What were we thinking?

The imminent collapse of the country’s most expensive condo development is more than a symbol of what’s to come. Everywhere.

As the Millennium Water development drifts towards bankruptcy and ruin, putting the taxpayers of Vancouver and BC on the hook for a billion dollars, there is much blame to go around. The dinks who run the delusional city should never have committed to bailing the thing out when it was just a badly-run project to furnish accommodation for athletes during that brief Olympic thingy. The idiots selling it laughably thought there was a market for units costing an average of $800,000, or 30% more per foot than in Toronto, in a town a third the size.

So now that the city’s called a $561 million defaulted loan, it symbolizes a real estate market whose reach exceeded its grasp. Worse, it embodies the role government’s played in propping up an asset that’s been begging for a bullet. It all but ensures this will not end well.

Hey, and the madness continues.

Here’s a long-standing NDP member of Parliament, for example, tabling a bill to help people get more in debt and rob their retirements just so they can buy a home and watch it decline in value. Peter Julian tabled a private member’s bill Thursday to further goose the amount of money that can be sucked out of an RRSP and used as a real estate down payment.

“This bill would help ensure that the ability of Canadians to purchase homes does not diminish with time and inflation,” he rationalized. “RRSP contributions to home ownership must reflect the increased cost of housing. This is only fair and should help make homeownership more accessible to more families.”

This nutty law would index the RSP Home Buyer’s plan to inflation, allowing the $25,000 maximum down payment withdrawal to grow larger each year. Just what we need. More property virgins thrown on the pyre.

Putting fool politicians catering to dumbass realtors aside for a moment, and as Vancouver slides into the sea, I called about a commercial building I fancied in mid-town Toronto. A business tenant there told me it’d been available for three months, but no offers. I asked the agent on the cell if it was still available. ‘Yes,’ she gushed, ‘and it’s so special that you called. We’re accepting offers on the property tomorrow afternoon.’ How much?, I growled. ‘Two million,’ she said, ‘but you can come in with less.’

You bet I can. And I’d also have the only offer in the room. Even facing career death, some people never learn.

But all this chicanery, greed, bad judgment, delusion and political debauchery is lurching towards the cliff. You can tell this when even the biggest financial players in the country are doing what they can to minimize the body count. Earlier this week the Royal Bank warned affordability is sinking as average families see half their pre-tax income sucked off by their houses.

Now CIBC cautions real estate is overpriced by 12% – strangely in the middle of my long-standing estimate of a 10-15% average price drop in the first phase of the correction. Housing is overvalued in BC (by 17%), Alberta (12.5%)  and Ontario (11.6%) with the West “looking vulnerable.” Ya think?

“No part of Canada looks to be immune to further housing market weakness, with significant momentum having been more recently lost,” said economist Warren Lovely. “… But it’s in B.C. and Alberta where housing prices have overshot fair market value by the largest margin … with an ongoing correction expected to dull residential construction activity and blunt consumer enthusiasm.”

But the juiciest words come from our own Mark Carney, head of the Bank of Canada , now doing his repentance thing for having dropping mortgage rates so low that house porn swept the nation. Goaded by F, the BoC crashed the cost of money to its lowest level in history in the hope people would borrow their brains out and buy stuff. It worked.

Now he warns we have too much debt, which makes him such a funny guy.

“This cannot continue,” he said darkly in a speech in Windsor, of all places. “With Canadians working, but not as much as they would like, they have been borrowing. Real household credit expanded rapidly throughout the recession, in contrast to previous downturns, and has continued to grow through the recovery. Canadian households have now collectively run a net financial deficit for 37 consecutive quarters. That is, their investment in housing has outstripped their total savings for over nine straight years. In effect, households are demanding funds from the rest of the economy, rather than providing them, as had been the case through the 1960s, 1970s, 1980s and 1990s.”

This is central banker talk for, holy crap.

It means what just happened to the $800-square-foot condos in Vancouver is about to visit everywhere else. Carney’s crack cocaine loans and our insatiable need for a granite-&-stainless fix have produced the overarching reason real estate is sunk: debt.

It feels a lot like Vegas or Miami, circa 2005. As an incredulous Yank said to me recently, ‘Don’t you guys get CNN?’

Well, yah. But it’s different here.

229 comments ↓

#1 Contrarian Canuck on 09.30.10 at 8:51 pm

The canary is dead!

http://financialinsights.wordpress.com/2010/09/30/im-alive-the-canary-is-not/

#2 Michael W on 09.30.10 at 8:56 pm

Al Sinclair on Hot Property (CP24) tonight basically said if you didn’t buy in September you missed the boat because prices are already increasing and bidding wars are back. This guy just cracks me up. My wife and I enjoy watching the show just to laugh at this clown. Too funny!

#3 Jeannie on 09.30.10 at 8:59 pm

Just waiting to hear the interpretation of this photo from the really, really deep thinkers here.
All I see is a couple of buxom bells frolicking in the surf…but wait, there’s
gotta be a subliminal message in there somewhere. Garth wouldn’t show it just to mock Venus-sized ladies, so to all you armchair psychologists ..what’s he saying?

What was she thinking? — Garth

#4 asp on 09.30.10 at 9:02 pm

Do you know what Millennium Development Corp is worth? Looking through their website, I would not be surprised to find that they had assets worth billions. So when push comes to shove, the city will get all the hundreds of millions it is owed.

#5 Real Estate Deal or No Deal on 09.30.10 at 9:02 pm

Looking forward to your speech on Nov 9th … in Toronto. Clients and wife are coming … spoke with this client about selling her home … she bought at the peak, last time … she went home and thought about it … and decided to sell it.

It is completely paid off and I told her to stash it in dividend income producing assets and to use the cash to pay for rent … when the whole thing blows over, they can down size into a snazzy spot.

Thanks, Garth.

#6 Matt Stiles on 09.30.10 at 9:04 pm

If Mr. Julian wants to make homeownership more affordable, he could start with eliminating all of the legislation that has previously sought to do the same. Every single one of the attempts to do this have resulted in precisely the opposite. Is his understanding of markets and human incentive-based action really that poor?

#7 Jsan on 09.30.10 at 9:08 pm

The stunning part of all of this is that this debt gorging is happening while Interest rates and mortgage rates are still rock bottom. The minute that rates head higher we are going to see some “very ugly” hit our economy as way over extended individuals get crushed by even heavier debt payments.

As has been stated before, the ultra low interest rates and massive government stimulus have not only pulled many more fools into a grossly overpriced housing market, it has pulled many what would have been future commercial and infrastructure projects into the present giving the economy a temporary reprieve. What happens on the other side of the stimulus spending and cheap interest rate spending?

Carney should be very worried!

#8 john m on 09.30.10 at 9:11 pm

H.F.and C (alias larry,mo and curly) sure put the screws to our country. Hmmmmmmm does this mean the general public won’t have the extra funds to enjoy all the new community centers, hockey rinks and other show places built with tax dollars to stave off the recession? Well i certainly hope they are being used more than the 2.8 million one in my community which to my knowledge has had 3 functions since it opened in July…..like the pic by the way (looks kinda like “F” in drag :-) )

#9 EJ on 09.30.10 at 9:11 pm

17%?? Pfft, more like 50% overvalued, probably more. Bankers, brokers, agents.. all of them will understate the problem.

#10 John on 09.30.10 at 9:16 pm

Garth, you go from that great picture a few days ago to this? Are you trying to make things right with someone? Its nuts , like throwing us into warm water and then an ice bath, my heart can’t take it!

#11 squidly77 on 09.30.10 at 9:23 pm

http://www.investingintelligently.com/wp-content/uploads/2006/09/calgary-house-prices-1973-2006.jpg

#12 squidly77 on 09.30.10 at 9:28 pm

http://calgaryrealestatemarketblog.files.wordpress.com/2008/09/calgary-misery-index-a-reason-for-optimism-in-the-housing-market.png

Calgary realtors

http://3.bp.blogspot.com/_PRH6JEp9ogE/TJq1_0oz4tI/AAAAAAAAANA/Vo2e6VukF9k/s1600/untitled.bmp

Wanna jump with em?

#13 Too Old Bob$ on 09.30.10 at 9:29 pm

Summers over, time to button up the cottage.

Talked to a cell phone sales clerk the other day. About 24 years old. Nice kid actually, very polite and definitely knows his cell phone info. Some how we got talking about careers etc. He told me that one day he wants to either be a car sales person or sell real estate. I asked him what his desire was for real estate. He proceeded to tell me that recently he just bought a condo that was foreclosed. He bought it for 50K less than what it was supposely worth. I didn’t get into the details of price etc. He then said that because it was foreclosed and he got it at 50K less asking, he immediately increased his net worth by 50K. I’m listening to his story and felt a bit despaired about the whole thing. He also mentioned that he was going to keep it for a year because of tax consequences, then he was going to flip it and continue forward. WoW! I told him that when I was his age, my desire was to buy a house, live in it and pay it off. He said that that was old school and this is the new way to make money. Anyways, I wished him luck in his venture and hoped eveything works out for him. Geez! I’m getting old, thus the blog name. LOL.

My perspective of the shiny gold metal and bubbles works like this. When every joe blow talks about it, then get out. My library lady is a good example of conditions and events. When she starts talking about Gold, then you know it’s time to dump it. Right now she is more worried about her books coming back on time, though she did show me her new necklace 18k, that her husband bought her. Hmm! maybe we are geting closer than I thought.

PS. is that girl too big for that bikini or is the bikini too small? I guess it depends on how you look at it.

#14 bridgepigeon on 09.30.10 at 9:31 pm

Thanks for spelling it out again for us Garth. Very succinct photo also…

#15 Debt's Dark Embrace on 09.30.10 at 9:37 pm

What were we supposed to think?
Money was almost free to borrow, anybody who had a pulse was approved for mortgages and loans, we were told our economy was solid as the Canadian shield, home prices were constantly rising, buy now or be priced out forever, interest rates were at historical lows, we were encouraged to borrow and buy and we were made fearful of not buying and missing the boat. Government, politicians, bankers, the media, and the real estate industry all lied to us and told us everything was good and going to get even better.
What were we supposed to think?

#16 Jake on 09.30.10 at 9:39 pm

A wise man once said:

Pop!……… what was that?

Realtors ……… now I am going to have to go to school for longer than 3 weeks. I’ll start by getting my grade 10.

No Money ……….. I am poorer than I think.

Broker …….. next 5 clients get free ipod.

Ok, not as good as Dan but I’m working on it. I think we should have a tribute to Dan day.

#17 dd on 09.30.10 at 9:45 pm

“Now CIBC cautions real estate is overpriced by 12%”

Idiots. I guess they want to be on the record for predicting the housing bubble.

#18 MJ on 09.30.10 at 9:47 pm

My question is, do I buy a $180,000 home in the Oliver, BC, now, or wait a few years in hopes a correction meanwhile paying $12,000 a year in rent? I have 100k in cash ready for a down payment. Is this worth the wait on a home which probably will not drastically decrease in value over the next few years?

Invest the $100K to get 6% and let it pay half your rent. How hard is that? — Garth

#19 gcmcanada on 09.30.10 at 9:47 pm

Bubble.
http://www.flickr.com/photos/gcmcanada/4955433365/

#20 Cowboy_aka_My_View on 09.30.10 at 9:50 pm

{I called about a commercial building I fancied in mid-town Toronto}

That’s it! No, please tell more. Come on one sentence, back to boring subject. Don’t buy, rent instead. Jus sayin!

#21 dd on 09.30.10 at 9:50 pm

” ‘households are demanding funds from the rest of the economy, rather than providing them’ ”

Well Mark, do you think the 1% savings rate would have a bit to do with it? Yes all this cheap money but you can’t direct were it is going!!!!! A slight side affect.

#22 nonplused on 09.30.10 at 9:53 pm

Good post Garth! Nice to see the ol’ take no prisoners approach back!

I wonder how high these realturds think prices can go before they finally can go no higher. I mean, this isn’t BreX! My Dog, it isn’t even Nortel. At some point all that can be borrowed is borrowed until you get something like runaway inflation in income, which doesn’t appear likely.

It still looks like there is a seller’s strike underway out there to me. While that may support prices for a bit, it should lead to a disaster in the number of sales. It will be interesting to see the September and October numbers. I wouldn’t be suprised to see a slight increase in average price coupled with a very low sales number. Then, when everyone thinks it’s safe to go back in the water, a listing tsunami.

Hey, how about them gold prices everyone? (Ha, ha.) Up 27% per year since 2005 in Canadian dollars. Yet the public is trading in jewlrey instead of loading up. Oh well even that market will cool eventually, once the financial crisis, or should that be crises, is over. Let’s see, bail out Europe, Florida, California, the banks (again), FDIC, Fannie, Freddie, AIG, GM, soon the pensions, cities, and more states. Oh ya, and let’s throw in a currency war! And maybe even a couple of real wars! What’s not to like? Back up the truck and buy stocks, jokers are out there talking DOW 36,000 again.

This thing isn’t over. We’ve only seen Act I. There is more of the drama to come. Quiet a set up though.

#23 T.O. Bubble Boy on 09.30.10 at 9:57 pm

September has been something special!

Vancouver is looking at a near-40% year-over-year drop in sales, and massive numbers of price reductions.

Toronto looks to have had the slowest September in several years, but listings still increased 15%-20% over August.

And – speaking of Carney, F, and friends: get ready for a few more GDP revisions…

“If resale prices were to fall just 5 per cent, $10-billion would be sucked from the economy, said Benjamin Tal, deputy chief economist at CIBC World Markets. Consumers would spend less, causing problems in other sectors of the economy.”

http://www.theglobeandmail.com/report-on-business/economy/housing/housing-slowdown-threatens-recovery/article1735997/

So, let me get this straight: housing prices fall 5%, and GDP goes down by $10B? Well, average prices in the GTA were already down almost 9% from the peak ($446,593 in May down to $411,012 in August), and volumes are down 20%-40% in many areas, so wouldn’t that mean housing-related GDP is actually down far more than that $10B number?

