No risk

security1

This is the final instalment in a trilogy about thick people. Today it is Don’s inlaws. Not only do they rag on him for just trying to protect them, but they show what fine sheeple they are. They deserve to be fleeced. And likely will.

First, some context. So far this week I have given you a mess of reasons why the near-term future (next few years) of residential real estate in Canada is mush. These range from fiscal and monetary policy to the implications of our new Third World-style deficit to rampant personal debt to demographics to our manufacturing disaster to the simple fact we are in a recession which will be longer and deeper than the sheeple think.

This means the current little housing tempest needs to be put in context. It’s as dangerous as it is delusional. A dinky price reduction has been tarted up by an historic (but temporary ) slide in mortgage rates, hyped by realtors and bloated by the media, and then sold to the herd as proof real estate is back! Buy now, the flock’s told, or lose out forever. And at the heart of this crud is one flawed tenet: Real estate goes up forever. It wants to go up, and in the absence of any reason not to, it will continue to rise.

Of course, this is not so. Housing markets ascend and fall like others. And the evidence is substantial we are nearing the end of a generational climb in the value of real assets, done in by the irresponsible swilling of debt, widespread speculation by untalented homeowners, a massive age wave, unavoidable energy crunch and a realization that what people will need in the years to come is money, not stuff.

Anyway, back to Don. He sent me this:

So yesterday I stumble on to your site and read backwards in time a few months through your blog.  The reason that I was actually looking for your site is that my sister has done the “move up” in house.  At first I was cool with this because I figure you sell an over priced house to buy another slightly bigger over priced house, you don’t lose too much.  It’s a nice older neighborhood that they love and they actually could use a bigger house and the new house is really nice — not your McMansion type.  They’re going from a $250,000ish to $350,000ish  and it’s a good neighborhood.  That house last year was listed at $479,000 (they claim).  I’m thinking in the back of my mind that if they wait another year they’ll be going from a $200,000 to a $250,000 house, but the neighborhood is important to them so to me that makes some sense.  It all seems reasonable and they can easily afford it.

Here’s where the story turns and why you need a disclaimer on your site.  They tell me that they’re going to keep their original house and rent it out.  Lots of people are doing this and it’s a great investment.  We’re talking about this at a family dinner with Mom and Dad (even worse they’re my Inlaws) and I suggest that it’s a bad idea to have two depreciating houses right now.  I even temper my argument with a why not sell now and take a wait and see approach with all this turmoil right now.  I figure after reading your blog, I’ve got some decent logical arguments to back up my point.  I really felt like I had a pretty iron clad case to make.

You’d think I’d said the dumbest thing a human has ever uttered.  These are smart, educated people and they just laid into me for saying something so stupid.  I wished I hadn’t brought it up.  And the funny thing is, it was all the exact same BS that you mention time and time again.  Houses never fall in value.  Real estate is the best investment.  Then they bashed me because I invest in Mutual Funds and how have I done with them.  Then I suggested that house prices have been dropping for two years already so how could they argue they never drop, and they turned that around on me by saying that’s exactly why you need to buy right now because they’re so CHEAP.  Frankly, I gave up.  But I still feel badly because I know they’re making a mistake and they’re very reasonable people that I care about.

Anyway, you should post a warning to newbies like me so we can at least be aware of the vitreous and hatred that our reasonable suggestions might get.  You are a brave man for getting up in front of people and talking about this stuff.  I’m just going to keep my mouth shut from now on.

Don, baby, I feel for ya. The forces of denial, self-interest and (especially) sheeple greed are formidable. Call it Bre-X, tulip bulbs, bullion, Pet.com or a raised bungalow, some lessons are simply never learned. Some thick people think financial diversification means buying two of the same thing, while others believe a long-term economic trend is anything which happened well before lunch.

So, zip it. Houses come and go, but remember – you’ve only got one family.

In this case, sadly.

180 comments ↓

#1 guava.ca on 05.28.09 at 10:18 pm

Re: 80s and 90s housing market

UBC keeps some great charts.

http://cuer.sauder.ubc.ca/cma/index.html

#2 Barb the proof reader on 05.28.09 at 10:19 pm

Don — I feel for ya too.

Many of us have tried to warn loved ones — very close friends in my case. Very smart friends, vice presidents of banks smart.

No go. In fact, they are gearing up to buy two more rentals, as they sit with a rental they have been trying to sell for two years and a commercial building where they are subsidizing the 5 tenants to get them to stay.

I dare not ever say anything to them again. Welcome to the club.

And you’re right, Garth should put up a warning shingle.

#3 Barb the proof reader on 05.28.09 at 10:28 pm

Garth,
What’s wrong with tulip bulbs, they are useful for attracting squirrel.

#4 D from London, ON on 05.28.09 at 10:50 pm

Garth writeth -“The forces of denial, self-interest and (especially) sheeple greed are formidable.”

Those are the exact devils I am dealing with inside myself these days! I think I need an Intervention…

#5 Suzukimum on 05.28.09 at 10:51 pm

That’s how I feel right now–I should have shut my mouth and not talk about RE with anyone.

Just 2 hours ago, I was asking my friend about the state of their new Mattamy house they bought in Feb 09. She said that they have not even dug a hole in the ground. So, I asked if they will walk away from the deal if Mattamy could not deliver their house in Jan. 2010. My wish for them is that Mattamy will not be able to deliver and they can get out of the deal. Here is why:

1) This is a couple in their early 60’s who are trying to sell their 50-year old bungalow that needs a lot of renovation. It has been on the market since Feb.
2) They bought a 3000+ sq foot, half-million dollar MacMansion in Ottawa.

To me all this is insane. She claimed that her friend’s house in the area is already worth more than half a million, and Mattamy has sold all the lots in the area (meaning the RE market is still healthy).

There are still a lot of people who are burying their heads in the sand. It is pointless to convince them to see to see the light. I give up.

#6 victoria reader on 05.28.09 at 10:58 pm

Ha nice I ran into the same problem over beers trying to explain what ive read here. Noone agreed that real estate is a bad thing to buy right now.

#7 Jerry on 05.28.09 at 11:10 pm

Don,

I know how you feel about trying to be brave and step in front of a train. Normally, I tend to agree with your conclusion to simply zip it until I can’t take anymore the non sense stuff that people talk about in cocktail parties at your expenses because, if you zip it, you start feeling irresponsable. They sincerely believe in their investment ideas. The other day, I had to intervene because I over heard my friend’s wife telling my wife that at least they have a roof over their head in a very ignorant voice because she dared to question their wisdom. I’m starting to believe that either way, you end up alone. What do you do when your friends cannot join you for a dinner or a drink out because they are loaded with debts? These are regular activities that we used to do before they decided to “buy” instead of paying someone’s else mortgage. What they forget is that, by all definition, most people live under the poverty line simply because of one mistake: They over paid the house. The sad thing is that they don’t even realize it. You should hear the answer I get when we propose to go out for restaurant, or a drink out. These days, I get “I’m nt hungry, We have plans, ect….. In meantime, they forget that these are things we used to do on regular basis. (see 10 Myths about real estate in Greater fool by Garth turner). These days, just like religeon, I try to not get into discussions on real estate.

#8 squidly77 on 05.28.09 at 11:14 pm

what you post is setting in with the house gamblers

realtors and specs are bleeding cash
theyre getting scared and fighting back the only way that they know how..by insulting and bashing your excellent posts

kinda like a sheep giving you lip or a mosquito sucking your blood…it lasts just as long as you allow it to
then you get pissed and theyre gone

http://www.edge.org/documents/archive/images/lion%20carrying%20impala.jpg

be scared specs and realtors as your about to get the financial pasting of your life..be very scared

#9 ts harpoon on 05.28.09 at 11:15 pm

Don: Your in-laws may be suffering from DENIAL and I don’t mean the river in Egypt…

Denial is tricky stuff.

It has many faces and disguises.

Its number one symptom is the denial of its own existence.

It keeps good people in everlasting blindness destroying any chance for healthy change.

It will fight viciously for its survival all the way to insanity institutionalization and death.

Denial is not threatened by you trying to beat it by yourself, in fact it welcomes it.

The last thing it wants is for you to join with others who are dedicated to destroying it.

That is all, except for the following

CHART OF THE DAY: The Stunning Jobs Collapse

http://www.businessinsider.com/chart-of-the-day-decline-from-peak-employment-2009-5

#10 ts harpoon on 05.28.09 at 11:22 pm

Ok..Just one more to reinforce Mr. Turner’s points:

http://www.layoffdaily.com

#11 Jan on 05.28.09 at 11:23 pm

Don – mind your own business. If people want your opinion – let them ask.

#12 Renter in North York on 05.28.09 at 11:29 pm

Hi,
today I was talking to my colleague about this sale
http://www.torontomls.net/PublicWeb/CL_CF.asp?link_no=25103219.259010&t=l&fm=F
And this blog entry
http://www.greaterfool.ca/2009/05/26/the-greatest-fools/
My colleague lives 2 streets away from this street and he has sold his house 2 weeks ago (semi 4b/3b) for 520k and listing price was 535k. His house was only slightly renovated with leaking roof. He said that after complete renovation he would get something like 610 – 620k. Anyway in 2007 price of his house was 650k without renovation and he bought for 500k in 2005. So he didn’t make anything on it and he lost some money.
Long story short – So I’ve asked him how is it possible to have listing price of 549k and sell for 715k in year 2009
He told me that in his area houses are selling for these prices but 715k was little bit higher.
He told me that selling agent put listing price at 549k and that was about 100k lower as real listing price to attract people and bidding process. He said that seller and agent didn’t plan on accepting offers for 549k anyway.
So they attracted 23bidders and he assumed at least 3 – 4 of them were really, really interested in the area and completely renovated house. So bidding started and rest is the history. He said if they started at 630k (as they should, because that is real price right now for that house in that area) they would never attracted that many bidders.
549k was never really price that you would get that house for. My bet would be that from 23 bidders, there were 5 low ball offers, 10 listing price offers, and 4 offers with listing price and no conditions and 4 real big fools willing to bid anything.
Of course I don’t know that but I can guess …
Good night.

#13 squidly77 on 05.28.09 at 11:30 pm

realtors and specs
the easy money lazy and free loading scare mongers who wish to preach their virtues and pretend to be professionals (in their make believe..flip this house fantasy world) who bellow out their scare mongering advice to the masses will feel the public wrath

the real estate industry will be torn apart by the public when all is said and done

never have such a gang of thugs been given the kind of mass media coverage before to perpetrate such mass fraud…may you all go broke

this from a belligerent realtor in the US who now has his home in foreclosure

“The BubbleBloggers will someday bawl balefully in private, but they will never, ever admit that they have been very publicly very foolish.”
idiot realtor on commission gives advice

the woodsheds out back…wanna see

tick tock tick tock ti…

#14 EJ on 05.28.09 at 11:34 pm

Ah, such short memories people have. Houses being “cheap” right now is a comparison made only to last year when they were at all time high bubble prices. Not exactly the best comparison to make. Take a look at historic trends and you’ll see where prices should be, but aren’t. Then it’s quite obvious that they’re overpriced.

However, even when you “win” an argument with a housing junky, they just get angry with you and treat you as if you’d slighted their choice in religion.

In fact, the housing addiction is very much like religion. They believe so heavily and blindly in their investment that it’s faith-like. No amount of fact or reason will convince them otherwise.

#15 Jeremy on 05.28.09 at 11:43 pm

“I still feel badly because I know they’re making a mistake and they’re very reasonable people that I care about.”

You said it dude, we’ve all had this experience, if you think it’s bad now, wait until your sister goes into negative equity on her mini-empire, then it’s going to feel even worse.

#16 confused and fed up on 05.29.09 at 12:06 am

Don,

Don’t worry you are not alone.

Cheers

#17 Lance on 05.29.09 at 12:12 am

Don,
The one consolation you can take from their response is a reminder that you have one up on the sheeple masses and if you are strategic with your investments, you can make a fortune playing the other side of the coin.
In several years, when sitting down for a family dinner, your relations will once again gripe about the decade-long collapse in real estate prices… and you can sit back with a smug grin on your face and think about all of the money you made betting on the stupidity and denial of the masses.

#18 $fromA$ia on 05.29.09 at 12:18 am

Buddyies comment,

Hey man, people learn best and sadly sometimes only from their mistakes.

It’s kinda like falling asleep at the wheel or carrying your nose so high that you trip.

Lets hope they (learn/FK UP) before they get their hands on their share of the inheritance.

#19 the Coming Depression on 05.29.09 at 12:20 am

Call it Bre-X, tulip bulbs, bullion, Pet.com or a raised bunglow, some lessons are simply never learned.

BULLION? I bought BULLION in 1979, did you know I have not lost 1 cent on “Gold Bullion”? Silver BULLION, I bought in 1985 around $8. I don’t know, I preserved my wealth never had to worry about how much money will I lose this year or next or the year after that….Now its over 20 some odd years later I never lost a cent…How well did you do?

#20 Dave on 05.29.09 at 12:27 am

this may be off topic, but its a goody! those that have read my stuff know I delve deep into the financial world. Here’s my issue:

a lot of people are calling the stock market increase a bear market rally- I don’t have a problem with that. The reason why they call it a bear market rally confuses me though. They say the economics haven’t improved, home prices are dropping still, the unemployment numbers in the U.S are still roughly 600,000 per month etc. However, is the U.S the country we should be looking at in determining where the global economy stands? Savings rates in China are increasing, their economy is growing, they’re hoarding commodities from various countries.

If China is the economic superpower, their improving economy should be the one we look at in determining whats going on. I know that people like Bob Hoye keep referring to the employment numbers and lack of improvement from U.S companies, but isn’t there a chance he’s tracking the wrong economy?

#21 Da HK Kid on 05.29.09 at 12:40 am

What else do the Sheeple have to know!

I’m sorry but has anyone in history ever claimed success riding on the back of the herd. The complacent Canadian is likely the worst to be hit right now.

The case is the Sheeple have been advised over say the last 30 Greenspan years (which have been used to inflate the bubble of stimulus through other means) swallowing the whole greedy planet in it’s path in a false economy built on greed and human nature.

The reverse is now going to happen so if you choose the Sheeple route you are going down with the ship plain and simple.

There will be pain people, this will not end well and it is up to you to protect your loved ones at all costs.

Yes “well educated” “know it all in-laws” need not engage in what is exactly YOUR OWN BUSINESS!

For those who cant stand their in-laws, what a great opportunity to put some further space in place.

The problem is when they are screwed, they will try their best not to come knocking in spite of your common sense!

If that occurs, send them a squirrel!

TOUGH LOVE BABY, TOUGH LOVE!

