Garth's speaking schedule is here.
Is there a nasty surprise waiting for real estate investors? You bet.
Eight years ago Toronto was short $72 million. Last year the gap was $447 million. Thus year it will be $700 million. In nine years it will be at least $1.2 billion. To balance the books then would take a property tax hike of 37%.
Welcome to the next decade, kids.
Ontario is short $24 billion this year. BC about $3 billion. Alberta over $4 billion. In fact every province in Canada’s in the red.
The feds, of course, are short $56 billion. When you add up the money all governments are spending this year that they don’t have – which I figure is just a little under $100 billion – you get an idea of what’s coming. And it’s inevitable: (a) honking big tax increases, and (b) huge spending cuts.
The tax increases will be in the form of the HST (provincial), a higher GST (federal) and property taxes (local). That’s for starters – over the next three years. After that, you should expect the age at which CPP is paid to increase to match that in the States (67), the RRSP tax deduction to become a credit (cutting the benefit by up to half), health care premiums to creep across Canada and a surtax on ‘high income’ Canadians (over $100,000).
The spending cuts will be insidious. Already BC is closing schools and shutting down emergency response units. Toronto charges people to own cars and put out their garbage while it’s also phasing out schools and pools.
And how long before we get to this state?
COLORADO SPRINGS — This tax-averse city is about to learn what it looks and feels like when budget cuts slash services most Americans consider part of the urban fabric. More than a third of the streetlights in Colorado Springs will go dark Monday. The police helicopters are for sale on the Internet. The city is dumping firefighting jobs, a vice team, burglary investigators, beat cops — dozens of police and fire positions will go unfilled.
The parks department removed trash cans last week, replacing them with signs urging users to pack out their own litter. Neighbors are encouraged to bring their own lawn mowers to local green spaces, because parks workers will mow them only once every two weeks. If that. Water cutbacks mean most parks will be dead, brown turf by July; the flower and fertilizer budget is zero.
City recreation centers, indoor and outdoor pools, and a handful of museums will close for good March 31 unless they find private funding to stay open. Buses no longer run on evenings and weekends.
Could this be the scene in Canada in five years? Ten? After all, it may come down to a choice between endlessly increasing taxes, or governments simply living within their means.
Personally, I see no alternative. Governments country saved nothing, let infrastructure crumble and were totally unprepared for an economic meltdown we were talking about on this blog a year before it happened. In merely 10 months, Ottawa has driven taxpayers into debt faster than during the Great Depression or either of the World Wars. The consequences will be with us for a long time.
So, what to do?
First, avoid taxes. Stuff money into RRSPs and collect the massive deduction that does along with that. Slide all your investment assets inside the shelter of a TFSA so you avoid paying any more. Make your mortgage tax-deductible by selling assets, paying off the home loan, then reborrowing to buy the portfolio back. Stop collecting interest and start paying 80% less tax with the same amount of dividend income. Create a tax-free pension using universal life. Use the homebuyer’s plan to leverage up a downpayment with tax money. Income split with your kids and recycle capital gains to them with a tax-free savings account. Use leverage to get money out of a RRIF free of tax.
All of those strategies are in my latest book, and if you don’t know how they work, find out.
Second, prepare for a property tax storm and a service drought. The worst may be a few years away, but that makes it no less inevitable. Pay close attention to the taxes on any real estate you consider buying, then ask yourself if you could afford to pay 50% more. Also realize what that might do to property values, especially in cities where homeowners are already nailed.
Finally, in keeping with the squirrel-loving, contrarian, coonhound -‘n-ammo nature of this blog, imagine living in a place with a third fewer cops and first responders, restricted public transit, dead parks and rarely-spotted snowplows or police cruisers. In that kind of world, where would you want to be?
Yeah, I know. The bunker.
Good luck with the razor wire.
143 comments ↓
A snippet from Ilargi at TAE today:
Most of all, don’t try to be like the people who raised Toronto home sales by 87% last year, lifting prices by 18%. Those people just bought themselves a one-way ticket to the slaughterhouse.
So, does this mean Nostradamus Jr. is right?
Vancouver East & West*
Attached & Detached
as of: 02/04/2010
New Listings – 85
Sold Listings – 27
Back On Market Listings – 2
Price Changes – 15
vancouver west and east side
listings surging, sales not
http://www.yattermatters.com
#108 miketheengineer on 02.04.10 at 8:02 pm — Our son is in steady to reasonably good shape, Mike. Has to have seven weeks – three months of radiation, then rest.
Our two friends are a little different — one lady in mid-80s, the other sixty-ish, but both are tired and greatly looking forward to stepping out their ‘sacks of clothes’ (physical bodies) and moving back into the other worlds.
Both have become worn out from keeping appearances up, both want to move on. We wish them well, as we know we will meet again.
Thanks for the reply.
——
Speak of the devil. This was the lead link on wrh.com, a few minutes prior to Garth’s latest “Debt nation” column. Read the heading and weep with joy — this is Wall Street and Bay Street combined, a.k.a. Shovel Shit Street!
And the US TARP bailout? It isn’t US$700 bln.; it 23 Trillion! Not contrived m$m financil mumbo-jumbo, so it must be true!
No proof yet, but I wouldn’t put it past them. — Frauds If the feds. are buying up and manipulating stock markets, the inevitable crash will be all the more painful for those unprepared. When the market burns, al-Quaida will be the crotch-bomber patsy! Debt bomb going off shortly.
——
Instead of canceling Canada’s debt, can the politicians be cancelled instead?
Finally got your book …. late supper busy day ..you know this is about the future so you better buckle up … doesn’t sound like a bed time read but here goes. cheers .
Finally, your blog is on point, w/ solutions instead of your personalized attacks against various “flavour of the month” Ottawa personalities.
…The world is looking freaking scary right about now, but Canada looks the safest haven…even being w/ $100 Billion in the hole.
Unfortunately, today’s blog is describing a poor outlook for Ontario.
May we live in interesting, but safe, times.
Nostradamus jr.
Vancouver PRICES Reality check
or B***S*** busting
I always like to lower the microscope on what appears to be the generally accepted.
Vancouver RE Bulls would have you believe they have made a spectacular 20% return on investments over the past year. AND they have if their timing has been near perfect.
Just have a look at the numbers from the Vancouver Real Estate Board’s HPI stats (which are undoubtly massaged to cast price increases in the absolute best light) and you will see the story.
Real average Vancouver prices today are still lower than their peak in 2008. If you purchased during Nov 08 to April 09 period when Van prices took a huge hit due to global economic uncertainty, you have seen a very nice paper appreciation of about 18 percent AND you are a market genius for perfect market timing OR just plain LUCKY.
If you have purchased outside this time period you have seen a much more modest price appreciation of 5 to 10 percent. If you bought in early to mid 2008 you are still looking for the break even point.
If you purchased the property in 2006/2007 as a rental you are likely still under water since the cost of holding a property in Vancouver is much higher than the rent you can make on it.
But even if you were lucky enough to have perfect timing your 20% gain is only on paper – -you cannot actually realize it because transaction costs eat up more than 20% (RE fees, transfer tax, legal fees., GST). Nasty, nasty.
The bottom line is, those people that throw around the 20% appreciation number are claiming they timed the market perfectly – and maybe some have. But more likely they bought outside the sweet spot of spring 09 and are still either underwater or just 5 to 10 percent up. ALL on paper of course, since they would never consider selling.
I honestly do not know the future. RE bulls may be right and prices may continue up or stabilize – I think there is maybe a 10 to 15 percent chance of that.
But I have lived too long and seen too many bubbles in property and equities to not believe a major correction is more likely. (I can even admit that I have been suckered into some of those bubbles – I think I have actually broken even on some silver ingots that I bought in 1980?)
The major question is when will the correction occur and how big will it be?
I am not smart enough to know exactly when so I will stay on the sidelines and watch. And let my landlord pay the mortgage, taxes and upkeep on the nice Victoria home I rent for $1000/m less than what it would cost to buy and keep up.
Garth, why no mention of the great deals in the stock market? Anyone who cashed in their GICs to invest in equities the past few weeks may be burning your book by now. You can still get 3.6% o a 5-year GIC btw.
GIC = dead money. — Garth
Cities are in the red because they spend too much money cleaning parks. OK, sure, whatever you say.
Seriously a solution is to own a paid for house and to earn your income through a corporation. That way you can at best average out your income and at worst take the money and run if it gets too bad.
I wouldn’t put my money in a RRSP given your government desperate for money scenario.
Something has to trigger the fall of RE prices in Vancouver. In 1982 it was 15% inflation and 21.5% interest rates. There is nothing on the horizon that would remotely resemble a calamity like that.
The other anomalies such as unemployment, recession etc, would slow the RE market down or even a slight drop; but, no real significant reduction and no respite for our youngsters – 25 and up – to own a home unless they get really big help from the parents.
My .02 worth.
The next 5-7 years will be one for the history books. Higher taxes, reduced services and a huge increase in fees.
Its all downhill from here, can;t see the CPP age changing to 67 anytime soon.
Its going to be a interesting sociology expirement, watching the boomers have to put with less in their golden years after having paid taxes their entire life.
Garth you made the right choice staying out of politics.
The right answer is going to be cutting services/jobs at all levels and raise taxes, but what politican or political party is going to say that?
Will the largest voting block (boomers) accept that?
interesting times
“The major question is when will the correction occur and how big will it be?”
I am sure, as most people suspect, that the OWE-lympics hype has kept everything just a boomin’ along.
BC’s piddly little economy would have sunk long ago without it. Just a matter of time.
So at what point will Canadians become so outraged about the various municipal, provincial and federal fiscal mismanagement that we finally see a tax protests and maybe an all-and-out tax revolt?
Cool interactive chart: Greater Vancouver Sales 2007 – 2010
http://canadabubble.com/charts/439-greater-vancouver-sales-2007-2010.html
Hello #7 omg.
As most of your post related to Van, do you rent a “Victoria” or “Victorian” house?
Also I see that you are old enough to have seen some bubbles. Nothing like some experience (aka hard lessons). But I’m curious, if you have silver from the 80s, you’ve also had two excellent buying opportunities even on the West coast. How did you come about to be renting
now?
You SEE???
I TOLD you the market was gonna crash!
I TOLD you not to ask me HOW I knew, cozz then I would have to KILL yuzz!
But, here we ARE now!
The Big Shred has COMMENCED!
Here, pull my FINGER!!!!!!
#42 Munch on 02.04.10 at 8:27 am Hi
The catalyst for a Canadian housing bust (and Australian and South Afcrican!) will be a tanking stock market.
The next leg of the crash (aka The Big Shred) has already begun, and there is NOTHING that can stop it, as bad news keeps rolling in and sinks into the subconscious.
Mark my words, this is it!
How do I know?
Well, if I told you that I would have to kill you, so you’re just going to have to trust me.
Yes, I’m a doctor!