#24 The InvestorsFriend (Shawn Allen) on 09.30.10 at 9:59 pm

Edmonton Condos for half price

I heard a radio advertisement today in Edmonton that our top real estate agent Terry Paranych was marketing about 50 condos in a development at prices up to 50% off.

I have never in my 21 years in Edmonton ever heard an advertisement like that. Surely not all condos are on sale like that, but even a few condos at 50% off is certainly a chilly wind on the remaining embers of real estate fever here.

I don’t see it on his Web Site but here is a link to his Site.

http://www.paranych.com/list_properties_office.php?listing=sys&list=con

The radio ad was on 630 Ched

#25 Frenchy on 09.30.10 at 10:02 pm

@gcmcanada

Nice photo from Paris ;)

Garth,

I received your book today (decided to buy it after seeing you here in Vancouver). Thanks a lot for the little note! I’ll read that on my way to work, in the skytrain. I see the Olympic Village everyday and I’m so glad I’m a renter today…

#26 UrbanCowboy on 09.30.10 at 10:05 pm

Hey, what would happen if people start pulling their homes off the market? I know of one couple that did that, which was interesting because I know they never lived in the place for very long when they tried to sell it. But then I notice the for sale sign gone, and doubt they actually sold it – otherwise the RE agent would have put ‘sold’ on the signage which is normal. Also, I was speaking with a developement company mogul and they said they were in the process of building a condo complex but won’t be preselling or selling for 2-3 years. Are these all tactics that would keep RE off the market to artificially keep supply down thus prices up? Would this work?

PS – I know we try to stay away from gold bug talk, but gold ain’t going down until currency confidence and stability is restored. And as long as the US is in economic hardship gold will maintain full steam ahead, and things are only getting worse in every aspect.
Gold -hitting $1310 tonight.

#27 T.O. Bubble Boy on 09.30.10 at 10:07 pm

Interpretation of today’s pic:

The girl in red bikini is Mark Carney, and is telling the girl in the bikini-turned-thong (the average Canadian):

“You know, if you hadn’t taken that giant mortgage on the over-priced condo, you would have been able to afford the entire bathing suit!”

#28 kc on 09.30.10 at 10:08 pm

4 asp on 09.30.10 at 9:02 pm “Do you know what Millennium Development Corp is worth? Looking through their website, I would not be surprised to find that they had assets worth billions. So when push comes to shove, the city will get all the hundreds of millions it is owed.”

Somehow I feel that when the smoke clears 100% of 0% will still equal S.F.A …. They have been short on making the payments that they owe the city. If they as “rich” as you state (or feel they are) why can’t they make payments in full? My guess is that they are getting caught in a out going tide and we are now witnessing who has been swimming naked. And it gets way better if you get a free cheque from a stupid (Olympic) city who was willing to bankroll your sorry ass… I am sure this is going to end with the city smeling like roses…. HAAAHAAA…. buck up BC it is time to pay for the party….

cheers

#29 Chaos on 09.30.10 at 10:11 pm

Jeannie

The exposure of the corpulent superstructure of the bodacious frolicking babe is analogous to our consumer driven economy and the resultant secured and unsecured debt that is on full display everywhere.

The itsy bitsy teeny weeny blue string bikini is all that is holding back an avalanche of debt and embarassment when we finally bust out (pun intended) of our national delusion of the mantra “DEBT is GOOD” and everyone finally voices what has been apparent for some time, that ‘the King has no clothes”
(or the Queen, the Princes and the Princesses)(or for that the matter…the family mutt)

In short… our asses are showing.

What were we thinking?

#30 Coho on 09.30.10 at 10:19 pm

Now now, Garth. Easy on Mark. Weren’t you taught that well dressed clean shaven men in suits with nicely combed short hair are gentlemen and should be trusted and respected?

And who cares if they talk out of both sides of their mouths. And just because our trusted policymakers throw banana peels along our path, it doesn’t mean we have to slip on them. Ultimately it is our fault for not looking and more so for having blind faith in the policies of these knowledgeable trustworthy respectful gentlemen even though deep down we know better. And after all, no one is holding a gun to peoples’ heads to borrow money. Actually it is the opposite. It is the old carrot and the stick ploy. First the carrot (easy to borrow money) and then the stick (pay through the nose…forever).

#31 Randman on 09.30.10 at 10:23 pm

From Peter Souleles…

“We were in raptures when increasing house prices were doubling our net worth and enabling us to take out lines of credit with which to buy more houses, share portfolios and lead the life of plenty. The reality is that we did this at the price of chaining young couples well into the future. The results are obvious. Hardcore debt combined with a soft core employment market has now gutted house values.

Let me put it another way. Over 25 years the person with a $100,000 loan at 5% makes a total of $175,377 in repayments, whereas the individual with a $50,000 loan who makes the same monthly repayments will only pay $84,180 in 12 years. This is a $91,197 difference that in better days would have gone towards educating our kids, helping them with their first home and putting something aside for our old age. Instead the additional 13 years are devoted to SOLELY SERVING the interests of banksters because even those of us who are savers are being paid pittance for the privilege of depositing our money with them. As a result is it any wonder that savings rates have plummeted and insane investments have sky-rocketed?

To top it all off we exported the manufacturing and high tech jobs we once had so that we could all buy cheaper goods whilst boosting the share price of entities that profited from this move to the East.

We wanted it all and had it all, but like I keep saying, “neither debts nor wealth can compound forever.”

To make matters worse we have the temerity to expect the younger generation to buy our still price bloated houses and pay for our retirement and medical care whilst medicine and science pushes us well beyond retirement age in terms of longevity. We then expect them to heat those houses even though a combination of rising fuel prices and climate warming initiatives will make those sprawling McMansions nothing more than white elephants. We also expect them to buy our share portfolios at top dollar and to service the nation’s debt even though it can never be repaid. Well forget it. ”

And this….

“My advice to young people is to steer clear of debt that cannot be repaid within 10 years and if they or their parents want to save for their future, then they should invest in gold and silver. The truth is that we do not know WHAT the future holds and WHERE that future will be. Precious metals, especially for those in the USA and Europe, provide the means of being able to maintain value, flexibility and portability like no other asset can. Stay away from ETF’s and the share market and try to remember that the system is rigged. Moreover, it is interested in you if you only if you are borrowing fiat or buying “stuff”.”

and this…

The peasants in India who have little or no education still buy gold and silver. Is it because they have no formal schooling or is it because history and experience have taught them far more? I say it is the latter. As Mark Twain once famously said, “I never let my schooling interfere with my education.” Unfortunately so much of our schooling these days is through the squawk boxes of the financial world that have subdued the catatonic public with the effectiveness of an Indian snake charmer.

Governments and international organisations everywhere are secretive about what gold they have (or don’t have) and what transactions they enter into (through derivatives, swaps, leasing etc). They know that gold is the ultimate weapon of mass fiat destruction and they fear that when it is activated that their hold on power and hence our lives will be severely questioned and tested.

A return to the principles of a gold standard that constrain government spending and retain the value of money will in turn enable the return to the more enduring values of humanity.

In the meantime, the writing is on the wall for all to see. Be careful because it could fall at any time.

#32 Sherri on 09.30.10 at 10:25 pm

“Don’t you guys get CNN”?

LOL.

No! We get BNN!

#33 T.O. Bubble Boy on 09.30.10 at 10:29 pm

The CMHC Report has some very telling data:

http://www.cmhc-schl.gc.ca/odpub/pdf/67065.pdf?fr=1285901846932

For anyone who says that the market isn’t driven by risky CMHC-insured loans, check out the Chart 12 on page 9… it clearly shows that virtually 100% of all mortgage credit growth is from CMHC’s Mortgage-Backed Securities!
(also shown again as Figure 3-5 on page 37)

There is no other way to look at it: the Canadian Housing Market of the past 10 years is a Government-backed Ponzi Scheme.

#34 Soylent Green is People on 09.30.10 at 10:31 pm

In both children and adults, there is an association between television viewing time and the risk of obesity.

A 2008 meta-analysis found 63 of 73 studies (86%) showed an increased rate of childhood obesity with increased media exposure, with rates increasing proportionally to time spent watching television.

Obese people consistently under-report their food consumption as compared to people of normal weight.[81] This is supported both by tests of people carried out in a calorimeter rooms[82] and by direct observation.

http://en.wikipedia.org/wiki/File:Obesity6.JPG

#35 Mike on 09.30.10 at 10:32 pm

Hot properties is the biggest joke, it is fair and balanced, I guess being sponsored by 1) a real estate agent 2) a mortgage broker 3) a builder make it rationale and objective.

It makes me mental because I know there are morons watching and soaking up every word.

#36 Patz on 09.30.10 at 10:37 pm

Millennium Waters/Athletes Village is such an apt symbol for the coming crash. Kind of like the Spirit of Ecstasy hood ornament on a Rolls Royce heading for a brick wall; Emily gets crunched first.

It is the ultimate hubris in a city in which over weaning (and unjustified) pride is like sushi on the Ginza, i.e. everywhere.

Even one of our local RE gurus Tsur Sommerville professor of estates real at UBC’s Sauder School of Business calls it a bunch of not very well built buildings on a “slag heap.” Viewers of the condos have said that most don’t even have a view in this “jewel of a setting.” The latter is a phrase Bill Good has used almost every time he’s discussed them.

And as he was wailing today about finding a “market strategy” to unload them a woman called in to say that she and her builder husband had visited them on the weekend and they were “shoddy beyond belief.” No granite counter tops or hardwood floors, just finishes that resembled Ikea flim flam. According to her there were already signs of wear like mouldings separating from door frames.

Vancouver’s greater fools have proven themselves capable of the greatest credulity when it comes to drinking the local RE Kool Aid. Milly Waters maybe represents a bridge too far for even them to cross.

#37 bullion.bunny on 09.30.10 at 10:41 pm

Tv repairman crack….anyway….

It feels a lot like Vegas or Miami, circa 2005. As an incredulous Yank said to me recently, ‘Don’t you guys get CNN?’

Truer word could not have been spoken!

#38 prairie gal on 09.30.10 at 10:43 pm

#6 Matt Stiles wrote:
If Mr. Julian wants to make homeownership more affordable, he could start with eliminating all of the legislation that has previously sought to do the same. Every single one of the attempts to do this have resulted in precisely the opposite. Is his understanding of markets and human incentive-based action really that poor?
____

unfortunately, yes. politicians are not necessarily qualified to govern.

#39 Love this Blog on 09.30.10 at 10:44 pm

EXCELLENT post Garth!! Best one yet.

You should gloat my friend – you called it 100%

#40 prairie gal on 09.30.10 at 10:47 pm

re: the photo

swimming naked

#41 JET on 09.30.10 at 10:47 pm

#3 Jeannie:

If I may offer my interpretation (just for fun, OK?):
Her clothing = equity
Everything else = debt
Losing her equity and falling underwater = priceless!

#42 saxophile on 09.30.10 at 10:48 pm

Everybody loves a fairy tale ending and mine just happens to be Van Morrison’s.

#43 Cameroni on 09.30.10 at 11:02 pm

“As the Millennium Water development drifts towards bankruptcy and ruin, putting the taxpayers of Vancouver and BC on the hook for a billion dollars, there is much blame to go around” —Garth Turner
————————————————————

Some of you older folks will recall the incredible boondoggle that was the Olympic Stadium (The Big Owe) built for the Montreal summer games of 1976.

The final cost after 30 agonizing years and a special tax on tobacco to pay the debts came in at a whopping 1.6 Billion dollars. Only about 1.2 billion more than originally projected. No big deal really. It was for the Olympics after all. And national pride.

You would think cities like Vancouver had learned something from Montreal’s experience about financing “White elephants” for special events. Sadly, they did not.

And so now the loan has been called on the Olympic Village from Millenium due to a shortfall of payments and it will probably never be paid in full. The city will likely go on the hook for the balance of the costs at a time when real estate values are set to hit the rocks on the shores of Wreck Beach.

The city will survive and not likely bankrupt but it is somehow a fitting end. They will lose their shirts for the next couple decades but what the hell,…….the “Wreck” is a nude beach anyway. Who needs clothes there.

And unless you are a Kangaroo, where do you put your loot anyway?….oh wait,…I know. Oh shit.

#44 Devore on 09.30.10 at 11:11 pm

#6 Matt Stiles

If Mr. Julian wants to make homeownership more affordable, he could start with eliminating all of the legislation that has previously sought to do the same. Every single one of the attempts to do this have resulted in precisely the opposite. Is his understanding of markets and human incentive-based action really that poor?

Social engineering and government policy producing the exact opposite outcome? Shocking!

#45 CREA Cirlce Jerk on 09.30.10 at 11:17 pm

Lol, awesome photo Garth. What WAS she thinking?

There’s no do-overs on the beach, just like there’s no do-over to anybody who bough houses in the last two years. Al Sinclair is just a part of the Realtor Circle Jerk. He’d tell you the earth is flat if somehow that would sell more real estate.

#46 Bob on 09.30.10 at 11:19 pm

Incredible:

“In a development that could drastically change the way Canadians buy and sell their homes, the real estate industry has reached a landmark agreement with federal competition authorities.

