First, a blog success story. Man meets house. House eats man’s money. Man finds spiritual awakening, then a greater fool. OMG, pass the tissue.
Garth: I am a 36 year old bachelor. Six years ago I went into business undercapitalized and deep in debt. After two years of 14 hour days, no life, and losses of over 100k I finally managed to get to profitability.
Oct 2008, After saving 100k I decided to buy a fixer North York 3 bedroom bung for 500k on a good lot. Thinking 50k on my LOC would cover the renos, I dove into debt to complete my first home. The 50k soon dissapeared and I still had no flooring or kitchen. Needless to say I needed another 50k. After taking out a second mortgage to complete, a friend introduced me to your blog. I read “Money Road”and then started doing the math. I soon realized that I was tossing most of 120k salary into servicing my 2500/month mortage, 1500/month revolving LOC plus utilities, taxes, and daily trips to Rona. I was left with a huge mortgage, huge personal debt, no money in the bank, no investments and an empty house. Good parties though.
After reading your book a second time I decided to hire a staging company, a home inspection and an excellent agent. I sold my house condition free with a large deposit last Thursday for 750k. I will soon have 200k banked, freed up 4k plus a month in cash flow and am in the process of finding a good finacial advisor. I also found a great bachelor pad for 1500/month and traveling Europe all of August.
Garth, thank you. You have no idea how grateful I am. – Toronto Rebel
Reb, that’s a fine tale and I’m pleased you got out alive. You remind me of the last poor souls hoisted to helicopter salvation on the roof of a Saigon building in 1975, as the whole rotten regime crumbled around them. As the bird strained to fly, the cries of the damned and the doomed could be heard below. Call them sellers.
This war is over. Ages ago I told you what to expect: First prices would crescendo. Then listings would explode. Sales levels would wither. Finally, prices would crumble. We have now reached DefCon 3.
Last month about 100,000 new houses flooded the market. Despite all that fresh choice, sales actually declined, down 2.6% from March and about 7% from the end of the year. There are about 250,000 houses for sale in Canada, of which 200,000 did not sell last month. The real estate industry worked hard this week to put the best face on things (of course), but even spinmeister economist Gregory Klump bombed. His low moment came on BNN claiming the delusional Vancouver market is ‘balanced’ and prices will continue to increase.
Poor George. I remember when he came to Ottawa a couple of years ago and asked me to personally autograph a copy of my new book, “Greater Fool” for him – which forecast real estate woes ahead. Obviously it was more than the man could take.
In fact, the whole lending, banking, mortgage-making sector is sorry to see this conflict end. Even BMO deputy economist Doug Porter, usually a sane guy, was spewing: “Canada’s housing market has gone from full gallop to stately cantor, and is poised to slow to a leisurely trot in the months ahead.” That will be a good trick. The steed is kaput.
As for CREA (Klump’s boss), the official line was that the market “is firm but not frothy,” which made me think of a girl I once dated. Nice, but no helicopter.
Finally, Reb, I just spoke with a guy who makes a ton of money in the financial business – north of half a million a year – in Vancouver. “You know this market is insane,” he said, “when my wife and I feel we’re actually priced out of the market. I mean, there’s nothing less than one point five that you’d even want to live in.” So, he rents.
Start the main engine, dude.
Engage the rotor. Drop the ladder. Wave, and lock.
God help ‘em now.
151 comments ↓
Garth, what`s your take on Hamilton, a market that hasn`t seen much gains in the last year and house prices are very low.
And there’s a good reason. — Garth
You won’t have to wait until 2011 to see the start of dropping house prices.
In Victoria BC according to VREB the prices have been going down for 4 monthly slowly now. (a 25K reduction which isn’t a lot yet but read on)
http://www.vreb.org/pdf/vrebgap.pdf
The listings have gone up from 2,600 to 4,200 over the past 4 months
http://www.vreb.org/pdf/vrebgal.pdf
and they have increased again over the past 2 weeks by over 400 more.
THE MOST TELLING info is the following
A summary of house sales in a defined large area in-town for the past few months:
March 2010 63 sales
April 2010 60 sales
May 2010 2 sales to date as of May 17, 2010
Now the sales summary to date is typically a few days behind, but even so this past 2 weeks has been a near total collapse of the buying demand.
Combine this with the ever increasing inventory and it will be very tough now for a high percentage of sellers to sell their homes at the prices they are seeking.
There are more cases recently of sellers lowering their prices 20 to 50K and then taking their houses off the market after it still doesn’t sell.
No idea what the near future holds for price levels, but a shift to a buyer’s market has happened over the past few weeks in this city. Amazing how fast it happens when it finally arrives.
The big unknown is when to jump in as prices will continue to drop until the inevitable swing back to a seller’s market (but is that in 6 months or 6 years?). Always this is the question!
Bullish long term on housing here.
Gooooood Morninnnnnnnnn Vietnammmmmm!
Let the onslought commence!
I suspect we are, in fact, surrounded by ersatz big spenders. Net worth is what counts, and we should take a look at their debt loads.
If sanity is to return, not just cheap credit, but employment and incomes must fall.
Rents are dropping in Alberta. I guess if you feel the urge to do some negotiating, you can always pay your landlord a visit.
Every single reader on this blog reads every single one of my posts.
…Not a single post of mine is “Sheeple” material.
and to date I am the most accurate pundit on this blog.
…..ain’t it the truth…
Nostradamus jr.
#2 Robert Logan,
I think it is useless to think about how long it will be before we hit bottom. There are too many factors complicating any prediction. However I wouldn’t hold my breath. It will take the rest of this year for the top to come off and many years more for the adjustment downwards. As interest rates rise prices will continue to push down. Check back in 3 years and expect it will be more than 5.
@#4 Rob
Two straight years now in Calgary my rent has decreased. It’s easy. Take your yearly rent, and subtract a months from it. Divide by 12 and demand that this be your new rent. They know that the only way to not lose a months rent by having it sit empty is to lower it anyway to someone new. It won’t work forever but it certainly does now. I’m a good tenant so that helps. And if they call my bluff (which its not), I just start browsing through the 100s of 100s of 100s of places that are up for rent.
Kind of nice that the condo market is so over built… makes people try to rent whole houses for $1000 in Killarney, Sunnyside, Bridgeland etc… I love it.
Colleague of mine is selling his starter home in Ottawa for close to 300k.
Guess how many viewings it got on the weekend. I’ll give you a hint: 2, 8, or 40?
Yes, 40 groups went through.
Perhaps they’re all trying to ‘beat’ the HST and the new mortgage qualification rules?
The horse tale told by Doug Porter reminds me of a similar story they were telling Americans a few short years ago (minus the animal references, of course). Something about soft landing? Anyone remember that? Go ask someone in Phoenix how well that turned out!
#5 NDMS jr.,
Do you realize that most of us think you spend your days in a rubber room wearing a straight jacket while tapping out your postings with your toes?
Saigon 1975 eh? Hmm, could’ve sworn I saw that scene in a zombie movie or two.
Also from Doug Porter of BMO:
“Prices may see one last uptick in the next few months, but are expected to simmer down notably in the second half,” said Doug Porter, deputy chief economist at BMO Capital Markets.
“Indeed, outright price declines are certainly a very real possibility in Ontario and B.C. amid much more moderate activity after the HST kicks in.”
http://money.ca.msn.com/investing/news/breaking-news/article.aspx?cp-documentid=24264595
The guy still sounds sane…
and to date I am the most accurate pundit on this blog. – #5 Nosty Jr.
Sorry Nosty – you’re not a pundit, just a puppet for all those conspiracy theory doomsdayers who spew garbage daily. Some of what you post is interesting, but none of it is your work or your opinion. Although your view of life is entertaining none the less.
Garth, let’s face it, 99% of homeowners that should have sold missed it!
Those who have, take the shortest rental term possible as rents are about to decrease…along with housing values for a very long time.
When the SHIFT occurs and people finally hit the “It’s cool to save” mode and a decade of thrift occurs, what do you think this means for RE sales, car sales, retail sales etc?
At the end of this, there will be so many sub primers underwater and boomers who are desperate to cash out that affordable will be here again!
However, only a handful will either have the capital or meet the new lending restrictions when the dust settles.
What does this all mean for the Prime Mortgages? If you have as Garth says only max of 40% of your portfolio in RE you may be okay. For those who are in the more camp, save like crazy NOW!
Garth, what happens if we see perpetual momentum to the downside on all of the above, how do we recover?
It still looks like it’s going to take some time. The big bounce has convinced a lot of sellers and agents it pays to wait if you don’t get your numbers. So sales might just dry up until the banks are forced to take action on growing numbers of foreclosures.
Toronto Rebel, it’s great that you were able to get out at the top of the market
. Think about re-investing the gains and the free cash flow in your own business, instead of investing it in today’s inflated financial markets.
No market is a good market right now, including Hamilton. The only place I would ever buy in Canada is SW Ontario, i.e. Essex and Kent. The rest are overpriced.
A good website about the crash in the U.S. that is equally applicable to Canada: http://www.patrick.net
David Rosenberg said yesterday that the European debt crisis will lead to a deflationary shock on this side of the ocean. Real estate prices in Canada may have finally reached their peak and begun their long (quick?) and steep decline but it won’t have the help of higher mortgage rates to accelerate the downward trend anytime soon. Stagnant wages will though. Predictions that five mortgage rates are going to hit 8 percent in the near term are now nothing more than a pipe dream. Things are changing daily.
I’m sure this has been posted before but this is abysmal.
“OTTAWA — Canada ranks first in terms of debt-to-financial assets ratio among 20 OECD countries…”
This is one time where you do not want to be first. Just adds to what most of us already know. That the day of debt reckoning will soon arrive. It will take very little to tip this cart and our bubble house of cards. Even more reasons as to why the Carney has to raise interest rates. This is the result of reckless BOC and government policies and really naive consumers gorging themselves at the trough of easy credit.
http://www.financialpost.com/news-sectors/economy/story.html?id=3013137
RE: #7-Dave in Calgary
You must be a good tenant with a spineless landlord
Why don’t you go and rent one of the “whole houses for $1,000.00 in Killarney” then.
I am a Calgary landlord as well as it is my job to research and know Calgary rents. There is simply no whole houses for $1,000.00 in the areas you speak of. Are you just posting that here in the hopes that if it appears on this blog that it will become a reality???
Rental Wanted ads in Calgary up 60% in the last 8 months. For rent ads down 25%
Know what that means Dave? Your next bluff will be called. Or you could peruse the endless for rent ads and find the perfect whole dump in Killarney for a grand.
Why don’t you just wait a little longer because Garth said Calgary house prices will fall 20% or more. We just don’t know when or how long that will take.
Oil is tanking…..maybe soon.