Rgds
Munch
BC about $3 billion … before the 5 ring circus?
So, what to do? ,,, depends where you live… in BC we are having a PARTY… maybe you have heard of it? it is called… invite the world on the backs of the TAX PAYERS!!!!
Carney does not see a change in mortgage rules
http://www.reuters.com/article/idUSN0419521020100204?type=marketsNews
I still do not understand (maybe I am too early) why a 20% across the board cut for all levels of .gov in their salaries, benefits, and pensions are not on the table, as in no layoffs. Reducing costs/expenditures is the only way. We cannot keep taxing and laying people off or paying for pensions when the plans are busted. No one is coming to our rescue unless someone can invent a warp drive engine and soon.
I know most see this as ‘screwing’ with their lives but I got to say when all your ‘brothers’ and ‘sisters’ have been laid off they will not be your ‘friends’ anymore. They will have said we all should have sacrificed and they will be right.
A good quote posted in the comments section over at Mish’s site:
“Nassim Nicholas Taleb, author of “The Black Swan,” said “Democracies can’t handle austerity measures very well. “We’re going to have a severe problem.””
I am sure “Stimulus Plan 2 – The Humongous Stimulator” is already in the works to bail out the states. What’s not to love? More borrowed money, and the Federal Government can attach all kinds of sticky lube to the money in the form of program objectives and conditions. In other words the insolvency at the state level is a great way to grab more Federal power.
Need money to keep the police going? Great here it is but you have to beef up the war on drugs. Need more money for firefighters? Great but they all have to be women and minorities. Want money to keep the school open? Here you go but you have to allow full time defense recruiters to have an office in the school and let them coach the football team. Money to plow the roads? Perfect but you need a special licensing fee on vehicles that don’t pass certain emission and mileage standards. Get ready for the leviathan to start really thrashing around.
I don’t know if that will happen in Canada. Depends on the ability of the various levels of government to continue borrowing at low interest rates.
But at some point it has to mean one thing: Increase competition for borrowed money. The money has to come from somewhere (unless the BoC just prints it), so all this borrowing must mean higher interest rates down the road as governments try and outbid the mortgage and commercial/business markets for debt dollars. I mean, why loan money to a would be home owner at 2% even if it is government backed in theory, if the government itself is bidding 4% directly? Not there yet but it seems to me that’s where it has got to go.
The alternative of course is that the BoC starts buying up the new government debt at 2% and printing money to do so, which they can. (They have an asset in the form of a bond to back the new currency so it’s all above board.) But since the BoC is a crown corporation, people should see that for what it is. Money printing. Just like John Law, the Weimar republic, etc.
Here is a quote I love:
“At least half of all economic history is concerned with the tragi-comedy of governments getting into debt by extravagance and trying to get out by fraud. The other half is concerned with individuals attempting to do the same.”
- Tilden
And more ominously:
“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
- John Maynard Keynes
And finally, to explain how we got where we are today:
“Everything has been said before, but since nobody listens we have to keep going back and beginning all over again.”
- Andre Gide
Garth, the last half of my post got dropped. Delete this one if the following did make it to the moderated version.
The alternative of course is that the BoC starts buying up the new government debt at 2% and printing money to do so, which they can. (They have an asset in the form of a bond to back the new currency so it’s all above board.) But since the BoC is a crown corporation, people should see that for what it is. Money printing. Just like John Law, the Weimar republic, etc.
Here is a quote I love:
“At least half of all economic history is concerned with the tragi-comedy of governments getting into debt by extravagance and trying to get out by fraud. The other half is concerned with individuals attempting to do the same.”
- Tilden
And more ominously:
“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
- John Maynard Keynes
And finally, to explain how we got where we are today:
“Everything has been said before, but since nobody listens we have to keep going back and beginning all over again.”
- Andre Gide
The Bankruptcy of the United States is Now Certain
http://www.infowars.com/the-bankruptcy-of-the-united-states-is-now-certain/
I got my annual utility bill from my city in metro Vancouver. The total due has gone from $819 in 2009 to $943 in 2010. That’s a 15% increase! I’m sure that 10 years ago it was under $500. This is for Water, Garbage, Sewer and Recycling and does not include property taxes that will be coming later this year.
Finally, in keeping with the squirrel-loving, contrarian, coonhound -‘n-ammo nature of this blog, imagine living in a place with a third fewer cops and first responders, restricted public transit, dead parks and rarely-spotted snowplows or police cruisers. In that kind of world, where would you want to be?
Yeah, I know. The bunker.
Good luck with the razor wire.
*******************************************
Direct shot at Goldbugs–
Big sell off–good day to give the knife a twist–
History says–
Deflation is a period in time–where innovation and invention are most likely to occur–
Think they might be right–
This came to me–while i was in the bunker–taking my shift on the M-60–
Eat beans–then harness the gas–re-pipe it-into your coleman stove–and presto–perpetual motion-
pretty cool huh
This is off-topic, but FYI there is a facebook group called ‘Can this Onion Ring get more fans that Stephen Harper?’ The site has been up for 48 hours and yes, it has more fans. The onion ring at current hour is at 52000 vs Harper’s 30000. Onion rings make me sick, but so does Stephen.
VAN or TO RE Owners! You will never time the exit!
People ask me why a dumped all my RE when I did in place of an extra 20% gain. Simple, only the insiders and elitests know the last 5% of the top and bottom.
Dont fool yourself that you have that insight!
Furthermore, I opted to get bigger gains in investments which offered some stability and liquidity.
Contrarian? One would think this approach is realistic but in an unrational paper over the problem where 30 years of manipulation has even the top investors taking a hit off the ponzi pipe I guess I am one!
Shame on you for playing yourself if you fall to this level. Shame on you for putting your family second to your greed.
Garth’s only moving his scope over to TO as there really isnt anything else to say about VAN/VICTORIA/ABBOTSFORD & KELOWNA as it’s all been said and it’s not worth exploring any further.
The Mad Max world is here — everyone for themselves, kill first, ask questions later.
With a bunch of goofballed looneybins running this joint, it is natural that sheeple should be bamboozled into following their dictates.
——
Politics is a helluva dirty business, and these links Whistleblower
go a long way to proving it. Nothing anyone can do about it, ‘tho.
Has anyone heard rumblings of Bernanke and Tony Blair being arrested recently? Something is happening, for good or ill.
Gold took a hit, so is this the reason China will buy more? 6:45 clip toward end.
Fears of ‘Lehman-style’ tsunami as crisis hits Spain and Portugal
Interest rates will be low until Feb, 2011 in the US. Many mortgages will be resetting over the next 24 months and the FED will help homeowners/commercial owners get into these. The FED doesn’t want to raise rates and ‘entice’ people walk away from their investments. It would create huge losses and credit would freeze.
After Feb/11, there is little refinancing coming up. Then it will matter less to the real estate market in the US what the rates are. Rates will then really go up in the US.
Here is a link to an interesting graph.
http://fxmarketanalysis.files.wordpress.com/2010/01/image0022.png
Now the question is, what will Canada do then?? Follow the US?? I think not because it would be economic disaster for our RE market and subsequently our economy. Expect Cdn dollar devaluation as our rates stay low well into the foreseeable future.
Well, we live out in Colwood and it looks like a 32% or so property tax hike total for the past two years.
Infrastructure crumbling? Any of you gone down along Esquimalt Lagoon lately? The bridge is closed, Not sure why, but isn’t that infrastucture?
Been to city hall lately? Look at the sidewalk leading in.
Oh yeah, but we can take taxpayer money and lend it to city staff at zero % interest to buy some sort of electric scootter or bike.
Stoneleigh over at the Automatic Earth has a great piece on Renewable energy,(look on the right hand side) in it she explains much of the electrical grid infrastructure, and the looming problems. Great Read.
The Froogle Scott Chronicles: Mortgaging Our Souls In Paradise –
Part 3: Priced Out Forever? Vancouver Renters and Basement Suites
see:
http://wp.me/pcq1o-sv
In the latter half of the 1980s I was a student at the University of British Columbia, augmenting my student loans by working part time as a bartender in one of the student bars. . . . One evening Mike, one of the food prep guys, told me that he and his mother had just bought a house on the East Side, traditionally the working class area of Vancouver. . . . I remember the price he and his mother paid: $90,000. -Froogle Scott
In other times, and other places, renting was and is the norm. But during the kind of runaway real estate boom that Vancouver has experienced, just about everybody who can buy, eventually does. The cheap loans and social forces are irresistible. Ownership rates rise to record highs. The renter pool becomes more highly concentrated with vagabonds and the indigent. Renters become an underclass, targets of derision and subjects of pity. -vreaa
Hi Garth,
Good post, again.
I think you are definitely seeing through the denial, the equities promoting behaviour (which describes most financial “advice” in this country) and the wishful thinking.
I do beg to differ with you that the current crisis can stretch “five to ten” years without some significant break. I think it is more likely that we go through a “first deflation, then inflation” scenario. Japan did that after WWII and some academic studies of default crises point to a similar pattern. If you are interested you may wish to check out a couple of my back posts. One on Japan:
http://marketdepth.typepad.com/marketdepth/2009/09/winter-in-japan.html
and one covering the history of deflation/default scenarios as viewed by a gold bug:
http://marketdepth.typepad.com/marketdepth/2009/10/golden-calendar-trade.html
Anyway, I come here fairly often to read the great stuff you have to say. Thank you for your service on behalf of honest public discourse in this sometimes misguided country.
Geoff
Correction: Feb, 2012
Most ideas make sense EXCEPT….
DON’T BE A FOOL — KEEP AWAY FROM UNIVERSAL LIFE. IT’LL SCREW YOU OVER
Looks like your predictions are seeping through quietly, in between the usual denials. See this article on BoC’s Carney talking about the housing bubble that shall not be named.
Carney
Note that first he says that
“The Canadian mortgage market has functioned I think exceptionally well during the course of the last decade … we’ve seen the strength of the system of mortgage insurance and it’s provided an important funding avenue for the banks as well. It’s allowed our housing market to weather the storm,”
Then:
“I must say we don’t see a need for structural change in the mortgage market.”
But then hedges his bets with this little gem:
Carney said the central bank continues to be concerned about the pace of household borrowing, a point he has been driving home to Canadians to prepare them for eventual rate hikes.
“We want to caution people that rates are extraordinarily low right now, they’re low for a reason … but it’s a means to an end.”
“(in relation to investments) By fearing risk, you are taking a greater one.” — Garth
Great expression Garth, it’s definately one issue I’m battling with myself as I do fear risk, but your book is helping.
I was reading about P/E ratios in your book and thought I’d check a stock we buy: http://www.google.ca/finance?q=TSE:NXY and had to triple check the P/E ratio… 130?!
TODAYS TOPIC –
The return of the Mike Harris (Ontario) days or worse than that? I remember when Harris cut everything in Ontario and man, it was tough getting any job and the cut back services were harsh at the time.