The legally binding deal will allow for home sellers to pay for only those services they want from their real estate agents…”

http://www.financialpost.com/Competition+watchdog+realtors+reach+deal/3605505/story.html

#47 Old_is_Gold on 09.30.10 at 11:31 pm

#15 Debt’s Dark Embrace on 09.30.10 at 9:37 pm

What were we supposed to think?
Money was almost free to borrow, anybody who had a pulse was approved for mortgages and loans, we were told our economy was solid as the Canadian shield, home prices were constantly rising, buy now or be priced out forever, interest rates were at historical lows, we were encouraged to borrow and buy and we were made fearful of not buying and missing the boat. Government, politicians, bankers, the media, and the real estate industry all lied to us and told us everything was good and going to get even better.
What were we supposed to think?
__________________________________________________I agree with you 100% except for the use of PAST TENSEin your comment. This game is still being played (free money, liar loans, 0 down, 3/4 million dollar mortgages for burger flippers, lies in the media, government, industry……..)

The more things have changed, the more they have stayed the same. I wouldn’t put it past the ‘O so Conservative’ superheroes in Ottawa to concoct another magical brew to keep the pot boiling a bit longer yet. It won’t be over till the fat lady has sung (is that her in the picture?) And the fat lady ain’t singing just yet – thus prices still rising (although I doubt that very much.) I believe D-day will come next spring unless more magic wands are waved by the sorcerers that turns what obviously is lead into what looks like the shiny stuff.

However, sooner or later all RE owners will be dragged down but those who bought in the last 5 years will find out that they were wearing lead shoes after all and have now been encased in a concrete drum from which even Houdini could not make an escape.

#48 Cameroni on 09.30.10 at 11:36 pm

Jeannie @ #3 wrote:

“Just waiting to hear the interpretation of this photo……..Garth wouldn’t show it just to mock Venus-sized ladies, so to all you armchair psychologists ..what’s he saying”?
———————————————————-

He’s saying, if you don’t like allegorical hotties in negligees then this pic will leave you all speechless because most of you people are too spineless and politically correct to gripe and bitch about a “fat” ugly woman in a bikini who is way more inappropriate than the “Victoria’s Secret” cutie from three days ago.

Now where are my ink blots.

#49 dark sad person on 09.30.10 at 11:45 pm

#3 Jeannie on 09.30.10 at 8:59 pm

Garth wouldn’t show it just to mock Venus-sized ladies, so to all you armchair psychologists ..what’s he saying?

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

I’ll bite–

“A bubble was blown with little notice-then-the tide went out and all the negative “leverage” that needs to be covered was revealed”

#50 Nostradamus Le Mad Vlad on 09.30.10 at 11:48 pm

-
“What were we thinking? It all but ensures this will not end well.”

It’s akin to permanent tooth decay, the gum is poisoned and we’ll all be Toothless in Toronto! Oh dear. Come back tomorrow!

Mark Carney warns we have too much debt. Man, is he ever a Roads Skollar! Where does his IQ come from? GS?
*
#3 Jeannie — “. . . the really, really deep thinkers here.”

Hi Jeannie. After pondering over said pic, the closest interpretation I get is Men In Tights. Hope this helps!

#16 Jake — Right on! A tribute to Dan day would also be a good follow-up!

Gold / Silverbugs – Rare earth minerals new gold?

Interesting. “At the drop of a hat, fiat currency can be purposely inflated, deflated, or de-valued.”

3:11 clip Powerful stuff. Thank gawd we don’t have US politics here, ‘tho we’re not far off.

Basel III Banks seem to be changing their tune.

Inherently Evil QE bares its fangs.

Replay Dirty Thirties Part Deux.

May have something to do with the hacks here.

T & R Cleaning up everyone else’s mess.

The factories are staying in China, which implies wealth is also transferring to Chindia from here.

A Toxic Agenda which we’re not supposed to see. Yeah, right!

Ethnic Cleansing via trade wars.

#51 Wise Guy on 09.30.10 at 11:52 pm

Gold is great when it’s going up and that’s why my parents who bought their gold more than 20 years ago for $375 sold 10 Oz yesterday.

Despite Gold being valued at $1308/Oz, this is not the price that they got. In fact, they got $1275 and anyone who is selling Gold will also experience this when you sell.

They still have another 20 Oz to go and they will sell soon, but if you ask them if Gold was a great investment, they will tell you, “NO”!

When they bought their Gold, essentially, the price didn’t do anything and in fact went down, fluctuating for the next 15 years.

Right now, my mother feels that the price of Gold will still rise, but my father is satisfied to get out now. He realizes that once Gold has its run, there will be a very fast exodus when it does drop.

They have lived a pretty simple life, but sold their house four months ago, knowing that we were close to the peak of the housing market and now have sold some of their gold. They are both close to 70 and are renting a home. Not because they have to, but because they choose to.

I personally think they have made two very wise financial decisions.

#52 dd on 10.01.10 at 12:04 am

Well Mark, do you think the 1% savings rate would have a bit to do with it? Yes all this cheap money but you can’t direct were it is going!!!!! A slight side affect.

#53 Tom on 10.01.10 at 12:09 am

What is amazing, is that the City of Vancouver, and the city councilors are totally unaccountable. They screwed up royally, negotiating terrible terms with the developer, and they managed the entire process poorly. They’ve cost us taxpayers a fortune and they don’t face any consequences. They haven’t even apologized. They should not only lose their job, they should be sued. As for anyone stupid enough to pay 600K for a 600 sqr ft apartment in Vancouver, maybe they would fit in well at City Hall. lol!

There are already problems with the construction in some units. There is no greenspace among the buildings and they are so close together you could probably hear your neighbor snore.

#54 Cameroni on 10.01.10 at 12:16 am

#16 Jake Said”

“Pop!……… what was that?

Realtors ……now I am going to have to go to school for longer than 3 weeks. I’ll start by getting my grade 10.

Ok, not as good as Dan but I’m working on it. I think we should have a Tribute to Dan day”.
——————————————————-

I agree Jake. Maybe I’m crazy but I laugh like hell every time I read one of Dan’s posts. Where is he today anyway?

#55 Bailing in BC on 10.01.10 at 12:23 am

#3 Jeannie

“gotta be a subliminal message in there somewhere.”

I think what Garth is trying to say, in his oh so subtle way, is that the crack is starting to show in the market

and, Oh Lordy what a gianormous crack it is, in a totally overinflated market.

Anyone who has taken a bite out of the rear end of this market will end up packing sand.

#56 grumpy on 10.01.10 at 12:39 am

Actually, our ‘intelligensia’ like Maggy Atwood and Taliban Jack have been wailing about those ‘American bastards’ beaming CNN and Fox into Canada exactly because they want a complacent and ignorant population that is much easier to misle if they’re uninformed. It is differant here , we’re less informed than any other G20 population by the practicesed design of the government. Now sleep…..sleep……nothing to see here….we’re # 1…cause we’re stupider than everyone and we seem to like it.

#57 vomitingdog on 10.01.10 at 12:41 am

Garth,

Please. When you gave your talk in Vancouver, I asked you if you had been to visit our lovely Olympic Village. But you must not have been taken me up on my offer. It’s $1,000/sq. ft., not $800. For the most discerning buyers only.

#58 Tony on 10.01.10 at 1:01 am

I still have a lot of property in Alberta but unfortunately most are townhouses and apartments. You have to discount them around half their peak values to sell them. Edmonton seems to be the worst right now as all the satellite communities now cost more. I’m trying to unload right now before the price of oil drops to 50 dollars a barrel US as the price of oil was manipulated upward when it should’ve fell off a cliff last month. Natural gas made new lows as that market seems to trade at fair market value. There isn’t many greater fools in that province unlike Ontario.

#59 kansai_92 on 10.01.10 at 1:03 am

This is for the folks who are worried about “THROWING AWAY” money while renting.
Got news for you, the interest you pay the bank when owning is exactly the same.
It boils down to simple math.
The place I’m renting, the interest alone would be more than what I’m paying in rent.
Don’t forget about the strata fees and property taxes.
You got it, all down the toilet as well.

#60 Charles on 10.01.10 at 1:12 am

The headline in the paper (I think it was the Globe and Mail) this weekend in Vancouver said something about the city possibly being on the hook for “several million” dollars because of the Millennium Water development disaster. But in the article it said that the best case scenario was a loss of $50 million, and worst case it would be $150 million. Two questions immediately come to mind. First, since when is 50 considered “several”, and second, who wants to be the loss is greater than $150 million?

#61 Charles on 10.01.10 at 1:13 am

that’s supposed to be “who wants to BET the loss is greater than $150 million?” Sorry!

#62 Jeff Smith on 10.01.10 at 1:23 am

OK, let me take a stab at the photo. I really really want to have the chick in the front, but what I have to do is get past the broad in the back, I probably be crushed. Ouch !

#63 jay on 10.01.10 at 1:27 am

Word on the street is that CUPE in Vancouver is going out on strike next late spring over wage demands and that some inside managers will be happy to see them out. Should be interesting to see it all blow up around the same time for the city council.

#64 Waiting and waiting on 10.01.10 at 1:40 am

I learned of a VIP condo presentation/sales event in Toronto this week.
They are serving a seafood dinner.

Last year and this spring, I remember watching news about people waiting in line for a week to get a chance to buy a unit.

Actions speak much louder than words.

And Garth, about your political career, it’s not over.
I am sure you know and have been told that all you have to do is make getting elected/re-elected/promoted your main priority.
You just can’t let things like what’s good for the country/moral/honourable get in the way.

#65 betamax on 10.01.10 at 2:09 am

Garth, nice to see that you have refused to bow to pressure from the PC crowd and are still posting pictures of scantily clad hot babes.

#66 Crash Callaway on 10.01.10 at 2:16 am

#3 Jeannie

My armchair analysis of the photo:
Not only is Garth a watchdog and protector of house junkies but he is an advocate for those that fallen between the cracks!

#67 TaxHaven on 10.01.10 at 2:23 am

For those of you who didn’t grow up in Vancouver, City of Hubris, perhaps a certain B.C. restaurant chain’s advertising patter can show us why “it’s different here”. And why a condo development in which “50% are priced at under $1m!” WILL be flogged and touted to the skies as some kind of “opportunity”…as if that will make it so.

“IT’S A WEST COAST THING!”

“What the heck is a west coast thing?”

“To folks east of the Rockies, it’s an attitude. A vague combination of laid-back work ethic and tree-hugging earnestness, topped off by a preoccupation for muffins and mineral water. To us, it’s a physical reaction to Mother Nature. An awareness of the magnificent range of scenery and terrain we enjoy here. Scenic plateaus, pristine rain forests, jagged snow-capped mountains, sparkling lakes, rivers, breathtaking beaches and really good parties.”

“It’s a feeling we don’t think words can capture…”

And, in case the wheels DO somehow inexplicably come off the thing, the hubristic developer

“…will continue to work tirelessly with the city to develop a mutually acceptable plan that protects the value of the asset for all stakeholders.”

~ Except anyone silly enough to purchase a condo…

#68 Burnaby Boy on 10.01.10 at 2:24 am

What were we thinking? When the new editor of The Anglican Journal, Kristin Jenkins, refers to God as she in an editorial we are becoming too smart for our own good. The real estate debacle is the least of our worries. No wonder the country is in a mess.

#69 Numbers. on 10.01.10 at 3:34 am

Americans are smart from their ongoing house price drops and they are trying to teach Canadians what they learned. Debt does not equal wealth.

STAY OUT OF REAL ESTATE.

But do Canadians listen to the newly educated American’s? Do Canadians smartfully learn from the mistakes south of the boarder? Are Canadians really any different?

Those are questions for you to ask yourself.

#70 Mike Turner on 10.01.10 at 3:36 am

They knew they would be bailed out they played the system and won the lottery…

#71 Mike Turner on 10.01.10 at 3:42 am

It’s different here Italy has the Vatican Ciao

#72 PR on 10.01.10 at 5:06 am

Numbers of sales quebec province: septembre 2010 compare to same month last year, -11%.

So 2010 compare to same month in 2009 is; mai juin juily, august, septembre,
-8% -16% -21%, -5%, -11%

Its going down!

#73 Onemoreting on 10.01.10 at 5:22 am

Someone still needs to tell me where all of Canada’s GDP is going to come from?

CAD’s been to high for 18 months!

USD and anything pegged to it is loosing ground everyday!

As for Garth’s new’s, where’s theres smoke……

#74 David B on 10.01.10 at 6:10 am

Fr. this mornings WSJ

Crisis in Ireland Shakes Europe
Ireland said additional costs of propping up the country’s banks could stretch its budget deficit to nearly a third of the country’s total economy — a record for any euro-zone nation.

Strange an interview on CBC radio last evening one man said if Iceland is even in worst shape stating if they get their loan approved they will owe more than thier GNP!

Hello … Global Economy! But fear not Mr.s H & F & C are standing on the Canadian Shield and all will be well …. well for those smart 36%ers who love their evey move!

Hang on it’s going to be one hell of a ride … “DOWN”

Are you prepaired?

#75 Jayman on 10.01.10 at 6:31 am

#15 Debts Dark Embrace
I think that is the definition of “sheeple”. I believe the answer to the question you posed is we were/are suppose to think for ourselves. We have lost our focus and any connection to personal responsibility and accountability. It’s quite sad. But what can we expect from a society that bails out the big modern day deities (sp?) And the wealthy on the backs of the middle class tax payer.

#76 Bill ( Peterborough) on 10.01.10 at 6:33 am

Re Old_Is_Gold ( yesterday)

Thanks for the link yesterday, in regards to Coho’s comment, good to see you back.