#22 alberta ed on 05.29.09 at 12:45 am

Yeah, well, to read Mario and the Calgary Herald and the RE shills, Calgary real estate has nowhere to go but up… what with all the new transit plans (read: multi-million$). In the meantime, Alberta’s ‘economy’ is in the tank, nevermind a few oilsands projects maybe cranking up, the province squandered the last boom, the city’s building multi-million bridges to nowhere, and neither city or provincial government has a clue how to cut spending. Only in idiot would buy RE in this scenario.

#23 Da HK Kid on 05.29.09 at 12:53 am

GM Government Motors can someone do the math for me why $9B is coming from Canada and mere $30B from the US for the bankruptcy.

Oh yeah, and just double it kids as that number wont be correct!

#24 supersocco on 05.29.09 at 1:15 am

Unfortunately, to them I am crying Wolf and they won’t listen any more.
I have now zipped and will just sit back and watch the next few years unfold.

#25 . . . fried eggs and spam . . . on 05.29.09 at 1:17 am

“Houses never fall in value. Real estate is the best investment.”

Enron, World.com, GM, Dome Petroleum and many others of like ilk resemble houses built on sand.

Real estate is the best investment, but only if one is prepared to take a 0/40 deal, put nothing down, sign it using Harper and Flaherty’s signatures, thereby guaranteeing they’ll pick up the tab, then — RUN LIKE HELL!

The CPC willingly put the 0/40 into play — almost certainly with major guidance from Bernanke / Paulson / Geither / Carney’s say-so, as they knew well in advance that most people would be fleeced dry by their patently absurd ideas.

Someone has to be held accountable for this mess, and ‘leadership’ (if it can be termed that) starts at the top — the PMO’s office. Now go and give ’em a good spanking they will never forget!
——
To add to Garth’s ever-growing menagerie of vast numbers of Sheeple, Porkers, a lion and a silly-billy goat (or something like that), please include the following! — http://tinyurl.com/qw2trx
——
Now a new and vastly improved Financial Frankenstein, complete with pic. Isn’t he just sooooo cute?! — http://www.conspiracyplanet.com/
——
Iran and Russia have approx. 20-25% of the world’s oil / gas supplies, say 22.5%. This link shows that north of the Arctic Circle has approx. 13% oil, the rest gas, the two of which amount to a third. Total both up and it amounts to roughly half of all the world’s supplies.

Antarctica may have a whole bag of undiscovered goodies as well. Finally, South America and Africa. After that, go look for another planet to piss on! — http://tinyurl.com/nmco8r

#26 MenWithHats on 05.29.09 at 1:23 am

I feel your pain Don . Next time start the conversation with ” How ’bout them Leafs ? “

#27 Mish on 05.29.09 at 5:27 am

Notice how Garth slipped “bullion” in there?

Very slippery.

Putting the world’s lowest risk investment in the world in the category of pets.com and Tulips.

Pleeeeeeeeeeeze.

Get over your gold issues Garth.

#28 Joe on 05.29.09 at 5:54 am

So when the majority believe that housing prices never fall then it will come true. The governmemt wants this also so they will keep interest rates low anyway they can. Thus you may prove to be wrong because you can’t beat the herd just like in the stock market.

#29 Dom-GTA on 05.29.09 at 6:30 am

Dan,

I have to laugh, I used to post the same comments last summer. I have been berated and mocked for my real estate advice.

Unfortunately, I was right, told a family member last summer not to build just because they couldn’t find exactly what they wanted. Today they are divorced and the house is 30% off from what they paid…

The worst part is there is no vindication to this…You are not going to feel better if you are right and they lose lots of money. Better to shut up now and at least know you have said it once!!

Good Luck

#30 Bottoms_Up on 05.29.09 at 6:41 am

Don, don’t forget you also have the ‘www.greaterfool.ca’ family now.

Saw an ad on tv today–this Sunday, 10pm (est) on CBC they are airing “who killed the electric car”. Worth the watch!

#31 canadian Army Guy on 05.29.09 at 6:48 am

What’s wrong with moving up?

I well know that this blog is populated with pessimistic folks – if not crazy (who’s that squiddly guy?) who think that real estate can only go one way: south.
Who cares if real estate even loses 1/2 its current value by next year? In 10 years it’ll go up again?
Give your heads a serious shake!

Using your logic, let’s never purchase motor vehicles again. They actually lose value. They all do. 100% accurate. So, let’s start walking everywhere. Don’t even take the bus: they lose value as well.

Folks need shelter. Some folks actually have money to buy a nicer $474K home. Who cares if it goes down? It’s not an investment stupid. It’s a roof on your head. Might as well have a nice one…

Just keep renting and eat your squirrel meat.
Seems like jealousy runs this blog.
BTW are you for real for suggesting to eat squirrel? LOL. Pretty retarded!

P.S. Sell your car before it’s too late.

#32 Riveted on 05.29.09 at 7:16 am

Don,

I’m the ‘you’ in our family. My sister and her husband bought in a declining market, 0-40, and pulled another 20% out for renovations, despite my raised eyebrow and gentle cautionary questioning. My wife and I raise our kids three blocks away from them in a rented flat with approximately the same living space at about a third the monthly cost. We do not have a stainless steel fridge or granite countertops, yet we somehow manage to live normal and healthy lives (I swear, it’s true!).

With a household income of over $200K, my sister and her husband are in negative equity and negative monthly cash flow. We put our monthly surplus to work attacking our relatively small debt load – we started doing this the day after reading Garth’s book.

I usually keep quiet around the dinner table because, fundamentally, it’s none of my goddam business (the stink-eye I receive from my sister confirms this). I reserve the right, however, to give them a lashing when their business becomes mine – like when I found out they borrowed money from my retired, fixed-income mother yet continue to burn through cash on things like fences, freezers, a new deck, satellite cable, barbecues, weekends away (because they deserve it), and other ‘necessities’.

Your sister will do what she does, regardless of your warnings or the truth that so many refuse to acknowledge. She’ll do it under the guise of ‘needing more space’ or ‘being in a good neighborhood’, but make no mistake…that’s horseshit. She’ll do it because she WANTS it, and wants it so badly she’s willing to ignore the reality of the world around her and make her brother feel like an asshole.

Your biggest struggle over the next three years will be resisting the temptation to say ‘I told you so’.

#33 David Bakody on 05.29.09 at 7:17 am

“You can’t tell a Heinz Pickle Frig all” and Don that is true from teenagers to silly fools with a pocket full of cash. Many years ago I pinned a note on our family fridge: Teeagers know it all and adults are stuck in yesterdays world, so now is best time from them to leave home when they know everything.

So Don treat these people and others as Teenagers ….

It’s a no win situ unless you agree even then when things go south they will turn on you ….. me I like to say “Bad Move” then only agree to continue if they agree to listen reminding them at times ….. then I here my ears ring for days as they talk behind my back.

Sorry Don but with family it’s dammed if you do and dammed if you don’t . My dear sweet mother’s line always apply …. “If in doubt don’t” Many years ago I called Mum and told her I was buying a small sailboat and keeping it at a small marina …. she said good for you David you will meet a bunch of new people. With money she told me always to remember it takes long time to save it so take a long time spending it. Wisdom indeed comes from age.

#34 Mike B on 05.29.09 at 7:30 am

All very interesting but where can one buy a 250k house in Canada? While I would love to see RE join the downward current I have not witnessed it here in T.O.
Yes the US is in bad shape and yes their market has tanked in some areas but all one has to look at is the strength of the can/us dollar to realize that our commodities (not our banks) will provide us some bouyancy for years to come… So RE prices dropping by any great margin may be a fools dream…and as a buyer a dream I am reluctant to let go of…

#35 D from London, ON on 05.29.09 at 7:37 am

One of the reasons I come here is for the rational, best-guess economic predictions that support my underlying small-c-conservative, risk-adverse view of what I should do with my finances (special thanks to Da HK Kid and Vancouver_Renter for keeping it real). I have found that trying to argue with anyone who does not also hold this position is futile – the vast majority of their counter-arguments are based on irrational, emotional appeal. Denial, self-interest, greed and a wholesale swallowing of m$m propaganda (often with an undercurrent of fear) are the basis for most pro “buy NOW” arguments. Any logical arguments against will not defeat these forces. Instead I often find myself being drawn to “The Dark Side” by their arguments! It is best to avoid talking with others about the future of house prices and interest rates if at all possible, lest your own denial, greed, etc. becomes activated.

That being said, I have found that it is best not to talk about personal finance (including house prices, interest rates and “the stock market”) with anyone who does not already share your own opinions. For me it goes into the same category as religion, politics and who one is or is not having sex with – all of these are areas where rational argument has no traction and appeal to emotion and a need to reinforce the rightness of past decisions wins the day.

One final comment – we don’t appreciate know-it-all house boosterists pushing their opinions down our thoats – but the chances are that they look at us with the same feeling! There is nothing worse than a self-righteous evangelist, especially if he/she turns out to be right in the end (as we all hope and expect to be). Nobody likes someone who is trying to burst their bubble – and if you turn out right in the end you may end up losing even more friends.

My advice to Don is to remain sitting like the Buddha, serene, patient and not judging your in-laws. Do not try to save those who do not wish to be saved. The future will unfold as it will, and we will either be right or wrong, but if we don’t push them away while trying to save them we will still have our family (as Garth notes). That is the path I am trying to follow, but it is difficult to follow reason when appeals to emotion are swirling all around me.

#36 905er & Spouse on 05.29.09 at 7:38 am

Don,

Right now the topic of real estate is right up there with religion and politics. Just don’t go there with extended family and co-workers.

Last time we brought up the topic of real estate at a family dinner, someone said, “let’s just not talk about that…”

#37 Glenn on 05.29.09 at 7:44 am

I think Garth avoids gold/silver mostly because of the “faith in the market” theory.

If everyone drops paper currency, rushes into metals, then dives into the nearest bomb shelter, the economy will sputter and stop for sure.

That’s the thinking, I assume. The only wrinkle in the plan is A) silver has damn near doubled in price over the last 5 years yet has silver ever lost 40% of its valve in as many years…and B) this isnt an “economic downturn”, this is the end of life as we know it.

Ask the average German post-WWI if he would have better off with gold or a brick of paper currency. Its been said that gold (and real estate, for that matter) is the mountain that the paper currencies are trying to climb.

#38 Joe on 05.29.09 at 7:48 am

Bullion holders did lose anything since 1979. In early 2000’s wasn’t gold $250 per ounce and now it is $950. Unless they all bought in at $950, they must have lost or gained something with a 5 fold increase in value.

#39 catamaran guy on 05.29.09 at 7:49 am

Don I feel for you. been there.

If you really want to see your in-laws freak out,try mentioning peak oil and collapse,they’ll run you out of the house!

#40 Sean in E-Town on 05.29.09 at 7:54 am

Garth sir, and your loyal readers, I vacillate. I am a condo bunny and an economic sinner. I lust for equity in my heart, and the burdens and maintenance and the yo-yo-ing values that come from ownership. And here’s why: I rent right now. If I wish to rent a condominium right now, take, for example the one I have been looking at, eyes drooling, though for most people they would consider her a box, it is 95K, with fees and taxes of less than 300/month. Normally renting for about 800 a month. I have done the thing that 25 year olds almost never do, stayed incredibly liquid, and apart from some unsecured zero-interest bonds, (I.E. Sis graduating from nursing school and needing a tide over until the first paycheque or three.) I am sitting on 16K in cash, and another 4K of those genetics backed bonds.

I have been holding up rent/price as my iron ratio. And in Edmonton, before this bubble, the number was 12. (http://dynamic-evolution.com/ehb/090527-4.jpg) Twelve years, one hundred and forty-four months… Multiply that by the 800 in rent that I’m looking at paying (power not included) and rent-price says pay 115 thousand. Remove the condo fees (200), and it says eighty-six-five… remove the taxes too (70), and we’re looking at seventy-six large. So which one is it, Garth? When does the 600 square foot, concrete, highrise close to fixed rail public transit become the buy I won’t regret for the rest of my life, at least not compared to the management expense ratios that eat into the gains in my mutual funds? I know you’ve analyzed the panic in the eyes of buyers in TO and Vancouver and Calgary housefish paying a quarter-mil for a wooden box in the sky, but what about the guy who wants a place at the bottom of the scale to live till he’s ready to eat mush in a nursing home? How much sense does this buy make for him? Keep in mind that if I lose my job, which is pretty secure if I want it to be, and go get something at $280 a week, I can still carry about 800 a month in housing expenses (fees, taxes, all of it)… by the skin of my teeth, but I can do it. What number could I say I paid for this box that wouldn’t make you cringe and think me a greater fool?

#41 ally ally oxycontin free on 05.29.09 at 8:04 am

All this ‘good news’ is a cure for constipation …

U.S. REAL ESTATE MAY 27, 2009

http://online.wsj.com/article/SB124334273595354315.html#articleTabs%3Dinteractive

http://online.wsj.com/article/SB124334273595354315.html#articleTabs%3Darticle

http://blogs.wsj.com/economics/2009/05/26/a-look-at-case-shiller-numbers-by-metro-area-9/

FDIC’s List of Problem Banks Continues to Grow

http://blogs.wsj.com/economics/2009/05/27/fdics-list-of-problem-banks-continues-to-grow/

Economists React: Home Resales at Bottom, Prices
Have Further to Fall

http://blogs.wsj.com/economics/2009/05/27/economists-react-home-resales-at-bottom-prices-still-have-further-to-fall/

All I need now, to tip me over into the bliss, is a finance minister and B o C governor telling me they have sophisticated tools at their disposal, and the current credo is; Spend Spend Spend and Lend Lend Lend.

#42 Happyplace on 05.29.09 at 8:30 am

I’ve been the target of much criticism from family for renting the last 3 years and sitting on my cash. Granted I’m renting my former matrimonial house back from my ex-husband so that makes me somewhat of a loser, but it’s all about the old Labrador! I still think I’ll come out ahead if I wait another year to buy and I don’t think I’ve lost anything financially by renting (just my self-esteem!).

#43 Samantha on 05.29.09 at 8:31 am

Don, just because they are educated does not make them smart. There are many educated people who lack common sense or the ability to research and analyze information that lies outside their field of study. In particular, many people seem to have an aversion to historical data.

House values rise and fall, and not always in a mass market setting. For example, a person who purchases a house in a better neighborhood. Nice house, nice neighborhood, until the neighbors sell their house. New neighbors move in and turn the property into a cross between an auto wrecker and a municipal dump. Cha-ching – down goes the value.

This scenario can also happen in the case of a neighbor who decides to keep the house, but move out and become a landlord. The tenants move in. Quiet people, but strange, they seem to have many, many, many friends who come and go at all hours. Hello, crack shack.