-261 points on the TSX and -268 on the DOW. Wow, what a day, although I’ve thought all along the bull market wasn’t based on sound economic fundamentals. It wouldn’t suprise me to see them go back to March 2009 lows.
More taxes, more cuts and less jobs, less stuff, less everything because it’s more $ doesn’t sound like fun at all.
A poster made a good point about market drops and RE prices yesterday. In 2008 when the market crashed expensive ($1m+ RE in Calgary) was cut by 20% in the next few months that followed.
Mike
Debt. Think about this word long and hard folks, because two much debt can give birth to the end of capitalism itself. Capitalism is a system that is not invincible to sytemic crashes from unsustainable debtloads brought on by regulatory mismanagment and the human components of greed, fear and ill will is all that is required.
The true question, the real question when it comes down to economies and governments and which systems reign supreme over all will always come back to which systems give individuals and groups alike, the most “substained” freedoms possible and enshrine the rights that protect these freedoms with the preservation of the most basic of human rights. Most central to freedom itself is the question of ownership, the simple freedom too own possessions as individuals, never mind as a nation or organization but… who owns us? Who do we serve? And if all this life has taught us is to serve our mere selves, then we’ve learned nothing, nothing about family or friends or human rights and humanity, or all other life included especially so life that has led us to our origins of existence.
It has always been about freedom, readers and it will always remain so. How many of us reading these words can legitimately say that any system other than capitalism and democracy is one to give individuals and groups alike, the most freedom possible… but can it be sustained? For we have been born into democracy and capitalism as Canadians. We’ve been born into these systems and have embraced them as the systems that allow all individuals to pursue their dreams, to make their dreams come true no matter how large or small through the ease of raising capital in the markets and through banks with regulations chosen by elected officials who are respected to honor the systems they represent and they are in every way shape and form capitalism and democracy.
But…. are these systems perfect? Is for profit provision of essential services the way to go in all or any respects? Should police, penal and justice, healthcare and education be “for profit” too, as some businessmen and their shareholders would like you all to believe? Are elected officials flawless with policy and the will to serve their nation and people over for profit organizations?
We are living in an age when more and more of us are getting into too much debt that cannot be later sustained as interest rates rise and incomes conversely become stressed. Who can consider themselves to be economically free when they’ve taken on too much debt? Is freedom working for banks which, through the aid of wreckless government policies and personal greed and lust for power as motive, opened the doors wide to too much credit for too many for too long?
Where is the freedom of a nation who’s citizens and governments and financial institutions, driven by greed and lust for power, intentionally borrowed and lent beyond their means? Do americans feel more free today with a tanking currency, double digit unemployment and millions of homes being foreclosed on as we speak? Where is the freedom in debt slavery, of a capitalist system that has, through the lobbying of banks and corporate self interests, enslaved too many consumers from the ability to spend through ultra high, unsustainable or poor house pick ‘em debtloads that have systematically brought nations and their currencies to their knees?
People from all stripes have to understand that too much debt load, too much bank ownership of our personal homes, belongings, towns and cities, provinces states and nations…. too much debtload leads to the destruction of freedom itself? When will we collectively finally begin to understand this truth?
We are all living in a bubble, folks, literally inside, looking out. Our perception of reality is limited. We don’t communicate telepathically. We don’t have eyes on the backs of our heads. We don’t know what the other side of the world is thinking or feeling in their days and nights unless we make that conscious effort to try and from where I’m standing, most of us don’t make the effort to know the names of our neighbors next door never mind down the street. Our interests for the most part, are not universal. We deliberately don’t and won’t feel the impacts of the lives of others crashing around us unless it unavoidably and directly effects us and unfortunately, this, as a rule, comes far too late.
Why are we continually disconnected to the suffering and needs of others without appreciating that the environments that breed such suffering can and often are… our own? Is there a need even now to mention the truth that we literally are products of our own environments?
Its time to choose leaders who actually do care for the hearts and minds of those they will never have a chance to meet. Its well past due to elect those who truly are connected to the needs and sufferings of others. Its long past time to hunt for the heads of misguided, self serving leaders (we should have been hunting them years ago), replacing them with leaders that actually care about children that are not their own, of generations that they will never meet or see. Its long past “Corpus Diem for the masses who find leaders from their ranks that acknowledge and honor this truth:
“We as individuals and groups alike will have opened our eyes to our individual and collective destinies when we plant shade trees under which we know full well we shall never sit.”
“Finally, in keeping with the squirrel-loving, contrarian, coonhound -‘n-ammo nature of this blog, imagine living in a place with a third fewer cops and first responders, restricted public transit, dead parks and rarely-spotted snowplows or police cruisers. In that kind of world, where would you want to be?”
Garth, you’re describing the services void that already exists in some cities. Only we can’t call-out the army to remove our snow any more.
How many men have given serious thought, leave alone discussed with, the wants and wishes of the women and children in their lives in terms of moving out of the city and into smaller communities or even a wilderness area? The mention of fewer police and fire services by Garth reminded me that not too many women feel safe when they’re left alone in the country. Dogs are no protection from the serious criminal.
In all seriousness, how many have given this kind of geographical move much thought? I suspect quite a few posting here have come from a rural background and that, while they remember the slower pace of life and the closeness to nature, they may not want to actually go back there.
don’t worry about lack of cops. Under the Security And Prosperity Partnership (SPP) signed in 2006 by Harper, Bush jr. and the Pres of Mexico, that is all taken care of. U.S military troops now have the legal right to patrol Canadian streets . Garth won’t address anything to do with the SPP, even though he was attached to the government at the time. The amalgamation of tax codes, laws, both military and civil, open boarders is all on the menu. Its called the formation of the North American Union. But i guess squabbling over how best to use a TFSA takes president in fantasy land.
London police salary at 80000.00,plus retention pay.City in the hole,thinking about tax hikes.Talking to store owner,paying 6000.00 to the city every month,no new business, just surviving.Closing next month.
Garth, Now i’m not sure if i want to buy a house even if they go down 20%?
Shane
I can only hope that once government funding is removed from so many services and programs, that we finally see the amount of our tax dollars that are being wasted on government bureaucracy and politicians. Gordon Campbell has yet to reduce the size of his caucus from his post-election increase, that none of us asked for. The cost of maintaining politicians during their terms and afterwards is astonishing, yet none of them are called to task on it. I resent their contempt of our tax dollars.
Oil’s tanking, stock markets are tanking.
Watch the housing pyramid scheme come crumbling down.
Here in Ottawa houses are sitting longer on the market. As new listings come to market, I have noticed price drops are starting to occur. The RE market in Ottawa has taken off in the last 3 years, with price gains that were unheard of for this city. It has to correct soon….
“which I figure is just a little under $100 billion – Garth”
It’s probably quite a bit more than than, this number does not include deficits made by public corporations, public universities, schools boards and hospitals (etc…) which ultimately the government is responsible for.
That’s why in Quebec for example the public debt has been increasing steadily for years despite government presenting “balanced budgets”. Now they admit running a deficit but still use the same accounting tricks, so the real number is much higher than what they claim. Not sure how other provinces do it though.
“Governments country saved nothing, let infrastructure crumble – Garth”
School walls and bridges don’t vote, don’t strike and don’t have pension plans….
You are right, public services are already decaying, it will get worse, much worse.
For anyone who disputes the stats that most first-time buyers are highly leveraged, and CMHC is driving the entire market:
http://homeandgarden.homes-extra.ca/Homes/2010/02/04/12740581.html
This is an article from a CMHC rep. He clearly states:
- most new buyers do not have 20% down, and therefore the banks giving them loans will require the buyer to have CMHC insurance
- For down payments under 10%, banks will give you the cash
It’s frightening how automatic this all sounds! If you read between the lines, CMHC is telling people that the market is so out of whack that 20% down is not likely to happen for new buyers, and that it’s routine to just walk into a bank with zero down payment and get that part of your purchase financed too.
In my opinion, CMHC should not be pushing itself as the “automatic” option for new buyers. They should be viewed as the emergency/fringe option, only being used by low-income buyers to purchase homes that are below the average price. The belief that almost all buyers should be considering CMHC for their home purchase essentially eliminates the financially stable/conservative buyers from the market.
The next 10 years will be lean years for our uncivil servants. 50% of which could disappear tomorrow and nobody would notice.
After decades of spineless politicians cuddling up to public unions and bribing them with our money, completely ignoring people in the private sector, the public/private cast system has become so obvious that only a blind man could not see it.
I will vote for any government that promises an endless stream of pissed of uncivil servants striking on city sidewalks. This will be my biggest criteria of whether government is doing it’s job. I want to see 24/7 coverage on CBC of these parasites freezing their butts, screaming about some imaginary injustice that has been done to them.
If any of them is not happy to work, fire their ass immediately and hand them a lifetime ban from any government job.
Non-Farm ayrolls just released (US)
Another shocker!
Down we go again!
No end in sight!
Bye-bye property bubble(s)
“imagine living in a place with a third fewer cops and first responders, restricted public transit, dead parks and rarely-spotted snowplows or police cruisers.”
It’s called Edmonton and we’re already there. The city has grown rapidly and none of the infrastructure has kept pace.
Most of the housing bubble and some of the other weaknesses in our economic situation can be traced back to our response to 9/11.
Osama bin Laden is having a chuckle in his cave.
(Does he own or rent his cave or his he squatting? Do you think he has hedged his money in the stock market?)
#28 Onemorething on 02.05.10 at 1:34 am
VAN or TO RE Owners! You will never time the exit!
People ask me why a dumped all my RE when I did in place of an extra 20% gain. Simple, only the insiders and elitests know the last 5% of the top and bottom. ”
Perfect logic! Just as when the stock market crashed in 2008, it was a SHOCK, but as Money Road points out, anyone could have seen it coming if they looked. Same with the housing price adjustment, SHOCK, but you can tell it’s coming or now here…
It may be too late to sell…
Mike
How on earth do people here rationalize supporting any theory (or theorist, as it were) that delivered such a tremendous error in forecasting. It simply boggles the mind.
Wait for it, Lordy @ #12, wait for it. The green curtain is billowing under the building wind of reality, and pretty soon you’ll see the busy little Wiz’ in all his glory. Check your house prices then.
“At what point will people get enraged?”
Easy!
When they can no longer eat or when they no longer have shelter
Not before then – people are dumb, generally speaking!
Is that is what it is, is?
Seeing govts go broke warms my heart, and “avoiding” taxes makes it all the better.
Hello Garth.
I see you are reporting on Canada the financial basket case. A nation governed by politically correct fools who couldn’t run a fish and chip joint for a profit if their lives depended on it. If I were King I ‘d fix the problem my way, otherwise I think Canada is screwed!
Steven
#12 LordAbove
“How on earth do people here rationalize supporting any theory (or theorist, as it were) that delivered such a tremendous error in forecasting. It simply boggles the mind.”