#77 Pete on 10.01.10 at 6:42 am

Al Sinclair on Hot Property (CP24) tonight basically said if you didn’t buy in September you missed the boat because prices are already increasing and bidding wars are back. This guy just cracks me up. My wife and I enjoy watching the show just to laugh at this clown. Too funny!
———————————————————-

idiot Al time is coming to an end. He better of saved his money well cause realtors like him are finished if the agreement means what I think it does. bye bye Al and you propaganda of lies

Real estate group reaches tentative agreement on MLS listings

http://www.theglobeandmail.com/report-on-business/economy/housing/real-estate-group-reaches-tentative-agreement-on-mls-listings/article1736411/

#78 TGS on 10.01.10 at 6:47 am

Distressed home inventory continues to rise in the US…. the bottom is still not in sight.

http://www.bloomberg.com/news/2010-09-30/distressed-u-s-homes-sell-at-26-discount-as-foreclosure-supply-increases.html

#79 Dan on 10.01.10 at 6:58 am

Real estate group reaches tentative agreement on MLS listings

http://www.theglobeandmail.com/report-on-business/economy/housing/real-estate-group-reaches-tentative-agreement-on-mls-listings/article1736411/

POP!

Realtors…………………What was that?

#80 Danforth on 10.01.10 at 7:07 am

==
Worse, it embodies the role government’s played in propping up an asset that’s been begging for a bullet.
==

Hello – Friendly FYI – grammatical error on the apostrophe on _government’s_.

(…which is rare, normally blog postings have impeccable punctuation!)

#81 goldenfox on 10.01.10 at 7:12 am

Why data supports both deflationist and inflationist arguments and why interest rates refuse to go up and answers to other nefarious questions.

http://www.financialsense.com/contributors/rob-kirby/treating-symptoms-ignoring-the-root-cause

#82 fancy_pants on 10.01.10 at 7:14 am

read the writing on the wall.. er, picture
Analogy: Daddy left the cookie jar open too long and ‘our’ insatiable appetites took care of the rest. The truth can no longer be covered up.
Reality: Carney lowerer interest rates and the sheeple gorged on debt. Cracks are starting to show.
IMO, the finger of blame points both ways.

#83 Brian1 on 10.01.10 at 7:24 am

Picture—Renaissance Hot

#84 takloo on 10.01.10 at 7:27 am

I havne’t read the CIBC article and I wonder what methodology they used to derive 12%…

TD’s estimate is identical – 12% and lists the various valuation methods with their pros & cons

http://www.td.com/economics/special/el0910_housing.pdf

#85 bigrider on 10.01.10 at 7:32 am

On the subject of gold.

Here is an interview hosting John Embry of Sprott asset management. Hardly a shop full of wack jobs ,there calls on both the economy and gold have been precient since the beginning of the millineum.

He envisions a new currency backed by gold by the time all is said and down. Not saying I agree but am firmly in the camp that says gold moves much higher. Would love to hear you argue with these guys Garth..I think you would lose.

http://www.theaureport.com/pub/na/7087

#86 bigrider on 10.01.10 at 7:33 am

#78- I apologize for all the speeling and grammatical errors.. to early in morning is my excuse.

#87 Tony on 10.01.10 at 7:43 am

#24 The InvestorsFriend (Shawn Allen)

Check out the prices of Country Club estates in the south west part of Edmonton in Patrica Heights. They’ve fallen around 60 to 65 percent from the peak back on the third week of June 2007.

#88 Brian1 on 10.01.10 at 7:51 am

Someone was again complaining about irresponsible borrowers. True, but we, the taxpayer utimately foot the bill. We still have to pay for someone else’s house thanks to the government.

#89 Brian1 on 10.01.10 at 7:56 am

Apparently this blog, for some, is a Shangrila, a place to hang out, chill, listen to music videos, have a few beers, roll some joints. Just kick your feet up and watch the world burn. Cool Daddio.

#90 S.B. on 10.01.10 at 8:00 am

G&M’S RE poll?

62% voted No

“Is now a good time to buy a home”

http://www.theglobeandmail.com/report-on-business/economy/real-estate-poll/article1736015/?from=1736411

p.s. I suspect Garth is buying that commercial property for use as a future charity house: Home for Wayward Realtors and Urchins.
Or a place for warehousing the mountains of books he will surely sell at the Toronto event. :P

#91 Aussie Roy on 10.01.10 at 8:05 am

kansai_92 on 10.01.10 at 1:03 am
This is for the folks who are worried about “THROWING AWAY” money while renting.
Got news for you, the interest you pay the bank when owning is exactly the same.
It boils down to simple math.
The place I’m renting, the interest alone would be more than what I’m paying in rent.
Don’t forget about the strata fees and property taxes.
You got it, all down the toilet as well.

Bingo…. I wonder if you have the same dreadfull saying there “rent money is dead money” I’m still looking for some cash with a pulse. You can choose to rent a property at 3% of its prices or rent the money (interest on debt) at 6%. But we still hear that buying is good renting is bad and paying 6% to rent the money for a 3% rental return is somehow a clever investment.

Aussie Update

http://www.news.com.au/money/property/house-prices-dip-and-will-fall-further/story-e6frfmd0-1225932622360

http://www.smh.com.au/business/funny-business-stress-testing-banks-20101001-1609x.html

http://www.smh.com.au/business/rates-could-pop-house-price-bubble-economist-20101001-15zvn.html

http://www.igmarkets.com.au/cfd/australian-housing-bubble.html?QPID=2688&QPPID=1

#92 Carruthers on 10.01.10 at 8:08 am

#6 Matt Stiles wrote bout Peter Julian:
“Is his understanding of markets and human incentive-based action really that poor?”

Matt. Peter Julian is NDP. His understanding of markets is not poor, it’s non-existent. Remember what these clowns did to Ontario back in the early 90′s? They are clueless about anything except redistributing other peoples wealth. Which, I think, answers your question about human incentive-based action too.

Toodles.

#93 Sunburned Canuck on 10.01.10 at 8:09 am

At first I thought the fat girl was from Jacksonville FL, but then again, she did not have a body riddled with tattoos and she still looked a bit too thin.

I was wrong, unless the ink was photo-shopped out…

#94 Bill ( Peterborough) on 10.01.10 at 8:18 am

Friend works at a pipe making plant outside Hamilton. Supplying pipes , fixtures for oil, gas industry out in Alberta. Last year 148 skilled workers working there. This year 43 only. They seem optomistic about next year.

Another friend owns cab company in Kitchener / Cambridge area. Had alot of people in cab telling tales of loosing good paying jobs and having to work in box stores, falling behind on payments, loosing homes. Grown people actually sobbing in cabs , paying with loose change.

This is only the beginning .

Agree with Coho, Old_Is_Gold. Sure nobody put a gun to peoples heads to get into debt, but at the same time people have been manipulated by governments, medias, financial institutes to buy in a failing credit based economy. Don’t kid yourselves , they knew.

Very few people think on there own nowadays, relying on others to do their thinking. which is what got them into this mess.

Anybody who thinks they are insulated from what is coming up will be in for a big surprise.

Good jobs substituted for minimum wage jobs, alot of people just floating from paycheck to pay check. Cost of living rising, taxes going up, currency devaluation…
Looks pretty Rosy the future.

#95 Numbers. on 10.01.10 at 8:30 am

Gold people forget to tell you the WHOLE story behind the numbers.

M3

M3 is the money supply out there. This chart shows you clearly, money supply is actually LOWER than it has been in 7 years thanks to the losses in RE, stocks, etc.

http://www.amanita.at/pictures/file_1268230410-d6e8395527ff0487139abba089507b62.jpg

Numbers people, it’s all what is behind the numbers.

Gold is only rising due to speculation, not because of money supply. Remember that if you are buying it for any reason other than speculation.

#96 nicole on 10.01.10 at 8:40 am

We are on a ship of fools.

#97 lonely limey on 10.01.10 at 8:42 am

I take it you won’t be using leverage to purchase that illiquid investment Garth?

An income-producing, multi-tenant commercial property with a positive cash flow, acceptable ROI and tax-deductible expenses and interest charges is not the same as a residential property. Any other questions? — Garth

#98 dd on 10.01.10 at 8:47 am

.#95 Numbers.

…Gold is only rising due to speculation…

You forget to mention derivatives. You know, the big black whole on Banks balance sheet!

#99 Paul on 10.01.10 at 8:48 am

http://www.timescolonist.com/business/Real+estate+deal+could+mean+lower+fees+buyers+sellers+Canada/3607949/story.html

#100 Boombust on 10.01.10 at 8:51 am

re: the photo…

You people don’t get it.

It’s four o’clock in the morning (in Iqaluit), those are her pajamas, and that’s her bed.

She’s a mermaid. Duh.

#101 prairie gal on 10.01.10 at 8:58 am

#56 grumpy wrote:
Actually, our ‘intelligensia’ like Maggy Atwood and Taliban Jack have been wailing about those ‘American bastards’ beaming CNN and Fox into Canada exactly because they want a complacent and ignorant population that is much easier to misle if they’re uninformed. It is differant here , we’re less informed than any other G20 population by the practicesed design of the government. Now sleep…..sleep……nothing to see here….we’re # 1…cause we’re stupider than everyone and we seem to like it.
_____

Not even remotely true. What thinking people object to is having special treatment (‘must carry’ status) given to a news station that is intended solely to advance government propaganda.

#102 mikey on 10.01.10 at 9:01 am

Like i said before i can’t wait till the house prices drop 40% in the GTA over the few next years i was hoping in 2011 but not sure if it would happen that quick

Mikey

#103 Tonguestump on 10.01.10 at 9:11 am

I find it interesting that most people are mirror image twins of the bank asking for 25% more for a consumer good (housing) than what it is worth. Banks are constantly trying to get away with extracting more just like the little old widow that bought a bc lakefront cottage in the 1950′s for 18K and will not budge a penny from the offer unless her 1.2 million dollars is met. Greed has become an infection from top to bottom. It’s not just these TPTB. Look no further for tinfoil and takedown than your condo dweller truly, sincerely expecting a million bucks for his concrete 900sq. footer because if you stand on your tip toes out the corner of a window you can see mountain.

#104 dark sad person on 10.01.10 at 9:19 am

#95 Numbers. on 10.01.10 at 8:30 am

M3 is the money supply out there. This chart shows you clearly, money supply is actually LOWER than it has been in 7 years thanks to the losses in RE, stocks, etc.

Gold is only rising due to speculation, not because of money supply. Remember that if you are buying it for any reason other than speculation.

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

You’re wrong on both statements-

M3 is not an indicator of money supply-

M3 contains MZM-
MZM accounts for MMMF’s-

It also contains Time Deposits and checking accounts-that are subject to daily Sweeps–

So tell me how-transferring money from my pocket into a MMMF–increases the money supply-or-
how withdrawing my money from a MMMF decreases the money supply?

Here are your M3 components–

http://research.stlouisfed.org/fred2/categories/28

**************
Gold is going up because of Credit risk-
That started in 2001 and continues today–
The people who see the Gold price rising-only because of speculation-are people who look at the wrong data and come away with the wrong conclusions-

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

89 Brian1 on 10.01.10 at 7:56 am

Apparently this blog, for some, is a Shangrila, a place to hang out, chill, listen to music videos, have a few beers, roll some joints. Just kick your feet up and watch the world burn. Cool Daddio.

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

http://www.youtube.com/watch?v=tY5x8pF512k

#105 Evangeline on 10.01.10 at 9:21 am

#31
((A return to the principles of a gold standard that constrain government spending and retain the value of money will in turn enable the return to the more enduring values of humanity))

I agree that debt doesn’t seem to be a solid monetary foundation but the gold standard didn’t stop the last great depression from happening, so the gold standard isn’t a perfect solution either.

But yes, it’s true, socialism a basically a Ponzi scheme, the younger having to support the older, as well as ever fatter and larger government, through taxation.

#106 C on 10.01.10 at 9:22 am

As we all know now US equity markets had their best September since 1939. Well the Baltic Dry Index had a terrible September. The Baltic Dry Index is a good indictator of economic activity in the pipeline.

Equity markets peaked back in April, yet the Baltic Dry Index had a strong May? But from June to mid-July the BDI collapsed. BDI was strong in August yet equity markets were very weak in August. BDI was very weak in September yet equity markets were flying in September.

Maybe the two will flip in October/November like we’ve seen all through 2010?

On another note, the W network in Canada is coming out with a new show called “Burn My Mortgage” starting October 5th. A sign of things to come???

#107 Bill ( Peterborough) on 10.01.10 at 9:22 am

Food for thought:

A few things which may supercede your decisions about buying real estate in the near future.

http://www.youtube.com/watch?v=saoNTX-lIhc

http://www.youtube.com/watch?v=B4SmFxyust0&feature=related

http://www.youtube.com/watch?v=HbvQMJXJmVQ&feature=fvw

#108 nicole on 10.01.10 at 9:28 am

“The ship of fools”, 1923 Vienna; by Oskar Laske; and what happened again in 1929?

Anybody knows?

#109 C on 10.01.10 at 9:30 am

I’ve noticed on AM 680 on the radio here in the GTA, that lately they have had a lot more ads for condo developments. I guess before they used to just sell via word of mouth. Now it’s time to advertise due to the slowdown perhaps???

#110 Soylent Green is People on 10.01.10 at 9:34 am

re ← .#56 grumpy on 10.01.10 at 12:39 am

I don’t want Sun TV (aka as Fox News North) in Canada. We have hate laws in Canada. That is what makes us different from the USA.

I do not support Canada’s Prime Spender Stephen HarperCon secretly setting up his own t.v. news station.