Gregory Klump. David Lereah 2.0
Sign of the times in Vancouver:
Huge realtor billboard ads popping up
Huge condo tower ad on front page of local ‘paper’
http://vancouver.24hrs.ca/PDF/2007/10/10/20100517.pdf
Nothing like the smell of RE fear on a bright spring morning…
Thats a great story, but the untold story to date so far is:
drumroll:
People are selling because they HAVE TOO, they are in a MUST SELL situation. Either because they have extended their credit already or before they go bankrupt.
The smart money already got out of RE, now its the late comers to the party, and yes, some of those new listings are people wanting to cash out, but the majority are in a desperate situation.
Thats what happens in a jobless recovery, we are still at less jobs then 2008, people must sell, relocate, downsize etc.. in order to live. House is the last thing everyone always holds on too, people will max out credit cards, LOC’s, sell their old jewellery, sell their toys before the bank takes there house.
If all of these listings were move up buyers, house sales would be chugging along but give it 3-6 months, and everyone will be asking– where are these sellers going to live? as the sell side of the equation is going to be huge.
Serioulsy, don;t take Garth;s or my word for it, get out there in the real blue collar world (not the govt jobs) but the real working communties like Kitchener/Cambridge/Guelph/Barrie/Brampton/Ajax/Whitby and see for yourself what is going on with their local RE/commercial RE/commercial business’s. Talk to regualr folks.
Folks, its done, and it will be very REAL for everyone, even the naysayers by December. Wait for Global and Macleans to be running the negative equity stories, they are coming.
oh all this doom and gloom here but homes are still selling here in toronto, immigrants are still coming here were still hot we are the new, new york .. toronto rocks .realestate in toronto is a the only sure bet here.. the poncho
Reminder to self…
You can lead a horse to water…but you cannot make it drink.
We are on the edge(the last milimeter) of massive change.
To pretend that anyone has 5 years to slowly watch this clusterwoof called the canadian /real estate market/economy/government overspending/aging demographic/manufacturing-job exodus/political paralysis/taxation fiasco/consumer debt/student debt/business bailouts by government/healthcare system driven into overdrive/taxpayer services reduction/schools closing/teachers being laid off/obese children/pensionless boomers/Arctic melt/disappearing salmon/dead pine forests/oil sands environmental time bomb/society brainwashed by the MSM…unwind, is WOOFIN’ delusional.
Just sayin’…real estate is not the only disaster on the menu. The chefs have been hard at work to serve you up an absolute buffet of heart stopping delights.
Choose wisely.
Word
#2 Robert Logan
As a fellow Victorian, your stats exactly match what I’m observing. By my estimation, any single family home that was originally listed for < 650K has seen an average price drop of 6% in the past month – if the owner has chosen to adjust the asking price. Also telling is the growing price gap between asking and selling prices. I'm expecting a 30% price drop by 2013.
Nostrilldumass Junior….I ignore your pitiful contributions.
Rent is going down in Alberta. I rented a 1000 sq ft house for 1500 2 years ago, now I’m lucky to get 1200. It’s for sale and I may have to reduce price.
You know….I generally try and not disparage anyone..not really. But when will people seriously pull their heads out of their a..h…..s ?(I know to many blank spaces for letters)
There comes a time (you would think at least) when evidence of the obvious would become,….well…obvious….
When I hear people say such inanities such as since the price of oil is falling we are no where near peak oil….I realize that there is almost complete disconnect between both the nearly totally artificial edifice of modern finance and the true reality of the world.
Its like this folks…in summary (non doomers please just pass by,…. go to the fridge get a beer,….scratch your itch (you know where it is…and turn on american idol)
Peak Oil in 2005-2006
Meltdown of world economy commenced
Debt based economics began their implosion as the real world of “free energy” died
Massive attempts by Big Oil and TPTB to keep system at least steady have failed…EROEI is to damn low
EROEI of 10-15:1 will cause complete collapse of modern economics and thus societies (we are at maybe 20:1 now)
When complex emergent systems are subjected to intense stress they will adapt for a time…then fail in catastrophic ways.
The disaster in the GOM if it cannot be stopped (and there is ZERO evidence than they can stop it…did ya’ll watch Anderson Cooper put the screws to BP today???……70,000 bpd out the pipe and you think that 1,000 bpd into your little straw contraption matters?
This event WILL stop offshore drilling in NA…..if it don’t then we know for damn sure peak oil is here……
As the offshore rigs are idled…..and as China and India enter their long awaited meltdown ( I mean seriously….can the economy of the dallas fort worth area alone keep the Chinese economy going ?) and as the price of oil collapses (demand destruction is WHY the price is falling…aint it obvious even to a damn redneck?)
As the asian economy implodes and the american eagle begins to bite at itself in the frustration of the failed american dream……
The world starts down the adjusted hubbert peak….
( and we will start down it this year….GOM assures it now)
The we shall see if all the smart minded, economically astute types can manage to tread water while their much vaunted investments (commodities need buyers, bank stocks need money flows to keep their worth)
begin to buckle under the impossible impacts of the unrelenting hammers of a world quite literally starving to death for lack of energy….
Like a cancerous tumor (and make no mistake that is EXACTLY what the modern human enterprise is…..high finance and all) that is deprived of its blood supply the human edifice will begin to die.
The areas that go first are the least vascular….expect to see mass death in asia….and in the poverty stricken generally, worldwide……as the welfare state collapses entirely….watch the social chaos erupt…….
like a dying tumor whose fetid tissues cause mass inflammation in surrounding systems we shall see the drums of war sound anywhere where there is the ability for the “strong” to take from the weak”
Expect to see political collapse in the USA now within the next 2-3 years…..the people know that Obama has failed (there was no way he could succeed)…it is a problem of energetics…..the rules of collapse are well defined
1) financial
2) commercial
3) political
4) social
5) familial
In the USA they have seen 1) come and go….FIAT QE is the symptom of failure
2) is well under way…..just how high does M fidledee have to go before we admit it 25%…35%….50%??
3) is coming now…..
God help all when 4 comes……and you do not want to know what happens if 5 is reached (read “the mountain people” sometime…..)
In Canada we are stupid…we think that “Natural Resources” and low population will save us……
We hit peak NG this year…did anyone notice?
The Tar sands have an EROEI of about 3-5:1…need I say more?
If political collapse comes here (and it will) see if TPTB care if your lights and heat stay on (even if you can pay for it)…..ask a Pakistani how that works ( and they were at least smart enough to have Nukes…unlike us)
We think that we are so damn special…..I watch my country men and women go about their lives blithely unaware of the turmoil that lies just 9 meals away…..or 3 nights at minus 20 C…….
Concerned about the “baby boomer cohort”?….they should be more concerned I would think…..if we hit 4) the long pork will be on the grill all across this great land…..if it was good enough for Iroquis why not for us eh?
Yeah we are special alright…
and I suspect that the earth (the only “economy” that ever really mattered in the end anyway) is about to call our loan……
and we are way, way overdrawn…
to continue the analogy….. beating a dead horse…..
“Good parties though. We have now reached DefCom 3. Engage the rotor. Drop the ladder. Wave, and lock.”
Blast off! Let the joy ride to hell begin — one for all, all for nun!
Undoubtedly the biggest parties will be those who own their homes outright, have a fairly good nest-egg and those (like Rebel) who sold at the top, took your advice and live an adequate lifestyle.
No point in rubbing other’s noses in it. They all had the same opportunities, but chose not to pursue them for their own reasons.
Stock markets are collapsing as they should! 5:17 clip. Riots not included.
Snoozing — Corporate bonds have gone for a nap in Europe.
China increased their US Treasury holdings. This may have something to do with the aforementioned.
End of the socialist (savior) state. “Germany is well down the path to national insolvency — a path shared by all developed nations attempting to fund unsustainable Savior States.”
Gorbachev and the EUSSR — remember him? “The myth is that the Soviet Union’s economy collapsed under the weight of massive military spending and inefficient bureaucracy. Most Europeans believed that Soviet economics was no match for Western capitalism. Most Americans still believe a retired Hollywood actor singlehandedly forced Soviet bankruptcy by amping up the arms race.”
Here’s a link to a home builder who’s taking the unethical approach. What he’s doing is bothersome. Feel free to contact him. I’ll explain…
http://www.highmarkhomes.ca/
a colleague at work (he’s from Whitby…about an hour east of Toronto) tells me 2 weeks ago he went to see homes that will be launched by a builder in the area. Upon arrival he said there was a cop at the gate and lots of people in sales office. There were floor plans etc. and he spoke to one of the sales people. This was the first day of opening this office – roughly the 6th hour. Homes were being sold for between $400k – $800k (that is not a typo, and yes I did say this was in Whitby!). The sales guy had a bunch of “sold” stickers on a lot of the homes’ floor plans or whatever was on display. He claimed that “78 of the 88 houses they were going to build, had already sold in the first 6 hours!”. He told my work colleague that the houses that were sold were all the $700k to $800k homes. He said the only 10 left were the $469,000 homes.
I thought about this all for a couple of minutes. I asked the colleague how sales were in his area in general. He said nothing was moving and hasn’t for a while and gave me examples. He then mentioned a very important fact………the sales person from Highmark Homes has been calling and contacting him for the past 2 weeks saying that the sale is ongoing! Boy did I laugh my arse off!!!! I asked the work colleague “so, this guy sold 78 houses that were above $700k in a little over 6 hours, but hasn’t sold a single home of the 10 he has left, in the $460k range in 14 days??? He then figured that he was tricked and didn’t like looking like a fool. I explained further that there are no $700k homes being sold there, only stickers stating that there will be!
I had a very good laugh, but at the same time, it leaves a bad taste in my mouth what this HighMark Homes did to create this buying panic. I’ve just emailed these clowns to let them have it.
#1 Sid,
I’ll assume the reason Garth speaks of is the loss of steel and manufacturing jobs in Hamilton. I disagree that house prices here are very low. In my opinion the economy here does not justify the increase in house prices here over the last 10 years. I’ve lived in Hamilton for more than 40 years and this period is no different than the ’80′s when house prices went through the roof. Case in point, I grew up on a busy street on the west Mountain. Every house on the street is ’50′s era one & half storey, low damp basements, poor insulation. My father bought ours in the ’70′s for $26K. In 1995 our family also bought the house next door for $90K and rented it out. In both cases, our family agreed that we bought both houses for a fair price given the economics of city at the time. Fast forward to 2009 and houses on the street are being listed between $200K – $250, some in better condition than others, but still too high given the economics of Hamilton today, in my opinion. Of course, anything in the $250K range doesn’t move and sits on the market for months. In April 2009 our family sold the house next door for $163K for asking price. It sold in 4 hours. When my father passed away in November 2009, we listed his house for $185K and it sold for $175K in one week. Both houses needed work, foundation mostly, but we think we priced them fairly. I still live on the west Mountain (they call it Ancaster but it ain’t) and I’m still seeing houses here being listed way too high. A few have sold, most do not. In my opinion, house prices in Hamilton are no different than anywhere else in the country. Hamilton has been sucked into the housing bubble, to a lesser degree perhaps than regions with actual working economies, but make no mistake, greed, speculation, realtor pumping and CREA boosting are alive and well in the Hammer.
