One can make the argument that even with today’s low interest rates, a price-to-rent of, say, over 15 means that a house is not economical to buy versus GICs, i.e. if a house costs $300k and only commands $1666.67 per month in rent you’d be better off to rent and put the savings into GICs.

The relative numbers you give can indicate upward or downward pressure on the trends, but the absolute number can tell you if it makes economic sense to buy or rent.

There is no way the U.S. government is spending $80B a day in Iraq. This would amount to $29 TRILLION per year, more 3-times the current U.S. debt level accumulated since the Declaration of Independecne.

As for bailing out the automakers, it is a poor investment. The Big 3 have been losing market share for decades because they make crappy, gas guzzling cars, are poorly organized, have unions which inject inefficiency into every part of the production process, overpay their staff, and have ridiculous legacy retirement benefits which they can’t hope to meet.

Bankruptcy potection would allow the firms to reorganize, address these issues and emergy as leaner and stronger competitors. It doesn’t mean they will disappear.

“It would be better for the economy in the long run to let them go under. ”

Let’s try and remember that, in the long run, we’re all dead. The coverage I heard on CBC radio this morning had an economics professor suggesting that if the US were to let the big 3 go under, with economic spin-offs, that could total around a million job losses, conservatively, in the US.

I’m not sure how much that’s worth, but if they can spend 80 billion a day in Iraq, they can probably spare something to keep that from happening.

Of course, the moral hazard problem has to be kept front-and-center in everybody’s mind, if taxpayers are ponying up the cash to save the industry, well, the government gets a say in how they operate.

1) ask if the 2nd offer is registered

2) ask for the agents name

Thank you!

ps. post-olympic real estate prices have exhibited price decreases in all hosting cities, check out the appropriate years for Calgary, Atlanta, Beijing etc. please do yourself a favour and don’t buy in Vancouver until after 2010!

Confidence won’t return to real estate any time soon. The US auto industry is about to collapse will have broad implications to our economy and real estate.

Of course I’m mixed on the auto aid package. They are delaying the inevitable by in essence, burning tax payer money. The big three haven’t invested in their own businesses because management knows that their business model has been ineffective since 1980. It would be better for the economy in the long run to let them go under.

Obama asked “What does a sustainable auto industry look like?” Well I have an opinion that easily answers that question. If we let the big three collapse, then there will be a massive opening in the marketplace. New businesses will finally get a chance to enter into what was previously a closed market. These entrants can compete on new business models and the winners will have models that are sustainable. Even if they reinvented the wheel, the current Detroit manufacturers wouldn’t be able to deliver any of its value to consumers.

Long term gain versus short term benefits means that Detroit will have to sell themselves well to get a package. If they don’t, then watch out, because real estate is going to take a massive hit.

Pensions such as Ontario Teachers invest in risky assets for a reason – without the higher returns your pension would be completely unaffordable.

The typical Ontario teacher works 30-35 years and will be retired for 20-25 years. To give provide a good pension on that basis you can’t put money in risk-free investments (although one wonders if such a thing exists anymore anyway – i.e. ABCP). Investment returns make up 80% of a pension and contributions only 20%. So if you want low risk investment you’re going to have to accept a greatly reduced pension. This is not a tradeoff most employees are willing to accept.

The point is that OTPP is a very well run pension investment program that makes calculated, shrewd long-term risk and return decisions. Of course this is not going to pay off every year and there can even be a few really bad years – like they will probably go through now. But to compare it to gambling or speculation or carelessness isn’t accurate.

http://www.youtube.com/watch?v=C8shpirOIvo&feature=related