I mean, COME ON !!!!!!! Does that really sound like a good idea? Talk about your sheeple.

~~~~~~~~~~~~~~~

Kory Teneycke, a former top spokesman for Prime Minister Stephen Harper, has resigned from the effort he started to bring a right-leaning TV network to Canada.

http://www.theglobeandmail.com/news/politics/ottawa-notebook/former-tory-spokesman-exits-sun-tv/article1708269/

~~~~~

C.R.U.S.H. – Canadians Rallying to Unseat Stephen Harper

http://tiny.cc/CRUSH

☻☻☻

#111 C on 10.01.10 at 9:36 am

If we get the big slowdown in real estate will Hot Property change the name of their show? That show is frustrating to watch. Wayyyy too biased to provide any real value. Basically a an opportunity for Al Sinclair and Monster Mortgage to pump their product.

Cold Property in 2012?

#112 wetcoaster on 10.01.10 at 9:36 am

What was this person thinking paying almost half a million for this Victoria dump in a so so part of town. The fools are still alive and well on Sheep Island.

http://tinyurl.com/294qynw

#113 Consider This on 10.01.10 at 9:41 am

Garth, can you please help me understand the numbers quoted for how much the housing markets across Canada are overvalued? I’m thoroughly skeptical of these numbers as they do not appear in any way to be near the degree of overvaluation we are actually experiencing. For example, Vancouver is stated to be only 17% overvalued (I’m guesstimating closer to 35%), yet the affordability ratio is sitting at 9.3 (the U.S. market collapsed at an average affordability ratio of 4.6). With salaries in Vancouver lower than salaries for the same job in the U.S. in similar cities like San Francisco or Seattle (salaries would be anywhere from 5%-15% lower in Vancouver), taxes in Vancouver are much higher, housing costs higher than most U.S. cities, goods in general cost more, expendable salaries in Vancouver are much lower than they were in the U.S. This would indicate to me that Vancouver is MUCH more overvalued than a mere 17% when the rest of the U.S. has fallen over 25% with far better conditions than what Vancouver is experiencing. Can you help me understand how these numbers are compiled and if you feel these numbers are indeed accurate? Thanks.

#114 Off the Leash on 10.01.10 at 9:41 am

Gold $1,320.00 an ounce pure and simple… no promise to pay backing it just a market telling you that’s where it’s at today… might be higher tomorrow, might be lower. But then mightent everything. Where do you think it’s going? If you were to speculate what might be a better risk… real estate? Gold? or the financial markets? I don’t know. What I do know is Gold is at $1,320.00 per ounce today. Up 30% from a year ago.

#115 Blorg Dorg on 10.01.10 at 9:42 am

Looks like the Globe is quoting you directly now, Garth:

http://www.theglobeandmail.com/report-on-business/top-business-stories/why-mark-carneys-call-to-stop-gorging-on-debt-is-serious/article1737067/

“their investment in housing has outstripped their total savings for over nine straight years.”

I’m sure you can make a better remark about journalistic quality than I could.

#116 CalamityJoe on 10.01.10 at 9:44 am

Did I get censored? Unreal!

The stuff that gets posted here, most of which is just cheerleading or insults, and you ban analysis?!?

Terrible policy. This is a death-knell for a blog. You’ll end up with only the worst of the worst!

You ARE BUYING canadian real estate Garth. That is not worth commenting on?

So far you are not worth noticing, let alone banning. Try harder. — Garth

#117 Bill ( Peterborough) on 10.01.10 at 10:01 am

Interesting how we have gotten in such predicaments, being such a so called evolved intellectual society.

People starving to death, wars for profit, selling each other out for materialistic wealth, disregarding other peoples rights of freedom.

http://www.youtube.com/watch?v=7VZ7av9FWDM

#118 Keith in Calgary on 10.01.10 at 10:02 am

Whenever someone with a vested interest in a financial product (banks with RE) tells you that something is overpriced by a certain amount, ALWAYS take that figure and DOUBLE it if you want to know the truth.

My question is, even though the banks are now publicly stating (although downplaying the amount) of what we knew to be obvious for years, do you think the bumbling idiot of a finance minister we’re stuck with will get out from under the desk of the governor of the Bank of Canada for a minute to tell CMHC to cut back on their mortgage advances by even 12.5% as the CIBC and RBC suggest is the amount that RE is over valued ?

You know, to protect the taxpayer, etc……….LOL !!!

#119 Tom on 10.01.10 at 10:03 am

Vancouver Olympic Village Developer Defaults on Loan Payment

http://www.vancouversun.com/business/Vancouver+Olympic+Village+developer+defaults+loan+payment/3605636/story.html

Thanks City of Vancouver, you inept boobs

#120 Brad on 10.01.10 at 10:06 am

173 TheBigLebowski:
They will be using cash in the form of U.S Treasuries dumped onto the market as interest rates go higher. That market alone is over 3 trillion and 60% is held outside the United States by foreign countries. Government Bonds down , Gold and real interest rates up, pretty straight forward.

Sorry but a treasury is credit not cash. A United States Treasury security is government debt issued by the United States Department of the Treasury through the Bureau of the Public Debt. There will be only a surge in demand for Treasuries as investors move towards the world’s reserve currency for safety (e.g. right now away from euro). Eventually, the US will default on their debt and these treasuries won’t be worth anything, however, that is further down the road. In the short term, a treasury or bond is a good thing to own regardless of the yield (compared to real estate or gold, since their is a high risk of asset deflation).

You also mention future increased interest rates. However, the 5-year mortgage rate in Canada is now down to 3.99%, it was 5.99% just a few months ago (RBC website). The banks do not control the long term interest rates, this is dictated by the bond market. With deflating assets and stock market, more people are entering the bond market causing yields to decrease. An increase in interest rates will only happen if people perceive there is minimal risk in the stock market and other investment vehicles (e.g. real estate). Precious metal investments may rise further, but cannot be maintained as individuals will begin to be squeezed by unemployment, house price declines, increased taxes and utilities. People will be selling their precious metals (at a loss) to obtain cash to pay off their debts and expenses.

#121 Bill ( Peterborough) on 10.01.10 at 10:23 am

Re# 81 Brian1

Apparently this blog, for some, is a Shangrila, a place to hang out, chill, listen to music videos, have a few beers, roll some joints. Just kick your feet up and watch the world burn. Cool Daddio.
****************************************

For others it’s a more hands on approach.
http://www.youtube.com/watch?v=6DCdhAfzpPU

#122 Real Estate Realist on 10.01.10 at 10:24 am

#49 Alan (from HUH? previously)

First of all, for you to insinuate that my opinion was formed by reading this blog is extremely presumptuous. You are wrong, to say the least.

As for the degree of correction on it’s way, you are in for a shock obviously. Yes, that is my “opinion” however it is an very well educated one. Most people on here can’t even begin to comprehend the domino effect of what’s about to happen. As I’ve said many times before, the early 90′s are going to look like easy street. (and most of what actually occurred was kept from you, trust me).

The one thing you are correct about is that “good real estate will always be coveted”. This is why I am involved in the purchase thereof currently, and will always be. The details are obviously outside of the “box” ya think?

#123 Debt's Dark Embrace on 10.01.10 at 10:25 am

Re: the picture

There is always someplace to park my bike!

#124 T.O. Bubble Boy on 10.01.10 at 10:27 am

Vancouver is in denial:

http://www.yattermatters.com/2010/10/try-try-and-try-again/#more-21455

>> Sales down 35%-40% from 2009
>> Listings up 15%-30% from 2009
>> Prices up 10%-20% from 2009

So, there is far less demand, far more supply, but somehow people still think prices should be higher… the upcoming reality check will be painful for a LOT of people!

#125 kelowna proud on 10.01.10 at 10:29 am

as per your Millenium Project article.

you are an idiot Mr Turner.

get your facts straight, then perhaps Middle Class Canada will read your POV.

today’s dribble appeals only to uneducated Canadians.

Nicely argued. You do the realtor profession proud. — Garth

#126 Devore on 10.01.10 at 10:34 am

#95 Numbers

M3 is the money supply out there. This chart shows you clearly, money supply is actually LOWER than it has been in 7 years thanks to the losses in RE, stocks, etc.

Sure it is.

What about M0? MB? M1? M2? MZM? M4? AMS? TMS? TMS1? TMS2? M Prime?

Did you know the FED no longer reports M3 as of 2006? And that it can be shown to be double and triple counting money?

I continue to wait for the effects of this so-called raging deflation, because so far all I see is a rising stock market, rising bonds, rising gold, and rising commodities and general prices, only thing that’s falling are leveraged assets and… oh yeah, the dollar. Almost like there’s an oversupply of money or something.

Look up from that chart of yours and look around you for once.

#127 Lianne on 10.01.10 at 10:37 am

More from Garth’s recent interview on HoweStreet.com

Here he is (at 9:12) referencing the genius of the Fed:

“I have a lot of confidence that these guys know what the heck they’re doing”

Really?

Ben Bernanke – Oct, 2005 – “There’s no housing bubble to go bust”

I said more than the one sentence. In any case, I do believe those running central banks and entire economies are probably smarter than us. What do you do, BTW? — Garth

#128 bullion.bunny on 10.01.10 at 10:41 am

Why would anyone believe me when……Jim Grant says…

http://www.zerohedge.com/article/jim-grant-accuses-fed-lethal-intervention-and-manipulation-us-economy

#129 Old_is_Gold on 10.01.10 at 10:41 am

#84 takloo on 10.01.10 at 7:27 am

I havne’t read the CIBC article and I wonder what methodology they used to derive 12%…

TD’s estimate is identical – 12% and lists the various valuation methods with their pros & cons
________________________________________________They use the following >SCIENTIFIC methods for their numbers.

1. Picking numbers out of a hat
2. Throwing darts
3. Reading charts (as in ‘astrology’)
4. Guesswork
4. And the most creative one – Imagination

#130 BrianT on 10.01.10 at 10:53 am

#114off-Gold will have pullbacks along the ride but the only way it will stay down is if there is a total housecleaning of the mess-since the “leaders” haven’t even publicly admitted it exists at this point, this is a very long way off IMO.

#131 rory on 10.01.10 at 11:00 am

#110 Soylent Green is People

SGiP, you are so blinded by your bias that restricting freedoms is seen as a good thing.

Yoy really should read Ezra Levant’s book
“Shakedown : how our government is undermining democracy in the name of human rights”. This is how the loss of freedoms always starts by do-goodies that cannot grasp the long term implications of their destructive actions.

I know you will say Ezra is a right wing nut. Of, course you will that is how all ‘Liberals’ respond to facts that they somehow conveniently need to dismiss. Wouldn’t want the truth to get in the road of your rants…kisses.

All should read his new one on Ethical Oil. He says that the ‘Oil Sands’ just may be the some of the most ethical oil in the world …read first.

If you are against all oil, just because, then I guess you have no car, no plastics, no food from more than grown locally, no computer, etc.

Reduce, reuse, recycle but no stone-age please.

#132 Bottoms_Up on 10.01.10 at 11:05 am

#59 kansai_92 on 10.01.10 at 1:03 am
—————————————
Real estate is local, and the decision to buy/rent should depend on your time horizon.

I bought in Ottawa in Sept. ’09 (8% down, 30 yr amort.).

I realize I’m paying a lot of $ in interest to the bank, however my mortgage payments, property tax and maintenance fees equals what the rent for my place would be (about $1800/mo).

Thing is, in 30 years, as a renter I own nothing, and will continue to pay rent for the rest of my life (could be 20, 30 even 40 years!) in order to have a roof over my head. As an owner, I would live rent free for up to 40 years and own a significant asset that could be sold or rented out for income.

#133 Old_is_Gold on 10.01.10 at 11:06 am

#53 Tom on 10.01.10 at 12:09 am

What is amazing, is that the City of Vancouver, and the city councilors are totally unaccountable. They screwed up royally, negotiating terrible terms with the developer, and they managed the entire process poorly. They’ve cost us taxpayers a fortune and they don’t face any consequences. They haven’t even apologized. They should not only lose their job, they should be sued.

______________________________________________
Politicians never face any consequences because the only one that can really hold them accountable is the so-called OPPOSITION However, the opposition knows that if and when they are in power they will need the same laxity that they provide the ruling party. Government in modern democracies is an ‘Old Boys Club’, and all members drink from the same trough of public money, therefore no one will ever be held accountable.

They screwed up royally, negotiating terrible terms with the developer, and they managed the entire process poorly. The terms were terrible only for the taxpayers not necessarily for the negotiating parties. The process was managed poorly from taxpayers’ perspective not necessarily from the politicians’ perspective. Are there any starving politicians around, once they have left office? Someone takes good care of them! And believe me, no one does it out of the goodness of their heart but payments for favors are always settled, one way or the other. So the city council did favors for the developers, and someone will benefit from it, it just won’t be the public.

“Three groups spend other people’s money:
children, thieves, politicians.
All three need supervision.”

“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess of the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” / Sir Alex Fraser Tytler

#134 Jamaican Gal on 10.01.10 at 11:07 am

#27 – That was brilliant!

“I think we should have a tribute to Dan day.” I agree! I agree! Post of the day, me thinks.

Garth, please keep chasing those pesky hackers away. I almost fell into a depressive state this morning; not over real estate, mind you – but because I couldn’t get to the site!

Love this blog.

#135 dark sad person on 10.01.10 at 11:12 am

#105 Evangeline on 10.01.10 at 9:21 am

#31
((A return to the principles of a gold standard that constrain government spending and retain the value of money will in turn enable the return to the more enduring values of humanity))

I agree that debt doesn’t seem to be a solid monetary foundation but the gold standard didn’t stop the last great depression from happening, so the gold standard isn’t a perfect solution either.

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

#108 nicole on 10.01.10 at 9:28 am

“The ship of fools”, 1923 Vienna; by Oskar Laske; and what happened again in 1929?