Garth, you mean “Defcon 3″. Sorry to be pedantic.
>#5 Notradamus jr. on 05.17.10 at 10:02 pm
>Every single reader on this blog reads every single one of my posts.
>…Not a single post of mine is “Sheeple” material.
>and to date I am the most accurate pundit on this blog.
>..ain’t it the truth…
>Nostradamus jr.
You sound like WileE Coyote (Genius!)
>#6 junius on 05.17.10 at 10:06 pm
>#2 Robert Logan,
>I think it is useless to think about how long it will be before we hit bottom. There are too many factors >complicating any prediction. However I wouldn’t hold my breath. It will take the rest of this year for the top >to come off and many years more for the adjustment downwards. As interest rates rise prices will continue >to push down. Check back in 3 years and expect it will be more than 5.
Don’t worry our friendly neighborhood PM and his cohorts (F & C) will drop the interest rates below zero, and then you actually pay negative mortgage rate to buy, so they everybody will buy pushing prices ever higher. How to pay for it? Raise taxes, all kinds of taxes. Tax the hell out of everybody and his dogs.
Two things:
1) http://www.financialpost.com/story.html?id=3039473
2) http://www.financialpost.com/story.html?id=3037712
Hopefully, all those looking for a home (myself included) can be patient for another 12-18 months.
#10 poncherelo
Man you must be right! I think you should get out there and buy everything you can, Now! Cause its only going to be 20% higher by this March!
Do it Man!!!
#35 Jeff Smith
Jeff….
C and F will have 0 control of where rates are going as they start to rise worldwide, and it will happen. Canada is just another country in this big world and when rates go up, canada will have to as well.
Get ready friend and face reality, its coming!
Anyone else noticing the insane numbers of RVs for sale by the side of the road?
I see it here – a lot, I read about it elsewhere, and I even heard of several cases within my own family, circle of friends, and coworkers:
Many people actually want to buy a house, but are desperately waiting for a massive correction. Many people are waiting to snap up multiple investment properties, and several have sold within the past year, hoping they have locked in profits and can buy the dip.
I don’t have a crystal ball to say how this will all play out, but that looks like some sort of price support. There appear to be a lot of shorts in this market that will have to cover at some point.
#28 Knucklewalker
Remember a couple of years ago when natural gas prices were really high? Well, what happened was that technology including horizontal drilling and fracking enabled America to tap into its vast reserves of natural gas trapped in shale. Now there is so much natural gas, they don’t know what to do with it and the price is near an all time low.
Well, it turns out that America also has 5 times as much oil as Saudi Arabia, but it’s trapped in shale, and the technology to make extraction economically viable isn’t quite there yet, but it could be soon.
If America is able to tap its shale oil, expect oil to be trading between $10-15/barrel within just a couple of years, and nobody, and I mean nobody will be taken seriously if they say we are anywhere near peak oil let alone that it has already happened.
Home Capital Group – the most successful “sub-prime” mortgage lender in Canada:
“We’ve taken a historical view of the market and we don’t think it will be down more than about 5 per cent, and that’s if it goes down at all. It’s not crushing; markets fluctuate all the time and most people will be able to sustain that quite easily. There’s also a very good chance the housing market will just move sideways. The general tone in this country is that the economy is very good and the U.S. is getting better, which can only be a good thing.”
http://www.theglobeandmail.com/report-on-business/a-blueprint-for-success/article1572135/
I guess you could now call this CEO a contrarian? (since everybody else, even bank economists, are calling for more than just a sideways market)
#32 NorthOf49 on 05.18.10 at 12:14 am
#1 Sid,
… My father bought ours in the ’70’s for $26K. In 1995 our family also bought the house next door for $90K and rented it out. … Fast forward to 2009 and houses on the street are being listed between $200K – $250, some in better condition than others, but still too high given the economics of Hamilton today, in my opinion. Of course, anything in the $250K range doesn’t move and sits on the market for months. In April 2009 our family sold the house next door for $163K for asking price. It sold in 4 hours. When my father passed away in November 2009, we listed his house for $185K and it sold for $175K in one week…
———————
People suffer from sticker shock, and a poor understanding of compounding. Check out, for example…http://www.moneychimp.com/calculator/compound_interest_calculator.htm
You will see that $90,000 in 1995 growing to $200,000 is only about 5.5%. That same $90,000 turning into $163,000 over that fourteen year span is about 4.4% annual. Not exactly bubbly returns! I too am bearish on RE prices, especially out west, but… people should not feel that something is expensive only because the price has risen. That will never provide a good metric as to when to sell an asset.
#5 Nostradinkus:
You need to find some sort of hobby more fulfilling than stroking yourself on Garth’s blog.
@ 20
I am a good tenant thanks, and it wasn’t too difficult to get my rent reduced thanks. And as #4 posted, rents are in fact coming down. And as I said, if they call my bluff there are 3 places for rent on my street in Sunnyside. I won’t lose. Break even, maybe.
Rental “wanted” adds. Wow, I didn’t even know those exisited. And you’re right, the 3br homes for rent in the core for $1000 – $1200 (I was being a bit optomistic) are a little dumpy, however these same dumpy houses are listing for over $400,000 (some over 500K). $1200 a month or $400,000… price to earnings ratio of almost 28.
Anyway, rents in Cowtown are coming down. I am a renter, and ASKED for a reduction, and got it. Two years running. Deal with it.
Hey Knucklewalker….speaking of “Saying such inanities” (sic) – – my goodness but you do go on (and on, and on….)
You said… “Expect to see political collapse in the USA now within the next 2-3 years” This is so random, perhaps you’re watching too much Discovery Channel low budget filler. Small wonder you’re not taken seriously. Such statements are completely out of left field – in the same vein as the utterances of a street-corner doomsayer.
You said… “We hit peak NG this year”. What are you talking about?? With oversupply, and a $4.18 spot price at the Henry Hub, would YOU be investing to explore for new reserves??
Finally, if you expect to pass yourself off as a learned man, learn to spell. Any well-read person (and most schoolchildren grade 3 and up) know how to properly use the words “to” and “too”, whereas you misuse them consistently including your last post.
Which leads to the question, if you don’t read, where do you get these theories? Do they come to you in visions?
”Reminder to self… You can lead a horse to water…but you cannot make it drink. We are on the edge(the last milimeter) of massive change.” #25 Chaos
Not “change”… the SHIFT
#28 knucklewalker on 05.17.10 at 11:59 pm
A little extreme there Dude, but you kiiiinnnda get it. It’s not all doom and gloom. There is actually a rather nice upside to it all. But it’s like “integrity”… if you have it nothing else matters, on the other hand if you don’t… well nothing else matters then either. Get it?
#35 Jeff Smith on 05.18.10 at 12:31 am
It’s all about supply and demand. But I think you are missing some of the inner workings of the equation. Good luck to you on that timing thing though.
#5 Notradamus jr.
…Not a single post of mine is “Sheeple” material and to date I am the most accurate pundit on this blog….
Buddy you are sheeple. You have called a couple things right. But it ain’t over.
#41 Lexington on 05.18.10 at 6:59 am
You’re dreaming Dude. You totally miss the whole concept of “Peak Oil”. We’re NEVER gonna run outta the stuff. That’s not what it is about. What it is about is that we are going to be forced, already are, to extract it from the most difficult places at huge economic and environmental cost. Guess who ultimately pays the price? You don’t really give a rats ass about what’s happening in the Gulf do ya, as long as you can drive that Hummer down the street to 7-11 and leave it idling while you run in and buy a pack of Export As right?
the SHIFT happens.
#42 T.O. Bubble Boy,
I see you found one more in the “it will just go sideways and flatten crowd”. Expect this will be the mantra from most of “credible” Re industry crowd this summer. Late summer/fall as prices begin to fall it will be replaced by “we have hit bottom.” That last one we will have to live with for years.
#41 Lexington on 05.18.10 at 6:59 am
It takes energy to crack shale oil.
When oil was first discovered it took one barrel of oil to extract 100. Today to extract light sweet crude it takes one barrel to extract maybe 36 at best.
“Technology”… shit… the effort would be WAY better directed at developing an alternative energy source rather than how to more economically extract a finite polluting energy source. But you run with that.
The SHIFT is going to leave you behind.
#23 Kitchener1,
You nailed it. Lots of current listings will be removed over the next 3-6 months because the seller doesn’t get their price and can afford to wait. While they will end up waiting for lower prices still they will not be able to bear the loses.
The market prices will then be driven by “must” sellers which is when prices could fall dramatically in some places – Vancouver, Victoria and Toronto leading the pack. Then the real pain begins.
Hello Garth.
When will sanity be restored in the market?
When the greediest real estate fanatic admits that the average home is worth between 30 and 50 thousand dollars and takes equal to or less than 6000 man hours to pay for it.
No more use of family income to conceal 2 incomes as if it were one income and therefore inflate home afordability calculations. No more cheating!
Sanity in the precious metal markets will be restored when the global supply of currency and financial assets is divided by the supply of gold or silver bullion as in metal not paper.
When you can buy a house paid in full for an ounce or two of gold or silver then all will be right in the world of finance.
Then the economy can go from death and slavery to life and freedom and not before.
Right now silver is trading for less than one cent on the dollar and gold for about two cents on the dollar because of financial and government institutions are cheating ,lying and trying to make the currencies look better than they really are. They really do think their illusions regarding monetary and fical policy are real and valid. Utter insanity and madness is what it is and to top it all off the sheeple go along with it and defend it. Madness I say.
Facing reality is not always pleasant but the longer it gets put off the harder its going to be on people when it becomes unescapeable.
Whom the gods would destroy they first make crazy.
Steven
Not the roof of “a Saigon building”, but the roof of the U.S. Embassy!
How poetic was that, and what will be our RE equivalent?
Actually that’s a myth. It was an apartment building where a large number of US nationals lived, according to the man who took the photo. — Garth
See, everyone does read my every post.
…Now to clarify…for the last time… which is doubtful because readers here don’t listen, they just spew crap.
Only Hongcouver “PROPER”, within a 20 minute walk or by Seabus to Downtown, is safe from any Canadian R E Downturn.
…The rest of Canada, including the Western Provinces are subject to R E $ gyrations….You can thank Ottawa which is controlled by Bankrupt Ontario for that.
After the Western Provinces secede, only then will the Western Provinces become gold to its citizens.
Go ahead friends, give it your best shot.
Nostradamus jr.
Kitchener1″
People are selling because they HAVE TOO, they are in a MUST SELL situation. Either because they have extended their credit already or before they go bankrupt.