Easy. Last year I attended a presentation by Patricia Croft. Go ahead, look her up. The words she used were “unprecedented policy response.” Predictions are only as good as the assumptions that were made in making them. Our federal government made a hash of *any* rational prediction through a wreckless and unprecedented policy response. That response changes the short-term environment, but it doesn’t change the fundamentals – as far as I can tell, it’s made them worse.
Canada churns out 43,000 jobs
http://www.globeinvestor.com/servlet/story/GI.20100205.escenic_1457224/GIStory/
Who cares if a lion’s share of them were part-time positions. This is good economic news so let’s all hope that higher interest rates come sooner, not later.
I for one, am glad that the public sector is about to get a dose of reality. The fact that the PM thinks it’s OK to take a vacation while most small and medium businesses are struggling to stay alive is probably the most telling statement he could make.
I got a call yesterday from some telemarketing thing asking if they can count on my support for Stephen Harper and the PC party. I told them I can’t support a Prime Minister who doesn’t want to work regardless of their policies. They had no response, and it was a short conversation. I said the same thing to my MP who actually came around to introduce himself a few weeks ago. Again, a very short conversation.
If anyone is interested in keeping up to date with Ontario’s debt clock, the Ontario Financing Authority maintains a site.
Funny thing is it probably takes twenty guys earning an average of 100K and indexed pension to keep this site alive lol:
193.3 billion
http://www.ofina.on.ca/borrowing_debt/debt.htm
That is a debt of $25,103 for every individual in the labour force. Assuming that about 50% of the workforce doesn’t pay taxes (the system provides them with net benefits), it leaves a burden of over $50,000 per person. In a middle class household of two, that is $100,000.
Add in federal debt and that figures doubles to $200,000.
Pensioners in many provinces are expected to increase by 120-140% by 2031. Currently the largest expense by the federal government is old age security.
By all measures the government will need to default on public pensions and CPP. Like it or hate it, in the shrinking economy of the future, it will be impossible to afford.
US and Canadian debt speaks for itself, not need for me to post it Google for yourself. This we know the WTO is not in good shape most if not all countries are in red, Toyota appears can not make cars, Honda a problems and well the big 3 are keeping silent, and billions has been borrowed for not one but two wars and even more for security. There is real big bang coming with Senior Boomers. Have not mentioned a penny yet! So now I would like all who believe in tooth fairy tell us just who is going to pay?
Hint #1 go to bathroom and look into mirror
Hint #2 refer to Hint #1 , no need for any more hints.
So if you truly believe becoming a “Greater Fool” paying 2 or 3 times the real value of a house AND banker and RE agent are “God” know yourself out go for it!
Know this …. when the house of cards fall, they will say how did we know? Just like hmmm Flaherty & Harper & a host of other so called smart people.
#10 Rain,
What makes you think “there is nothing on the horizon that would remotely resemble a calamity like that.” Really. The high interest rates of the 1980s were very much a result of the economic policies of the 1970s that lead to rapid inflation. The underlying cause was gov’t debt – in particular U.S. debt caused by the Vietnam War. In addition we had oil prices rise rapidly with the foundation of OPEC.
Darn good thing the U.S. hasn’t spent any money on war the past decade or so. OOPPPPPPs.
Really good thing energy is cheap. Oil prices can’t possibly go up. OOOOOppppppSSS again.
At least our government economic leadership is solid and we have not been running any deficits over the past few decades. OooooPPPPs.
At least the job market is strong and the economic fundamentals are solid. OOOOOPPPPPPPPPPPSSSSS.
Buckle up. RE prices over the lower mainland should fall at least 30% over the next 5 years. They could go down even further to return to historical affordability norms. In an era of asset deflation, rising taxes, slow wage grow and other uncertainties we have plenty to worry about.
#40….I am from a very rural area….I shot my first bear at 4 yrs (Dad held the rifle steady), I saw wolves tear apart a moose in the back yard…..I lived and worked in Suid Afrika when the Xhosa (Mandela) rose to power in the early nineties and I saw dead Afrikanders in their farmyards murdered by Black gangs……
It doesn’t matter what the women and children “want”…what they “want” doesn’t matter one single whit. What people want is a singularly modern concept based on cheap energy and the decadence it has bought.
The Dark Ages are coming now….and Canadians had better get used to it or get run completely over. The future does not care about you, the cop who will try to extort you for looking the other way, the bank who will try and rape you because you were stupid and took on debt to the parasites, the electrical grid that only comes on “some of the time” as the utility sector shuts down…….
I find it interesting that the mood of people is directly proportional to what they see any given day on CNN or CBC.
I am working the urban centers for a calculated time..then I am leaving…..my judgment of when is based upon a metric of lifestyle, risk reward and crime…..If the oil prices stay below 75.00 per barrel in Alberta for 2 years…I am gone….
If the oil prices go above 200 per barrel…I am gone…because either scenario represents the coin face of collapse of modern society.
Hi Garth,
I’ve been reading your site for a while but am confused by your latest article. You point to Colorado Springs as an example city of what can happen when taxes run dry, so your advice is to do whatever you can to hide your money from the tax man ?? How is that helping the neighbourhood you live in ? You can be smart with your money, but only a Greater Idiot goes to lengths to spite his own neighbours. I found your article insanely short sighted.
From yesterdays Journal de Montreal:
Foreclosures in Quebec in January 2010 up 33%
compared to January 2009.
Nice photo Garth.
BTW didn’t Kirk Russell & Goldie Hawn live in BC for
awhile when their son played jr. hockey?
Did they rent or did they buy?
Calgary March 31st! Finally. Ok, its going to sell out in no time, despite being a city oozing with greater fools there are a small core of us who have prepared our bunkers.
How does one go about finding out about tickets?
Details will be released here shortly. See you there. — Garth
#12
Thanks for the great “reminder” post on past predictions! Fantastic little nugget!
For Vancouver, the prediction was a 21 percent decline. We went up 18%.
I agree – in my position, I would have lost my job and credibility, but alas we do like to have faith in those that justify our own position.
#54 Mike (Authentic)
SHOCK, but you can tell it’s coming or now here…
I must be blind. G.T.A. 4 listings one mile radius, all sold within one week. Interest rates must climb to see change.
Psst, letting you in on debt nation’s political policy secret
new insidious tax
repay debt in devalued dollars.
Wow…..look at the stock market crash . The house of “CREDIT” cards is falling down. Looks like RE will continue to be frozen as home are NOT SELLING and listing have DOUBLED.
1……..2 the stock market crash is happening around you
3……..4 your RRSP will make you poor. 5………….6 RE is starting to sink. 7………….8 you might have to liqidate. 9……..10 you would have a house again.
POP…….What was that?
9…………..10 you will never own a house again.
The RE crash has started. The fact is nothing is moving and listings have doubled. The only sold signed you see are from summer time. Yet thats right. You know the housing isn’t selling when they see a sold up from MONTHS. One near where I live has been up for 5 MONTHS. The RE propagandists agents try to make it seem suckers/people are buying when in fact NO ONE is buying as the WORLD STOCKMARKETS are CRASHING.
For all those predicting the rise in property tax will crush homeowners, you are completely out to lunch. So what if their property tax goes up a whopping 20%!
A couple of hundred or a thousand or two dollars does nothing to impact a homeowner. The 20% gain in prices this year more than offsets the pitiful increases in property taxes that we can expect. I would rather take an increase of tens of thousands in appreciation per year than worry about a couple extra hundred bucks on bills.
Yes, yes, this will be in the context of rising fuel prices and/or rising income taxes. But the majority of people can make cut backs in their consumer driven lifestyles to cover those increases. A few less diners out, that latte gone, and whola, you have extra money…
If you hope these increases will be another “catalyst” for the crash, you can throw it in the corner with the “impending significant increase in interest rates” and the much anticipated changes to DP and amortization requirements….
You sound like the idiot buyers in Stockton CA in 2003. Good luck. — Garth
IRT #64 Junius
The deficit spending was entered into willingingly and intentionally to stimulate the economy and smooth things over while things went rocky in the US. You are falling into knucklewalker territory with your dire predictions and emo doom talk about 30% declines.
You are waiting for some kind of end-of-world scenario that will not happen. We are tied to the US economy, which despite its recent recession, is still by far the #1 economy in the world.
I just love the MSM and the RE industry here in BC… especially the Lower Mainland.
Inserted today in the Vancouver Sun (and probably the Province) is the biggest PUBLIC PROMOTION and VOMIT magazine from the usual suspects in the Vancouver Real Estate market.
Pacific Press (owners of the Sun and Province) are trying to pass this 80 page magazine off as an actual FACT based piece!!
First off! They’ve glamorized the cover of the magazine with a shot of Vancouver… to look like! You ready for this!! LIKE A LEGITIMATE MAGAZINE!!
Only thing missing was a price sticker and UPC code. (Which by the way! FYI guys… next time.. if you really wanted to pull a fast one over on the public.. you should have put both of them on there. That piece of marketing advice is FREE)
Second! HEADLINES!! – The World’s Most Livable City (BOLD FONT) – Page 10.
Now lets see! Who wrote this piece! Oh! It must have been by a legitimate commentary writer with no link to Pacific Press or the papers and some background on urban life style??
Ding, ding, ding! WRONG ANSWER!! It’s written by a Tony Whitney. And who is Tony Whitney you ask. Good Question? I’d never heard of him either. So I Googled him.. to see what his credentials were and some of his past writings. And low and behold.. what do I find. http://bit.ly/a7oBbK
He’s a past employee of Maclean Hunter.. and now he does EDITORIAL pieces for the MEDIA INDUSTRY!!
Hell! No wonder they didn’t include his professional background BIO in the RE / Economy industry to be able to write this urine. HE DOESN’T HAVE ONE!!! But glad to see he’s also an authority on Fire Places. (I’ll let you google that one on your own!)
Next! The ADS!
RE Hacks
1. Onni – The Mark
2. TAKaya Developments – Raven Woods
3. Intracorp – The Spruce, Highland Park & Glenmore
4. Solterra – Eaglewind & Dolce
5. Rize – The Rolston
6. Bucci – The Lumen
7. Baston – The Pulse and Coast
8. Bosa – The Affinity
9. Boffa – Jewel
10. Appia – Motif
11. Liberty Homes – Cascades
12. Wallmark Homes – Birchwood Estates
13. Ledingham McAllister – The Century, Silhouette, and Memento
14. Quantum – The Pearl
15. Emaar – Creekside
16. HJ Properties – Montage & Promenade
17. Nordel – The Altura
18. Domani Homes – Lotus
19. Raicon – Hazelwood Estates, Morgan Heights & Clayton Heights
20. Vesta – Milner Heights (with their own OpEd piece attached.. nice)
21. Regent – Paloma II
22. Penta – Remy
23. Magnum – Gallantree
24. True Key Resorts – Bighorn Meadows & Sunrise Ridge
25. MKS Resources -The Waters Edge
26. Pinnacle Int. – The Pier & Sapphire
27. and last but not least: Polygon – Cambridge Park
WOW! So over 1/3 of the magazine is Real Estate Developer ads.. nice!! That’s unbiased!