Anybody knows?
***********************

Cool–i can kill 2 chicks–with 1 stone-

There was no Gold Standard in 1929-
Gold Standard ended in 1922-

In 1914–One year after the USFR was formed WW# 1 broke out–
I could go deep into that part of it-but-
better not try it here-
Hint–read of the sinking of the Lustania–

Anyway–back to Gold Standard–

When the War to end “all wars” broke out-Gold Standard was in the way-
Understand-that the US Founding Fathers “knew” Gold Standard prevented Armies from fighting on Foreign soil-
So–a way was devised to shelve Gold Standard and simply issue Credit (print money) to fund the War effort-however People would not go along-with the proposal to end the GS–
So Government “promised” that when the War was over-GS would be reinstated-

(btw-JPM was short Germany to the tune of 15 Billion-an astronomical sum back then-but-wont talk about that either)

Anyway-when the War was over-the US was forced to reinstate GS-but the problem was-War reparations had to be paid in Gold-
Gold started “working”–doing what it was supposed to do-when Governments got out of control-
It was forcing massive Deflation-
Money (Gold) was being shipped out of the Country in War debt payments-

Note the massive Deflation in 1922-

http://1.bp.blogspot.com/_nSTO-vZpSgc/SRVLM8Kif0I/AAAAAAAADs8/Ad1Iwf_fPJ0/s1600-h/base-money-yoy-1.png

http://4.bp.blogspot.com/_nSTO-vZpSgc/SRVN4sw-LCI/AAAAAAAADtE/6EYg40HZUfo/s1600-h/base-money-yoy-2.png

There simply was not enough Gold in the World to pay-because Gold was locked-So–
Governments and World Bankers (of course)
convened in a little known meeting in Genoa Italy and decided to re-price gold (double count Gold reserves)
this is a long story-but here’s a short blurb of events-

http://en.wikipedia.org/wiki/Genoa_Conference_(1922)

So Gold Standard was manipulated and the World was forced to take a 100% devaluation of their Gold weighting to currency–

What was issued from this was the first “Paper Gold”
known as SDR’s-
The “birth” of the first paper Derivative-
Like now-these instruments masqueraded as “money”
Debt was paid-with more debt–just like now-
All this “extra” money found its way into the market-because-just like now-Credit Standards were loosened-
This came in the form of Margin requirements-which were eased-
people speculated in the Markets with Leverage/Margin and the wild speculation drove prices and the stock Market soared-
This was the kick off of the Inflationary Roaring 20′s-
Then-like now–the Pool of Greater fools dried up and the bust of 29 like now–happened-

So you see–there was no Gold Standard in the 30′s-

ZAP!

“What has been will be again, what has been done will be done again; there is nothing new under the sun”

Scary huh?

Bit of calm–

http://www.youtube.com/watch?v=r5U2ZbOESmY

#136 Devore on 10.01.10 at 11:12 am

But honestly, I’m not trying to be difficult or an a****le.

There is simply no agreement on what money is, or how to count it. That is a perfectly legitimate concern. This means there is no one true measure of money supply that everyone can agree on and use as a baseline.

Think about this. Are you increasing the money supply, decreasing it, or leaving it unchanged when you the following:

- earn a paycheck
- deposit money in a checking account
- deposit money in a MMMF
- stash money under the mattress
- buy physical gold
- get a loan
- pay off a loan
- default on a loan
- buy stocks
- die
- write a check
- fund a startup
- declare bankruptcy

And that’s just for starters.

Also, on the flip side, inflation, deflation, what are they? There’s also disagreement on what those are. Is it just change in money supply? Does GDP have anything to do with it? Prices? Public debt?

What does inflation or deflation mean for me as a worker, taxpayer, investor, homeowner, politician, businessman, city manager?

Does it matter if one year it’s a deflation, and the next it’s an inflation?

#137 Bottoms_Up on 10.01.10 at 11:16 am

#91 Aussie Roy on 10.01.10 at 8:05 am
————————————–
ps. the yearly rental return on my place is 7.1%

#138 bullion.bunny on 10.01.10 at 11:17 am

On another note, I had an interesting day at the bank that I would like to share.

I manage my aunt’s money; she is 89, still has all her marbles and owns her house outright here in Toronto. Plus she is still independent and lives alone with some drop in help from various services. I tried selling the house, but she has told me she wants to finish her life in this home. The portfolio is 80% GIC’s at 4.25% interest and 20% gold shares that were purchased on Oct 27, 2008 (the bottom). We both went to the bank to review things yesterday with some interesting results. Well the gold side did well, up four times from the bottom. Also the GIC’s are performing nicely but the term is coming up next year. As usual I got the “Gold is in a bubble talk from the bank”. I’ve heard this since Oct 27, 2008, to which my reply was as follows.

Yes I believe you will eventually be proven right, Gold will become the ultimate bubble! However we are not there yet, as you are well aware governments, banks, credit institutions along with the general public have been totally irresponsible when it comes to credit and spending. The day will coming when markets will FORCE everyone to become accountable for the sins of the past. This is the day when gold will blow-off the party will be over, this day is far in the future.

………10 seconds of stunted silence with the following reply from the bank lady..

“Yes, you are correct. Everyone has been reckless and irresponsible, I see it every day!”

#139 Old_is_Gold on 10.01.10 at 11:18 am

Voices from the Past warn us of greater dangers than just the price of houses or The DJIA. The greatest experiment in governance of human beings in all of human history is failing right before our eyes but the majority yet slumbers, doped on the numbers!

“If Congress can employ money indefinitely to the general welfare, and are the sole and supreme judges of the general welfare, they may take the care of religion into their own hands; they may appoint teachers in every State, county and parish and pay them out of their public treasury; they may take into their own hands the education of children, establishing in like manner schools throughout the Union; they may assume the provision of the poor; they may undertake the regulation of all roads other than post-roads; in short, every thing, from the highest object of state legislation down to the most minute object of police, would be thrown under the power of Congress….

Were the power of Congress to be established in the latitude contended for, it would subvert the very foundations, and transmute the very nature of the limited Government established by the people of America.”

by: James Madison (1751-1836), Father of the Constitution for the USA, 4th US President

Prophetic words indeed!

#140 Bill ( Peterborough) on 10.01.10 at 11:19 am

Re #116 CalamityJoe

So far you are not worth noticing, let alone banning. Try harder. — Garth
*****************************************
Garth is right.

You have to go down the “Rabbit Hole” and see how far it will take you , in order to fulfil Garth’ comment.

http://www.youtube.com/watch?v=9HmJQyS8QVw

#141 Sam on 10.01.10 at 11:20 am

I’ve noticed those ads for years on 680, they’re not new, but they were not huge volume.

I don’t listen much any more – cut myself off from that time waster last June, so I don’t know if the volume of ads is up since then.

Your antennae may be more sensitive than before.

__________________
#109 C on 10.01.10 at 9:30 am

I’ve noticed on AM 680 on the radio here in the GTA, that lately they have had a lot more ads for condo developments. I guess before they used to just sell via word of mouth. Now it’s time to advertise due to the slowdown perhaps???

#142 somejerk on 10.01.10 at 11:27 am

picture = no matter how you look at it, its ugly…

#143 DaBull on 10.01.10 at 11:29 am

#24 The InvestorsFriend (Shawn Allen) on 09.30.10 at 9:59 pm

“Edmonton Condos for half price”

It’s called Marketing, ever heard of it!!!

These Condos are 50% off a suggested retail price which is probably up to 100% more than the going rate price for a comparable condo. So selling you something at 50% off a 100% jacked up initial price is not a good deal. It’s just selling you something at the going rate.

Again… Marketing… Make the dumbass’s think they’re getting a good deal when in reality they’re not.

#144 Ron in BC on 10.01.10 at 11:32 am

Ditto # 113

Garth, CIBC’s 17% overvaluation for Vancouver or Kelowna for that matter to me is no big deal. That means a condo or house selling for a million would likely drop to 830K.

So what? In most cases the seller would still be making huge profits given what they paid only a few years ago.

I’m hoping you still feel we will see corrections out here of 30% or more and soon. Until that happens we are still incredibly overvalued or is that the price to pay for living in “Lotusland”?

#145 Spanky_Pantsbottom on 10.01.10 at 11:46 am

Garth said: “The idiots selling it laughably thought there was a market for units costing an average of $800,000, or 30% more per foot than in Toronto, in a town a third the size.”
I mean, really; how could anything sell for more in Vancouver than in the centre of the universe?

#146 Got A Watch on 10.01.10 at 11:47 am

If your comment is not getting through, before you go all “free speech vigilante” on Garth, you might consider that when the site is under DOS attack, your comment might not get through. Garth is, if anything, far too lenient with a lot of commenters about the personal insults etc.

You get all kinds here, from those to the far right of Attila the Hun (me – save the economy, fire all Government workers!) to those who want to still pump up real estate in Canada. Just keep it polite, the Blog Dawgs bark is worse than their bite. Pat them on the head and give them a biscuit, they’ll love you.

We’re rocking in Canada, Ford and others at record sales levels. Go out and consume, consumers! Buy like there is no tomorrow, you know there probably isn’t.

Mark Carney back-pedaling fast on the rate hikes. Wait till he starts talking rate reductions again. Hmmm, just like the early ’90s. I guess that was when Mark was still in grade school. I wonder if the windows on his limo were tinted so dark he could not see the streets of Windsor he was driving through.

Is there a “Windsor Real Estate Blog” that documents the decline? If not, someone from there should start one. I was there recently, it looks Depressed, though of course compared to Detroit it looks pretty good still. A low standard to compare to though, ouch.

If you live in Vancouver, sell your $1 million $ home and go to Windsor, you could buy a prime waterfront home south east of Windsor on Lake Erie, and have maybe 2/3 of the proceeds left over. It’s a no brainer.

#147 young & foolish on 10.01.10 at 11:51 am

if interest rates begin to rise … we will ALL be affected,
from the young suburbanite, to to small business owner

nothing wrong with owing RE … so long as it does not exceed 30% of your NET (paid for) worth …

and some RE is even good for cash flow …. ha!

I thing Garth’s lesson is simple …. lower rates forced up the price of RE to unsustainable levels ( and we all know that debt does not “deflate” along with asset values)

the big question is … how long can low rates last?
maybe longer than most people imagine?

#148 lonely limey on 10.01.10 at 11:53 am

An income-producing, multi-tenant commercial property with a positive cash flow, acceptable ROI and tax-deductible expenses and interest charges is not the same as a residential property. Any other questions? — Garth

All of the above can also apply to a residential property purchased with the intention to rent out,which was my point.

#149 Northern Dirt on 10.01.10 at 11:54 am

#114 Off the Leash
“What I do know is Gold is at $1,320.00 per ounce today. Up 30% from a year ago.”

And the TSX is up 20%..

#150 eaglebay on 10.01.10 at 12:23 pm

Soylent Green, the socialist.

What does Sun TV have to do with “hate laws”?
It’s about time that we get a media that might see the other side of the coin.
Let’s get away from brain washing.

#151 BrianT on 10.01.10 at 12:34 pm

I guess the honeymoon is over-the MSM gives just a tiny peek behind the curtain http://finance.yahoo.com/news/Emanuel-Would-Need-to-Explain-bloomberg-3841656178.html?x=0&sec=topStories&pos=7&asset=&ccode=

#152 bill on 10.01.10 at 12:43 pm

i think the picture is alluding to prester johns balloon. lighting the way and thereby helping the distressed travellers find their way through the re estate landscape.

#153 bullion.bunny on 10.01.10 at 12:47 pm

#133 dark sad person on 10.01.10 at 11:12 am

Great post……best yet. Take the charts from the beast and use it against them.

#154 Mikey on 10.01.10 at 12:59 pm

So we have record breaking sales on autos for the same reason as we HAD record breaking sales on RE before HST. All based on debt and low financing or free financing. The surge in sales is likely the result of people figuring that the age of free financing is over. Get it while you can.

Every bright spot in the economy is on on the back of DEBT.

Higher consumer spending is based on more debt not prior savings from consumers like in prior…..well long ago recessions.

Corporations know that this will not end well.

No wonder Carney is concerned. If he is smart, he’ll raise one more time to get the message home. Slow down your borrowing.

#155 junius on 10.01.10 at 1:01 pm

#124 T.O Bubble Boy,

Indeed. The spin is in. Prices still going up! Yet sales are way down as listing surge.

The first problem with the stat is that it compares year over year when everyone knows prices went up from Sept of last year through April. They have only been coming down a few months.

The second is with median prices. More expensive properties are still moving as the buyers are less price sensitive. This skews the averages. However it is still temporary.

Everything is on track for the fall in the fall.

#156 Tom on 10.01.10 at 1:02 pm

What we all knew but could never quite believe what we were being told.
Excerpt from Carney’s speech in Windsor yesterday. He is starting to get honest. Unsustainable in the future and there was no real recovery.

“However welcome, these headline figures mask some important details. Much of the employment growth is in the public sector, with only half of the new jobs in the private sector. Many jobs are involuntary part-time. In fact, although employment has regained its pre-recession level, hours worked have not. Overall labour input (the combination of employment and hours worked) has made up only two-thirds of its decline during the recession.”
You have to ask yourself what area of the economy is going to make up for the new housing and infrastructure jobs that we are going to lose in the next six months?

#157 Prof ANON on 10.01.10 at 1:12 pm

As I noted yesterday. I have to move because the G- Friend got promoted and it no longer makes sense to live where we are geographically. We are pretty great partners, so breaking up is not an option (she also makes a great living). We have narrowed down our options to either buy a cheap SFH from a motivated seller (likely in financial trouble), or renting in a multiplex. Neither option will even come close to straining us financially. More than likely we are going to go ahead with trying to buy the SFH, primarily because we will have a ton more space and we both hate living under a neighbours heavy breathing. However, because of the cost of the property and of rents in this particular case, I don’t really see a significant financial downside to purchasing. Comments?