The smart money already got out of RE, now its the late comers to the party, and yes, some of those new listings are people wanting to cash out, but the majority are in a desperate situation.”
Yes Kitchener1 , People who are selling their homes NEED to sell before they will go BANKRUPT. Canadas housing is a PONZI has gone higher and higher until you have no more buyers to feed the ponzi. Once that happens the house of ponzi falls down. Last housing crash prices fell 10-15% in less then three months and would of crashed another 25% if it wasn’t for the NO MONEY conservatives to help manipulate the housing market. Sellers need to sell before they go BANKRUPT and that is a fact.
POP…………
NO MONEY……..What was that?
#46
good lord lady (I assume “lady”??) I didn’t know that I was being graded on grammar…
I was much better in the sciences anyway
Think what you will, you are in the VAST majority anyway…if that makes you feel better please do carry on.
Folks really have to stop using the current “spot price” for a commodity as a bellwether for what its availability is in the long term…that is not how economics works.
#41
shale oil and shale gas are very different beasts
the EROEI in shale oil is so low that to even consider it viable you must imagine that there will be an entirely new and wonderful free energy source that will show itself so as to make the extraction viable (but then, with such and energy source….why would we need the shale oil eh?)
The religious belief in “the market” and even more so in the “manifest destiny” of modern humans will be our downfall.
A little thought experiment if you will…and I am not saying it will happen (I sincerely hope not)
Imagine the casing of that deep bore in the GOM tore through and we were faced with the complete eruption of 2-3 billion barrels of oil (and I have no idea how much NG)….what are the ramifications…seriously now what are they?
Just think it through and then tell me that we do not have a serious problem.
ps: I do hope that I least entertain those of you not apoplectic over my abuse of the word “To”
have a nice day ya’ll
#47…I sure hope there is an upside dude…cause i just don’t see it?
#45 Dave.
You have great trust in your Landlord. I guess that is a good thing. I dont trust any of them. There are no rental caps in Calgary. If they want you out they will raise the rent. It is my practice to not ask for a decrease and say nothing unless he decides to raise the rent, then I will deal with that. It is a hassle to move around and this is primarily why people in Calgary want to buy. My wifey explains what we are paying for rent and people ask if we are crazy. She says to them that I dont have the cajones to buy. I told her last night that now is not the time to buy. And that when I lock onto a target to buy she should try and stay focused, try to keep up with me because I work with lightning speed if I want something. This is how I secured the rental in 2007 when vacancy rates were 0.5%. I rented the property right out from under several other tenants, wrote the check right in front of them.
I wouldnt trust any of those property owners in Calgary. Even if you have a good one, it could end badly.
#28 – Knucklewalker – Lay off the pot! There is no “peak NG”. There is currently a 200yr supply in the US alone. Political turmoil is a given, but this isnt your thoughts, just regurgitation. I’m guessing you are one of “the mountain people”.
#52 junius on 05.18.10 at 8:26 am
Close.
There is indeed many a hopeful seller who really is not that motivated who will remove their listing from the market amidst falling prices and their coming to realize there are fewer greater fools who have the means to pay them what it would take for them to move.
We will not be buying and selling homes because we want to anymore but rather those homes that are for sale and bought will be so by sellers and buyers who need to buy and sell – transfers, death, marital breakdown, bankruptcy, etc.
Demand will wane but so too will supply so there is every likelihood it will actually be a more balanced market than we have seen in some time. Let’s face it supply is being driven up by the poor timing of those sellers hoping to cash in. It is ever thus though that they list their properties too late. Each and every Spring I see it happen. The only reason it is more dominant this spring is because of the rather large lift we have just run the course of. Unfortunately many a seller who thought to put this to their advantage missed the opportunity following the herd that thinks it is better to list when the grass is green and both flowers and for sale signs start popping up all over the place.
I do suspect that the “vulture” wannabes will meet some disappointment on a number of fronts. Yes there will be reduced prices but the fundamentals do not warrant wholesale slaughter in that regard. There will in fact be some areas that retain their prices quite well. I’m not talking about Provinces or cities I am talking about specific neighbourhoods within specific cities.
Anyway, gotta run… but you and Kitchener1 are close… on one aspect of the SHIFT, all-be-it a small and only consequential part of it. It’s a part of that SHIFT thing. Hang on… hang on tight as SHIFT happens.
“Every single reader on this blog reads every single one of my posts.
…Not a single post of mine is “Sheeple” material.
and to date I am the most accurate pundit on this blog.
…..ain’t it the truth…”
Let’s all pitch in and buy Nostro a badge. Canada’s Greatest Blogger (self acclaimed)
Thanks North of 49 and for others on your take on the Hamilton market. Mother in law has a rental property there (Stoney Creek) that has a basement suite that is very cash flow positive and in good repair and she was asking our opinion on whether she should sell or not.
#61 Devil’s Advocate,
We are not too far apart. Sellers will primarily be the desperate and buyers will be the “bottom guessers” or vultures. Should make for interesting times to be a realtor. Certainly a change of pace for you.
#46 Renting in Rosedale on 05.18.10 at 8:01 am
LOL, as usual. Cheers.
ROTFLMAO . Too funny . The dumbest,alleged, economist on the planet (Stephen, Bozo, Harper) is handing out free financial advice to the G-20/8 .
Something about deficits .Saints and Gods preserve us .
What a jerk !
#56 Dan,
Remember that in absolute numbers the “have to” sellers could be a small group. Much depends on how strong the headwinds are in the overall economy. This is the “delta” factor if you will. Things like interest rate rises and the strength of the overall economy.
However lurking out there in 4-5 years is the beginning of the CMHC mortgage time bomb. As mortgages from 2009 and 2010 begin to reset at higher levels there will be another wave down of Re prices. Not to mention further pain for Canadian tax payers as the CMHC payouts steepen.
#55 Notradamus jr. :
Only Hongcouver “PROPER”, within a 20 minute walk or by Seabus to Downtown, is safe from any Canadian R E Downturn.
Your predictions seem to get narrower and narrower every day — first BC, then “Hongcouver”, now a few city blocks… will the prediction soon be that just your home is immune from the downturn?
Devil’s Advocate “do suspect that the “vulture” wannabes will meet some disappointment on a number of fronts. Yes there will be reduced prices but the fundamentals do not warrant wholesale slaughter in that regard”
LOL come on realtor devil. What fundamentals are there to support the housing ponzi? 40 years mortgages and nothing down? 35 year mortgages and nothing to 5% down? The fundamentals are strong with NO MONEY? The fact is NO MONEY has no money for a reason. There is also a reason why the banks took all their NO MONEY mortgages and gave it to the taxpayers. Canadian housing is nothing more then a ponzi and once the ponzi has no more greater fools……….look out below.
I can’t believe how many people on this blog post arguements with each other. While it may seem satisfying to retort, do you really think you are presuading the other person to change their mind?
#33
((….Sorry to be pedantic.))
I think he also meant ‘canter’ not ‘cantor’
Nostrodumbass listening to the voices in his head .
Buddy you need a whole team of psychiatrists to help you sort through your many problems .
I don’t read your garbage .
How many times has Garth kicked your ass to the curb ?
#57 knucklewalker on 05.18.10 at 8:55 am
The religious belief in “the market” and even more so in the “manifest destiny” of modern humans will be our downfall.
**********************************
“The market” has been here-since time began-
It will always be here-with the exception of extinction-
What’s happening today is “old hat”- we’ve been here before-we’ve survived-we will continue to survive-
Sure-we could see a mass “reduction” in population because of one thing or another-but-do not for one second dis the market and it’s ability to discount the future-it is light years ahead of you-
When it’s ready to move-it will bowl over everything in its path-
The market dwarfs all–
It is “always” right-
It “never” loses–ever–
Well Devil A….you know what they say…
“Shift happens.”
“Up Shift creek without a paddle.”
“That’s bullShift.”
“The markets took a Shift today.”
“The economy is in the Shifter.”
“The guy didn’t know whether to Shift or wind his watch.”
“Shift outta luck.”
“Shift or get off the pot.”
“Your’re Shiftin’ me!”
“Shift onna shingle.”
“I gotta take a Shift.”
“The Shift Hits The Fan.”
“No Shift?”
“Shifthead.”
“Know your Shift from shinenola.”
“They are currently located in Shiftsville.”
“Things have gone for a complete Shift.”
And on that note, there’s something I have to “change”.
#50 Junius:
“Late summer/fall as prices begin to fall it will be replaced by ‘we have hit bottom.’ That last one we will have to live with for years.”
Junius, am I correct in that I read that you predict a fast decline in prices into this fall and winter with a long, period of flat prices for years after? I am curious what you and all the others here think. I hope that we have the bulk of the price drops sooner than later and I’m curious for what others are expecting.
I am not an investor, realtor, or any kind of financial expert. I’m an average, working, professional person in my late 20s who just wants to be able to buy a home for a reasonable price at some time in the future.
I started looking for a home just as prices started to run up back around 2006. I’m more than well aware that I’m one of these “horny” for realestate types that Garth describes but I’m trying to stick to my guns and trust my insticts when everyone else around me is doing the opposite.
Here are the latest stats on my area – see Powell River:
http://www.bcrea.bc.ca/news_room/2010-04.pdf
As you will see, we are already experiencing price declines.
My questions to all: I don’t need the absolute bottom of prices to buy a home, I just need to buy somewhere close to it so that I don’t hate myself for throwing my hard earned money away just for the sake of owning the roof over my head. What do any of you predict for small, BC coastal towns? How soon do you think I will see the bulk of the price declines so that I can feel comfortable purchasing?
#68 T.O. Bubble Boy on 05.18.10 at 9:36 am
#55 Notradamus jr. :
“”"Only Hongcouver “PROPER”, within a 20 minute walk or by Seabus to Downtown, is safe from any Canadian R E Downturn.
Your predictions seem to get narrower and narrower every day — first BC, then “Hongcouver”, now a few city blocks… will the prediction soon be that just your home is immune from the downturn?”"”
…lol…My position has not changed one iota…perhaps you or anyone here should ask Garth to authenticate my R E platform prediction.
Holding my R E here has kept me near 15% – 20% ahead of those who have sold…and i believe RE $$ will rise alot more in my neighbourhood….like 50% higher within a year.
Nostradamus jr.
Wow – time to shut the blog down for a week or two Garth so some of these basement dwellers can get out and find activities other than polluting your website with garbage. Great post once again, but the comments on here have hit a new low.