Then of course we have a sprinkle of the usual high end furniture stores, Lending Companies and home design companies in there. and some other fluff pieces by folks no one knows. (or cares to)
And.. but alas.. what would a Vancouver promo fluff piece be without our USUAL West Coast Cheerleader – Ozzie Jurock.
The Great and Powerful Ozz has a piece on how visiting foreign investors can capitalize on buying Vancouver Real Estate. (probably because he sees what coming.. and is trying to suck in a Greater Fool from outside the city to buy in.. and continue the ponzi scheme!)
and the LIES keep on coming! Great Job boys…. you’re tell people (or print) enough of them.. and you’ll begin to believe it’s the truth!!
“Move Along! Nothing to See Here!”
By Adrian Blomfield in Jerusalem
Published: 2:05PM GMT 05 Feb 2010
Dubai is to issue an arrest warrant for Benjamin Netanyahu, the Israeli prime minister, if investigators conclude that the Mossad intelligence service was behind the killing of a senior Hamas official in the emirate last month.
The threat to detain the Israeli leader came as police in Dubai linked the apparent murder of Mahmoud al-Mabhouh, a senior member of the Hamas military wing, to the Jewish state for the first time.
Dahi Khalfan Tamim, Dubai’s police chief, claimed that the dead man was killed using methods known to be employed by Mossad, Israel’s foreign intelligence agency. He added that Mr Netanyahu would be held personally responsible if Mossad was identified as the culprit.
======
Rationalization is the saviour of self respect
BAE files:
Prince BandarPrince Bandar, challenged as to whether there is corruption in deals with the Saudi royal family, replies: “Yes. So what?We did not invent corruption.”
“http://www.guardian.co.uk/news/video/2007/jun/07/bae.files.bandar
In the US, the company will plead guilty to offences of false accounting to settle bribery allegations made over the enormous Al Yamamah arms deals with Saudi Arabia stretching back more than 20 years, as well as corruption allegations over arms deals in central Europe.
The deal with the Serious Fraud Office in the UK covers one arms contract only, under which an overpriced military radar was sold to Tanzania. The SFO said some of the cash would become “an ex gratia payment for the benefit of the people of Tanzania”.
The settlement vindicates a long campaign fought by the Guardian, which began a series of exposures of BAE’s criminal conduct more than six years ago. BAE repeatedly denied all wrongdoing.
Because the charges have been brought under the 1906 Corruption Act, Lady Scotland can halt the case before it reaches trial. A bribery bill is currently going through parliament but has not yet become law.
http://www.statutelaw.gov.uk/content.aspx?activeTextDocId=1289609
The SFO was prevented from investigating allegations of BAE corruption in Saudi Arabia. Tony Blair, then prime minister, intervened on the grounds the probe was displeasing the Saudi royal family, and a threat to British “national security”.
========
The maximum sentence for false accounting under the Theft Act is seven years in prison.
“Lawyers representing those who have been charged have raised with us the question of Parliamentary privilege. We have considered that question and concluded that the applicability and extent of any Parliamentary privilege claimed should be tested in court.
“Can I remind all concerned that the four individuals now stand charged of criminal offences and they each have the right to a fair trial. It is extremely important that nothing should be reported which could prejudice any of these trials.”
================
audit fees will eat the collection fines and the people will still be out the pounds.
18 Jun 2009
Gordon Brown sacks Kitty Ussher for flipping homes to avoid tax
The announcement came a day after the publication of a report by Sir Thomas Legg showing that around half of MPs have been asked to repay a total of more than £1m to the Commons authorities because some of their previous claims were deemed improper. (guardian uk)
#66 JK
RE: Colorado Springs
I think you completely missed Garth’s point.
“Voters in November said an emphatic no to a tripling of property tax that would have restored $27.6 million to the city’s $212 million general fund budget. Fowler and many other residents say voters don’t trust city government to wisely spend a general tax increase and don’t believe the current cuts are the only way to balance a budget.”
http://www.denverpost.com/news/ci_14303473
There are some people on this blog who are absolutely brilliant and then some that might benefit from some basic economics.
Pick up Garth’s Book – and read.
Prices don’t go up forever, and when Flaherty says he ‘will never put taxes up” or cut ‘equalization payments” = he talking through his size 3 1/2 Ballcap.
Taxes, fees, UP. Services gone.
Next line of Battle = Pensions and the Mandarins versus Stockwell Day, Harpies favourite “Dr. No”.
Look for that RRSP to get grabbed *right – just like Argentina, or be forced to have percentage in Canadian T-Bills.
So many people are going to be crushed by this collapse it is beyond my comprehension how so many people think that the “Government”is going to be them out.
WE are the Government = but choose carefully who you want to blow your money.
So far, with a Dictatorship until March 4th – nothing is going on in Ottawa, except the Partisan scare tactics that have reduced my beloved Country to a patchwork of angry and cynical voters and busted boomers.
Garth’s projections for a necessary rise in Toronto’s property taxes is bang on.
Toronto residents do not even pay for the city services that they consume. This, before any provincally mandated or cost shared services.
While we are bombarded with stories on how Provincial downloading has straddled the city with a structural deficit, a look at the numbers shows that not to be the case. Using the information available here ( http://csconramp.mah.gov.on.ca/fir/View/Review_Toronto%20C.xls ) it is apparent that the real reason the city is in such a state is that residents (from the residential property class) consume far more services than their taxes pay for. Looking at just four expenses, ignoring any provincially mandated and cost shared programs, demonstrates this. To provide General Government , Protection to persons and property, Transportation and Recreation and Cultural Services cost the city an average of $4,844 per household. This does not include social services, libraries, etc.. Nor does it interest or the capital budget. On average the city generates approx $2,300 per year in residential property tax.. Even after adding in other revenue such as TTC fares, permits, etc. there is a tremendous shortfall. The city has only been able to maintain this imbalance by handouts from upper levels of government, raiding the reserves and by having the highest levels non residential property tax. The last avenue (high non residential taxes) deserve special attention. There is going to be tremendous pressure this year to abandon or suspend the program in place that addresses that issue, one that is already insufficient. The city will do this at thier own peril.
Between 2002 and 2008 the relative value of the the non residential assessment base has declined by nearly 10%. This automatically forces a a shift in burden towards the residential class. Sadly the city has framed this occurrence as a positive as remarked by city manager Joe Pennachetti in the Post ” City manager Joe Pennachetti said this morning that the provincial assessments are helping the city accelerate its recalibration of property tax ratios, to increase the portion that comes from the residential sector to two-thirds and reduce the ratio contributed by business to one third” One final piece of perspective, compare Toronto to that of Mississauga. Using 2006 data from the Municipal Performance Measurement Program it shows that Toronto spent $8,422 per household in 2006. On the other hand Mississauga and the region of Peel combined, spent $3,848.29 per household. So the average household in Mississauga pays more than $500 per year in property tax than the average household in Toronto and gets $ 4,573.71 less in services. Toronto looks more like a black hole than an engine of growth. Every addtional houehold the city adds will either increase increase its fiscal shortfall or induce a decilne in service levels.
In 2008 Toronto residents paid;
$204 less than Mississauga
$886 less than Vaughan
$968 less than Oakville
$755 less than Markham
$917 less than Richmond Hill
$1,101 less than Pickering
$814 less than Oshawa
All while Toronto spends considerably more per household and per person.
http://www.toronto.ca/…/backgroundfile-20057.pdf
#75…entered into willingly?….who exactly asked the american public if they wished to enter into a deal that when all tallied, has essentially made the USA into a Banana Republic. Notice how “they” never talk about “debt” only deficit…..and even the deficit numbers are enough to beggar the imagination……
But irregardless of fiscal policy that would no doubt make Maynard Keyens proud (until hyperinflation ensues at least)….
The energy ceiling IS real…..and you can roll your eyes, and snort through your nostrils in derision as your way of life grinds steadily and inexorably to a close.
Anyone see the oil prices today?…70.50 per barrel US…(what the US dollar index I don’t exactly know?) in the greatest depression (yeah I said depression..if you can’t see it yet you are a grade schooler) in world history. This thing will make the great pullback of the 1870s (yes it was worse than the 1930s) look like a kindergarten party.
You are completely correct in your assertion that we are tied to the US economy in lockstep…I concur completely……that is not a good thing.
For all the yapping about “Yankee ingenuity” I have yet to see some wonder child in their parents garage (check out the unemployment rate in the 20 something crowd lately?) manage to create a zero point energy device or maybe perpetual motion hummer???
It hasn’t happened…and will never happen…because there a few truly unscaleable walls in this universe…..the second law of thermodynamics being one…….
Good luck using “monetary easing” and deficit spending to escape that little quirk of reality.
30%…who said anything about 30% reduction in house prices???..thats laughable…….just demographics alone make that the best case scenario……look at graph sometime that charts average house prices over the past 100 years…we are not even 50% back to the long term average in the US market yet….and that was during CHEAP ENERGY times…..
Given what the state of the world economy we should be at 5.00 per barrel…the fact that we are at 70.00 per barrel is the death knell for us all.
I am not a sky is falling dude….I am that very rare critter in the human realm…..a pragmatic realist……there are still a few of us out there amongst the plasma screens and the F350s.
So is it a buying opportunity on the stock market in equities or pm or commodities?
Or did we just experience the dead cat bounce from last march?
One day. Who cares? — Garth
#69 and #74 Vancouver Rocks,
I love the fact that you never acknowledge that the market correction from 2008 until now was a result of emergency interest rates and expansion of the CMHC insurance to expand the pool of buyers. You can’t possibly argue that market forces have been at work during this period. Please, we all know that eventually there needs to be a correction when interest rates do rise. I agree that they may be slow to rise but that is only because the underlying fundamentals of the economy are so crappy. If they were better the gov’t would have already had to raise them.
In regards to #74, I don’t recall anyone saying higher taxes would be the catalyst for a market change. My view is that they will be a contributing factor to downward spiral. There are a large number of factors from increasing taxes to energy costs to boomer retirement which will all serve as a drag on affordability.
The catalyst could be a number of things or a combination of factors. Right now I believe we are near the affordability plateau which means the next few months could be very flat in RE – few listings, few sales – uncertain direction. Most likely, in my view, it will be an eventual rise in interest rates. However it is possible that the weight of another combination of factors such as tax increases (HST), prices and unemployment will tip the scales without an event.
At least Mark Carney is being honest now. I thought his remarks the other day were a very solid attempt to regain credibility on his part:
http://www.canadabubble.com/bubble-watch/438-carney-sees-tough-recovery-for-economy-no-quick-return-to-good-old-days.html
#76 Grantmi,
I saw this too. Very pretty isn’t it?