Option 1: Cheap SFH. 50 years old. Structurally sound and completely liveable, but UGLY and DIRTY. Updated electrical. 1000 square feet above grade, 700 square feet of usable space in the basement with working but VERY rough sink/shower/toilet (it doesn’t quite qualify as a bathroom), 50X150 lot.

Immediate Outlay: Purchase Price: $85-95,000; Roof and Insulation: $10,000; Flooring, Paint, and cleaning supplies: $5000. Total: $100-110,000.

Potential Outlay in first five years: Furnace: $4000 (cash on hand), Water heater: $2000 (cash on hand); God Knows: $20,000 (savings could cover it, but a LOC is available). Total: $26000.

Financing: $100,000 at 3.8% (fixed), with $15,000 used as down payment/immediate repairs. Monthly mortgage payments $464.27. + $20 a mnth additional insurance + $70mnth taxes . Total

Intrinsic pluses: No landlord, no neighbourly noises, pets roam free, learn new handyman skills, get significant space for separate man cave and ladies den.
Intrinsic minuses: Complicated, must learn new handyman skills, time.

Option 2: Rent a 900 sq. ft. two bedroom apartment in a multiplex.
Financial: $1,100 mnth apartment rent, $100 mnth camper and boat storage (they are both TINY and paid for), damage deposit
Intrinsic Plus: Simple
Extrinsic Minuses: cramped, neighbourly noises, pesky landlord, no man cave or ladies den.

#158 Aussie Roy on 10.01.10 at 1:15 pm

lonely limey on 10.01.10 at 11:53 am
An income-producing, multi-tenant commercial property with a positive cash flow, acceptable ROI and tax-deductible expenses and interest charges is not the same as a residential property. Any other questions? — Garth

All of the above can also apply to a residential property purchased with the intention to rent out,which was my point.

Its all about at what rental yield.

I have no issue with buying income-producing commercial property. But this does not include a rented condo or a single house. That is lunacy. — Garth

#159 Aussie Roy on 10.01.10 at 1:20 pm

Bottoms_Up on 10.01.10 at 11:16 am
So based on current valuation your property is yielding 7%, or is the value based on your purchase price from when you purchased?. Sorry for the dumb question but you would be surprised how some people dont understand how current rental yield is calculated.

#160 Bill Gable on 10.01.10 at 1:21 pm

Vancouver Taxpayers have been led down the primrose path, all the while they are paying their brilliant City Manager a tonne of money, to watch the Good Ship Vancouver, run right onto the rocks. Who signed off on this garbage?
Now the schmuck Taxpayer will be on the hook – and believe me – after taking a tour of these dumps, you would be HORRIFIED at how badly they are finished. It looked like a High School Shop class was set loose.

This will end badly, very badly – and still people in Vancouver keep standing around, mouths agape, like Alfred E. Newman.

“What me, worry?”

#161 lonely limey on 10.01.10 at 1:45 pm

I have no issue with buying income-producing commercial property. But this does not include a rented condo or a single house. That is lunacy. — Garth

I wonder how all those commercial landlords of empty units and offices in the GTA feel about their once income-producing properties?

Where would those be? — Garth

#162 Lianne on 10.01.10 at 1:46 pm

In any case, I do believe those running central banks and entire economies are probably smarter than us. What do you do, BTW? — Garth

I grow food. Why do you ask?

Just wondered what qualified you as a monetary policy wonk. — Garth

#163 Joe Q. on 10.01.10 at 1:47 pm

#130 Bottoms_Up on 10.01.10 at 11:05 am

“I bought in Ottawa in Sept. ’09 (8% down, 30 yr amort.).”

You’ve laid out the argument against renting forever. Few would disagree, even here.

Did you do the math on whether it was worthwhile to save for another year or two while waiting for prices to drop? The interest due on a 8%-down 30-yr mortgage over its lifetime has to be staggering. At least equal to the purchase price of the home, no?

#164 dd on 10.01.10 at 1:47 pm

“I said more than the one sentence. In any case, I do believe those running central banks and entire economies are probably smarter than us. What do you do, BTW? — Garth”

If you read the fine print – The blogee can retract statements made in a delusional state within 12 hours and life will carry on as before.

#165 Kevin in Winnipeg on 10.01.10 at 2:27 pm

How can a bank give out a mortgage for an overpriced asset? If I required a loan for a vehicle or anything of substantial value and the item was not worth what I am asking for, I wouldn’t get the loan.

Now CIBC says the housing market is overpriced in Manitoba by 11.3% and obviously Winnipeg would be a higher percentage. That $200,000 home is now only worth $177,400 in the banks eyes. How do the banks get away with approving the mortgage?

#166 BCGirl on 10.01.10 at 2:43 pm

Here’s an interesting article posted from our Vancouver City Counsellor Geoff Megg’s today:

Headline: Vancouver’s housing is the least affordable in Canada; our market most vulnerable to sharp decline

Here’s the link to the full article.

http://www.geoffmeggs.ca/2010/10/01/vancouvers-housing-is-the-least-affordable-in-canada-our-market-most-vulnerable-to-sharp-decline/

#167 Bill Gable on 10.01.10 at 2:44 pm

World War I to finally end for Germany this weekend. The Germans have finnaly paid the whole tab. (CNN 9.30.10)

http://tinyurl.com/3a8uhzb

Vancouver will be paying for Milly WaWa ’til the Cows come home.

#168 BrianT on 10.01.10 at 2:54 pm

#162Lianne-just do what you are told and listen to your betters-Bernie Madoff is “smarter than us”.

Until that comment I thought you had something useful to add to this site. — Garth

#169 Derek on 10.01.10 at 2:56 pm

Sir Alex Fraser Tytler did not say:

“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess of the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.”

We’ve got all his books so we know that for a fact.

I don’t know who the real author was. But the first time the quote appeared in writing was in a letter to the editor of a newspaper in 1951. My guess is that the guy who wrote the letter made it up and then attributed it to Tytler because it sounded more impressive coming from a dead 18th century Scotsman, than from a live 20th century American called Elmer T. Peterson.

So it’s bullshit.

#170 dark sad person on 10.01.10 at 3:10 pm

“I said more than the one sentence. In any case, I do believe those running central banks and entire economies are probably smarter than us. What do you do, BTW? — Garth”

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

Not answering for that poster-but-
I have to question your assumptions about TPTB-
“being smarter then us”

Which of their statements about –

“green shoots and the bottom is in and the light at the end of the tunnel and escape velocity and economic renaissance and hope and change and the power of stimulus and a hundred other bullish buzz phrases”
Which do we believe?

If we believed any of them-we would all be wrong-cuz-

Not one of them happened and not one of them is true-

They-do not know what to do-
They’re all Keynesian’s-
They “think” they can control Markets-but-
Mr Market has stymied them-
Sentiment has shifted-
They’re pushing on a string-
They’re simply trying to make it move by “pushing harder”
Ain’t gonna happen-

Problem for us is–

They ended up with all the Money and we ended up stuffed-

So–maybe you’re right G-they are smarter-or-maybe it’s the fact that the stuffed people are a just dumber-fatter and less ambitious then they are–

Meanwhile-Countries blow up–
Bond markets rise-Gold markets rise-

Danger Will Robinson-

http://www.youtube.com/watch?v=sCrXJ5gF-cQ

#171 Lianne on 10.01.10 at 3:18 pm

“I have a lot of confidence that these guys know what the heck they’re doing” – Garth

Well if it is the intention of the Fed to impoverish American citizens while ensuring the financial health of the big banks and the wealthy top 1% of the population, then I guess that they do know “what the heck they’re doing”.

Just wondered what qualified you as a monetary policy wonk. — Garth

My qualifications? I can read.

The Fed hardly impoverished citizens whose own greed and financial myopia drove them into a housing and credit frenzy. As for saving the banking system, you may disagree with the inequities of the actions, but financial collapse was not (and is not) an option. Central banks have much to atone for, as I have said for quite a while, but these are not among their sins. — Garth

#172 supersocco on 10.01.10 at 3:19 pm

Vancouver YOY sales were down about 40% but a new all time high average price record was set! The average home price set a new record at $1,016,324!

http://www.yattermatters.com/2010/10/try-try-and-try-again/

#173 grantmi on 10.01.10 at 3:27 pm

#2 Michael W on 09.30.10 at 8:56 pm

Al Sinclair on Hot Property (CP24) tonight basically said if you didn’t buy in September you missed the boat because prices are already increasing and bidding wars are back. This guy just cracks me up. My wife and I enjoy watching the show just to laugh at this clown. Too funny!

This due is funny!! Buy buy buy!! http://bit.ly/cVThDR

I like his smug comment that you should have bought over the summer like “I SAID” because the market rallied over that period!!

What a smeg!!

#174 lonely limey on 10.01.10 at 3:31 pm

I wonder how all those commercial landlords of empty units and offices in the GTA feel about their once income-producing properties?

Where would those be? — Garth

Here:

http://tinyurl.com/2dm8wb9

I see commercial listings and ask, so what? If you’re trying to argue all real estate is toxic, you have much to learn. — Garth

#175 ALE on 10.01.10 at 3:46 pm

The Fed hardly impoverished citizens whose own greed and financial myopia drove them into a housing and credit frenzy…. — Garth

Until that comment I thought you had something useful to add to this site. — ALE

I’m kidding with you by the way Garth.

We both agree that interest rates were kept to low for two long. In a true capitalist world markets would set rates . Capitalism works BECAUSE people are self serving – that isn’t the problem here. The problem is the distortion in the markets by banks and governments that sent false signals to the population to act on that greed; that policy should be regarded as fully responsible for the mess we’re in.

ALE

#176 bullion.bunny on 10.01.10 at 4:17 pm

The Fed hardly impoverished citizens whose own greed and financial myopia drove them into a housing and credit frenzy. As for saving the banking system, you may disagree with the inequities of the actions, but financial collapse was not (and is not) an option. Central banks have much to atone for, as I have said for quite a while, but these are not among their sins. — Garth

All central banks are wealth transfer mechanisms! The Fed may not impoverish its citizens, but it acts as an enabler by flooding markets with cheap credit. Central banking in general is a fraud so blatant only an intellectual would fall for it.

Or a bunny. — Garth

#177 LHHW on 10.01.10 at 4:17 pm

Garth, your response to comment #97 was like music to my ears.

#178 dark sad person on 10.01.10 at 4:21 pm

but financial collapse was not (and is not) an option. Central banks have much to atone for, as I have said for quite a while, but these are not among their sins. — Garth

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

Let’s define-Financial Collapse-

Why do you see it at a one eyed monster?

I see it as Salvation-

What will change?

Current Politicians will be thrown out–
Picture Mussolini hanging by his ankles (just kidden)x

The Market will find equilibrium-

Debt will be non existent–

Deflation will end-

Gold will be reinstated-as base money–

Society will prevail-after some hardship-only in a more sensible manner-
There will be hardship on this current path anyhow–
(could be a bit of upheaval first)

bit of an antidote-
Talked with a blogger-an American who was living in Argentina-during its default/currency crises-blow up-
He lives in the west central area Mendoza Province-
He travels there quite a bit-
He said-if he hadn’t been aware of the fact-by IT-he would never have known-because nothing changed-
Sure-there were problems in Buenos Aires but it never lasted too long-because People improvised and the Market worked-merchandise flowed-without-Government control–

Of course-Government was returned to power and the IMF (of course) stepped in and now they are heading towards it again–IN DEBT–to the IMF–

Iceland is going through a hardship-
They told the IMF and their Politicians and World Bankers to go to hell-
They are enduring and improvising-
Their PM–is facing charges–

What the hell is there not to like about Default?

Maybe something to think about and–fear less–

#179 Bottoms_Up on 10.01.10 at 4:28 pm

#163 Joe Q. on 10.01.10 at 1:47 pm
—————————————-
I provide the case against renting to help try and balance this site out. I believe a lot of people blindly follow Garth’s advice, without analyzing their own particular situation and their own particular city.

I did hard time as a renter — 13 years. I basically had to buy because I moved to Ottawa and the rental market here is ridiculous — would you shell out $22,000/yr in rent for a place you could buy for $300k?

The interest on my mortgage is actually a little less than the purchase price (but obvious can change with changing rates), and in 1 year of ‘ownership’ I’m up an unrealized 12%. Had the market gone down 12%, well, ya, I’d be (unrealized) screwed, but that $22,000/yr that flies out the door in rent would quickly add up to offset those losses as a buyer….

#180 Bottoms_Up on 10.01.10 at 4:32 pm

#159 Aussie Roy on 10.01.10 at 1:20 pm
—————————————-
Yes, I was talking about rental yield given my particular situation (what I paid and what I could get for rent).

The ratio based on the price of my place today would be 6.4%.

#181 Bottoms_Up on 10.01.10 at 4:37 pm

#157 Prof ANON on 10.01.10 at 1:12 pm
——————————————
That’s a no-brainer.

Buy.

Price divided by rent ratio: 95,000 (12*1100) = 7.2

(you could buy 2 houses and you’re still within the proper metrics for buying!!)

#182 bullion.bunny on 10.01.10 at 4:42 pm

Or a bunny. — Garth

No, not a fan of Central Banks, have to agree with sad and dark. Time to stop improvising the population via currency depreciation. We need to do what Iceland has done, round up the people that created this mess and start putting them behind bars.

There are not jails big enough to contain those whose greed causes financial runs. — Garth

#183 bullion.bunny on 10.01.10 at 4:45 pm

#179 dark sad person on 10.01.10 at 4:21 pm

Of course-Government was returned to power and the IMF (of course) stepped in and now they are heading towards it again–IN DEBT–to the IMF–

Of course, as a bank criminal why would you want to work? When it’s money for nothing and the chicks are free. Just ask Paul Wolfowitz!