Here in my little corner of the world, I have watched a mini-boom. Quite funny really. I paid $35,000.00 for my house in 2007. Soon after, the prices of houses escalated rapidly. Houses comparable to mine were selling in the range of 90,000 to 110,000.00, with a few that sold higher. Some of the people who purchased them were from AB and BC. However, here we are in 2009 and a couple of days ago I checked MLS to see what was happening in our community. Sure enough – prices starting to drop – like a rock. One house was listed 79,900, dropped to 74,900 and last week down to 57,000. At 57,000 it’s still overpriced for this town.

Prices will revert back to their normal levels – everywhere. The market has to be compatible with income/wages or people simply cannot afford to buy. What we have witnessed in the real estate bubble is tantamount to watching Halley’s Comet – it’s a once in a lifetime event.

Also, there was some comment on a previous entry about people here saying that mortgage payments would double if interest rates doubled. I don’t believe anyone here said such a thing, however, it leads to the following points:

1) The going mortgage rates in the ’80’s were in line with todays’ rates. When interest rates climbed in the 80’s, it happened so quickly that no one had time to prepare. Mortgage rates doubling? Try tripling, quadrupling and beyond. Run your numbers at 15, 18, 20, 22% and see what your budget looks like.

2) Many people are purchasing with a reliance on 2 incomes. What happens when one person loses their job or both? Or Mr. Stork arrives? Or to keep a job, wage cuts are accepted? Then what?

The vulnerability I see is the unwillingness to take into consideration long term issues and plan accordingly before purchasing a home. People worry so much about “qualifying” for a mortgage and that magic number the bank say you can afford. Can you afford that payment on UI benefits? Do you have an emergency fund to cover 6 months to 1 year of all living expenses, including the mortgage payment, in case of a crisis?

The other vulnerability is not relating national and international social, economic and political events to their impact upon jobs, interest rates etc. People are so insular and compartmentalized in this country. Wise people watch and respond ahead of time, adjusting their course and weathering events more comfortably. Fools do rush in following their impulses – and when problems arise, react from a position of weakness and limited information.

#44 obooma on 05.29.09 at 8:43 am

How can the housing market decline when the stock market is rallying 40% in 2 months? If we return to the late 90s boom where the stock market rises 20-30% annually, and god forbid, another dotcom bubble, then house prices will soar. Plus the huge wave of Gen Yers hitting 30 will support the first time buyers market. This housing market has nowhere to go but up. In 5 years, average home prices in Toronto will be north of $600k.

#45 pjwlk on 05.29.09 at 8:45 am

#11 Jan “Don – mind your own business. If people want your opinion – let them ask.”

I don’t remember seeing Don asking for your opinion Jan…lol

#46 mattbg on 05.29.09 at 9:02 am

There are a lot of people that believe marketing is deceptive, but it’s pretty clear that in many cases it is simply out to provide you with excuses to do something you already want to do. Someone that catches on to what they’re up to is never heard, so what’s the risk? There are plenty of people that want to listen. You can tell this is going on because there are so many people who don’t argue rationally about real estate, but simply justify their decision with marketing lines and don’t move beyond it to really explain what they are doing.

None of these people who have been confronted with the facts can claim that they were deceived, and that is probably why they are so angry about the opposition. You have made them responsible for their own actions if it goes bad.

It’s sad that we have to hit the brick wall of infeasibility rather than moderate our own behaviour.

#47 Just a Carpenter on 05.29.09 at 9:03 am

Don,

First off, until I know what their prospects are for revenue ( could it be that they may realize a decent return?) I cannot make a credible judgement on the decision without details. What I can suggest though is that;
A) they want to be landlords
B) you insist that being a tenant is the smart thing to do
A + B= you rent their house and keep the $ in the family.

I do have to shake my head all all who are screaming sell, sell, sell, and with the same breath DON’T BUY! Can’t have one without the other……

#48 mattbg on 05.29.09 at 9:05 am

#12, at this stage I wouldn’t put it past the real estate associations to start buying and selling houses amongst themselves for inflated prices to provide some front-page real estate stories about how well the market is doing :)

#49 Bill-Muskoka (NAM) on 05.29.09 at 9:11 am

Finally an actually intelligent column from the MSM!

Time for a purge

#50 mattbg on 05.29.09 at 9:12 am

#31, canadian Army Guy: obviously, what you say about cars is true. The difference is that most people don’t look at their cars as an investment, while real estate is seen by many as something that will only go up in value over time and as a way of building wealth.

I completely agree that people should look at houses as a place to live and judge it on its own merits, but that is the main difference between houses and cars — they don’t! And when you buy a house these days, you are paying a price that prices in the hopes and dreams of the proportion of society that is using real estate as an investment vehicle.

#51 pjwlk on 05.29.09 at 9:29 am

#32 Riveted:
“Your biggest struggle over the next three years will be resisting the temptation to say ‘I told you so’.”

You can say that again. I’m already having a hard time…

#31 canadian Army Guy: I just wanted to thank you for providing such an excellent example of “the positive attitude” most of us here face just about every day…

#52 Jonathan on 05.29.09 at 9:31 am

House prices always flatline in the Spring after the first year of a downturn… I showed you San Diego in spring 2007, and we all know where they are now!

Take a look at Toronto after it popped in 1989. After prices fell 5% or so, people felt like homes were cheap. They bought. Price declines slowed considerably. Then Fall came and prices went off a cliff.

To everyone here looking for their extra 10-20% price decline, relax. Odds are you will get it.

http://cuer.sauder.ubc.ca/cma/data/ResidentialRealEstate/HousingPrices/housing-pri-toronto.pdf

Thanks guava.ca #1 for the link.

#53 DonWhoSentTheEmail on 05.29.09 at 9:33 am

Normally I steer clear of the “comments” sections but I wanted to thank people for their comments of support and condolences as they extrapolate freely. (My favorite is the “Mind your own business” which I believe is the correct answer) A few background things that might be interesting to people.

Normally, I’m the guy who keeps his mouth shut and minds his own business. I was asked what I thought. Normally I would suggest that my stock portfolio is reason enough not to listen to me. I knew the topic would come up, and something about keeping both houses was bothering me. So I did what we all do — Google. I came across a lot of interesting information, the world seems very polar right now in real estate. Garth’s blog seemed very reasonable (the comments section not quite so much :) and I liked his style of writing. I don’t agree with everything I read, but he brings up some very valid points that you aren’t hearing much elsewhere.

I’m not against real estate. The house I’m sitting in I bought 10 years ago and they tell me it’s still somewhere between double and triple in value even after dropping. That’s by far my best investment over that span (with the exception of a few trips to Disneyland with my kids).

My problem with their rent and buy plan is pretty simple. I think the odds are in favor of a continued price drop in Alberta in the short term. The short term isn’t that hard to predict. The economy here in Alberta sucks right now, and it’s like a train, even if oil prices came up tomorrow (which they have started to) — trains can’t do U-Turns at the next crossing. My motto is simple, if I’m going to waste money, it has to be on beer. So why invest in a high likelihood short term loss? Take the money out and max out your RRSP (or buy some Guinness).

So I listened for a half hour at how smart this plan was, drank my beer(s) quietly and when asked, suggested quite meekly that I though selling was a better idea right now. The reason I emailed Garth was that I was quite surprised at how…almost angry everyone became. I wish I would have brought up something like politics, religion or abortion. That would have been mild discussion.

Thanks again everyone,

“Don”
(Moderator please don’t post my email here (not sure your policy). I get enough spam as is. Thx)

#54 Mish on 05.29.09 at 9:35 am

gold up 1.7% today.

#55 Ted on 05.29.09 at 9:39 am

“Don — I feel for ya too.

Many of us have tried to warn loved ones — very close friends in my case. Very smart friends, vice presidents of banks smart.”

I love the way people on here think they are the oracles of the real estate market! These same people “warned” their loved ones to stay out of the market three years ago and watched as they missed out on some of the most incredible gains made in real estate ever! Not saying now is a time to buy, just that nobody needs “saving” from an arm chair quarterback!

With the recent pull back the bears are becoming as myopic as the bulls were 6 months ago…

#56 905er & Spouse on 05.29.09 at 9:43 am

Don,

Been there done that.

We are planning on doing the same as your sister (move to a bigger house, better area) but we are renting in between. Just moved last week.

People at work as me why I don’t buy. “It’s the best time to buy!!!” they say. I used to tell them that I am waiting for housing prices to drop in south Mississauga (as they are STUPIDLY over priced) and everyone was telling me I am nuts and being almost rude to me over it.

Now I just tell them I am waiting to find the right house before I move.

Less pain

#57 Dan in Victoria on 05.29.09 at 10:07 am

Don,don’t you love going to turkey dinner with the family,especially when they turn you into the turkey?

#58 Dave on 05.29.09 at 10:10 am

I well know that this blog is populated with pessimistic folks – if not crazy (who’s that squiddly guy?) who think that real estate can only go one way: south.
Who cares if real estate even loses 1/2 its current value by next year? In 10 years it’ll go up again?
Give your heads a serious shake!

————————————————–

because it could be up in 10 years people should buy today? how about they live in someone else’s home and invest the downpayment money in places they can actually earn something?

its no wonder that the herd always loses. Its people like you that reassure me that I won’t have to work after 40.

#59 Future Expatriate on 05.29.09 at 10:13 am

Happy Pentecost.

Bad news. Obama has US military on DEFCON TWO over Korean Nuke Crisis.

#60 smw on 05.29.09 at 10:27 am

#31 Canadian Army Guy

A jealous renter arguement, you must be new here huh? Because your a Canadian ground pounder, I’ll cut you some slack. :)

Housing has become a commodity, that is now bought and sold for profit, the difference from when our dear grandparents bought and were part of the post WW2 boom was, they came back in droves, started families and slapped down CASH payments, now a house can almost be bought entirely on MARGIN.

Its the MARGIN portion that put us in this mess. Especially when we are on the reversal portion of the boomer/baby boomer generation.

MARGIN is what created the Great Depression. The reason we haven’t had a shot at a Great Depression until now, is we just removed the checks and balances in 1999, it was called the Glass-Steagall act of 1933.

66 years without a major credit bubble because of this provision…

Your correct in your assumption that its a roof, so what’s the difference if you rent or own? Cash in your pocket is the difference.

Housing has a value and it has a price. Don’t confuse the two.

A car is your liability, when purchased; when leased, its a liability to the leasing company.

Likewise with real estate, I lease my property, I pay the monthly cheque, which is well under the cost to purchase(or well under the cash flow that home at today’s price can generate), its a liabilty to the landlord.

My rent is half of the cost it is to buy the EXACT same four walls and roof.

If I buy, its a liability to me, because at this point, if your correct on tens years of stagnation, I could have put that money to better use in other areas, instead of sitting in concrete.

I don’t have to buy a new furnace, pay the property tax, property insurance. And my current rented shelter is as liquid as it gets, which brings me to my next point, which your only looking at it from your perspective.

The reason its a no brianer for you is, when your relocated via your usual rotation, the GoC has a huge hand in supporting your RE efforts. Your risk is hugely diminished, because your risk is with your deployments!

http://www.cmp-cpm.forces.gc.ca/dgcb-dgras/pd/rel-rei/aps-paa-2009/index-eng.asp

Personally, its the least they can do for those brave enough to do the public’s bidding.

It is a great time to renew your mortgage for the current mortgage holders, bad time to get in if your young and this is stage one (This is the one thing during this down turn that will help baby boomers after being down 30% in the markets).

PS What’s with everyone slagging “retards” on this blog? Is that the best some of you can do, jeez, get a thesaurus or ask Barb the Proofreader for some other adverbs, adjectives and nouns.

Having money tied up in non liquid investment moving down and sideways for a decade, is how shall we say… cranial impeeded logic.

#61 Bajwa on 05.29.09 at 10:28 am

The real problem I see with people today.. is easy money. Our grand parents worked their asses off to feed the family and maintain a happy lifestyle. They knew the true worth of money. Now with so much money floating around, people don’t work hard to earn this and as a result we have this brainless, greedy herd of fools running the real estate market. Plus realtor, whose only job seems to be “pushing people in the hell fire”.
Bravo Garth keep up the good work. . . Its good to see things from your dimension, where reality and true value is the first check..

#62 Leonard on 05.29.09 at 10:41 am

Convincing people over such issues takes time.

Use peaceful evolution instead or direct confrontation. Get subtly her attention to different facts that makes your point. The light will come from herself, as you can’t force anybody to see, but you can slowly direct them towards it.

By the way, everybody I talked to, agrees to the following logic:

Current low interest rate is a life opportunity to get a mortgage, not to buy a house. Second, there is much less buyers when interest are high, but its more difficult to afford house. Which leads price to go down.

Try it… it even worked on Chinese people here :)

#63 905er & Spouse on 05.29.09 at 10:42 am

Hey guava.ca,

Thanx for the link…I’m going to print up the chart for my area, print it on a small card and give it to every person who tells me I’m crazy not to buy NOW. I’ll tell them have a look at this chart then we’ll talk.

#64 Sheltered from the storm on 05.29.09 at 10:47 am

Same story here.
We sold our rural property in Feb. 2008 – we felt that a recession was coming and we were afraid of being stuck in a house that wouldn’t sell.
Everyone thought we were crazy or stupid.
We’re now renting in Waterloo waiting for the market to drop. Half of my coworkers now say maybe it was a good idea to rent, while the other half say this is a great time to buy now that housing is so “cheap”. The latter half also say that Waterloo is immune to housing downturns because of the insurance/tech industries. I looked at historical prices here and it has always followed the rest of southern Ontario. Go figure.
I guess it is hard to resist when we have morgage brokers advertising on the radio that this is the best time ever to get into the housing market – scary.

#65 Bill-Muskoka (NAM) on 05.29.09 at 10:53 am

Perhaps we should define the exact nature of the former Bush administration, and hence that of the Harper minority government’s ideology?

The ongoing global economic manifestations would tend to clearly indicate that the ultimate goal, the New World Order (first uttered by former President George H.W. Bush in about 1991), as such, is nothing more than the imposition of Hegemony.

This clearly clarifies the real reasons for such things as the NAU/SPP and the adherents to such a proposed political structure.

I believe the rest is mere ‘Wag The Dog’ diversion which promotes FUD and a means by which the Sheeple will acquiesce their obedience based on a perceived necessity of maintaining the status quo (which is not what is happening) in an imposed delusion of security. The truth, pertainign to the current economic tsunami, is revealed in the article Manipulation: How Financial Markets Really Work

The signs are now becoming clear and a prime example is the latest Bush era leftover of the U.S. wanting to fingerprint non-U.S. citizens on LEAVING the U.S. This nothing more than an attempt by the Hegemony Empire in waiting to create a global database of all people in preparation for the slow, yet inevitable establishment of a One World Government.