I am not going to worry about it. Clearly it is a marketing piece. I although I do agree I would feel a bit more comfortable if it has a “Buyer Beware” sticker attached.
Personally I hope that a number of investors from abroad do invest in property in Vancouver. It doesn’t hurt me and it doesn’t hurt the local economy. It just delays the inevitable for a while longer.
Well I mean from the high of 11950, not just off of today.
I have 50 percent of my money in gics and short term bonds and if this is just a minor blip before it goes back up again it would be a great time allocate my money differently.
81 knucklewalker on 02.05.10 at 12:20 pm
You are completely correct in your assertion that we are tied to the US economy in lockstep…I concur completely……that is not a good thing.
For all the yapping about “Yankee ingenuity” I have yet to see some wonder child in their parents garage (check out the unemployment rate in the 20 something crowd lately?) manage to create a zero point energy device or maybe perpetual motion hummer??
*****************************************
For all their problems and self made screw ups–I’m glad we’re tied to the US “economically”
Who has the deep capital markets that can match?
Check the CDS risk spreads–
The US is still the safest–
Every flight to quality goes to the USD first-
Wont say it will always be so–but–as far out as i can see–where else for now?
http://4.bp.blogspot.com/_FM71j6-VkNE/SbnEjCCMQDI/AAAAAAAABX0/fgFbsfq2pZ8/s1600-h/sovchart3.jpg
If you want insight into what the fed has done with the tarp money read the following article. If the people knew what was going on, there would be bankers hanging from lamposts.
http://www.financialsense.com/fsu/editorials/amerman/2010/0204.html
Garth, would you consider doing a Blog posting on proposed “Buy American” deal for Canada. It looks like we are getting the short end of the shtick yet once again. It only applies to the current expiring Stimulus money and not to future stimulus. Yet, it opens the bidding process for them on Canadian projects for an unlimited period of time.
This is especially concerning as their businesses are getting tax breaks with daily announcements. How can we compete with a blizzard of trillions created out of thin air?
Further to the “Buy American” deal:
Senator Feingold today called for strong Buy America provision in the new jobs act. Provisions that cannot be easily circumvented.
Hmmmm
One day. Who cares? — Garth
You been on vacation the last two weeks?
#75 Hoon,
I know why the gov’t enacted a stimulus plan. I understand basic economics. In fact, I think it is now clear that the stimulus in the U.S. was too SMALL and it may not have done enough to allow the underlying economy to catch up and operate on it own. We are going to find out in Q3 and Q4 of 2010.
My belief and many other on this Blog are that this is not a normal market cycle recession. It is much deeper and will take much longer to come out of.
In any event the borrow stimulus debt has to come out in the wash somewhere in the future. Other factors need to adjust such as taxes and other costs. Furthermore gov’t stimulus and deficits usually mean inflation down the road as the gov’t prints money to get themselves out of the deficit.
The main point is that at some point the Piper needs to be paid. I think you have to be a blind optimist to think that the world economy will bounce back and productivity levels will increase so much we will grow our way rapidly out of the hole we dug. I am not all doom and gloom but I agree with people (like Mark Carney) that we are likely to see GDP growth rates below 5% and probably closer to 2% for at least the next 5 years.
One of the side effects of this will be a correction in the vastly inflated price of Real Estate.
Knucklewalker, you are one entertaining dude.
Avoid paying taxes legally:
- work part time
- do not buy expensive and non functional for you goods.
- try exchange of goods and services with you friends
Remember:
Most of your taxes are going to feed autocratic parasites from the different levels of the corrupted governments.
BigLebowski
But i guess squabbling over how best to use a TFSA takes president in fantasy land.
precedent
74 van rocks
you’re right – the big increases coming will not crush most homeowners –not right away anyways — and they won’t change their habits of going out for dinner or their daily latte or two
they all have plastic–you don’t really think any of these fools buying into todays market will change their ways anytime soon do you–they’re just going further and further into debt thinking the equity in their houses will bail them out
i ve been there –it doesn’t always work
Not saying the govt use of our money is effective / efficient or needed but $100,000,000,000 divided by 30,000,000 citizens is only $3,300 each. We all have to pay taxes and the americans seem to like to shoot themselves in the foot to avoid paying a fair share.
75 Hoon on 02.05.10 at 11:39 am
We are tied to the US economy, which despite its recent recession, is still by far the #1 economy in the world.
#1 economy is a smoke and mirrors shuffle. Sure they are trying to control and police the world with that “phantom” expression.. war on terror’… The US of A is in a quagmire of trouble (and us Canucks are being lead down the same path)
How can a country be an economic leader when they have gutted a once dominating manufacturing sector?
How can a country survive when trade deficits are the order of the day?
How can a “RICH” nation survive on <20% unemployment and the greater bulk of what is produced in the country is PAPER from financial instutions and there are more MBA's given out then engineering majors? you call this a balanced country?
How can a country survive with T – Trillion's $$$ and let me spell it out. $4,000,000,000,000.00 in red ink?
You just about got it correct… "which despite its recent recession," what you needed to say was… the country that never left its recession is now into a full on depression…
“the RRSP tax deduction to become a credit (cutting the benefit by up to half”
Then there would very little benafit to an RRSP… Sorry but I don’t think even our Government is that stupid…
Oh, maybe they are…
In Regards to Post 21 Rory, cut government salaries 20%. First government workers are underpaid in compaison to Private Sector. Second when the government was in Surplus did we get a bonus? and third you private sector folks road the big wave when things where going good and now when times are tough you bash the government employee.
I can tell and give you many examples of people who laughed at me when I made $50,000 a year and they made double and trible that amount in high tech, they said come join us quit the government and make real money.
But……you spent your money instead of saving the differnce. cause when the party ends in ends. In conclusion the hare, or the person who made the fast money in half the time that I made my life earnings is crying the blues cause their out of a job. Get a life. All you fat cats had to do was save for your retirement. Now you want the government to save you!
You lived in the fast lane and borrowed beyond your means and now cause your unemployed you want to bash the turtle who earns have your salary? sorry I do not cry for you fat cat.
What was the number transferred to GM? we could have saved tons of money just let the corporation fail! in the end the market will correct itself. Far cheaper.
never say too big to fail Do you remember MF to big to fail eh?
Do not come to government to save your sorry butt. You elect governments based on what they promise you not what services they will cut. And now they promise you the moon and you idiots are still laping it up, we will be real voters and toss out the Conservatives and vote in the Liberals duh….. what did they do to the economy back in the 80′s do you remember the banana republic. How about the NDP who in Ontario spent more than any other government in total before it?
Do not cry the blues you deserve everything you get.
Then why live in this country?
What is the competitive advantage of living in Canada?
May as well sell everything, cash out, and live in some other far flung country.
#16 Taxoayer like everyone else
Hi – thanks for the comments – I live in Victoria.
I sold my last house in Victoria in late 2006 because it made sense for a number of reasons. One of which, but not the determining factor, was the absurd prices in Victoria. The house had appreciated about 300% since I bought it in the mid 90s.
(PS – for all those out there that will say I have lost out on 20% appreciation in the Victoria market check your numbers first.)
“Then why live in this country?” –bill
cuz this is my country.
duh
#40 Joe Calgary,
IMO, those living in larger population centres that have family living in rural areas will be lucky in that they’ll have somewhere to go to — away from the breakdown of society as we’ve known it. There will be fewer goods and services and much more anger and unrest in the streets.
There are some truly good people that will help others, but they are the minority (which we will soon find out) and when times get tough all pretence of civility among those who pretend to be decent when times are good, will drop.
You’ll be better off working with friends and family to carve out a simple and more independent life in the country than immersed with the masses in a dog eat dog lifestyle that will strip you of any spirituality you may have once had.
#75 Hoon
…is still by far the #1 economy in the world. (USA)
You sure about that? There is a huge difference between credit induced spending versus spending from savings earned by manufacturing products and providing services that are in demand, worldwide.
The USA will either make the shift back to a primarily production based economy as such they had in the 50s (thanks in large part to WWII) or continue to serve slushies and charge banking fees as it sinks deeper into debt.
There is no way for USA to spend their way out. Looking at the Case Shiller chart, your looking at it hitting between 120 and 130 before it hits bottom. That puts the end of the blood letting to 2013 – 2014.
http://www.ritholtz.com/blog/wp-content/uploads/2008/12/case-shiller-chart-updated.png
So the prognasticators right now claiming that there could possibly be ANOTHER 33% dip in USA home prices before it flatlines; I see their point. Its not that far off and won’t get better until employment icreases, not just levels off.
Hence why guys like Marc Faber are still chewing on hyper-inflation for the USA, they(Government) continue to attempt to inflate themselves out of the deflation that is happening right now. If they continue this policy for any continued lentgh of time, Faber may be correct.
KW is 100% correct in his assestment that the USA is in a depression, funny, one quarter of growth(barely) wipes the slate clean and we’re back on our way like nothing happened.
When the US housing market finally bottoms out, look for rates to shoot to the moon. And being on the tit of the American Empire, Canada will be drinking the same milk.
Its not the end of the world, hence why we prepare, however, totally disregarding the fact that a stable source of cheap energy is the key to econimic stability and success, is foolish.
Back to Faber, he is banking on a 20% in the S&P. He was right last spring, does that mean the TSX also hits 10K by end of February and bounces or stays flat the rest of the year?
“Then why live in this country?
What is the competitive advantage of living in Canada?
May as well sell everything, cash out, and live in some other far flung country.”
#100 Bill on 02.05.10 at 2:27 pm
You are absolutely right.
Run away from Canada for your survive.
#99 Ottawaboycryfor me not on you said:
“In Regards to Post 21 Rory, cut government salaries 20%. First government workers are underpaid in comparison to Private Sector.”
Dude, please read carefully the following link because it totally debases everything you have said.
http://www.cfib-fcei.ca/english/media_centre/canada/119-labour_policy/49-huge_wage_gaps_favour_public_sector_over_private_sector.html
You also said: “Do not come to government to save your sorry butt” …where exactly do you think .gov gets the money to save sorry asses …that would be from me the taxpayer …remember us but what do you care… your chq shows up every 2 weeks, you spend it all, ‘cuz in 2 weeks another comes, guaranteed …you save why – as in you don’t have to because you have a gold plated pension …what is so wrong with .gov just came out of your mouth … Sorry, dude …reality is coming and ty for reinforcing my idea on why 20% is needed…your a poster child.
# 86
You are still thinking like “wise” old investor…(no insult whatsoever)…you know those guys that talk about “cyclical investment trends” and “Elliot wave theory”…
those ideas (based upon an ideology of entitlement and CHEAP ENERGY).
The ONLY power that the USA now possesses is military…and we may well see what exactly modern “Roman State” tries to do with it “Legions” as the energy curve plows ever downward.
There are 5 stages to a civilizational collapse….the USA is now into stage 3 (true loss of belief in Government and Policy)….they have moved at warp drive from 1-3 in as little as 5 years.