@ #59
I feel your pain, as I moved to Calgary in January 2007. I remember how odd it was, that I was in a city where it was 10 times easier to find a job than an apartment. However things have changed. If your landlord wanted you out, at least now you have options as to where to go, and your landlord will have trouble getting someone to fill your place for 2007 rent levels. My landlord is actually a very nice person… she admitted that she had increased the rent from 2004 to 2007 by 60% so I do not feel bad for asking for my two %8.3 percent (1 month in 12) decreases. Obviously in 2007 I was just interested in having a roof over my head, but in 2010, I am interested in NOT paying 2007 prices. Especially when there are options. There’s hundreds every month on craigslist alone. Many people are either moving to lower their rent, or at least asking their landlords for a rent decrease. I negotiated in good faith and obviously my landlord agreed in what I was saying and I signed a new 12 monther…
#60 Grandpa Grinch
It depends who you read.
http://www.energybulletin.net/52767
Take Uranium as an example. 25% of the the worlds uranium is produced in the Athabasca basin in Saskatchewan. Camenco is the worlds largest uranium producer at 17% of the worlds global supply. Their largest high grade mines in the world are poised to be fully depleted within 20 years. When Camenco runs dry of high grade deposits, we can expect reality to set in that unless there are new and highly significant discoveries in Uranium, at current consumption rates 30 to 40 years of global supply should be taken as realistic.
The same holds true for most other deposits in the world including coal, natural gas and oil. The days of the big payday discoveries are over (meaning the days of the high flying stocks propelled by discovery are much fewer and farther between). The largest oil pools discovered over the last 40 years have been oceanic. This should tell us something.
There are question marks of course… like what is really underneath the ice in iceland, or would we want to go there or how underdeveloped is Africa really or will Antartica be accessible for development some day or is underground ocean mining feisable and what we are seeing develop is that to even question the need to develop resources that generate so much greater cost and risk is to tell us that the end is near. Don’t get me wrong, profit is the reason why BP was there, but… the risk… this could be the end of BP as we know it and isn’t it sad how BP is handling this?
First they have a blowout which may or may not have been human error but from there, it was all human error. They used blowout preventers that failed. They sank their own rig with too much water in trying to put out the fire and took with their sinking rig, all the pipe and means that they had to contain the pressure. Then they utterly lied their asses off as to the full extent of the environmental catastrophe they had caused.
Readers, lets let this information sink in some here. BP had an estimated 7,000 to 8,000 BOE per day of pressure at ocean level meaning the oil had to travel a full 1.25 miles vertically from the ocean floor through a column of pipe and even with that much gravity and friction, it still had that much pressure at ocean surface. When the pipe sheared at the ocean floor, the amounts gushing without the restrictions of pipe friction and gravity have experts thinking its now 10 times what pressures were at ocean levels, or around 70,000 barrels of oil per day or higher, perhaps as much as 100,000 BOE’s pd. That is a major catastrophe that should be the worst in human history dwarfing any other spills in comparison.
What was BP’s initial estimate? 1,000 BOE’s per day leaking. Again, they had 7 to 8 times that at ocean surface and new it was likely 70 to 100 times what they initially said from the ocean floor. Did their grotesque minimizing of the truth initially delay efforts to clean up the mess in the gulf? Absolutely. They’ve lied about everything they’ve done up ’til this point. Why should any government or nation trust BP again? Why should this corporation not be sued to oblivion? Yeah right, the shareholders. Lets not forget about them. The brand is cooked, tranfer the wealth and start over with new management, right? And will we have learned anything?
A short century ago, we had less than a billion people on the planet. Today we have closing in on 7 billion. Peak oil, peak coal, peak natural gas, peak water, peak fertilizer, peak food, peak housing, peak people… its far more real than we think.
And as there are more and more of us, the pressures on our environment to sustain growing populations, especially in developing nations will show just as it is now. Knucklewalker is reacting to these facts in the one way he best knows how which is to try to do what he can to ring the alarm bells but unfortunately, we have world leaders such as Stephen Harper who won’t focus on whether or not our existence is sustainable, but on whatever it takes to gain more market share of fleeting power in an effort to serve a select group of individuals, the majority I believe, who aren’t even from this nation and are driven purely for profit. Really, is there a difference between the CEO of BP and the Stephen Harpers of the world? I don’t see a difference. Do you see a difference?
Everything that supports our existence, that supports all life is interconnected. Our economies are also interconnected. If one doesn’t take care of the environments or take stock of the resources needed to support life, never mind support our present consumption rates or paradigms of existence, we can expect potential economic systemic collapses and some major die offs of life to occur as a result of total mismanagement of our environments, its that simple. Essentially, the wrong people driven by the most self serving of motives are in positions of leadership and there are no easy fixes.
As for Obama, I wouldn’t call Obama’s leadership a total failure. People expected way too much from this man, forgeting just what it is that he inherited. If Obama survives his first or only term, I would love to see his dream of electric cars on the road quickly come to fruitition. Its a start. There is so much more to do and we are running out of time. I fear it will get worse before it gets better myself, but when sanity returns and people realize it really is do or die, the ones who know the answers, truly know… not just think they know but truly know… they will have to have the courage to speak and lead. The stakes are far too high for them to be silent now.
All life is a test on so many levels, the biggest challenges to come within ourselves is to not become depressed or apathetic, but to become highy engaged, realizing that our micro environments are just as important as the macro. In essence, it all starts from within. It begins at home with some of the most subtle of changes. A simple smile to one’s wife or husband, a jester of kindness, an appreciation for the rest of the life around us, to look before we step, doing something for life knowing that one will not personally benefit, planting trees knowing full well one will never harvest in their lifetime… when we get to that level within ourselves, never mind what the rest of the world is doing, thats where we will find hope within us and the world will find hope within itself.
#19 Jsan on 05.17.10 at 11:21 pm
—————————————-
That’s a debt-to-”financial” assets ratio. Canadians have other assets too eh (read: housing).
Here’s probably a more important article:
“While IMF projections show Canada’s debt falling in the years to come – in this respect Canada is alone among the G7…”
http://www.theglobeandmail.com/report-on-business/top-business-stories/imf-warns-on-surging-debt-but-canada-stands-alone/article1569046/
geez now that I have started my new six figure government job I really don’t have time to read everything. just a recap from patience:
81/143 Original dave. “Based on what you say, things are going to just disappear. Stocks down, euro down, usd down, china down, gold down, canada down, australia down. You realize this is impossible? I guess you don’t. Value has to go somewhere. ”
Unfortunately economic theory and the real world rarely mix well together. The law of conservation applies to science, not economics. Economic value is tied to the monetary system. And guess what? HUGE chunks of mone ha djust vnaished in the last few years. Everytime Freddie Mac writes off another 10B that’s 10B in ‘value’ that is never seen again. (and think of the reverse: if the Feds printed 1Trillion in USD than there would be 1T in ‘value’ added to the market? huh?) In economics value is created and destroyed all the time.
#124 yeah Christmas will be a good time to buy. In 2013
#124/128 We already went over the Hongcouver thing. it isn’t racist. It’s been that way for a long time, like the two cities of Buda and Pest that are commonly called Budapest. Besides Hong King literally translates to Fragrant harbor. So Hongcouver could simply be “fragrant ‘couver”. My macaun/cantonese/mandarin/shanghai friends are baffled by how anyone could possible interpret Hongcouver as ‘racist’ whenThere are no people labelled ‘Hong’ in China so how can it be racist? Hancouver, maybe?
Game on! Saw a ‘price change’ sign on lakre shore blvd w in Toronto on the way into work this morning. I am assuming it did not go up! Pretty sure this is it. This would have been 599 in january.
http://www.realtor.ca/propertyDetails.aspx?propertyId=9272777
Dedicated to BigLebowski and other gold bugs:
Oh, traders smart put out the buys.
The price of gold is on the rise.
The price of stocks is very grey.
They sell in May and go away.
So gold bugs have a smiley face.
It rises at a rapid pace.
But stock bugs have a face that’s long.
And that’s the message of my song.
Garth, thanx for the correction at my #54.
Don’t know how the myth started – the NY Times clearly labelled the picture as the “top of a building in Saigon” on its April 30, 1975 front page.
In other news, the great Ronnie James Dio has died.
http://www.calgaryherald.com/entertainment/Black+Sabbath+vocalist+dies/3035796/story.html
This is truly upsetting news. Worse than this housing issue.
#60…peak NG occurred this year in Canada…not the USA
but all the much touted huge finds in the USA are dissappointing folks..the fall off the production curves on Gas wells is so steepe….I won’t hold my breath waiting for the gas powered fleet that Good Ole boy Pickens wants to jumpstart.
#73
I am not sure how to interpret what you are saying?
“the Market” in the context that I am using is less than 500 years old…..I do understand that currencies and monetary exchange are older say 6000-10,000 yrs
and barter is as old as our species….ask any chimp that pays for sex with bananas and antelope meat
I am not an economist except in the macro sense..my training is in ecology and medicine…..but I can use my eyes, which is more than most folks locked in these concrete anthills we call cities can….
Our markets HAVE NOT priced in the biological costs of the future…because they don’t even understand that we have operating in true deficit since the start of the industrial revolution.
Nature always bats last….and she will this time also.
RE# 61 Devils Advocate
Wait for it, same thing happened between Oct 08-May of 09, sell side became huge and price drops of 20-30% were the norm. was it fear, yes to a degree.
Just go back and look at the lay off number from 12-18 months ago. 100′s of thousands of folks lost their good paying corporate/blue collar jobs. If these folks were living month to month or even if they had one year of living expenses saved up, they have exahusted that already.
These people are the REAL ECONOMY, they are the ones that buy things from big box outlets, buy new cars, take vacations etc.. they are hurting.
There jobs are not coming back.
Yes, some people are just dreaming out there but watch the listings to continue to grow over the months, just like it happened in the US.
Add to the fact that a couple of subprime lenders are no longer renweing mortgages and that alone dumps inventory on the market, future demand forward etc..
When asset prices fall, yes some will try to vultch, but people will just wait. in 12 months we will be seeing the media release numbers of month over month price drops on RE, they may be small but when the price is dropping, people will just wait.
Post #75 Small town realestate.
Thats a hard call, my unscientific rule of thumb is about 5-6-7 year range out from the peak. Its just a rough estimate.
When people are saying real estate is the worst possible thing to buy you’re at the bottom.
Keep in mind there will be some excellent buys along the way to the bottom, people will have to sell for whatever reason, and some will take a beating.
There is no way to accurately predict what and how it plays out.
Look at your needs, look at where you are in life, are you buying a home or an investment?
Stick around here, some pretty sharp people giving some good advice. You’ll learn a lot from the smart ones, although you may have to fill in the blanks yourself.
You do have to weed through it.
Richard Russell has a pretty good track record-he is calling for the sky to fall in 2010 so the market might not be the best destination for your sale proceeds from dumping your overvalued shack-maybe gold,silver and shorting http://finance.yahoo.com/tech-ticker/dow-theorist-richard-russell-sell-everything-liquid-487564.html?tickers=dia,spy,xlf,^dji,^gspc,^ixic&sec=topStories&pos=4&asset=&ccode=
Post # 79 Daystar
Your last paragraph is so true.
I just continually beat my head against the wall wondering if anyone gets it.