No, I am not a Conspiracy Theorist. I am an analyst who looks at things based on cold logical facts. This movement is promulgated by those who live in FUD and counteract their obsession with a need to feel in control.

Consider it to be but another form of universal religion imposed upon the masses by the few. That seems to be the inate nature of human beings who have an underlying paranoia, and those who use that weakness to their own narcissistic advantage consciously or unconsciously.

If you doubt the veracity of ‘religious zeal’ consider this article Was Bush on a mission from God? We also know that Harper represents the same Far Right Fundamentalist ideology (more from convenience than true commitment), which brings with it a justification factor using ‘God’ as their authority to act. History teaches us that such people are not to be trusted with power. The Inquisition shows their truest nature.

While you are buried in a myriad of details regarding a narrow view of reality, the broader picture shows what is really transpiring like a locust swarm on the global stage.

#66 Mrs Loquacious on 05.29.09 at 10:58 am

To be honest, I’m more comfortable talking about religion nowadays than I am talking about RE and investing. The former can be attributed to differences of opinion in matters of faith, whereas people take critiques of their investment choices quite personally.

However, as the economy declines further into the fall and next spring, I have a feeling that it’ll be increasingly easy to talk religion at that point; people will be searching for hope and higher powers when all of their net worth gets reduced to mere pennies on the dollar, jobs are lost, and bankruptcies are filed along with divorce papers.

For so many, the chase for the biggest dangling carrots causes them to lose all perspective in life. Sometimes it takes the removal of these distractions before they can focus on what is really important.

#67 CalgaryRocks on 05.29.09 at 11:07 am

To all renters that don’t want to pay for furnaces, maintenance etc. You do realize that unless your landlord is a moron, he has accounted for maintenance, taxes etc, when setting the rent.

And to the guy that said ‘leasing a car is the financial company’s liability’, do me a favor, drive your car in the ditch and let us know who pays to get it fixed. Afterwards, punch a few holes in the walls at your rented appartment and call your landlord to come and fix it. Let us know how long it takes him to fix that for ya!

#68 NoFreakinClue on 05.29.09 at 11:20 am

Garth,

I believe the fact that there is such a divergance between people regarding future of RE in medium term, might be that neither side offer reasons that is supported by numbers. Arguement generally is limitted to the “macroeconomics events” or general terms.

Could you point us to a study/analysis with some real numbers rather than opinionated arguments which describes / estimates losses in RE in Canada or TO?

#69 Live Within Your Means on 05.29.09 at 11:39 am

You’re post Garth made me think about a young couple I know of. He’s got a high school degree and she’s got the same, but she managed to shmooze her way into a pretty good job. They bought a half duplex about 2 yrs ago, with his Mother cosigning. Mom lives in a subsidized co-op. They married in the caribbean last winter, with families attending at great cost. The kids put on a reception at a hotel when they got back to town for those who couldn’t attend their wedding. Then they bought an expensive house and are renting out that duplex. They’re in their mid 20’s. They’re living like there’s no tomorrow. If either lost their jobs, they’d be up the creek with out a paddle and in major debt. But, gather that nowadays one can just declare bankruptcy and it’ll be wiped out in a year, or so I’ve been told. Correct me if I’m wrong.

#70 Al on 05.29.09 at 11:42 am

#31

“Who cares if real estate even loses 1/2 its current value by next year? In 10 years it’ll go up again?
Give your heads a serious shake!”

If you don’t mind buying something for twice the price today that you can buy it for next year, give your own head a shake. Besides, what if you get posted next year?

#71 Cash is King on 05.29.09 at 11:52 am

#65 – Bill

The signs are now becoming clear and a prime example is the latest Bush era leftover of the U.S. wanting to fingerprint non-U.S. citizens on LEAVING the U.S. This nothing more than an attempt by the Hegemony Empire in waiting to create a global database of all people in preparation for the slow, yet inevitable establishment of a One World Government.

Agree with you 100% I was forced to a finger print scan at LAX after showing my passport on a flight back from Sydney. When I asked why I had to scan the answer was, “because you will miss your connection flight to Detroit as we will detain you.” Now on 2 occassions since that time, when I cross the boarder at Detroit, US customs have asked, “Have you ever been finger scanned? I am now “scanned for life” and at anytime can be “held” by the US for any reason, real or created, at the whim of the US governement

#72 Got A Watch on 05.29.09 at 11:55 am

I think everybody here has had the same experience – try and tell somebody that “real estate does NOT always go up”, and they go crazy, like you accused them of being into child porn or something.

Even today, we have a guy named Fox (never heard of him) who claims to be a ‘real estate expert’ who has ‘returned to Toronto from the USA’ (LOL). He writes books about ‘How To Make A Fortune In Real Estate’ (not sure of actual titles, didn’t pay attention), and claims to have ‘made a fortune in flipping US real estate’.

Sure, it was so good down there, he had to return to Canada to inflict himself and his stale ideas on Canadians. I guess his books were a hard sell now in the USA, what with real estate plunging in value and all. Wonder if he foresaw that in his books.

So this turkey now has a 1 hour paid ‘advertorial’ on an AM radio station in Toronto every Saturday. Where he tells listeners how great real estate investing is, and how much money they will make, if only they followed his amazing money-making methods. Of course, you have to buy the book to learn what those are, he is very vague on the radio.

The same AM radio station now airing ads that say “Thanks, Dad. Your real estate investment in ’09 has really paid off for us, we are living the high life now”. LOL.

From all this conclude that the real estate crash in Canada has many years to run yet. The kinds of sentiment seen here have to wiped away, and replaced by public knowledge that “Never buy real estate, you’ll lose your shirt!” before we reach the real bottom.

Hope springs eternal in the minds of the real estate crackheads. It is obviously a very potent drug, able to wipe away all reason and common sense.

#73 mikewasanengineer on 05.29.09 at 11:58 am

Garth et al.

Well, after getting turfed out from my job at Magna, I
went and filed for EI.

I attended some sessions provided by the career councilling service. (I have 2 months to use them for resume reviews etc) It was all people in their 40’s plus there, all managers and such. The people there were very nice and helpfull.

I then went to schedule my meeting with Mississauga Community Connections, where they review you and refer you to the appropriate government service. I spoke with a very nice person there, actually she was great. The bad news, I have to wait over 2 months to get further appointments. THEY ARE OVERLOADED. She said that she has never seen soo many people outa work. I felt sorry for her in a way, having to deal with so much dispair coming in.

Once again, I state, EI IS A JOKE. The government is totally unprepared for the crisis. Not enough people, and not enough resources.

So the moral of my story is: YOU ARE ON YOUR OWN.

I would love to hear from anyone who know anyone who works at a welfare office…..what is happening there now?

Mike

#74 Ted on 05.29.09 at 12:00 pm

Buying or selling real estate depends completely on an individual’s particular situation. I’ve been a long time bear and have been frustrated to see how much profit I could have captured over the past three years. I don’t see that happening again going forward so nothing I can do about it now. However, with the pullback in prices I can get something that sold for 650 – 700K for about 500 – 550K. At that kind of price I can lock in a five year rate and have mortgage payments, taxes, & maintenance equal to our current rent. With the incredibility low rates we’ll have the opportunity to use extra cash to pay down the mortgage more rapidly during this time (just as a renter would invest the difference between rent and buying in every bear argument). With all the benefits of ownership (for our particular situation in life) we feel taking the risk on a five year bet is worth it for us. Five years is a long way out to make economic predictions with any accuracy.

#75 Live Within Your Means on 05.29.09 at 12:19 pm

Last post for the day. House next to us was sold last July for $219. by children – quick sale as parents ended up in hospital & would never be able to return. Purchasers (we know one of them) bought it and immediately put it on the market for $260. No bites. So they’ve spent months and much $$$ renovating – siding, windows, roof, bathrooms, kitchen, etc. Assessment this year was $278.00, before reno. They do have a large separate garage with a small greenhouse on the side. They had a ‘Sale by Owner’ for the last month and finally went with a Century 21 agent beginning of the week but as of today no online listing. My DH & a few neighbours saw it & all wonder whether they’ll make any profit on it. They did open concept in main living area, but everyone says its ‘too’ open. Asking price is $325K and its at least 30 yo. Granted, its a nice neighbourhood with large lots (min 20 ft. between houses) in comparison to new developments. Who knows, they might get their price. As long as I live in my city, I don’t want to live anywhere else.

#76 The_future on 05.29.09 at 12:21 pm

Garth,

Oil is picking up again. What does this equal for Calgary real estate? An increase again in prices on top of the already present bubble conditions? Or will prices show a long slow drop to normal inflationary levels? Perhaps you could step in as Prime Minister and fix this mess. Mandate a correction in housing to actual values instead of the “market value” mess. What’s the deal with market value anyway? Truely supply and demand? Or speculators who decided to profit? Looking forward to you in office.

#77 NoFreakinClue on 05.29.09 at 12:32 pm

Relying on cheap interest rate fixed for not 30 years (like US), but for 5 years is purely resemblance of Adjustable Rate Mortgages in US that ‘s taking them down to knee. WHOLE CANADA is behaving like California now speculating to death…

I don’t have theoretical background to see where interest rates would be 5 yrs from now, but if it is goign to be 12% when your 5 yrs mortgage resets, that would SUCK!!!

#78 David Bakody on 05.29.09 at 12:56 pm

Dollar up sharply and it could go higher ….. hello hope all these greater fools are not in the manufacturing or tourist industry …… or anything that is sold to the Yanks. And 2010 is not far away so there could be seat sales there also for many venues let alone all those junk sales. All a whole lot more.

#79 Rhino on 05.29.09 at 1:15 pm

#50 mattbg on 05.29.09 at 9:12 am

#31, canadian Army Guy: obviously, what you say about cars is true.

(smile)

Not quite…

My 1976 Mini is now worth about 7 times the original purchase price. If you buy the right car, and it turns classic, there are exceptions to that.

However, it was not bought as an “investment” – just a bloody fun thing to drive. And, I still drive it almost every day as a commuter and toy (no more winters though…).

Isn’t that a good parallel for why one should buy a house? Like, uh, less bought to resell profit from others and rather something to enjoy and live in?

#80 Live Within Your Means on 05.29.09 at 1:16 pm

#73 mikewasanengineer on 05.29.09 at 11:58 am

OK its not my last post.

Mike – Sorry to hear you’re one of the unemployed & I wish you and all those in your position the very best. My sis contributed to EI for more than 30 yrs and never claimed EI. She also worked in the US for 5 years. She was laid off in Jan and was short 12 hours. She needed over 700 hours to qualify, and now its been reduced to something like 400+ in her area, but she can’t qualify because its not retroactive. She’s 59. I paid into EI for more than 30 yrs and rec’d 1 cheque when I moved from 1 prov. to another. What good does extending EI benefits if one can’t access EI. And so much for retraining when one is 59. I’m also upset that our current govt. lies in the HoC stating that the Liberals propose reducing the qualification hours to 340 indefinitely. They have clearly stated that it is only during this unprecedented global recessionary (perhaps depression) period. Whats $1.5 or $2 B on top of their $50B deficit if its to help out people who will only have to go on welfare & possibly lose their homes, etc. Those thousands of EI unqualified people will spend money on food and basic necessities. Harperites always accuse the Libs for downloading the debts in the late 80’s/early 90’s on the prov/muncipal govts (which were caused by B.M BTW), but Harper will do the same via causing those non-EI recipients having to go on welfare.

#81 PTDBD on 05.29.09 at 1:23 pm

My barber keeps old magazines around. Flipping through a 1997 edition of “Canadian Business”, I came across a real estate commentator’s conclusion on owing Vancouver real estate. The writer called ownership there as”a bad idea” since it was overpriced relative to renting.

Who cuddanode?

#82 Chris in England IG-AZ at the moment on 05.29.09 at 1:26 pm

Canadian Army Guy #31: “BTW are you for real for suggesting to eat squirrel? LOL. Pretty retarded!”

===================================

Can’t say I have seen it on restaurant menus but I don’t get out much to the best places.

“‘I cannot personally get enough of these grey squirrels, people are eating them.

‘If I was getting a hundred, they would take a hundred each and every day, the demand is so high. They are sold as soon as they hit the counter.

‘I supply to order. I pick the phone up and say right, your squirrels are in.

‘They are going to top restaurants, butchers, the working man. They are a delicacy and they are really hard to get – especially up this neck of the woods.'”

Paul Parker, Gamekeeper

http://tinyurl.com/l8f4em

#83 Bill-Muskoka (NAM) on 05.29.09 at 1:31 pm

#71 Cash is King

Thank you for substantiating my point. What I find very interesting, as a CanYank, is that the U.S. Constitution specifically prohibits the requirement for ‘papers’ (aka, ID, fingerprints, etc.) against any U.S. Citizen (Note: Canadians do not enjoy the same protection), and even the imposition of driver’s licensing, and a myriad of other things related to travel have been decided repeatedly by the Courts.

Here is one concise and good example of such findings.

a href=”http://www.w3f.com/patriots/totravel.html”>RIGHT to TRAVEL

The entire 9/11 based rational is faulty and illegal in too many instances. I, for one of many, still do not buy the 9/11 explanations, especially I reject the Pentagon fiasco as pure fabrication by the Pentagon and Bush administration. There was simply NO physical evidence of a 757 airliner hitting the building. Something made a hole, but a Cruise Missile or small military jet, or bomb is the most likely candidate. The entire thing was way too convenient, including the WTC, which is plethora of technical and engineering contradictions.

Let us never forget the Frontline program on it all, which was taken from ‘Fahrenheit 9/11, or vice versa? While we all know Bush is a certified Moron, his reaction was way too calm, even though he was struggling to read a kindergarten book, and it was upside down when he was allegedly ‘informed’ of the event. This entire event single handedly brought about the justification basis for the Patriot Act and all that has followed.

#84 Bill-Muskoka (NAM) on 05.29.09 at 1:32 pm

Oops! Bad link. Sorry. here it is correctly:

RIGHT to TRAVEL

#85 Shiner on 05.29.09 at 1:49 pm

#67 CalgaryRocks

Why are you driving your car into ditches, and punching holes in your walls? smw’s obviously talking about things that happen that are out of your control. BTW, your handle? Been there, done that, and it doesn’t rock. It doesn’t even roll.

#86 dd on 05.29.09 at 2:08 pm

#76 The_future on 05.29.09 at 12:21 pm Garth,

Oil is picking up again. What does this equal for Calgary real estate?