“Deep capital markets” become damn shallow when your dollar value is measured as a quadrillionth fraction of an ounce of gold……ask Zimbabwe…
More to the point…the idea of shifting $$ around the world to gain “value” is going to lose credence faster than a street walker claiming “virginal status”……the realization that PAPER assets are worth nothing is becoming rapidly apparent to all but the braindead and the hopeful…..
If modern 1st world humans discovered en mass just how desperate the current energy situation is….you would see farmland values in the stratosphere as measured in paper dollars instantly with a concurrent complete 95% collapse of all “urban” properties…..
It really is that dire….just for sh.. and gig… google up the “NET HUBBERT CURVE” sometime and look at it long and hard…then read about it a little……
That curve takes “American Superiority” complete with aircraft carriers and the Patriot act….and shoves the entire edifice into the trash bin of history in 20 short years…..that bin might be glowing with Strontium isotopes but the bin is real.
Guess where little cousin Canada is, as the American Eagle gets its tail feathers handed to it by the energy curve??……our beaver is going to be shaved…..and we aint in no porn movie…..
#92..thank you kindly..one does what one can…I’ll be here all week…..
lol, most people that I know that work for the government do it because they like the easy hours and figure they would make the same or less in the private sector, so why bother.
If you’re willing to give up 50 to 100k per year in extra salary for the security of a government job then you are a very special case indeed.
#96…sorry I will shut up after this…..
the Canadian federal debt is more than 482 BILLION
provincial debt added on makes it out to be 36,000.00 per Canadian….
the american fiasco is about 40,000.00 per Yank….
so we are superior exactly WHY??????
How can anyone think that this is reasonable or prudent or even survivable……shaking head as I exit the room…..
#91 junius on 02.05.10 at 1:44 pm
#75 Hoon,
I know why the gov’t enacted a stimulus plan. I understand basic economics. In fact, I think it is now clear that the stimulus in the U.S. was too SMALL and it may not have done enough to allow the underlying economy to catch up and operate on it own. We are going to find out in Q3 and Q4 of 2010.
******************************************
No amount of stimulus is–or could ever be big enough to correct the massive debt imbalances–
What we should have done is stepped aside and let the market work–let the insolvent banks fail-
Of course it would have wiped out all bond and share holders,so what–they took the risk,they deserve to lose–
Once insolvency was realized–as in marked market and bank defaults the only way out–
Governments should have nationalized all those banks–fired or jailed,all involved and “then” printed the money in order to make depositors whole and enough to continue with day to day commerce–
Then the money would have had some zing to it and we would at least be on bottom–fully re-priced-
Losses would have been catastrophic,for anyone in debt and house prices would be–who knows where–but–they would be at the “right price” today–
Instead-we have printed/devalued our currency’s–stuffed the banks full of taxpayer dollars and solved nothing–
The debt still overhangs–hidden in level 3 assets/good bank/bad bank–and no idea of fair market value–
Lot’s of derivative savvy people claim that there was at the time of the meltdown–as much as 70% value in CDO’s/ABCP/blah blah–
So had that paper been marked and sold,to the solvent banks–and there were actually quite a few–
We wouldn’t have had to print near as much as we will now–
We would have had our debt cleared–banks recapitalized–the crooks in jail–and then–governments could have sold all the nationalized banks,back into the private sector–
But–it didn’t happen that way–
We still have all the debt–we’ve thrown trillions at the debt monster and he’s chewing it up faster then we can print it–
We cannot print our way out–never–
All governments are doing is kicking the can down the road until the next election,hoping they can hold their position of “power” for awhile longer–
And when it’s all said and done,we’ll end up where the market wanted to put us in the first place–
At the bottom–with debt flushed from the system–but at least with a currency of some “perceived” value and we could then start the long grind back up–But–
We will fight this thing all the way,printing and devaluing
our currency’s until something/some major currency blows up–maybe even the CAD–then we slump in a smoldering heap at the bottom–right where the market told us to go–in the beginning–
The market is “always” right–it “never” loses–ever–
IRT #104 smw
I am absolutely sure about it. They are an economic powerhouse. I am not denying anything about its current state of affairs either… my investments lost 35% too
The US debt and current deficit spending is a topic on its own and worth discussing. But we’d be better off doing that over beer than on here
Too complicated.
#49 TO bubble boy
I totally agree!
Do these 1st timers not understand that they will be holding these monster loans, barring any miracles, for a lifetime.
koodos!
A market can be “unstable” when prices are going “UP” as much as when going down!
Although I’m really not a believer in the “gun totin’ bunker dweller” lifestyle, a piece of southern Manitoba bush/farmland/pasture sounds pretty good right now. Manitoba has lots of fresh water, wildlife, and my folks say the winters are alot milder recently. Apparantly 100K still gets you a quarter section (160 acres) of mostly cultivated land. Bush/pasture would be much cheaper.
“Some governments have resorted to privatization of tax enforcement to enhance efficiency of the tax system. The assumption is that leakage of revenue will lower under a privatized regime”(wiki)
..so does that include free agent hackers who seem to be cheaper than auditors.
==============
remember 1994
The new refugees. (Americans who give up citizenship to save on taxes)
Forbes, Nov 21, 1994 v154 n12 p131(5)
Expatriation
Authors: Lenzner, Robert; Mao, Philippe
It’s easier for foreigners who have property in the U.S. to avoid the worst of American taxation, but even for them there are pitfalls. They must pay U.S. estate taxes on assets held in the U.S. unless they safeguard them by means of an offshore legal structure. Only certain fixed-income investments are immune from the IRS.
A foreigner can shelter his U.S. assets in the following way: Set up a trust outside the U.S. in some tax-advantaged locale, such as Bermuda, the Cayman Islands or the British Virgin Islands. “The foreign trust must own an underlying holding company, called a private investment company (PIC),” Lawrence says.
“The PIC opens an investment account in the U.S. Otherwise, a foreign individual who has a stocks-and-bonds portfolio of U.S. companies would be subject to U.S. estate tax. If the securities are owned by a true foreign corporation, the individual is not subject to the estate tax. The foreign corporation acts like a shield to
http://web.archive.org/web/20060227051231/http://www.frissell.com/taxpat/FORBES1.HTM
http://finance.senate.gov/sitepages/hearing102103.htm
PBS Frontline documentary into tax avoidance
http://www.pbs.org/wgbh/pages/frontline/shows/tax/
107 knucklewalker on 02.05.10 at 3:39 pm
# 86
You are still thinking like “wise” old investor…(no insult whatsoever)…you know those guys that talk about “cyclical investment trends” and “Elliot wave theory”…
“Deep capital markets” become damn shallow when your dollar value is measured as a quadrillionth fraction of an ounce of gold……ask Zimbabwe
***************************************
Actually–I’m not an investor–at least since 07–
I am net long physical gold–short most indexes–
Also hedged short gold (at the moment)
Long USD–short EUR–
I understand fiat currency’s are all going to meet their maker–they always do—
But when? 5-10-15 years–maybe tomorrow–who knows for sure–but-
the USD will be the last to go,because of its reserve status–
Show me a better paper currency right now–
The US owes all its debt in USD,so it will never “have” to default on their debt–
The rest of us don’t have that option–
We will all hit a wall–long before the US–
I understand the stages of a crumbling empire–
Debasement–military overreach are the final two and we are there now–but–
These things play out over a long time–
Rome didn’t burn in a day–
We still need to keep in the game and play the hands we’re dealt–
As far as the USD hyper-inflating?
I doubt it–i showed you the default risks of other country’s compared to the US –
They’re in far worse shape then the US,despite its obvious problems–
I laugh when i hear China will stop buying the USD and float their Yaun–guess what?
If China stopped buying and actually did manage to crash the USD–You wouldn’t see nothing but smoke coming from the holes the Yaun fell through and–
With 2.4 Trill. in USD reserves–they would become the biggest bag holders in history–
Uncle Sam might be at the bottom of the cluster fu*k–but–
He’s still got all of us–by the balls–
I know several people who took pay cuts to work for their country as a public servant. They valued the type of work the department’s would allow them to do. They are also capable, hard working and well educated. Their lower salaries are just part of their compensation package which is in part made up for by a better pension.
It’s a travesty that the government has allowed/encouraged? pensions to be eroded over the last generation. To uncreative people the solution to this problem is to cut remaining pensions. The Fed. of Indep. Business is all for this as it reduces the need to compete for their talent by also offering pensions.
I would take a study about the public service produced by a right-of-center lobby group with a grain of salt.
A true greater fool in the making = Vancouver rocks
Garth take him or her on the road with you as an prime example …lol
#105 Prophet: “Run away from Canada for your survive.”
All your base are belong to us. You have no chance to survive make your time.
#114 you have no idea how much I agree with that mentality…and geographically correct to…
#116 point taken …..I am also a big fan of the gold camp in all its glory…..with regards to the reserve currency angle…that is what the US military is there for in reality.
Your are correct in your general timing of currency issues….I would caution however that contrary to popular belief the Roman Empire in fact collapsed inside of 2 decades…..loss of ability to govern….think america without central control by 2030…..a completely fractured union (with nukes none the less)
The Net Hubbert curve will make the World Collapse much faster than did the Roman edifice….it was driven by ox and man power…solar driven….so when central authority went away the barbarians mostly went back to farm life (a few stormed the Gates and all that..but not many)
Now think what will happen in the modern world….no, no….not what will happen….what is happening…..
It is occurring at breathtaking speed already.
I submit that anyone who thinks their paper investments (electronic) are safe could be in for a shocking surprise at the rate that things are spiraling now.
118
Sure, I will go along as a prime example who has benefited from RE for over 8 years amidst the best advice of bear doomer and gloomers and armchair economists…
I am up for it as long as Peter comes along as the risk aversive basement dwelling renter that continues to cluck like chicken little about the impending RE meltdown (or the softer “correction” which is being thrown around now).
#107 knucklewalker …
I am more pessimistic than optimistic, but I think you are a tad premature in going to Defcon 3 …I still think we are in the middle innings of stage 1 but agree that moving from 1 to 3 or more could happen very, very quickly …just like dominoes.
Here is a link explaining the stages …
http://www.energybulletin.net/node/40919
I don’t have the foresight of Nostradamus Jr., but I’m getting an unsettling feeling for the months and years ahead. The Great Recession that we have just experienced will look like a cakewalk in the coming months and years.
I don’t think the masterminds who try to manipulate and control the inevitable demise through optimistic media briefings that everything is OK, is going to crash soon.
If a country, for example the PIIGS (Portugal, Ireland, Italy, Greece, and Spain) cannot generate enough tax and other revenue income to service their debt, then they will collapse. The US is not that far behind. Canada might not be as bad as the rest, but we’ll definitely be in a deficit until the jobs return. And I mean full time jobs, not part time jobs. You cannot make your mortgage payments with part time jobs. Therefore, the Housing Bubble is not too far in the future.