The wife and I took some time for ourselves the last few days. Just had to do a time out.
I know things won’t change soon but you have to start someplace.
hi prof. anon
I have long used the price of rv’s , harley-davidsons , pleasure craft and the like as an economic indicator.
These kinds of toys are the first thing on the block when hard times hit.
and those class “A” ‘s are starting to drop in price.
Hey Garth, I noticed from your previous post you are in Vancouver on Thursday.
This coincidentally ties in with the annual UDI AGM where Bob Rennie will be chatting about Millennium Water.
Are you planning on gatecrashing? These events could use some balance…
Here in the tri-city area a developer has been trying to sell “condos on the lake” for a couple of years by driving a car trailed by some snake-like balloon, advertising “free finished basement”. Good luck to them now! I can’t believe how many new houses are still being built. It’s not much different than Las Vegas where a developer claimed they had to keep building new houses because people want new houses. It doesn’t matter how many houses are already on the market.
#73
I am not sure how to interpret what you are saying?
“the Market” in the context that I am using is less than 500 years old…..I do understand that currencies and monetary exchange are older say 6000-10,000 yrs
and barter is as old as our species….ask any chimp that pays for sex with bananas and antelope meat
Our markets HAVE NOT priced in the biological costs of the future…because they don’t even understand that we have operating in true deficit since the start of the industrial revolution.
Nature always bats last….and she will this time also.
************************************
I suppose any of us can interpret our own definitions of what we perceive the market to be and when it “started” and what it does or doesn’t know- but-that’s only a personal pipe dream–
To say the market doesn’t “understand” the future- will unleash some negative karma at you-like it’s doing to Bernake-who foolishly thinks a few gray faced old men- can control and direct mass human sentiment-because like they “said” the market is not efficient at correcting these complex derivative problems–
He’s had half a dozen years to “fix” what he told us was fixable-
How’s that working so far?
The market seems to be saying otherwise-
I hear many say the market is manipulated-
What they should be saying is-the “stock markets” are manipulated-because there is one hell of a huge difference-
Not sure what to say about your last sentence-are you predicting the demise of humanity because of peak oil or that we’ll be shaken from the earth like fleas when nature decides?
I cannot argue with that-
My hope-is that the Mayans were right and if I can stay liquid until 2012–then i can say-I won–
#75 SmalltownRealEstate,
I think we will see some major price movement in the fall in the few speculative markets where there was a bubble created in 2009-2010. Vancouver and Toronto in particular where there is a high degree of speculation and investment along with a pool of exhausted renters trying to get in. In other words, the places with the biggest run-ups will have the biggest initial falls.
Then we will see a slow erosion over a number of years as interest rates, taxes and other costs at a greater pace then economic recovery and cut into affordability on a national scale. Pretty much everywhere should go down. I am sure some oil or mining community some where will be an exception but so what.
My main point is that the market is set for a long run downwards. This bull market began in 2000/2001 and really ran out its natural life in 2008. It was artificially pumped up in 2009 for what appears to be a 10 month bubble that is now losing its air. It will have popped by the fall and we will then head into a wind down. It could easily go down as long as it went up. It may take a decade or even longer to see today’s prices again. This is certainly the prediction in much of the US from 2006.
As I said yesterday the pace will be hard to predict because there are so many factors involved. However Canadian debt levels are so high, interest rates are so low and the economy is so sluggish there is only one path forward now. It is going down for a long time. Bottom will be 3-4 time earnings or worse if interest rates rise above 10%.
I would consider 4 factors. What is your rent to own ratio? How much debt are you taking on with ownership? How solid is your income? And, finally, are you treating your home as a place to live or an investment?
If the ratio is even, you have a large enough down payment and a good job then owning a home is fine.
Just stay resilient.
We all need a place to live.
#75 Small town Real estate
No one really knows how its going to play, we are all just putting our theories forward and at the end we will have to wait and see.
Personally, I see large declines of 20% in the next 6-10 months. Reason is that people get very emotional at the first signs of a dropping market, just like they do when the market rises (bidding wars etc..). Just like Nortel when it was going down.
RE agents and people vested in that business are hoping for a orderly decline but there was nothing orderly with the run up of prices so in my opinon, the way down will be just as quick.
Future demand forward
tightening of mortgage rules and big emphasis on credit worthiness
interest rates rising for the forseeable future
people being in a forced sale situation
jobless recovery
Way to much on the supply side (look at the 15 000 condo units coming online in west toronto)
etc.. are my reasons why it will be a quick drop then sideways market with minimal drops year over year.
People that have been holding on will want to sell before the price drops become reality.
Nobody will ever time the bottom with 100% accuracy. Nobody every though that the US is still in decline 5 years after the RE market crashed.
My theory is that because affordability over shoot to over 5 times income in the GTA, it will revert to below 3 times income before this is over and stablize somewhere in the 3.5 time income level.
Some prime areas will not see the same decline while some areas will see huge declines, I am already seeing price declines in some areas of Kitchener/Barrie/ Ajax-Whitby from last year, small declines but declines none the less. These declines are not in order to entice bidding wars but because people have to sell.
#87 Dan in Victoria,
I agree with your post. Easily could be 5-7 years of downward prices. Perhaps more because of the damage the bubble will do to young buyers and the Canadian tax payer through the CMHC.
As the man said yesterday, Patience.
Crude is weak again today, June crude below $70 / July around $73 at 2 PM.
I don’t see this lasting much longer. Might be too soon but I’m adding to positions (CPG, HSE, CVE)
#49 Devil’s Advocate
I didn’t say anything about the environmental impact of oil, or that peak oil would never occur. What I am saying is that many people believed we were at or near peak natural gas a couple of years ago, but thank to technology that has been pushed out a couple of hundred years.
Why couldn’t technology do the same thing for the vast reserves of shale oil? It may be that in a couple of years we will have more oil than we know what to do with, just like natural gas today, thanks to advances in technology.
Nostradamus Jr. You always say 2 or 3 reasonable things to “loss lead” me into reading your post and then you say something Section 8 like: “After the 3 Western Provinces secede…”
Day pass revoked. Again.
#5 Notradamus jr. on 05.17.10 at 10:02 pm
ha-ha. I had a good laugh….
We are still waiting for 50% price increase you predicted….or was it decrease?
#24 poncherelo on 05.17.10 at 11:43 pm
What are you smoking?
95% of immigrants come to Canada with the amount of money barely enough to rent an apartment and buy food, so they will not starve. That amount of money is enough usually for 6 month or 1 year, after that the majority of immigrants either apply for welfare or work survival minimum wage jobs. This is sad true, canadian immigration policy is a big scam.
Now tell me, how in the world are they going to buy your houses and condos?
5% of business immigrants who come to Canada with big bucks never saved Toronto or Vancouver and never will! Get real!
someone mentioned on here that the GTA realtors are trying to thwart listings on mls to provide the appearence that the market is far less crowded than it actually is. Does anyone have anymore info on this?
#78 Dave
Moving is a hassle and an expense. If you have a family to move it may be somewhat more difficult than a single person. Plus if I am saving only $100/month how much more ahead will I be? Id rather leave the rent at their 2008 levels, since the landlord isnt annoying like most of them, keep saving and buy a shack in a year or so. Why incur the hassle of moving? Unless the rent skyrockets, Im not going to bounce around Calgary to look for some ideal. It isnt to be found. Calgary is basically a plain on a high plateau with no trees and lots of land. If you want a nice place to live, think Bragg Creek or Ghost Lake, forget about Calgary. The northwest looks like a bunch of shacks in Brooklyn. Its more ugly than any woman Ive ever seen. All for the nice price of $350K. How stupid are the people here to actually believe that those $200K worth shacks were anything but? Its totally unbelievable! I guess I dont believe in keeping up with other people because that is pointless. There are always people ahead and behind you in terms of progression. Maybe if people started comparing themselves to the Big Boy upstairs they would see that they will never ever compare to God Himself and all this stupidity would stop. I’ll just have to accept that people are like a bunch of rabid dogs and that law and order is only an illusion to prevent massive civil unrest and complete anarchy and total chaos. The day will come when Im a stranger to this blog and I have house to live in, much more than an investment. As of right now Im prevented from that goal somewhat(could buy if I really wanted to) I just cant justify bidding wars on a bunch of crap shacks when here I am making good money, $100K a year, increasing each year. Why fortify all the idiots and morons selling that speculated and made money at someone else’s expense? In my view they can all go to Hell!!! Im still looking at places to buy, and when I decide for myself that Im tired of renting and the price is justified for the hassle of owning, then I will buy. And I wont need some authority to tell me when. When I feel like doing something, I do it.
Sold last week for a 75% profit (bought in 2006). I owe Mr Turner a nice cold beer. Getting from debt to surplus is a nice feeling too.
Nick
#82 Anna
Dedicated to BigLebowski and other gold bugs:
Oh, traders smart put out the buys.
The price of gold is on the rise.
The price of stocks is very grey.
They sell in May and go away.
So gold bugs have a smiley face.
It rises at a rapid pace.
But stock bugs have a face that’s long.
And that’s the message of my song.
If I may add one final line to your song…….
“If you are in gold, go long and stay long”
Stick with your day job – being a precious metals pain in the ass. — Garth
Canadian Lenders Not Renewing:
http://www.milliondollarjourney.com/mortgages-not-being-renewed.htm
Gold is not money/currency right Garth?
Keep up your pig-headed perceptions.
Sears and Kmart are now marketing a service that allows customers to sell their gold and silver jewelry to help pay for purchases:
http://in.mobile.reuters.com/mobile/m/FullArticle/eIN/CINDIN/nrbssConsumerGoodsAndRetailNews_uINN1725834120100517?src=RSS-INDIN
Yes, let’s praise companies that prey on the poor. — Garth
#106 X on 05.18.10 at 2:12 pm
————————————-
Would you give $200,000 to a guy with a 520 credit score who went bankrupt?
#102 C.T.O on 05.18.10 at 1:26 pm
————————————–
Yes, Devil’s Advocate posted on this a few days ago. To summarize: real estate is a business and there are many realtors. There is no way they are all colluding in order to prevent the appearance of increased listings. They are human beings trying to earn a living.
#97 – Rosedale – Worse than oil getting hammered is the Uranium stocks getting taken out behind the woodshed. A few more weeks of this and I’ll be loading up!
#2 Robert Logan
I live in Sannich, and agree, approx 1 in 5 listings tout “new price” and the others if you watch, have dropped, but the big clue is they are not selling… period. The Wind has changed, very suddenly, June stats will be very interesting.
Yes, let’s praise companies that prey on the poor. — Garth
Yes, because the poor really have lots of gold and silver to trade in. Dispicable imo.
#102 CTO,
This was on the CP24 show last week. Sorry but I don’t have the link.
The Realtor was from REMAX. He expresses concern about the number of listings flooding the market and tells realtors they have to do a better job of controlling inventory.