Calgary is built on Natural Gas. Have you seen the price lately?

#87 mattbg on 05.29.09 at 2:39 pm

#75 Live Within Your Means: you almost make it sound like a 30-year-old house is a bad thing. It’s not, and those houses are built way better than most of what you will buy today. Actually, I’d rather have a 50-60 year old house than a 30-year-old one, as long as it’s been maintained properly.

#88 Dmitriy on 05.29.09 at 2:47 pm

“…the Canadian labour market is falling at a rate not seen since the 1982 recession… This bleak picture, however, masks a positive story that is well hidden behind the gloomy headlines…. Our Employment Quality Index (EQI) is suprisingly stable.”

http://research.cibcwm.com/economic_public/download/eqi-cda-20090415.pdf

Addressing the issue of upcoming interest rates rise, what prevents a potential buyer to get it fixed for a long enough period of, say, 7-10 years (@ 4.95% -5.05% range) and continue sleep well…

http://www.mortgagealliance.com/customers/mortgage-rates-see-our-rates.asp

#89 marcus aurelius on 05.29.09 at 2:53 pm

#46 mattbg: “12, at this stage I wouldn’t put it past the real estate associations to start buying and selling houses amongst themselves for inflated prices to provide some front-page real estate stories about how well the market is doing ”

Well now – there’s a lead-in any red-blooded “journalist” would love to follow. Imagine the dorky prizes for investigative journalism that can come out of a little diligence and doggedness there….. Maybe start with Toronto C4 after 1995 … Oops, I forget – you Canadians don’t like ‘effectiveness’ in your so-called securities regulators, government ministries, competition bureau anti-trust types or any other public watchdog taking your money to rack up the worst enforcement stats in the Western World. Think about how feckless a real estate agent is, compared to say, a guy selling hashish in a Calcutta backstreet, or a car salesman. Now figure out whether it’s “possible” some of those Jabba the Hutt agents might possibly think about strategic insider buying and selling through Land Titles to pump up ‘street values’. If we could only get a real journalist (stand down, Ann Roehmer) to stop selling ad copy and look into that, maybe we’d have a ‘polite request ignored’ by those toothless government agencies!

Canada is the birthplace of sheeple not because its people are less intelligent or more naive, or its immigrants more dishonest (ever worked a retail lotto scam in the GTA, bunkie? Me neither, but I hear that OLG still pays you millions if you do, and lectures the public on how they ‘don’t look back’), but because its enforcement agencies are an embarassment to any ‘developed’ country. Truly awful and negligent disregard for justice and ethics. Why should a smart-ass real estate agent fear anything in Canada?

#90 Ted on 05.29.09 at 3:12 pm

I don’t have theoretical background to see where interest rates would be 5 yrs from now, but if it is goign to be 12% when your 5 yrs mortgage resets, that would SUCK!!!

It would suck but if they go there everyone’s getting slaughtered. We’ll see…

#91 CalgaryRocks on 05.29.09 at 3:23 pm

#85 Shiner on 05.29.09 at 1:49 pm #67 CalgaryRocks

Why are you driving your car into ditches, and punching holes in your walls? smw’s obviously talking about things that happen that are out of your control.

Those things that are out of ‘your’ control are already accounted for by your landlord in ‘your’ rent. See, he, unlike you, knows how to count and plan ahead.

#92 timbo on 05.29.09 at 3:43 pm

#76 future

what bubble? Chestemere is dead, went out to one area and 2 houses are under construction. Last year 8. Langdon 1 duplex in 3 months, last year 5 houses at the same time. Elgin 1 house per month last yeat 5.

If your in Calgary do yourself a favor, go into the industrial on the weekend and look at the for-lease signs. Go into the residential -new and look at all the empty houses with no blinds and the for -sale signs. Show me a massive building spree and I will change my conclusion.

#93 Dan in Victoria on 05.29.09 at 3:45 pm

Well Don, at least you can carry along an intelligent conversation with them,thats a dream for me.Brief snippets from last christmas,You’re wrong Dan, Obamba got in, 3 months from now it will be all better.So I ask ,what do you guys think about peak oil?Reply,I think there’s enough gas stations in the country we don’t need another company starting up.I tell them,You guys listen and watch too much MSM,Reply,Yeah I like when Santa sees him LOL(They thought I was talking about M&M candy commercials)…….I torment them mercilessly……And no they are not from my gene pool.

#94 mathew gibson on 05.29.09 at 3:58 pm

I stumbled on a nice summary of the future of real estate for Canada.

It comes from another great blog, The Market Ticker, by Karl Denninger. He writes of the US housing situation, which just goes to show haw far the Canadian market has to fall:

“The housing market is not done with its dislocation. Until people can buy on conventional financing without “Fed-enhanced” rates with a 28% front end ratio and a 36% back end ratio, putting 20% down on a conventional 30 year fixed note, the housing market has not found equilibrium. This does not mean there won’t be false bottoms – there will be, as there is a near-infinite supply of idiots who will throw themselves into the immolating fire of bankruptcy chasing what they believe are “deals”, only to have them blow up in their face a year or two down the road.”

#95 hobbygirl on 05.29.09 at 4:42 pm

To # 32 – Riveted
Sounds like what your sister is doing is elder abuse (financial does qualify). While I have no objection to a parent helping a child in trying times it is important to distinguish a ‘want’ from a ‘need’. Satelite cable is not necessary for survival.

As far as your sister’s claim of ‘because we deserve it’, the world never has and never will owe anybody anything. Sounds like an ass whooping could send her on a trip she deserves. My apologies for harshness, but I don’t take well to seeing someone get taken advantage of. Your mom deserves a nice trip, she’s worked for it and SHE deserves it.

#96 CalgaryRocks on 05.29.09 at 4:52 pm

#90 Ted on 05.29.09 at 3:12 pm I don’t have theoretical background to see where interest rates would be 5 yrs from now, but if it is goign to be 12% when your 5 yrs mortgage resets, that would SUCK!!!

If that worries you, then lock in for 10 years @ 5.25. 5.25 is a freaking gift when put it into context historically.

#97 CalgaryRocks on 05.29.09 at 5:02 pm

#92 timbo on 05.29.09 at 3:43 pm #76 future

If your in Calgary do yourself a favor, go into the industrial on the weekend and look at the for-lease signs. Go into the residential -new and look at all the empty houses with no blinds and the for -sale signs. Show me a massive building spree and I will change my conclusion.

Well, we’re hiring at least 4 people in my department. A friend of mine that got laid off, got called back 3 weeks ago and he says that his company is hiring again.

I called 5 companies to quote for a fence and only one actually gave me a written quote because the others didn’t have time to do the job. (Job was too small for them to bother or they were to busy to even show up on time)

Ah, and a funny one. One guy my wife was interviewing asked for a 250K/year salary the other day. Ok that’s funny, even for Calgary!

#98 squidly77 on 05.29.09 at 6:05 pm

CALGARY – The number of people on Alberta payrolls shrank again in March, with 23,300 jobs disappearing since February amid a general economic downturn.

The number has fallen 2.9 per cent since December — representing 51,000 lost Alberta jobs — the biggest drop among the provinces.
alberta hammered by job losses

#99 JoeCalgary on 05.29.09 at 6:25 pm

“Canada Has Record Current Account Deficit on Exports”

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aeqHB.61XOUs

#100 squidly77 on 05.29.09 at 6:45 pm

CAW positive public relation flop
http://www.windsorstar.com/Sports/Playing+field+mowers+scabs+warns/1640566/story.html

#101 RJ on 05.29.09 at 6:51 pm

At the height of tulip insanity, one bulb could fetch 5.7 pounds of gold. That is truly insane. Interestingly enough, one bulb would alternatively fetch around 57 pounds of silver, for a ratio of 10:1. That’s hugely out of whack today, and presents opportunity.

#102 squidly77 on 05.29.09 at 6:56 pm

http://debtclock.ca/

#103 CalgaryRocks on 05.29.09 at 7:14 pm

#100 squidly77 on 05.29.09 at 6:45 pm CAW positive public relation flop
http://www.windsorstar.com/Sports/Playing+field+mowers+scabs+warns/1640566/story.html

A scab is just a regular working man that does the work of 10 union ‘workers’ on top of his own.

#104 . . . fried eggs and spam . . . on 05.29.09 at 7:18 pm

Re: #76 The_future at 12:21 pm — “Oil is picking up again.”

All things being equal, if oil settles at US$110 / brl. for any length of time, diesel prices for the big rigs go up; big rigs transport most food between Provinces and States.

Trucking companies will charge supermarkets and others like them more to cover their maintenance and other costs. In turn, supermarkets increase food prices to keep profits stable, and stay in business which leads to higher inflation, but the CPI has not shown this — yet.

Consumers — us — are the last ones who keep the above going, as we are the ones who must pay higher prices for the food. What makes this a rather strange scenario is that a whole bunch of sheeple are, at best, treading water with mortgages, credit card debts, LOC, other debts, etc. to pay off, so not much left to buy basic staples with.

Consequently, food banks are being hit really hard now. At the Kelowna food bank, their shelves are almost empty, with no monetary or food donations coming in, yet the need keeps climbing.

Consistently high oil prices will have major impacts on a whole litany of things, and this is one of the effects — http://tinyurl.com/ktgom5
——
Ireland, like Iceland, Spain and a number of others is almost bust /\ http://tinyurl.com/l55t9f /\ while the Eurozone inflation is now zero. Guess no one knows what to do anymore! /\ http://tinyurl.com/m3jkkx
——
As the Euro and Pound are sinking and virtually worthless, what does that say for the US dollar? Not much! — http://tinyurl.com/m5skgp

Apparently, silver and gold are in the throes of reaching new highs. Still prefer silver, but haven’t got spare cash to buy some.

#105 Barb the proof reader on 05.29.09 at 7:38 pm

#60 smw,

Hey, you know darn well I’m not really a proofreader.

#106 john m on 05.29.09 at 7:48 pm

#97 CalgaryRocks on 05.29.09 at 5:02 pm

#92 timbo on 05.29.09 at 3:43 pm #76 future

If your in Calgary do yourself a favor, go into the industrial on the weekend and look at the for-lease signs. Go into the residential -new and look at all the empty houses with no blinds and the for -sale signs. Show me a massive building spree and I will change my conclusion.——ARE YOU A SHEEPLE? CHRIST WHAT WAS IT 61,000 PEOPLE WENT ONTO UI IN ALBERTA LAST MONTH???

Well, we’re hiring at least 4 people in my department. A friend of mine that got laid off, got called back 3 weeks ago and he says that his company is hiring again.
—-SOUNDS AMAZING SO NOW ONLY JUST LAST MONTH 60,986 NEED UI?
I called 5 companies to quote for a fence and only one actually gave me a written quote because the others didn’t have time to do the job. (Job was too small for them to bother or they were to busy to even show up on time)—- LIFE IS GOOD ON UI :-)

Ah, and a funny one. One guy my wife was interviewing asked for a 250K/year salary the other day. Ok that’s funny, even for Calgary!—-EVEN FOR CALGARY??????????????? CHRIST WHAT DO YOU THINK YOU HAVE THERE????????? ——stop look around take time to smell the roses……….you are living in a dream world promoted by a sheepherder :-)

#107 JoeCalgary on 05.29.09 at 8:27 pm

US–“Prime fixed-rate loan foreclosures have now surpassed subprimes”

http://www.cnbc.com/id/30984467

#108 john m on 05.29.09 at 9:01 pm

CPP pay packages draw Layton’s ire
NDP leader demands limits on compensation in wake of poor fiscal performance
Last Updated: Friday, May 29, 2009

The head of the Canada Pension Plan Investment Board saw his pay drop by about 30 per cent last year.

But if you ask NDP Leader Jack Layton, the CPP head’s pay cut should have been a lot more.

President and chief executive David Denison earned a salary of $490,000, a bonus of $735,000 and long-term incentives totalling $1.6 million, according to the board’s annual report released Thursday.

He also received $59,000 in pension contributions and $9,600 in other compensation, which included such things as life insurance and health and dental benefits.

That compared with a salary of $475,000, a bonus of $1.2 million and long-term incentives totaling just under $2.4 million, plus $57,000 in pension contributions and $8,800 in other compensation the previous year.

Layton says the compensation is outrageous considering the Canada Pension Plan fund lost so much of its value.

He demanded the Conservative government step in and slash the bonuses.

But Prime Minister Stephen Harper says that would amount to political interference with an independent agency

CPP board chairman Bob Astley said executive pay is based on investment performance over a four-year period measured both in absolute terms and relative to market benchmarks.

“Compensation does respond to performance, so that gave rise to those results,” Astley said.

For the financial year ended March 31, the fund’s assets fell by $17.2 billion, to $105.5 billion.

The loss on investments totalled $23.6 billion, partly offset by more than $6 billion in contributions from millions of employers and workers across Canada.

© The Canadian Press, 2009————-ah yes things are different here in Canada…good for you Jack!—————- and sheep herder harper thinks this is ok? Until we have some leadership ,honesty,and basic common sense at the top we are “headed to hell in a handbasket”………..curiously the sheeple herd up and follow??

#109 Boombust on 05.29.09 at 10:11 pm

I was taliking to a teacher the other day who is married to another teacher. They have two teenaged sons.

They were telling their sons that it may not be a good choice for them to enter the teaching profession…because, the salaries teachers earn will probably NEVER be enough for them to buy a house in the Vancouver area market.

I said, “Well, if a TEACHER or TEACHERS can’t afford a house, then I guess the prices will have to come down. Adjust. Correct.

She still didn’t get it.

#110 Boombust on 05.29.09 at 10:13 pm

“A scab is just a regular working man that does the work of 10 union ‘workers’ on top of his own.”

You’re an idiot. The “scab” wouldn’t have a decent paying job if it wasn’t for the union.

#111 dave on 05.29.09 at 10:56 pm

Garth is a real S*** disturber. That’s what I like about him.
Bashing gold gets 20% more replies to his blog.
Next time he speaks with Tom Jefferies on Howie Street he ask him for his take on gold. He can point you in to some real smart people – like yourself.
Like others – that goodness for gold – preserved my wealth – not very good at the stock market. Been a wild ride but I have not lost a cent with gold and have made above average rate of return over the last 6 years.
Like real estate I think there will be a crazy mania with gold. The trick his to sell a bit a time on the way to the top.

#112 Samantha on 05.29.09 at 11:32 pm

@108 John m – I saw this break on CTV yesterday. Just lovely. Here’s the link for CTV’s updated report which provides figures for some of the other executives….

