should surely be working to go in the other direction.
Trump’s 50-Year Mortgage Plan: What You MUST Know! Nov 14, 2025 Patrick Boyle The psychological dimension really matters too. A mortgage that outlives a career—and possibly the borrower—really changes the cultural meaning of homeownership. A home becomes less of an asset and more of a perpetual liability. Other countries have experimented with ultra-long mortgages – and - Spoiler Alert! it didn’t end well... Japan introduced 50-year and even 100-year loans during its property bubble in the 1980s. Those products were designed to let families pass debt across generations. When the bubble burst, borrowers were trapped in negative equity for decades.
My letter to reps:
This 50 year home loan idea is bonkers. We should have a system working to make mortgages with far shorter debt time frames possible for all of us. We've already been forced into this weird contortion of the market with 7 year auto loans, where we know that car sales are just all about profiteering on the interest on the loans. So much so that some of these subprime auto lenders have gone under. Japan tried 50 year mortgages in the 1980s and spoiler alert: it didn't end well! The housing market is already distorted and harmful to ordinary people, nobody should be making it worse. We need more affordable housing, and consumer loans that are better regulated and more fair, accessible, and sensible. The whole reason people in our region have been able to stay afloat was the fact that they got houses their parents passed along because they had paid off long before passing away. That system for the working class has been mostly destroyed by this point. The idea that elites in government playing games with the economy and finance would want to thoughtlessly make the situation so much worse for us is offensive. We need more housing, not fancy people playing games with financial gimmicks.
Please feel free to copy or repurpose for your own letters to reps.
AAA Rated Junk: What Tricolor and First Brands Reveal About Credit Markets! - Patrick Boyle Oct 4, 2025 Tricolor – Like many dealerships, earned more from the loans it made to its customers than from the cars themselves. According to Bloomberg – they regularly charged interest rates above 20%. Those loans were bundled into asset-backed securities and sold-on to investors. First Brands was built up through acquisitions – which were financed by borrowing. Its owner, Patrick James, expanded the company by stitching together smaller manufacturers - he then layered on further leverage by borrowing against invoices and inventory—tapping private credit funds and specialist lenders. Their business models weren’t inherently flawed. Tricolor served a niche market with limited access to traditional credit. First Brands built scale through acquisitions and supply chain finance. But each was exposed to pressures that have intensified in recent years: immigration enforcement, rising tariffs, inflation, and a consumer base stretched by higher interest rates and elevated vehicle costs.