His couches his opinion like it is good for the seller but clearly he is worried about the market.
#98 Lexington
Just because the US has a 200 year supply at their current rate of consumption, that doesn’t mean they will get it out of ground in 200 years to meet that demand. I will take thousands of years to get it out. So in the future they won’t have enough gas coming out of the ground to meet demand and price will rise.
The only reason there is a surplus right now is they are drilling all the shale gas sweet spots first, just like they did with oil in the past. All the cheap tight gas will be produced first, then the more expensive marginal stuff comes next. This marginal stuff will cost a whole lot more. The majority of shale gas fields contain marginal stuff. There is probably between 3 to 5 years left of the cheap sweet spot areas. Look at the Barnett shale’s if you don’t believe me, only took 5 years to reach maximum production. Now it’s in decline even though they are still drilling like bandits in that area.
Once those sweet spot have been drilled, look out, the depletion rate of shale gas will quickly overrun new production and gas prices will once again go through the roof and most likely stay there for a prolonged period. This supposed cheap shale gas is actually allowing peak gas to come sooner rather than later. Why? because right now cheaper than production cost shale gas is distorting the supply picture. The marginal production cost of Natural gas is the US is $8.10, that’s not good for the future gas production.
The only thing left to produce in most of the world is tight oil and gas and it’s not only expensive to produce but can not be produced at the sufficient quantities. Hence peak oil or gas.
Peak oil or gas does not mean we have run out or they don’t have sufficient reserves. It means we can not produce it fast enough to meet demand. When either the supply or demand gets out of whack, one will take care of the other. High prices will take care of demand, which in turn reduces future production which caused high prices again. So the volatility in the gas market has just be put on hold by the recession and the shale gas producers that have to drill to keep their leases.
I would advise you to look a little beyond the windshield and further down the road. Peak oil is already here and peak gas is just down the road.
Energy is going to cost you a whole lot more in the future and that’s a fact. That’s the trouble with non-renewable resources, they are non-renewable and sooner or later they run out or become to expensive to produce.
PS: Peak coal is also almost here too. Cheap high quality coal is almost gone. There is only a whole bunch of low quality BTU coal left.
#107 cash from chaos
Until Sears or Kmart (or any other employers for that matter) can pay their staff in gold it means nothing.
Gold is priced on emotion not real value…. Just like houses!!
clean stack and coal ….
The heart of the Calera process is the formation of novel, metastable calcium and magnesium carbonate and bicarbonate minerals, similar to those found in the skeletons of marine animals and plants, by capturing carbon dioxide from flue gas and converting the gas to stable solid minerals. We refer to this novel process as Mineralization via Aqueous Precipitation, or MAP for short. In its simplest form MAP involves contacting gas from the power plant with natural waters found in abundance on Earth. Many of the crystallographic forms Calera synthesizes are previously undescribed, or poorly known. These novel ‘polymorphs’ make it possible to produce high reactive cements, and aggregate precursors, with bulk chemistries that would usually be relatively inert….
http://www.calera.com/index.php/technology/the_science/
#76 Notradamus jr. on 05.18.10 at 10:54 am
#68 T.O. Bubble Boy on 05.18.10 at 9:36 am
#55 Notradamus jr. :
It’s getting better and better you are now replying to your own posts…..you know….. it’s called dual personality.
#10 junius on 05.17.10 at 10:28 pm is right doctors need to put cuffs on your feet in order to stop you.
#69 Dan on 05.18.10 at 9:45 am
…
…
What was that… nothin’… nothin’ Dan… just plain nothin’
#86 Kitchener1 on 05.18.10 at 11:35 am
The SHIFT will tend to be something of an equalizer. Supply, Demand, Equalibrium.
#98 Lexington on 05.18.10 at 12:53 pm
Wouldn’t that be nice or would it?
#102 C.T.O on 05.18.10 at 1:26 pm
Ya… that’s just plain stupid.
#114 DaBull on 05.18.10 at 2:56 pm
#98 Lexington
Not to mention the that natural gas is so often used to produce electricity and the implications of that…
Or that Natural gas is used in the extraction of oil from the tar sands and the implications of that…
Or the significantly lower BTUs contained in natural gas vs. oil and the implications of that…
Do I sound like a broken record to anyone else? My Wifey’s just about had it with me!
#79 I could not have said it better myself….you are a credit to our species
#93 I am still not sure if I should agree with you or disagree with you?
I do not believe in “karma” or in any higher plane of existence what-so-ever. I beg you not to compare me to any old gray haired dudes at the fed….ugh….
“The Market” in the way most humans perceive it is an invention of us monkeys (I know we are apes….please no religious type attack me now….That is a level of debate that I will no longer engage in)…
The “human” economy has been built (esp since the industrial revolution) on a false premise…..that our market priced in all factors……
It does not…..and now in front of our own eyes the truth is being revealed.
The natural world is “The Great Market” and we humans are but a small and foolish trader on the floor of a vast edifice that has existed for literally billions of years and will exist for at least a billion more once we have entered the abyss of extinction.
Do I think that Peak Oil spells the end for us……no….
Just for the 6.5 billion of excess population that the fossil fuel age bought us.
The longer term results to the biosphere that the age of fossil sunlight gave us….that may well spell the end of our species……some think (and bright ones at that too….) that we are headed to end our days within the century huddled 30 million strong along the Canadian arctic ocean and across Scandinavia and Russia…as the full impact of global warming becomes obvious (I do not wish to debate it…the science is sound..believe it or not….it is up to you).
In the end it play out as it will, and what you or I think really matters not at all…but it can at times be a diversion from life’s little travails.
7 billion people yes, but we are all aging ;^(
http://stats.oecd.org/Index.aspx?DataSetCode=CSP2009
#115 – Cheese
Wrong -houses are a consumer good while gold has been seen as a storehouse of wealth throughout history due to its limited & steady above ground supply on a per person basis (between 1/2 to 1 oz per person).
Interesting post I found today – on the value of the USD vs. Gold. Here is how many ounces you could have bought with $1000USD:
1910 – 40 oz
1970 – 28 oz
1999- 4 oz
2000 – 3 oz
2010 – 0.88 oz
While I’m not a gold bug, but a commodities bug (until the bull market ends), its interesting to see the loss of our purchasing power.
For those interested, here is a good article on the subject:
http://matterhornassetmanagement.com/2010/05/18/alea-iacta-est/
Gold has a monetary value attached to it, currently it is about $1200 USD. It is not a currency, it is another commodity. It will have real worth in its physical form if/when the fiat currencies fail. And odds are fiat currencies world wide will fail, maybe sooner than we may believe.
We want to hold onto what we know and believe in that fiat currencies are protected by government guarantee. But that is a false guarantee. We are seeing the proverbial canary in the coal mine today with how a world is awash in fiat based currencies and irresponsible monetary/lending practises. So, many want to flock to gold, but it is not a currency, it has worth but only to those who may want it. It is a commodity and nothing more as of our global market/monetary standards. One can’t go to the grocery store and pay for groceries with gold they may carry. Just as one can’t pay for said groceries with a bottle of motor oil, a sports trading card, a jerry can of gasoline etc.
In a world of true BARTER can we trade one commodity, good or even service for another, and that is fine, it does happen in daily life for many people, but as of today we live most of our collective daily life with fiat currency and that is the only recognisable and negotiable form of monetary trade.
The better question to ask is what comes if/when the fiat currencies each and all fail? Of course it can only be answered with pondering and supposing for tomorrow has yet to arrive. But if/when fiat based currencies fail then we will live life more to the ideal of barter. Gold will have a value given its place in what will be a very troubled world, but any commodity, product, good or service that we each may have and can provide will be barterable and a value attached as per a NEED to have basis. In other words in such a world if you need say a loaf of bread and I have some to offer and I may need some toothpaste which you have to offer we will negotiate a trade of goods. Gold will have no value in this said transaction. All transaction wil be based on a trade for service and goods.
Today we do not run our word by such as fiat money is the current tool of trade.
Our collective poison has been fractional reserve banking and usury through compound interest of monies lent, monies that do not exist until they are created out of thin air via the reserve banking ideal. It is an ideal that will meet with its own demise. What we do as a global human body after is the unknown. Many a bright persons have bonafide ideals as to what will/may replace the fiat currency and our corrupted global monetary ponzie scheme. Stay tuned folks. The ride we are on is still unfolding before our very eyes and its not going to be much fun.
Max Keiser on Athens radio. Greek lawsuit vs Wall Street, zero interest rates and market speculators.
http://www.youtube.com/watch?v=QHu8Ul6Cm-w
So pleased to report that my sis & BIL sold their home within 8 days $10K below asking price but above assessment value. People who bought lived in the area. The co. who built their current and previous house in their area are well known for their high quality construction. Now trying to talk my sis into renting for a year or so instead of buying a condo. Yes, they’ll pay off the remainder of their mtg. (not too much) & LOC (which they’ve been living off). They have to move by the end of June – Quebec – duh!! Still worried they’ll make a rash decision.
#125 Grandpa Grinch
…loss of our purchasing power….
True true true. Cash is great for short term saving but people have to move into other assets. GIC’s will be murdered going forward.
Seems as if China’s RE is tanking. So wot’s new?
#144 Devil’s Advocate on 05.17.10 at 11:45 pm — “What do you think it means?”
Ummm, fell asleep at the wheel. My bad. The answer:
#25 Chaos — “Reminder to self…We are on the edge(the last milimeter) of massive change.”
Thanks to all who participated in my getting better sooner than I thunk!
#39 Prof. ANON — Interesting that you brought that point up. In the US, homeowners who lost their homes, but had paid for RVs simply moved into the RVs, and let the bank handle the rest.
#55 Notradamus jr. — ” See, everyone does read my every post.”
Rightfully so. There is a whole pile of cow dung about to hit a giant fan, but most can’t see beyond the end of their nosehairs. Their choice.
#57 knucklewalker — “The religious belief in “the market” and even more so in the “manifest destiny” of modern humans will be our downfall.”
“Religion is the opiate of the masses” (Karl Marx or someone like that). Precisely, and the term ‘religious belief’ simply means the vast majority of sheeple put their faith and hope in something they have no control over — the market.
#73 dark sad person — “The market” has been here-since time began-”
Except in the case of the bartering and underground economy systems, to which we may well revert due to C-H-F’s utter and complete pre-planned incompetence.
Those three are not even able to run a coffee shop, yet we dumb clucks keep electing them. Something is wrong with that picture — maybe it’s time for a countrywide STV system.
#91 northeast canuck — “These events could use some balance…”
Love to be a fly on that wall if Garth shows up. Probably won’t last long, ‘tho!
Go ahead listen to Garth about where to put your hard earned money while everything around you craters but, the only portfolio insurance–G-O-L-D.
Big business is still more worried by double dip than tinny canuck igloo market. Doug Porter needs a toupee.