Outrageous.

http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20090528/cpp_bonuses_090528/20090528/

#113 timbo on 05.29.09 at 11:37 pm

#106 john m,

http://www.calgaryherald.com/business/Alberta+loses+more+than+jobs/1640502/story.html

head in the sand and talking out the other hole with the caps lock button taped down. Fencing jobs I can see as they are closing off industrial areas that are vacant. Give me a link to the job growth you see and hear? Let me guess, seasonal work (roads,landscaping)? funny with all this job growth on your island the mainland still is losing jobs or are these numbers fabrications.

You can always spot the poor guy who buys at the peak. Angry , in denial and will only see what he wants to see. Largest trading partner going broke and thinks we wear teflon. You are right globalization is jist a lie, our strong dollar will really push exports and provincial debt will save the day and keep taxes low.

#114 Calgary_rip_off on 05.29.09 at 11:44 pm

John M.

You wrote a very good post. Very very accurate. Timbo and Calgary rocks are pro bull despite reality. That guy that asked for $250K a year, that’s typical Calgary arrogance. However, thats about whats needed to live comfortably here. I make $90K a year, Im renting, and struggling. Something seems a bit off when a person that makes close to $100K cant afford a house here that only 5 years ago was worth half market value that presents itself now. This boom has created unsustainable conditions created by lust and greed. Its funny…because there wasnt anything tangible that changed, the house of cards is slowing collapsing. Unfortunately in Calgary change is very very slow. The local papers still think its a boom, the realtors, the sellers, and many of the homeowners. They’re right, houses are still overvalued by $200K a total ripoff, considering what you are getting.

Anyone contemplating a move to Calgary, dont.

1) Too expensive.
2) Claustrophobic.
3) Too conservative(not open to diversity)
4) Boring.
5) Green light cameras.
6) Cold half the year.

There are other reasons, those are the main ones. #’s 2-6 would be tolerable if my mortgage were $800 a month, like it should be, for a 1900 sq ft. house. This a prarie city not New York City.

Perhaps for ignorant posters like Mario Toneguzzi, Bob Truman, timbo, eduardo, CalgaryRocks(or any of the other status quo supporting idiots), a lobotomy is in order, as they are not seeing the statistics showing a house of cards in the real estate market, an unstable and unsustainable boom. Its just a matter of time before something bad happens.

The key is to not be around when it does. As a renter you can laugh when the market goes up or goes down because it ultimately doesnt affect you. So much evil in this town….the trick is to live in it and not be of it.

#115 timbo on 05.29.09 at 11:45 pm

Garth , with all the banter back and forth I see we have reached the anger stage of things.

http://changingminds.org/disciplines/change_management/kubler_ross/kubler_ross.htm

#116 Drew in the 'Peg on 05.30.09 at 12:03 am

I have had a similiar discussion with family, and another with my coworkers. They think I am dumb for renting, “You’re throwing your money away.”,”Buy a house it’s a good investment.”, the classic “Your building equity” and “Winnipeg house prices will never go down because there is so little land to build on” Yikes

They don’t listen or even want to know anything other than the common wisdom of owning a house. It’s sad that there are so many greater fools.

#117 Da HK Kid on 05.30.09 at 12:25 am

#31 Can Army Dude,

Let us all guess you own your home in full! Since 1985. Nuff Said!

On the rest of your comment, I tried to contact you but I was told you were “OUT TO LUNCH!”

Nice try!

#118 . . . fried eggs and spam . . . on 05.30.09 at 12:36 am

Jim Rogers’ 3:54 clip on the downturn. — http://revolutionarypolitics.com/?p=908

It is noteworthy to recall that The Four Horseman of the Apocalypse — Bernanke / Paulson / Geithner / Carney, a.k.a. In-, De-, Stag- and Hyperinflation played major roles in this continent’s economies, being told what to do, where and when to do it by those behind the scenes.

It is not Obama or any of the political heads who are putting all of this into play. Others, like the Bilderberg Group, Rothschilds and similar ones come to mind. We are guinea pigs, that’s all. Speaking of which — http://tinyurl.com/mxckl9

“The Lords of the Universe are ready to take over with the financial crisis they manufactured for the purpose… Long, but worth reading what is planned for us, with the full cooperation of our governments and silent opposition.

“Ed Deak.”

While we discuss / argue / fight with one another over opinions, they are screwing sheeples’ lives up, and there is nothing we can do to stop them. Except to have massive revolutions when the time is right, which is not too far off the horizon.

In unison with fake swine flu and three flu shots req’d. by DC for all citizens — http://tinyurl.com/lfdune, flare-ups / false flag ops. designed to scare the bejeezus out of us, it will accomplish their stated goal of reducing the global population by about 2/3, leaving this planet and it’s dying resources to them.

In light of the loonie’s surge vis-a-vis the US greenback, this — http://tinyurl.com/luvfa9 — might precipitate the slide of the dollar — http://tinyurl.com/nryah6

However, if the dollar continues it’s downward pull and takes the loonie, peso, yen, euro and pound with it, that leaves the yuan and ruble as top dogs, so what becomes of the Chinese holdings of US debt?

Events are happening in the world so quickly now that these stupid, waste-of-taxpayers’ money and dumbass Olympics may not even get off the starting block.
——
Could be that Russia knows something’s up. — http://tinyurl.com/lzh4j5
—–
Thought it would be good to have a good laugh at some of the stuff that doesn’t get seen on the m$m. — http://tinyurl.com/krhkr5

#119 Jake on 05.30.09 at 12:56 am

Don, it’s like watching two trains race towards one another from opposite sides of a hill. Sometimes you have no choice but to watch the wreckage that will be inevitable despite your best warnings.

Hey Bill,
Great posts today. I will probably have my fingerprints taken next month on my way home from Glacier National Park. Have you heard about the new cibersecurity bill? It looks like the Bush era tactics will continue to roll on. Hopefully Obama will catch on soon and try to clean things up. I can’t wait until he pushes for a serious investigation of 9/11 as well. Thank goodness we have someone we can trust in the White House now :)

http://www.infowars.com/cybersecurity-obamas-promise-to-trash-the-constitution/

#120 Vancouver_bear on 05.30.09 at 3:22 am

#44 obooma on 05.29.09 at 8:43 am
“This housing market has nowhere to go but up”

yeah right… is that because we are different? Or because you are realtor? Look around we are in crap only up to our shoulders….

#121 Mike (Authentic) on 05.30.09 at 4:59 am

#54 Mish on 05.29.09 at 9:35 am gold up 1.7% today.

StarBucks is up 61.14% in the last 6 months. Does this mean a cup of Frappochinolattenonfat is worth more than gold to some people?

You Bet!

It is crazy that Starbucks stock is up 61%

You Bet!

http://www.google.ca/finance?client=ob&q=NASDAQ:SBUX

Mike

#122 Dee on 05.30.09 at 5:13 am

A nice little piece of propaganda for your enjoyment.

http://english.pravda.ru/opinion/columnists/107459-0/

h/t zerohedge

What to do, what a to do…

http://bloomberg.com/apps/news?pid=20601109&sid=ad3g0wmJFaZQ&refer=home

If you don’t get a page try again later. It keeps disappearing and reappearing again.

#123 CalgaryRocks on 05.30.09 at 8:06 am

#110 Boombust on 05.29.09 at 10:13 pm “A scab is just a regular working man that does the work of 10 union ‘workers’ on top of his own.”

You’re an idiot. The “scab” wouldn’t have a decent paying job if it wasn’t for the union.

That’s so 50 years ago. Besides, WE wouldn’t have to pay for 10 union people to do a job that can be done by 1 person better.

#124 CalgaryRocks on 05.30.09 at 8:42 am

#114 Calgary_rip_off on 05.29.09 at 11:44 pm John M.

However, thats about whats needed to live comfortably here. I make $90K a year, Im renting, and struggling.

You are too funny. I have to laugh when a self avowed NDP supporting, wish Canada was Sweden, socialist whines that he can’t make it on 90k/year in Calgary.

You should have your picture on the first page of the pravda as socialist of the year. Poor baby, can’t make it on 90K/year. That WILL require a REVOLUTION!! LOL!

#125 Deepak on 05.30.09 at 9:07 am

@#60 smw

Friendly FYI…. I’m not sure if you are in any position to comment on other people’s use of language in their posts. You used “your” three times when “you’re” is gramatically correct.
I’ve been a professional recruiter, and your cover letter would have been in the bin by now. :)

#126 Mish on 05.30.09 at 9:41 am

#121 MIKE

6 months a trend does not make.

Starbucks stocks in down over -64% on a 5 yr basis

Gold is up over 200% on a 5 yr basis

Starbucks stocks in down over -50% on a 2 yr basis

Gold is up over 100% on a 2 yr basis

#127 Future Expatriate on 05.30.09 at 9:47 am

So much for the suckers’ rally. “If you’re not petrified, you’re not paying attention.”

#128 Riveted on 05.30.09 at 9:50 am

#95 hobbygirl

True…for the most part. She’s also very wonderful to our mother, and I guess had no where else to turn without feeling judged. I share your reaction on a gut level, yet I’ve also come to see her as no different than the majority of sheeple out there. I’m the debt repaying, flat renting, small car driving, local food buying, rabbit-ear TV watching (gasp!) freak of nature.

People see a $150K income with no conventional signs of prosperity and think “gambling problem” when they should be thinking “smart feller”.

#129 Future Expatriate on 05.30.09 at 10:33 am

I KNOW these folks are gold dealers, BUT this is a damn good chart on mortgage resets. Take what you need and leave the rest.

Mortgage reset chart

The worst is FAR from over.

#130 Davinci on 05.30.09 at 10:45 am

You listed a lot of bubbles and forgot the one bubble that has popped over 1600 times in the last 2000 years. The currency bubble, on average it takes 40 years for a purely fiat currency to pop.

But hey just like the home buyers in the letter, this time it’s different. Right? :) Governments are much smarter now. lol
I am dying of laughter.

#131 smw on 05.30.09 at 11:11 am

CalgaryRocks its the same guy, me, I made both comments so don’t be scared to use my handle.

Under the current economic climate and thinking government financial thought patterns, your suggesting that we drive our cars into ditches might actually help the ailing auto industry.

How very Keynes of you.

Next time your out for a drive, make sure you buckle up, fasten your special head gear and verify that you have LIABILITY INSURANCE on your vehicle, or you’ll be on the hook for the damage.

Don’t worry though, there is a huge over supply of leased vehicles on the books of the teetering automakers. See, when they’re returned off lease, they’re the responsibility(liability) of the manufacturer. And they are giving autos away at this point because of that over supply sitting on their books.

Speaking of liability; 5.5 trillion in mortgage debt, Fannie and Freddie. A lot of American’s learned, and even more(ALT-A, ARM) over the next couple years are learning the words “LIABILITY”, “DEAD MONEY”, & “FORECLOSURE”. Also see FDIC, AIG, CMHC and the term tax payer for liability.

The low rates and the tax break on the housing upgrades might be enough to bring in a few more consumers and keep a sputtering economy afloat, but not enough to save ourselves from the inevitable.

As for rent versus own, whatever you think, yeah, my landlord is a moron(Nice use of the english language, you got moron and retard covered, you sound very smart). But a simple calculator, a few numbers and common sense says, your the moron.

——————————————————–
Those betting on $100 oil to preserve their precious real estate bubble gotten gains, sweet dreams.

Say hello to Dubai!

Slumping demand would drag residential real estate prices down 50-60 percent this year from 2008 peaks, EFG-Hermes said in a research note this month. The market is unlikely to begin to recover before some time in 2011, it said.

http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSLL49042720090521

Maybe they should have dropped rates to 0 and had a few housing upgrade tax gimmicks?

#132 smw on 05.30.09 at 11:15 am

#54 Mish

Yeah, but how about silver? :) Up 4.2%!

http://www.kitco.com/market/

http://www.tulving.com/bullion/2008%20Canadian%20Silver%20Maple%20Rev.jpg

#133 Barb the proof reader on 05.30.09 at 11:34 am

TheFirstRick @ #123,

Got A Watch @ #130 has hit the nail on the head.

By the way, your critique — your personal attack on others posters — doesn’t add up..

Many of us have read The Honourable Mr. Garth Turner’s blogs for some time and are quite familiar with each other, we respect each other and several bloggers were even able to meet last August at Garth’s invitation. He has no such rule that people can’t give each other a nod, such as when Herb @ #33 noted something for me.

Only Mr. Garth’s opinion counts here. If that annoys you, then maybe you shouldn’t be wearing that crown. I truly apologize for having missed your Coronation. It must have been grand!

:)

#134 Bill-Muskoka (NAM) on 05.30.09 at 11:39 am

#119 Jake

Thank you! yes, I have heard about the Cyber Security plan and wonder why it has taken so bloody long for them to deal with this all pervasive issue of national security? But has it? No! Bush started it years back. Obama is merely following through and closing the loopholes.

Let’s take a no rose coloured glasses look at the issues, eh?

First, the modern world is literally run by computers.

Secondly, the majority of computers use Microsoft Operating System, albeit there are numerous others.

Thirdly, there is no need for physical bombs to destroy thing, or cause terroruist events, albeit disguised as ‘events’ by the ignorant MSM who like fish swallow almost anything they are lured with by the government, who is always looking after Number One…Themselves, but us as well (at least some are).

Look back on the major electrical grid outages, especially the one back in the late 1980’s that blacked out the entire western North American continent from San Diego, CA to B.C. Remember that? The MSM blamed it on a ‘brush fire’ because that is what they were told. BS!

The electrical distribution system is controlled using over the transmission line code called by various names such as PLC, X-10, etc. The transmission line carries the signal piggyback on the high voltage carrier. It goes EVERYWHERE. To the sub-stations, plants, even our homes. This is precisely how the new Hydro meters communicate back to a central system to determine time of use, and the amount of juice you will pay for.

It is also how the Grid is controlled remotely, and how power routing done.

Now, consider that all that also controls the power to the refineries, pipelines, reactors, railroads, air traffic control, hospitals, fire and police services, telecoms, satellite ground stations, and such. All of which can be used to create massive destructive events either directly, or indirectly.

People simply do not grasp how interconnected things are. They think, based on their own personal usage, that you must be connected to the internet to be affected. That is simply not true in the bigger scheme of things.

The government, of course, touts their need to protect their computer systems from hackers. granted, that is a viable thing because those system contain our personal data, as well as control over little items such as nuclear weapons. (Remember the movie Collosus: the Forbin Project’ or ‘Failsafe’?) Those system are generally controlled by dedicated satellite links, but where does the data originate from? Ground based computer systems.

