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After my annual foray to talk to real estate groups in Canada where lender prudence encouraged by regulator oversight has helped keep commercial property markets in equilibrium for the past two decades, I returned to the USA and read in the New York Times about how retailers like Wal-Mart and Home Depot have developed shadow banking schemes to extend credit at higher than average credit card interest rates to folks with low credit scores. The idea, of course, is to boost sales just as regulators here have tightened the screws on bank consumer lending practices to avoid the pitfalls of people buying things that they cannot afford—remember five years ago like the sub-prime mortgage crisis. And so what will happen? Many of these cash strapped buyers, who never should have been extended this credit, will eventually default on their credit card balances or consumer loans. Do we ever learn?

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