More evidence that we have no idea at all what we do
http://news.nationalgeographic.com/news/2010/05/100513-science-environment-gulf-oil-spill-cap-leak/
Matthew Simmonds is one of the most respected oil field analysts out there….
if says sh.. your pa….
you should!
Re: Sears & Kmart buying gold from their customers:
EB, Blockbuster, and Futurshop allow me to trade in video games to help pay for my purchases there, but it doesn’t mean Wii discs are about to become the currency of the future!
#125 Grandpa Grinch
Gold has not gone up so much as the USD has lost its purchasing power, same with most other currencies.
1000 years ago an ounce of gold would buy you a really nice suit, today an ounce of gold will still only buy you a really nice suit. People are flocking to it in panic, sheep trying to hide money where it won’t lose value, just like the tech boom and recently real estate, sadly paper gold is not real gold… it is no different to paper money, backed by nothing because there is not enough real gold for people to cash in their certificates for real gold, it’s like fools gold made of paper.
Sure Gold is a hedge against deflating currency but as a commodity that’s all it is, just a commodity. Oil is quite probably a better commodity to store wealth these days. My point was that unless there is enough gold to use as currency it never will be as people can’t be paid with it, there just isn’t enough. If society fails to a point where fiat money is toast then food and weapons will have more value than gold and I won’t be trading my food for your gold.
Sure makes nice looking earrings though!!
Stick with your day job – being a precious metals pain in the ass. — Garth
Thanks for that Garth…me thinks they wont though!
#24 Ponch, too much time trolling the TO burbs for RE, get back to the highway patrol with John. (heard he sold in April and now renting).
#70 Slice – I had a geat argument with Goldbugger that I’m still thinking about. I still don’t agree with him, but he definitely changed my mind on a number of topics. What you are probably seeing is pervasive “argument to win” (as if winning an argument on a blog means anything at all) rather than “argument to learn”. If someone is arguing to learn, they’ll ask questions and not resort to crap arguments (ad hominen, begging the question, strawman etc.) They probably won’t call the person they are learning from nasty names, either.
#125 Grandpa Grinch
Number of Boxes of Kellogg’s Corn Flakes you could buy with $1,000 USD:
1910 – 11,111 boxes
1970 – 2,632 boxes
1999- 436 boxes
2000 – 334 boxes
2010 – 303 boxes
Man I should have bought corn flakes in 1910 it has gone up 3667%. Gold on the other hand has gone up 4545%. So Gold is still the winnerl but you can’t eat it. But you may still be able to eat 1910 corn flakes, might be a little stale though.
#130 Nostradamus Le Mad Vlad on 05.18.10 at 5:37 pm
#73 dark sad person — “The market” has been here-since time began-”
Except in the case of the bartering and underground economy systems, to which we may well revert due to C-H-F’s utter and complete pre-planned incompetence.
*************************************
That too-is the market at work-what we see today-is only a tiny blip in time-
When we’re all nothing but dust-the market will continue on-discounting the future-as if nothing of significant importance happened-and really-nothing has–
The market has seen all this before-many times-same for Gold-they’ve always been there-every step of the way-
#133 knucklewalker — Not sure if you’ve seen this — BP Nasty Trix.
Propaganda Alert! “2010 is far from being the warmest year on record, being far exceeded by the Medieval Warm Period, the Roman Warm Period, and the Holocene Maximum (not to mention the entire Cretaceous).
“This is just another classic case of the government lying you into accepting new taxes and convinced you are far too stupid to realize it.” wrh.com.
4:09 clip — Look at the swimming pool and the size of the hailstones, about 1:25 on. May 16, Oklahoma.
Murder – Suicide due to financial debts. 1:21 news clip.
Conspiracies — “We make money the old fashioned way; we cheat!” wrh.com.
Unless it is referring to depopulation, the article’s author is living in a different solar system. Certainly not this one!
Hillary is having one of those rambunctious hot flushes over Iran, after having reached and signed a deal with Turkey to transport its uranium to Brazil, which will enlarge the percentage to about three per cent (90% or more is needed to turn it into nuke WMD).
Apparently, the hot flushes are called Men-Ohhh-Pawz. Bill is a man with pawz. Connect the dots! Hillary‘s zionists — a few facts. “The maps do not lie. Israel did not exist prior to WWII.
“Legitimate maps of Palestine exist from prior to WWII. In fact, I remember postage stamps from Palestine.
“So, anyone who tells you Palestine does not exist is a liar.”
Garth .. how’s that ‘free’ market worling out for you?
Conspiracy of Banks Rigging States Came With Crash
May 18 (Bloomberg) — A telephone call between a financial adviser in Beverly Hills and a trader in New York was all it took to fleece taxpayers on a water-and-sewer financing deal in West Virginia. The secret conversation was part of a conspiracy stretching across the U.S. by Wall Street banks in the $2.8 trillion municipal bond market.
The call came less than two hours before bids were due for contracts to manage $90 million raised with the sale of West Virginia bonds. On one end of the line was Steven Goldberg, a trader with Financial Security Assurance Holdings Ltd. On the other was Zevi Wolmark, of advisory firm CDR Financial Products Inc. Goldberg arranged to pay a kickback to CDR to land the deal, according to government records filed in connection with a U.S. Justice Department indictment of CDR and Wolmark.
West Virginia was just one stop in a nationwide conspiracy in which financial advisers to municipalities colluded with Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., Lehman Brothers Holdings Inc., Wachovia Corp. and 11 other banks.
They rigged bids on auctions for so-called guaranteed investment contracts, known as GICs, according to a Justice Department list that was filed in U.S. District Court in Manhattan on March 24 and then put under seal. Those contracts hold tens of billions of taxpayer money.
California to Pennsylvania
The workings of the conspiracy — which stretched from California to Pennsylvania and included more than 200 deals involving about 160 state agencies, local governments and non- profits — can be pieced together from the Justice Department’s indictment of CDR, civil lawsuits by governments around the country, e-mails obtained by Bloomberg News and interviews with current and former bankers and public officials.
“The whole investment process was rigged across the board,” said Charlie Anderson, who retired in 2007 as head of field operations for the Internal Revenue Service’s tax-exempt bond division. “It was so commonplace that people talked about it on the phones of their employers and ignored the fact that they were being recorded.”
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/05/18/bloomberg1376-L2M9970YHQ0X-1.DTL#ixzz0oKxUkVNN
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/05/18/bloomberg1376-L2M9970YHQ0X-1.DTL#ixzz0oKws4J5t
Gee .. I thought “naked” short selling WAS illegal .. ?
Merkel to announce short-selling ban -coalition source
BERLIN, May 18 (Reuters) – Chancellor Angela Merkel plans to announce Germany’s ban on short-selling on Wednesday, a coalition source told Reuters on Tuesday.
Another source said earlier that Germany would ban naked short-selling on certain stocks and euro government bonds from midnight.
“From midnight today there will be a ban on naked short selling of certain stocks and euro government bonds,” a source told Reuters. No further details were immediately available.
Economy Minister Rainer Bruederele told Reuters that it was possible the short-selling ban would be quickly enacted.
No other details were immediately available.
Rents are crazy cheap in Calgary compared to the carrying costs of home ownership. Our condo would rent for about $1200 less than our mortgage plus condo fees amount to.
And yes, I did pay way to much for my shoe box in the sky.
#84 JB on 05.18.10 at 11:33 am
In other news, the great Ronnie James Dio has died.
http://www.calgaryherald.com/entertainment/Black+Sabbath+vocalist+dies/3035796/story.html
This is truly upsetting news. Worse than this housing issue.
++++++++++++++
Yes, but very much like the housing issue, it makes no sense. One would have thought Ozzie would have bitten the dust first.
136 Cheese Greater Fool on 05.18.10 at 6:35 pm
Sure Gold is a hedge against deflating currency but as a commodity that’s all it is, just a commodity. Oil is quite probably a better commodity to store wealth these days. My point was that unless there is enough gold to use as currency it never will be as people can’t be paid with it, there just isn’t enough.
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Totally clueless comment-with nothing but hype to make your point-
Gold is a currency–it is the king currency–
Prove this chart wrong–
And you wouldn’t sell your food for Gold?
You talk as if people with Gold can’t buy or have their own godamn food or something–
http://4.bp.blogspot.com/_nSTO-vZpSgc/RbmVmJlgCkI/AAAAAAAAAPs/uJ8e5vdJSj8/s1600-h/SpotGold.png
http://4.bp.blogspot.com/_nSTO-vZpSgc/RbZwf5lgCXI/AAAAAAAAAN0/WJYO6dh-ogg/s1600-h/Gold-CPI-FF-Rate.png
136 Cheese Greater Fool on 05.18.10 at 6:35 pm
My point was that unless there is enough gold to use as currency it never will be as people can’t be paid with it, there just isn’t enough.
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Missed commenting on this ridiculous stupid comment–
ummmm–
Gold is “divisible”-of course there’s enough of it-
The rest of what you said–about Oil being a better store of value?
More bullshit–and if you want me to prove that to you–
I can do it–
46 dave in calgary
If interest rates actually increase, this always leads to more people renting. The vacancy rate will fall and rents will in turn increase. This is simple economics 101. The free ride for renters is over Canada wide.
NASTY
http://www.zillow.com/local-info/AZ-home-value/r_8/#metric=mt%3D34%26dt%3D1%26tp%3D6%26rt%3D14%26r%3D8%2C394976%2C395167%2C395002%26el%3D0
The guy Im renting from in Goodyear AZ bought in 2009. Looks like the bottom hasnt hit yet. Predictions are another 10-12% drop for Phoenix this year.
Vancouver ? Toronto ?Calgary? …….next?
how trustworthy is a vacancy rate?
=
FSA contacts 38,000 people to warn them they are targets of boiler room share fraudsters
FSA/PN/082/2010
19 May 2010
The Financial Services Authority (FSA) is contacting more than 38,000 people across the UK to warn them that they could be the target of share fraud after it recovered a master list used by boiler room fraudsters.
The list contains the names and addresses of 38,242 people who the FSA believes may be contacted out of the blue and offered worthless shares. The greatest concentrations of targets are based largely in London and the South East, but there are significant numbers present in Yorkshire and Lancashire too.
The list is the biggest the FSA has ever recovered and is believed to still be in active use by boiler rooms operating in the UK and abroad. The FSA is in the process of writing to every single person on the list to alert them to their presence on it, and to inform them how to avoid getting scammed. Anybody who thinks they may have been targeted by a boiler room should call the FSA�s customer contact centre on 0845 606 1234.
http://www.fsa.gov.uk/pages/Library/Communication/PR/2010/082.shtml
More Canadians in danger of outliving savings. Garth said it first, now MSM recognised it.
http://www.theglobeandmail.com/incoming/more-canadians-in-danger-of-outliving-savings/article1574083/