Now, settiing aside the teenage hackers trying to impress themselves and their friends by viruses and worms (the modern equivalent of swallowing a Goldfish), we have former irate employees who want revenge, domestic and foreign spies, real terrorists (No, they are not ignorant and uneducated, they often have advanced PhD’s and the funding to support their activities), and governments dedicated to overthrowing our stability.

So, if any one has been in the White House in past decades that will actually grasp the threat and the need for immediate preventative action, it is President Obama. Note that Bush and Clinton both just admitted they were unaware of the new Border Passport requirements for Canadians. The President doesn’t know everything.

As to the link you provided, that is relatively old news. The NSA, under Bush, together with AT&T, routed all the Asian internet traffic through those monitoring centres to protect American, adnCanadian interests. There was a TV program on it as well. If you do a Google search using ‘NSA’s internet monitoring’ you find page after page, article after article, on the subject. Now the FBI is admitting they too are involved. Well, what a shock that is, eh? The CIA has been doing it for years. In Ft. Huchucha, AZ the U.S. Army’s Military Intelligence Center monitors ALL communications traffic. The place is a virtual antenna farm and they monitor telephone, satellite, and internet traffic. Another well known fact. The computers look for wordws such as ‘bomb’ etc, and that flag a communication for analysis.

As Ben Franklin said so well ‘An ounce of prevention is worth a pound of cure! he was and is right. Surely, people have come to realize the world is bigger than their little town, province, or country? well, maybe not! Yes, there are unscrupulous people everywhere. We are all well aware of how those who shopped at Winners became Losers by one act of hacking. we need to rethink our position on what is necessary and what is not. National security is, after all is said and done, about OUR security. We are the Nation! Hope people remember that the next time we have an election?

Have a nice day, and remember, while we despise much of the antics of the politicians, who we view as ‘government’, the reality is that the government is really run by our fellow citizens and they think like we do. They are our monitoring system for security against those who would bring about Hegemony..

#135 Calgary37 on 05.30.09 at 12:08 pm

RE: #83 Bill-Muskoka (NAM) on 05.29.09 at 1:31 pm

“There was simply NO physical evidence of a 757 airliner hitting the building. Something made a hole, but a Cruise Missile or small military jet, or bomb is the most likely candidate. The entire thing was way too convenient, including the WTC, which is plethora of technical and engineering contradictions.”

*******************************

Since most Canadians probably believe the official account, I thought that I should lend you some support for your brave words.

I am not a student of 9/11, and I do not have my 9/11 files handy, so I am working from my memory. The Pentagon farce is the easiest to show that this whole operation must have been an “inside job”.

The Global Hawk program became operative in 2001. There were 6 old trainer jets converted into a version of a Global Hawk and 6 new Hawks came off the production line. These UAVs could fire Hellfire missiles.

I suspect that one of the old converted jets was “sacrificed” for the cause, which explains why there was so little debris on the lawn outside the Pentagon. There might also have been a thermite bomb planted inside the building during the recent renovation of that section of the building. That could explain why there did not seem to be much aircraft debris recovered from inside the building since it would have been quickly destroyed by the thermite bomb fire.

One comment about the WTC buildings. Apparently each of those buildings had a computer floor, but they were on different numbered floors. However, each of those planes flew into the computer floor in each building. That suggests that the planes involved were remote controlled and then were turned over to a homing device in each of those computer floors.

Cheers.

Power to the People. Let the Revolution Begin.

#136 Jeff Smith on 05.30.09 at 12:18 pm

If the US goes hyperinflation, will Canada do the same?

#137 rory on 05.30.09 at 12:36 pm

#125 Deepak

As a pro recruiter, I am sure you have encountered the smooth talking, excellent writing, over resumed ego jerk that lands the job because of these skills yet cannot deliver on anything worth while…all talk , no action …jeez that sounds like a lot like most politicians and VP’s…rofl…IMO.

#138 rory on 05.30.09 at 12:44 pm

#133 Barb the proof reader you said:

“Only Mr. Garth’s opinion counts here.”

Oh Barb …you are the ultimate sheeple…we all should have a couple saved for a rainy day…IMO.

In the concept of being respectful …being a sheeple is not a bad thing if you wish it to be.

#139 CalgaryRocks on 05.30.09 at 12:54 pm

#131 smw, my calculator says that my mortgage is about 50% less than renting the equivalent. I think when you tell people they are morons you should at least ask your mom to verify your grammar before posting.

Not that my grammar is always perfect but I do know the difference between your and you’re.

This might explain the lack of opportunities in your (not you’re life) LOL

#140 john m on 05.30.09 at 12:56 pm

#112 Samantha on 05.29.09 at 11:32 pm

@108 John m – I saw this break on CTV yesterday. Just lovely. Here’s the link for CTV’s updated report which provides figures for some of the other executives….

Outrageous.

http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20090528/cpp_bonuses_090528/20090528/
………thanks for the link Samantha….i guess for a prime minister who has squandered billions on vote buying schemes this type of fraud is acceptable…..what a rip off!

#141 CalgaryRocks on 05.30.09 at 1:08 pm

#133, Gotwatch is pretty quiet when the insults are made by the people that he agrees with. A good example of hypocrisy and why we don’t need Internet speak Nazis moderating this or any other forum.

Garth is doing a fine job letting both sides have a say.

#142 Bill-Muskoka (NAM) on 05.30.09 at 1:10 pm

#135 Calgary37

Let us not forget what valuable assets which resided in the sub floors of the WTC, like the Bullion Reserve, and backup data mainframe computers that were buried, or were they? Not to mention the thousands of paper documents, including contracts, which fluttered about, and how few people, compared to the usual occupancy, were present? Expendable assets perhaps? Wouldn’t be the first time, and won’t be the last that rational has been used.

The entire thing reminds me of the JFK asassination coverup. Offical government report that had more loose ends than a tattered rag; forensics that were a pathetic joke; criminals slithering about everywhere including the Mafia and CIA, FBI, NSA, and like Humpty Dumpty ‘All the King’s horses (ass) and men (wimps in suits) couldn’t put Humpty together again!’

No wonder the U.S. currency says ‘In God We trust’ because it sure as Hell isn’t ‘In Government We Trust’! LOL

Now what have we witnessed since? There are the dots people need to start connecting to see the Big Picture.

#143 Barb the proof reader on 05.30.09 at 1:22 pm

Calgary_rip_off @ #114,
Ditto. And add our saying in the 80s:
Please God let there be another Oil Boom I promise not to piss it all away next time
“the booms and busts of Alberta’s economy….lessons should have been learned from the 1980s: save when times are good so there’s something to build on for the future….that way, the infamous bumper sticker won’t make a comeback”

#144 hobbygirl on 05.30.09 at 1:35 pm

to 128 – Riveted

Most of us here share your frustration, I was raised by parents who grew up in the depression and to see how they lived and survived on nothing is incredible. I saw the homestead my dad grew up in and it made modern day backyard sheds looks like the Westin or Hilton Hotel chain. It was a generation that made something out of nothing and my belief is that they were the most normal generation of all of us. You sound more balanced than most, it is easy to think of natural entitlement to a swimming pool if you’ve known nothing else. Your mom is lucky to have someone looking out for her.

#145 CalgaryRocks on 05.30.09 at 1:38 pm

# 131 SMW arguing that leasing is smart because there is no liability (unless you count the time where the car is actually in his posession, which he doesn’t):

Don’t worry though, there is a huge over supply of leased vehicles on the books of the teetering automakers. See, when they’re returned off lease, they’re the responsibility(liability) of the manufacturer. And they are giving autos away at this point because of that over supply sitting on their books.

Yes but the smart person is the one that gets the free car.

Look like you’re the other person, the one that makes non stop lease payments on a depreciating asset that has lost 30% of it’s value the day you picked it up.

You need to go back to school and take a few personal finance courses.

#146 Torquemada on 05.30.09 at 1:54 pm

#125 Deepak on 05.30.09 at 9:07 am

I have a problem with bad grammar as well. Whenever I see someone write “your” instead of “you’re” I discount the writer.

However, you know what I also discount? Those who water down the term ‘professional’. There is no such thing as a ‘professional recruiter’. A professional requires an advanced degree in his field, years of practice, and adherence to a professional code of conduct. Doctors and lawyers are professionals. Recruiters are realtors who flip resumes instead of houses.

#147 David on 05.30.09 at 2:30 pm

Don sounds like as sensible person willing to look beyond the simplistic real estate industry cant that created this financial mess. Debunking the unexamined humbug ideas of friends and relatives will not make for great personal happiness. Say your peace and stick to your guns. Ask them to prove you wrong.

http://writ.news.findlaw.com/commentary/20090528_buchanan.html

#148 Calgary37 on 05.30.09 at 2:54 pm

North Korea makes HUGE blunder

The first Korean War ended with a cease fire/armistice agreement in 1953. It was signed by the USA on behalf of the UN, China and North Korea. South Korea did not sign.

The North Korean Hierarchy has just ended this agreement. They also made a threat to do this in 2003. However, the situation is much different from then. There are a lot of reasons for the Americans to finally bring North Korea’s weapons development program to an end.

Since they have activated their missile sites, this could be seen as a prelude to an attack on South Korea and thus, subject to some type of preemptive action. I wonder if they really understand what they have done?

If I was the American decision-maker, I would launch a Phase One attack on the North’s missile sites and on all of the locations that the North Korean Hierarchy live and work. It is time to cut off the head of the North Korean Serpent Beast.

I would then demand an immediate surrender from whatever authority is left over.

However, if the troops stationed in the DMZ who are prepared to launch a variety of artillery fire across the border on South Korean cities start to mobilize, then a massive Phase Two attack would be launched on all of the bases in the DMZ. Hopefully, very few artillery units will succeed in firing on South Korea.

However. before launching the first attack it would be necessary for the Americans to check with China to see if they still stand by their signature on this cease fire agreement.

Since Canada was a participant in the Korean War, this means that technically, we are at war again with North Korea.

The upcoming days could be very interesting and possibly dangerous.

Cheers.

Power to the People. Let the Revolution Begin.

#149 Dan in Victoria on 05.30.09 at 3:27 pm

Post#134 Bill Thanks for that explanation,Gives me some more reading material.Post#135 Calgary,thanks for that also…..

#150 timbo on 05.30.09 at 4:35 pm

#131 snw,

you probably already saw this but its wprth a note when you mentioned dubai

http://business.timesonline.co.uk/tol/business/markets/the_gulf/article5663618.ece

that must of been one massive midnight move…

#151 Jonathan on 05.30.09 at 4:51 pm

#12 Renter in New York

-a post worth reading

#152 Jonathan on 05.30.09 at 5:00 pm

#31 Canadian army guy

Whatever way you want to look at it, if you bought for 400K in 2008 and it was worth 300K in 2010, you’ve lost 100K. If you bought in 2010 for 300K and it was worth 400K in 2014, if you have to sell you’ve made a 100K. And whether you care or not, your bank certainly cares how much equity you have in the home. Anyone who does not consider the financial implications of buying a home, especially their first home, stands the chance of getting caught finacially years behind..

#153 Glenn on 05.30.09 at 5:01 pm

To Calgary37’s comments;

I think the whole tapestry starts to unravel at Building 7. Building 7 was never hit by any aircraft or debris, but lo and behold, down it comes like a house of cards.

But to the average sheeple out there, that fact simply flies over their pointy little heads. The most you get is a blank stare and a muttered “So?”.

As Hitler said, what good fortune for politicians that men do not think.

#154 Puppet Master on 05.30.09 at 5:19 pm

Troofers go home. Really.

#155 Dave on 05.30.09 at 5:34 pm

I think the writer raises an interesting point, though somewhat unwittingly. I’ve been lurking on this blog and generally agree with what Garth is saying. However, I often question whether or not housing prices will actually see the predicted correction. Much of what is being discussed here is based on the premise that we are experiencing the economic meltdown of a lifetime. I don’t dispute this, however, it seems that the statistics still don’t back this up. Unemployment in Canada will need to rise another 2-3 % before we even reach the levels seen in the recessions of the 80’s and 90’s.

Additionally, there is a lot of talk about the number of greater fools out there. However, to quote an old expression ‘there is strength in numbers’. If there are enough greater fools out there housing prices will have a bottom put in place. Without a major outside event occuring in the lives of greater fools it will be impossible for home prices to fall. As it stands now, it appears as though the economy has suffered its worst two quarters of GDP decline in Q4 08 and Q1 09. While house prices may not continue to grow I doubt they will fall much farther than they have already. The only place I would have serious concerns about is Vancouver where prices are well of out of range of the average household income.

Anyway, long story short if you put enough fools together they can effectively move the market as we’ve seen this spring. It effectively becomes a positive feedback loop. Buyers perceive that home prices only go-up, the market reinforces this belief (even in bad economic times it appears) more buyers come into the market to purchase based on fear, home prices continue to go-up, etc. Without an outside stimulus such as jobloss or the bank calling in a mortgage the cycle continues.

Anyway, just my two cents

#156 Glenn on 05.30.09 at 5:42 pm

#83 Bill-Muskoka (NAM) on 05.29.09 at 1:31 pm —

“I, for one of many, still do not buy the 9/11 explanations, especially I reject the Pentagon fiasco as pure fabrication by the Pentagon and Bush administration.”

Well, I suggest you don’t “reject” too loudly. Otherwise, you will be in the same spot I am. Back in 2000, my research showed that the Department of Veterans Affairs was actively destroying evidence in support of claim paperwork, and thus screwing veterans out of their earned pay and benefits.

Of course, everyone called me crazy, delusional, paranoid, insane, etc.

Only problem is, fast forward to 2008 and the new Inspector General of the VA took a little look around the shop…what did he discover? 41 out of 57 Department of Veterans Affairs Regional Offices were actively shredding evidence submitted by veterans.

Of course, this has all been going on with the full knowledge of the congress, senate, all “service organization” (VFW, DAV, AL, etc) and of course the VA scumbags themselves.

Now, because I was an early adopter of the “reject gov’t corruption” subculture, I can no longer step outside of my house without a snitch trailing me. Theres more to it, of course, but the last time I elaborated, my comment was simply deleted.

See, you would be surprised at how many that espouse freedom of speech really dont. And in the end, that is why evil will prevail.

#157 . . . fried eggs and spam . . . on 05.30.09 at 7:03 pm

Neil Young’s song “Like A Hurricane” is apt for this link — http://tinyurl.com/mcpk9s. It only refers to US Treasury Bonds as being “in the eye of the storm”, the calm before TSHTF big time (later this year and continuing).

Other than Treasury Bonds, printing presses going flat out, paperless electronic money which can be eliminated by a single keystroke, the stuff is, of course the second / third wave of foreclosures, this time having to cope with commercial real estate being hamstrung and henpecked and Canada is involved as well.