I’m sitting on the sidelines and waiting for this too happen. Why have your 10% down (or whatever) disappear after the purchase when the property value implodes.
Sweden is a tad cold these days, and it will lead to drinking problems — Frozen Jack Daniels. “This photo came from Stoney River Lodge, Alaska . The picture was taken on Jan 5th 2010. Minus 51 F.” wrh.com.
Yesterday I posted a link which said the US is now incapable of ever paying their debt / deficits off, and this is one of the main reasons.
When the US$ heads higher, worldwide stock markets descend rapidly. What is happening today?
The NWO (elite, Bilderberg Group, etc.) are taking the world’s economies down, prrimarily through War planning behind closed doors.
Secret Banking Summit. Are we invited?!
Remember Bills C-51 and 52, the Bill C-6 (both of which have been prorogued), which were designed to decimate health food stores? The CPC may have their lead now as this has already happened in Europe,
“EFSA, the European Food Safety Authority, has sharply reduced the list of available supplements and is in process of reducing potencies to ridiculous levels, such as less beta carotene than can be found in half of a large carrot.”
Blame game starts for US flatline! / Super Bowl or book reading? 3:46 clip. Reading books would educate the masses.
Vancouver East & West*
Attached & Detached
as of: 02/04/2010
New Listings – 85
Sold Listings – 27
Back On Market Listings – 2
Price Changes – 15
Vancouver All Areas*
Attached & Detached
as of:02/04/2010
New Listings – 272
Sold Listings – 78
Back On Market Listings -12
Price Changes – 53
*Courtesy REBGV
http://www.yattermatters.com
Listings in Vancouver are soaring. Sales are….NOT.
Do the math and come to your own conclusions my lovelies.
#117 Ottawa you said:
“It’s a travesty that the government has allowed/encouraged? pensions to be eroded over the last generation.” Public or private ‘cuz public sure hasn’t taken a bashing as of yet. Public pensions have done the exact opposite of erode at the expense of us.
“To uncreative people the solution to this problem is to cut remaining pensions. “ – So dude be creative; what is your solution.
“I would take a study about the public service produced by a right-of-center lobby group with a grain of salt.” – Want a study done by Unions or even the public sector themselves, so who would you suggest. I pick a business/taxpayer sided group.
P.S. – please show me one recently done study, say last 3 years that states the public service is paid less for an equivalent job. Please give me a link to one, really!
One thing Our Leaders should do is impose a 30% cut in all public sector salaries, benefits and pensions.
This should be done forcefully, no matter what collective bargaining and the court system says. As it is, these expenses are effectively bankrupting the country.
Right now, the urge of government seems to be to preserve highly-paid unioinized public sector jobs at all costs. Instead of making across-the-board cuts, they’d rather lay off the lowest-level employees, keep the fat 40/50-somethings, and avoid any alterations to already-”agreed” payouts.
Isn’t it about time “our public servants” joined the rest of us in cutting back?
i only wish Toronto would start cutting services and taxes and fire the majority of overpaid city hall flunkies.
this is off topic but worth reading- re internet licenses
http://www.globalresearch.ca/index.php?context=va&aid=17433
Worth reading…
http://www2.macleans.ca/2010/02/02/awash-in-a-sea-of-debt/3/
Victoria and area Month-End Market Statistics
Posted by
Feb 01 2010
Monday February 1, 2010 8:00am:
Jan Jan
2010 2009
Net Unconditional Sales: 418 247
New Listings: 1,211 1,055
Active Listings: 2,793 3,678
Please Note
•Left Column: stats for the entire month from this year
•Right Column: stats for the entire month from last year
127 Tax Haven
Or…
One thing our leaders should do is impose an additional 30% tax on all inflated private sector wages during the boom years and create a special “boom bust fund” for those specific individuals.
That way, when the illiterate hammer swinging 18 year old construction worker who used to make a ridiculous sum of money in the boom years loses his job or has his wages cut, he has a specifically made for him fund to fall back on.
The government should be forceful and implement this immediately so that private sector people stop complaining during downturns that the other guy should be cut “too.” It would also force these guys to realize that they work in cycles – some years are good, with fantastic salaries, and other years are tougher, with mediocre earnings.
You had you boom years – try and be smart next time and put something away instead of living high on the hog.
Isn’t it time that the “private sector” pays for their own bailouts instead all those public sector taxpayers?
A true Victoria story. I talked to my real estate salesman friend (they are people too) today. He told me about a recent sale of a single family house situated in an unremarkable area of the city. The house, built in the late sixties and in need of significant updates, was listed at $525,000 and sold after recieving 19 offers for $595,000.
The friend has been in the local real estate business for some 30 years, never seeing so many offers on any listing before. If this is not a bubble, what is?
In response to ‘Debt Nation,’ I submit this youtube video “Fear the Boom and Bust” a Hayek vs. Keynes Rap Anthem! Simple enough for anyone’s kids to understand the two differing philosophies.
http://www.youtube.com/watch?v=d0nERTFo-Sk&feature=player_embedded
A point to ponder in this rap with regards to ‘Debt Nation’ is that the ‘hair of the dog’ is not really a solution. Excellent video – short – humorous – and oh, so true!
1 – I agree with the bloggers who stated this blog by Garth was too negative.
2 – In relation to #46 who stated that Ottawa’s market is cooling off, I don’t know which city he is living in because my coworkers are putting in bids on houses and are losing out in price wars where the winning bid is $40K over asking price. He must be discussing lower quality homes; the good stuff is still in a market frenzy.
If Toronto and other municipalities started taxing basement apartments and illegal duplexes, triplexes etc. as the multiple residences that they are, they would have lots of money to pay their bills. CCRA should collect tax revenues as well from these income generating properties.
Hamilton, and every other major city, is filled with thousands of these illegal apartments. City Hall keeps whining about not having any money for infrastructure. They need to look to the slumlords who fill up single family residential zoned properties with as many people as they can pack in, profit large, and dump their tenants on the City for more services.
Why should someone make $12-20000 a year net on a property and pay the same property tax as a neighbour who does not rent their property, put in a 911 call every month, dump trash illegally, overload sewer systems etc.?
If you didn’t report $12-20000 of employment or interest income on your income tax form, year after year, Rev Canada would have you residing in a nice room with Bubba at the Gray Bar Hilton.
#100 – Bill…Bingo! Did that 10 years ago! Never looked back except for an annual vacation!
135 Ret on 02.05.10 at 9:00 pm
Why should someone make $12-20000 a year net on a property
MAKE??? that is the make or break for owning from a bank… with out that they are underwater… I bet you.
Hello Kurt at 59 and Junius 83. I disagree somewhat. Our
market (VI not victoria) has held steady, or even dropped a bit since the peak of 07/08, and we had
access to the same rates as everywhere else. Carney
looks like the master of the “elevator fart” from here.
66 JK – it is every taxpayers right to avoid paying taxes
by any legal means. But I have no problem if you want to pay extra.
Jess – thank you for your numerous postings and links. Many seem relevant to US law and taxes. Can you provide more Canadian content please?
OK, to all of the blog dogs who keep slagging “civil/public servants”; enough already. I’m one of them and thank god it’s Friday night. I have put in a b****h of a week, one of many. Working flat out every day, no breaks, lunch at my desk. Just like all you folks in the private sector. Yes, I am paid fairly, please note I said fairly! I do not belong to the $100,000 club. I came from the private sector later in my career so there is no “golden pension” waiting for me. A decent one for the years I will put in but it needs to be supported by other investments and CPP/OAS. So, am I complaining about working flat out, no, I happen to like my job. I put in more than an honest days work for my pay and would appreciate it if the blog dogs would acknowledge and respect that not all civil/public servants are f**&#’n the dog. Just started reading this blog recently, bought the book and for the most part I am learning and enjoying the experience.
Wow, this board is full of uncivil servants that sacrifice 50/100K per year in extra pay so that they can serve their country. How altruistic of them!!
In fact most studies show that the public service, if anything, is overpaid and also, way too big.
And BTW, that additional tax that you are talking about already exists given our progressive tax system.
#139 is bang on.
I’m tired of this civil servant bashing all the time. We work hard for years and give the best years of our lives for the taxpayers. First of all our pension is contributory and we work for lower wages as a trade off for the pension. It’s not a gold plated pension anyway (you’re just guessing ); we have to have other investment income in order to survive after retirement.
#120 knucklewalker on 02.05.10 at 6:37 pm
The Net Hubbert curve will make the World Collapse much faster than did the Roman edifice….it was driven by ox and man power…solar driven….so when central authority went away the barbarians mostly went back to farm life (a few stormed the Gates and all that..but not many)
*******************************
Oil–what can ya say–
Gold is a political metal and Oil is a political commodity–
I’ve read Kunstlers “long emergency and Simons –Twilight in the desert–
Oil always an anomaly–inflation or deflation–never seems to have a lasting hold on it–
Seems to have an initial effect,and then it decouples from economics–
So–i do agree with you about such a wild card–
We have ways of prolonging this “thing” but–
instead of doing what we can–
convert vehicles to nat gas–go nuclear–green energies etc–
we instead focus on making crooked bankers whole–who got caught up,in their own ponzi scheme–
We’re a society coming unglued and we just can’t get out of the way of ourselves–
We’re too tiny of a group–a handful of bloggers–
to make any difference–
someone above–talked about too much gloom on this board–
Reality–this time around–ain’t pretty–
knucklewalker, if it goes mad max, it won’t matter where you are.
coho, what makes you think society won’t break down in rural areas too? Are you thinking that rural people will not feel anger and unrest? That they’ll have goods and services while city people will not? That their distance communications will hold-up better than will those in the cities? And why on earth would friends and family who live in the country be so different in supportiveness nature than the friends and family who live in the city?
I’ve been reading about the roving gangs of thieves and rapists and the packs of stray, unfed dogs kicked-out by their no-longer-able-to-feed-them owners for over ten years, accompanied by all sorts of rants about society as we know it gone forever and death and destruction in its place. However, no one seems to consider that those roving gangs may head for the country, too, especially if and when word gets around that food is being grown in abundance there.
I’m not saying these things lightly. I’m rural-raised and not wanting to return there. Life was cold, lonely, and a struggle. A shortage of fuel made worse by a high price of oil won’t make rural life any easier, either.
You may not have heard about the pre-y2k Milne who kept repeating “If you live within five miles of a 7-11, you’re toast.” Well, to me a nearby 7-11 is somewhat comforting. An empty water tower or cistern isn’t.
140 Calgary Rocks
“Wow, this board is full of uncivil servants that sacrifice 50/100K per year in extra pay so that they can serve their country. How altruistic of them!!”
Or this board is full of civil servants that cannot stand the concept supporting room temperature private sector individuals who fail to plan for the future….
Most studies show that during boom years the private sector gets paid disproportionate to the value that they add…