It doesn’t help that a lot of the US’s manufacturing and skilled help has been sent overseas, which leaves our industries either going belly-up or heading off to greener pastures — cheaper, labor-intensive countries which leads to this — http://tinyurl.com/ngdbh4.

#136 Jeff Smith at 12:18 pm — “If the US goes hyperinflation, will Canada do the same?” /\ I would say so, as the two currencies are so closely intertwined, which might be one explanation of outsourcing of tech. and manufacturing.

BTW, here are the top five places on this continent to be broke (and happy, I guess). — http://tinyurl.com/nxl6p9 . I’m sure glad I’m retired!
——
Dubai is broke, but the comment from wrh.com is straight to the point. — http://tinyurl.com/n6jp65

“One has to wonder what the economic policy makers in Dubai see coming, to be making that move right now.”

#158 Guardia Civil Tricornio on 05.30.09 at 7:37 pm

#148 Calgary 37

Do you really think S. Korea wants to be flooded with all those starving from the North?

#159 TheFirstRick on 05.30.09 at 7:41 pm

#133 Barb the proof reader on 05.30.09 at 11:34 am
———————————-
You are truly deluded. Start breaking your pills in half, OK?

#160 Lucia on 05.30.09 at 7:45 pm

#31, the Canadian Army guy,

I couldn’t agree with you more on the principal of buy low and sell high. This is good. However, the current problem we face, at least for new buyers(first time for that matter) is not the price they pay . Rather, the relationship between price paid and household income. I think, this is where the debate needs to stay.

#161 Bottoms_Up on 05.30.09 at 8:12 pm

Kool-aid still being drunk in Ottawa:

Kanata April figures:

Absorbed singles:

April 2008 sales: 21 April 2009 sales: 22
April 2008 price: 371,995 April 2009 price: 414,945

However, total Kanata starts in April 2008 were 210, whereas April 2009 they were 32. What do the builders know that the ‘greater fools’ don’t?

#162 rory on 05.30.09 at 8:32 pm

#156 Glenn

Glenn, buddy …if true I would be slack jawed and incredibly worried & disturbed about our government… but there is usually three sides to every story …yours, theirs & the truth …I would like to know more.

My gut says GT and others would be on board to your story only if we could have a pic of the wife …NOT (just teasing)…bottom line we need to see something beside paranoia and the great foreign wife stories…like it or not you are paddling uphill.

#163 Bill-Muskoka (NAM on 05.30.09 at 9:32 pm

#156 Glenn

Like the Breck Shampoo Commercial of years ago ‘I told two friends, and they told two friends, and so on, and so on!’ We still have them OUTNUMBERED!

Another view is that of the famous U.S. Marine Chesty Puller, who rose from private to four star general and Commandant of the Marine Corps. There he was in Korea at Chosin Reservoir, surrounded by THREE Chinese Divisions. The U.S. Army had had the butt kicked and ran, but the Marines fought their way out in the dead of winter, carrying their own, their gear, and the dead and wounded G.I.’s and their equipment to safety.

Chesty’s comment about the three Chinese divisions was simple. ‘They are ahead of us, behind us, and they have us surrounded. Now the bastards can’t get away!’ That is why the Iwo Jima Monument proclaims ‘Uncommon Valour Was A Common Virtue’

We had the same valour at Vimi ridge and many other places. Freedom is for those who are brave enough to take a stand for others. That is why the Canadian Vets are so pissed at the auctioning of the Victoria Cross medal. That simply should never be allowed.

Semper Fidelis

#164 Dan in Victoria on 05.30.09 at 9:37 pm

Post#83 Bill, here’s a link for you. http://www.youtube.com/watch?v=oO2yT0uBQbM

#165 Jake on 05.30.09 at 9:52 pm

Here is an interesting video on 9/11 for anyone who is interested. It goes through the points Bill brought up as well as a few others. There are four videos dealing with it. The film in its entirety deals with Religion and the Banking system as well.

http://www.youtube.com/watch?v=bNGukcPO3XY

#166 Bill-Muskoka (NAM on 05.30.09 at 10:03 pm

#148 Calgary37

North Korea has a One Million person Army. Now, the thing their so-called fearless Leader does not grasp is that if they go to war again ground troops will be meaningless in this day and age.

There is a lot of posturing ongoing and there has been for quite a few years. Patience is the best approach IMHO! China may well decide to SQUASH Kim Il sung and they have more than sufficient troops and power to do so rapidily. Remember, China is now a World Power and playing in the Trade Game. They will likely not allow his insanity to jeprodize their economic position on the global stage. Time will tell.

The U.S. has already dispatched a squadron of Strike Fighters to South Korea per tonights Global National report. The U.S. is NOT in any position for another prolonged engagement fiscally or militarily, therefore, action, failing diplomacy, will likely be Shock & Awe, i.e., Swift & Sure!

NK’s leader is Nutbar to be sure. The forces at hand can easily arrange a lobotomy for him and his entourage. The world would not shed a tear, neither would most North Koreans.

#167 Bill-Muskoka (NAM on 05.30.09 at 10:05 pm

#149 Dan in Victoria

You are most welcome. Glad to have been of assistance.

#168 Bill-Muskoka (NAM on 05.30.09 at 10:13 pm

Troofers
#154 Puppet Master

LMAO! Would those be G.I. Truffles disguised as MRE’s?

#169 Lucky C on 05.30.09 at 11:02 pm

AHHHH. I can’t take it any more.

YOU ARE = you’re
YOUR = belonging to you

I’m also having rental property issues from the renter’s point of view and am wound kinda tight. Suffering from the biggest drawback of renting. Being forced to move on someone elses time table. The teenage beer drinkin mini rave on next door at the moment is making the moving thing seem like not such a bad idea. I feel better already. This blog is AWESOME!!! lol

#170 Samantha on 05.31.09 at 12:49 am

#140 John m – You’re welcome. When I first started paying into CPP not long after it’s inception, I (and others) were led to believe that was enough. This plan would provide for our retirement. Then, the tune changed, and we were told to get jobs where there were company pensions because we might need a bit more than the CPP. This was followed by the urging to purchase RRSPs, then Mutual Funds etc etc…because CPP was not going to be enough. Fast forward to today, and we have the USA openly stating that their Social Security is in trouble. And, the rumblings have also begun in Canada for our pension fund.

Lately, I find myself wondering if our pension fund was just another cash grab, and thinking that I would have been better off to just put my contributions into the bank. At least there would be some protection through CDIC and compounded interest would be better than running the risk of having a private entity not of my choice, managing my pension funds. Especially an entity that likes to pay big performance bonuses while the fund has lost money that last 2 years, and we are in one of the worst economic periods since WWII.

The CPPIB has been managing our pension funds since 1999. Interesting to note that 1999 was the same year that the Glass Steagall Act was repealed in the USA, with terrible economic consequences. It is ridiculous to think that the CPPIB is not accountable to the Federal Government. Who is going to be accountable to Canadian citizens if the fund is poorly managed or worse, someone employed by them decides to pull a Bernie Madoff? An actuarial report is all well and good, but I believe there has to be stricter monitoring of their investment decisions.

It would be interesting to find out just how many Canadians actually take the time to visit the CPPIB website and sift through the information to learn about how our funds are being managed. I do and it is amazing to me that they have invested in Calgary commercial property (a shopping mall no less). Wonderful choice for these times. Further, I did some research into the companies with whom they are partnering and I was disheartened to see that many were not Canadian. There are other concerns once you begin to investigate some of these companies.

I realize that International investment is part of portfolio diversification, however, with our manufacturing sector in the state it is in and the subsequent impact on our labor force, one would think that they would put some serious money into investing in Canadian businesses. We have some very talented and brilliant people in this country and they need to be supported in their ventures.

To digress a bit, but in line with the manufacturing issue, I listened to an interview on CBC radio the other day with Jeff Rubin, former head of CIBC World Markets who has just published a book “Why Your World Is About To Get A Whole Lot Smaller” which deals with the impact of peak oil and rising costs to obtain the oil that remains.

His perspective is quite positive. To paraphrase some of the points he made, he believes that we will begin to make things again because the cost of importing items will be prohibitive. He cited food as an example and said that we will no longer be eating avocado salads in January. We will eat seasonally and locally with a resurgence in smaller scale agriculture. Our clothing will be made in Canada. In short, manufacturing will emerge from it’s current death throes. If he is right, then perhaps there is a glimmer of light at the end of the tunnel.

#171 MISH on 05.31.09 at 7:43 am

#132 SMW

YES. Like you, I’m also long silver.

Platinum as well.

Enjoy the ride.

#172 Bill-Muskoka (NAM) on 05.31.09 at 10:33 am

#164 Dan in Victoria
#165 Jake

Thank you both for the links. The government and MSM are having a tad bit of difficulty with their mantras thanks to the internet. LOL

#173 Barb the proof reader on 05.31.09 at 10:59 am

#138 rory,

Rory, with all due respect the operate word is “counts”. This is just a blog (albeit a good one because of the author), but it’s his considered opinion, his book, his virtual at-home mom & pop store, coffee shop and barber shop. Every gracious, reliable and smart home sales party host let’s everyone have their say.
Respectfully again, everything below “Share your comment” is clients, window shoppers, other shop keepers, “browsers” …and Speaker’s Corner.

Only one drawback — chance of virtual hair clippings in your coffee.

#174 Ottawa on 05.31.09 at 4:11 pm

Now in Ottawa Builder/developers are advertising the capital gain person can recieve in real estate by comparing the price of house between 1959 and 2009 (yes, 50 years of owning real estate, you can make capital gain as per advertisement in Metro Ottawa). Go figure….why do we need to do this?

#175 Glenn on 05.31.09 at 4:40 pm

“Freedom is for those who are brave enough to take a stand for others.” #163 Bill-Muskoka

The problem I have is that this is not “the land of the free”. I view the current state of affairs as Germany, circa 1935.

If I were to be “brave” and stand up for America and its people, I would be little more then a pawn for the fascist machine. I did that back in 1991 and it didn’t pan out too well.

I respect and admire the honor and bravery of the Wehrmacht soldiers during World War II, but I would not want to be one of them. Likewise, I wont allow myself to fall into the same flag-waving trap of “patriotism” (also known as state idolatry) as the German troops did.

That being said, if one of the Provinces or American States decides to stand up and tell the fed gov’t to take a flying leap, then I will be the first to offer my services to that cause. I shoot 40 out of 40, pistol and rifle and can still put my boots on.

#176 Bill-Muskoka (NAM) on 05.31.09 at 5:03 pm

#175 Glenn

As George Carlin so accurately said ‘The flag is a symbol for the symbol minded!’

Yes, I served in ‘Nam, my son 8 times to the ME with the USAF!

As to States seceding from the Union, that is prevented by the Constitution. It is a romantic idea, but highly impractical.

The best battle is wisdom, supporting good candidates, corresponding with those who chose and were elected to serve, and keeping them aware you are aware as well!

Following those tactics, boycotting the sponsors of such hate mongers as Rush Limburger and his ilk sends a strong message where they care most…their bottom line!

The worst thing you can do is make your government work for you as they are supposed to! Participate as much as you can and don;t play the old game of worrying about offending someone, especially your family. Likeiwse, do not waste your energy on fools, or as Jesus said ‘Do not cast your pearls before swine!’

Just as atoms make up matter, so do people a nation, a community, a society! Oh, and smile, it makes people what you have been up to?

If you remember, or have watched Rick mercer’s ‘Talking to Americans’ then make sure and catch Jay leno’s finale from friday night as regards his segments on ‘Jaywalking.’ mercer was rather kind compared to the braindead walking Leno found on the streets, and then in his studio. My Gawd, the education system has gone belly up there.

Have a good evening, time to go watch a few recorded programs from this week, the good ones like Discovery, National Geographic, and something with intelligence.

#177 OttawaMike on 05.31.09 at 8:21 pm

#170 Samantha on 05.31.09 at 12:49 am
Re: Jeff Rubin, I do want to read his book but I’m very skeptical of much of his projections. In past he called for 200$ oil by 2009 and also claimed only 1/2 the number of cars would be on N. American roads within 10-12 years due to driving being out of reach to the average person.
I also seem to remember him banging the drum that there would be no Canadian recession in Fall 08 when the first stock plunge occurred.

#178 Glenn on 05.31.09 at 9:31 pm

#176 Bill-Muskoka (NAM) on 05.31.09 at 5:03 pm “As George Carlin so accurately said ‘The flag is a symbol for the symbol minded!’”

God rest his soul.

I think you are missing my point Bill. Let me clue you in to the America I live in. I pointed out the crimes being committed by the Department of Veterans Affairs back in 2000. The story blew up just a few months ago, exactly as I said it would 9 years ago.

The Veterans Affairs Police, a federal agency, have added my name to the “terror watch list”. The database was handed down to the state “fusion center”. Now, the Montana Highway Patrol accesses my banking records. Every place I use my credit card at gets a visit from the MHP.

The manager is told that I am a terrorist/murderer/pedophile/drug dealer, and given my picture. The manager then tells all the employees. Every time I step into a local eatery, one of the employees calls the MHP and a snitch is dispatched to my location to glare at me menacingly.

Keep in mind that in the town we used to live in, a border guard was poisoned at the local McDonalds. That was two years ago, and there have been no arrests. Its a town of 3000 people.

Yet me, the disabled combat veteran, am the focus of countless man hours and dollars. Oh yes, Montana is the meth capital of America. So the “peace officers” have nothing better to do I guess.

This is the America I live in.

P.S. this post will most likely be deleted.

#179 Bill-Muskoka (NAM) on 06.01.09 at 8:39 am

#178 Glenn

Sounds rather typical of the small town syndrome. Isolated, basically low level education, and more dogmas than dogs.

Personally, I would move out that intellectual cesspool. Good luck Glenn.

#180 Samantha on 06.01.09 at 9:55 am

#177 OttawaMike – I wasn’t too sure about his past predictions, so I pulled a link to a National Post story:

http://www.nationalpost.com/related/topics/story.html?id=1437507

Predictions abound in economic discussion and writing. Some really fall short, however, what I try to look at is what information or concept is this person or author trying to impart that may be worthwhile regardless of the accuracy of their particular prediction.

In Jeff Rubin’s case, for example, I like the idea that we would be evolving towards local production and a resurgence in manufacturing and away from the “barrista economy” (his term for service based jobs). Regardless of how it comes, be it peak oil or out of necessity to create jobs in this country, jobs making things rather than serving them or checking them out as a cashier, gives younger and future generations a much brighter future.

It’s one part of a big mess, but it sure would be nice if he were right about that one.

Hope you enjoy the article. I haven’t bought the book yet, but do plan to do so.