#184 junius on 10.01.10 at 4:56 pm

#170 Hoon,

Say what?

#185 lonely limey on 10.01.10 at 4:59 pm

@ #178 LHHW

See my response at post #148. I’ll elaborate for you by simply explaining my stance. Namely, that I feel income producing residential RE offers all the advantages that commercial RE can.

Garth tends to mock people who invest into the former because of taking on debt and illiquidity, hence my original remark. I have little doubt he would be taking on the same “risks” with his commercial venture.

Each to their own.

Residential income property comes with several strikes against it, two of the most significant are inflated cost and tenant-friendly legislation. Buying single units to rent out today is financial suicide. As for my comments on commercial real estate in the blog above, where did I say I was buying right now? I hope you pay more attention to your investments. — Garth

#186 Mike B on 10.01.10 at 5:03 pm

As for the picture up top… Jenny Craig to the rescue..
Fortunately I had eaten well before attacking this blog.
As for house prices here in Toronto. I see no sign of them dropping. Stuff is just selling … one around the corner from me in 10 days for full price.. Too scary

#187 VancouverGoinUp on 10.01.10 at 5:09 pm

The Olympic Village advertises that 50% of the suites are sold. But on a given night there are maybe 2 dozen lights on. Number of things going on here
1. HST – will it stay or go – big implications for 1.5 condo
2. Casino being built across the water blocks views
3. Questions re: quality of construction
4. Price Point
5. Social housing component – What does this mean – People who make 60 grand a year who can’t afford real estate or are we talking Hastings skid row as your neighbour when you pay 1.5
While Vancouver will always be GOINUP, there will be ups and downs along the way. The Village is expensive based on the above. Obviously as I have noted many times they buyers are not Canadians – how else do you have 50% sold with only 2 dozen lights on. The Village will eventually clean up and go higher

#188 lonely limey on 10.01.10 at 5:12 pm

If you’re trying to argue all real estate is toxic, you have much to learn. — Garth

Not at all Garth. I invest in rental properties. But you seem to have a disdain of residential property investing which in my experience offers all the advantages you listed in post #97.

So long as they are multiple units, it can make economic sense (but often does not). Single homes or condos, almost never. — Garth

#189 Brian1 on 10.01.10 at 5:18 pm

Garth: Are some of these bloggers going to come to your meeting with guitars and start singing. If so I’m bringing mine and will sing counter revolutionary songs. Or, better yet, I will bring my violin and play sadly for those who were crying in their beer last weekend because gold didn’t make it.

#190 Old_is_Gold on 10.01.10 at 5:19 pm

#149 Northern Dirt on 10.01.10 at 11:54 am

#114 Off the Leash
“What I do know is Gold is at $1,320.00 per ounce today. Up 30% from a year ago.”

And the TSX is up 20%..
___________________________________________________
This comparison is not entirely accurate since neither the Dow or the TSX have yet regained the ground they lost since 2008. Average gold price in 2008 was 870, so gold has gained roughly 65% while the TSX is still down roughly down 20% from its high that year. Even if we compare the high of gold in 2008 (around 1000), it is up 30% while investors in TSX are still down 20% from the summer of 2008.

Sure some smart people have made money in this stock market runup since then (mostly computers at Goldman Sachs) but the trillions lost in that crash have not even been recovered and probable never will be recovered. So comparing apples to apples, the TSX would need to hit 20,000 before we can say that it has gained what gold has since 2008.

#191 Old_is_Gold on 10.01.10 at 5:24 pm

#169 Derek on 10.01.10 at 2:56 pm
_______________________________________________

Derek, does it really matter who said what I quoted? Is the message not more important than the messenger?
Politicians put generations in debt just for sake of expediency, to hang on to power just a bit longer! Is this not what the warning in the quote is all about? Playing fast and loose with public money will destroy any country, and we have living examples of that – Greece, Ireland, Iceland, and a whole lot more coming on board almost every week!

Are these facts bullshit?

#192 Devore on 10.01.10 at 5:37 pm

#188 VancouverGoinUp

While Vancouver will always be GOINUP, there will be ups and downs along the way. The Village is expensive based on the above. Obviously as I have noted many times they buyers are not Canadians – how else do you have 50% sold with only 2 dozen lights on.

How? Maybe they haven’t moved in yet? Maybe they haven’t closed yet? I hear they are still closing the pre-sales.

Social housing is very easy. “They” won’t be your neighbors. There are three buildings at the back that are all social housing and way overpriced (but still subsidized) rentals for city workers.

#193 dark sad person on 10.01.10 at 5:41 pm

#136 Devore on 10.01.10 at 11:12 am

But honestly, I’m not trying to be difficult or an a****le.

There is simply no agreement on what money is, or how to count it. That is a perfectly legitimate concern. This means there is no one true measure of money supply that everyone can agree on and use as a baseline.

*******************
In what you listed as effecting Cash Money supply–
I agree
As usual Devore–you missed the most important part of the Money Supply–

CREDIT–

It totals around 15 Trillion $
The Cash Money supply–is around 1Trillion $-

If you do not believe Credit-is Money-

How come we can “spend” it?

#194 Reasonfirst on 10.01.10 at 5:55 pm

#188 VancouverGoinUp

RE: OV – Obviously as I have noted many times they buyers are not Canadians”

Why haven’t they bought the rest up – these mysterious non-Canadians?

#195 Devore on 10.01.10 at 6:01 pm

#194 dark sad person

Credit (bank created money) is only as good as the institution that issued it, and whose assets back it. It contracts and expands easily.

Is all money created equal? Maybe. Bank money is fungible with base money (paper notes), but this property relies on trust in the banking system, because the ratio is fractional. If everyone started to withdraw their money from the bank, would government issue more paper currency (base money) into circulation, or would people walk away empty-handed like in 1929-1933, when bank customers learned their deposits were really loans?

Inflation, deflation, that’s all well and good, but at the end of the day, what does it mean for me? In everyday life, I see signs of both inflation and deflation, so what am I to make of a monetary deflation that only academics and economists argue about endlessly.

#196 timbo on 10.01.10 at 6:03 pm

if you cannot get enough of that picture garth posted , here are a whole-wack of shoppers that really give the eyes a workout.

http://www.peopleofwalmart.com/?page_id=9804

I am sure there are a couple real-estate agents in the mix…

#197 dark sad person on 10.01.10 at 6:08 pm

There are not jails big enough to contain those whose greed causes financial runs. — Garth

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

Ummmmm–ain’t Stockwell working on that “problem” as we speak?

Billions he sez–Will be spent building Prisons-for “yet to be defined” criminals–

You read it too G–

Here’s a cool “Day” dream i just had-

In the world of Mass Psychology (if you believe in it) exists funny little Gremlins-
Know as CFV’s (counter veiling forces)
These are Oxymoron’s–issued by something we all seem so tiny beside- as we grovel with greed and fear-in its awesome shadow–
That “something” is called the Market-
(some will say it is the Universe itself at work)
But–to make a long “Day” dream short-

How cool would it be-if-
Stockwell–ended up in his own Prison? !!

http://www.youtube.com/watch?v=8kEjwm_me_s

#198 S.B. on 10.01.10 at 6:17 pm

I was in a downtown Toronto supermarket today and a genuine REALTOR(r) set up a podium in the entrance way and was handing out business cards.

The desperation was tanglible.
This is one up from begging…

#199 Evangeline on 10.01.10 at 6:33 pm

#3 Jeannie

((Just waiting to hear the interpretation of this photo……..Garth wouldn’t show it just to mock Venus-sized ladies, so to all you armchair psychologists ..what’s he saying”?))

Not that long ago he posted pictures of some ginormous big guys, at least one of them in bathing trunks, so it is apparently not a gender issue.

#200 grantmi on 10.01.10 at 6:38 pm

#188 VancouverGoinUp on 10.01.10 at 5:09 pm

5. Social housing component – What does this mean – People who make 60 grand a year who can’t afford real estate or are we talking Hastings skid row as your neighbour when you pay 1.5
While Vancouver will always be GOINUP, there will be ups and downs along the way. The Village is expensive based on the above. Obviously as I have noted many times they buyers are not Canadians – how else do you have 50% sold with only 2 dozen lights on. The Village will eventually clean up and go higher

Sorry GoinUp!!

I’m not having some crackhead living in my building soliciting for spare change so he can get another fix or a bottle of CherryJack!!

THAT’S why they are not selling!! NIMBY at it’s best! Especially if you know in advance and have to pay the OBSCENE prices they are asking for these units.

The city WILL relent.. and will dump the social housing aspect of this project! You wait! Then they will start selling slowly! Until then! Notta going UP or going to happen!!

#201 Evangeline on 10.01.10 at 6:40 pm

Dark and sad …

Thanks for the very informative post (and lovely music). I’ll keep it as as a starting point for further research.

Another thing I wonder is … if the economy were bustling, in a true sense: high employment in good jobs and a large market to supply and trade with … could monetary policy alone still mess things up?

E.

#202 US Investor on 10.01.10 at 6:46 pm

To speak to the point that YOY sales are crashing, but price is not (even going up a bit) in Vancouver. It is really very simple, Demand is imploding but sellers are slow to respond (prices are sticky). So there are a few people still buying at inflated prices (way up high on the demand curve) but the market is not clearing. This is proven by the fact that inventory is rising, and quantity of transactions is crashing.
I was in Vancouver recently ruminating with a local about the RE bubble there, and their response was “the market here is very complicated”. No it’s not, it is really very simple as are all markets, the whole demand curve shifted way out and to the right and continually outpaced supply – prices went way up. Now banks are in lock-down, demand is crashing, and there will be a continual stream of more supply for the next few years as construction runs its course (and people run for the exits). 17% drop is way too conservative, I think the over/under should be more like 50% drop in prices, no joke.

#203 dark sad person on 10.01.10 at 6:47 pm

#194 dark sad person

Credit (bank created money) is only as good as the institution that issued it, and whose assets back it. It contracts and expands easily.

Is all money created equal? Maybe. Bank money is fungible with base money (paper notes), but this property relies on trust in the banking system, because the ratio is fractional. If everyone started to withdraw their money from the bank, would government issue more paper currency (base money) into circulation, or would people walk away empty-handed like in 1929-1933, when bank customers learned their deposits were really loans?

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

Good points and good questions–

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

Credit (bank created money) is only as good as the institution that issued it, and whose assets back it. It contracts and expands easily

*******************
You are right on Credit is created easily and wrong on Credit contracts easily-
Also-Credit must find a borrower-or it is simply “nothing”

Your point about FRB ties in with this as well–
Like you said–the cash base is not in banks to cover deposits-its all been loaned out-plus the ratio of Credit/to base cash that has been created because of FRB–

Credit acts like money in expansion-
Credit does not act as money in contraction-
Credit contracts-but the debt it leaves in its wake-does not contract-this is the problem today–
Debt requires real cash to contract-
People are in debt because their net worth in assets (housing) has disappeared-they are underwater and cannot cover the debt-

If a homeowner defaults-the debt simply transfers from the borrower back to the lender–the debt remains-

The “only” way to eliminate the final debt-is for the Bank to default-or pay it off–

Cash does not and cannot contract–it’s always “somewhere”
It can be in a mattress-which is deflationary but is not Deflation-

As far as depositors-if Banks fail-
Banks should be Nationalized–rich bond and shareholders-OTC derivative holders should be wiped out-
(keep in mind-without the debt–these banks do have immense value)

If they were (temporarily) Nationalized-Governments could print the money to make depositors whole-
(money would be scarce-so it would be very strong and “seen” as valuable-lots could be printed without much devaluation-

I don’t like this system at all-but that-strategy in a Fiat system such as we have “could” likely work–
Doesn’t mean happy days are here-but-it would be bottom and we ain’t even close to bottom–yet–

I hear you about prices-but-food and oil-are always driven by weather/supply/demand and worse-by Geopolitical influences-Inflation or Deflation-

Other prices will have no choice but to fall-
Sellers have to meet buyers sooner or later at what price of affordability the Market clears at–
If Governments stopped interfering in the market-prices would fall much faster–

#204 Pat on 10.01.10 at 6:59 pm

@ #157 Prof ANON ,

Well, Hamlet, I say buy the house and start renovating. It should be entertaining – to resheet or not to resheet the roof, 20 or 25 year shingles, hardwood or laminate flooring, stainless steel or white appliences, countertops? Oh, the torments of the young ass. prof. and the invaluable advice of his anonymous friends. I can’t wait!

#205 jess on 10.01.10 at 7:15 pm

More rigor before the mortis

while you’re getting to the truth about past Amercians ,move to the present and get to work on asbestos, depleted uranium,etc etc….

… the United States is launching an investigation and also convening a group of international experts to review and report on the most effective methods to make sure all human medical research worldwide meets rigorous ethical standards. (cnn)

TPMMuckraker
U.S. Researchers Intentionally Infected Guatemalans With STDs In The 1940s
http://tpmmuckraker.talkingpointsmemo.com/2010/10/us_intentionally_infected_guatemalans_with_stds.php

http://michaelfury.wordpress.com/2010/06/23/by-their-fruits/

#206 Nostradamus Le Mad Vlad on 10.01.10 at 7:25 pm

-
Chaos — Good to see you’re still around!

#100 Boombust — “She’s a mermaid. Duh.”

Thanks for clarifying the mix-up. I thought it was a place to park my bike!

#89 Brian1 and #121 Bill (Peterborough) — “Just kick your feet up and watch the world burn. Cool Daddio.”

Splendid idea!

#143 DaBull — “It’s called Marketing, ever heard of it!!!”

Indeed! Marketing 101

Onemorething: Did a little investigation and discovered that George Soros backed Obama’s campaign in ’08. Both have communist leanings, Soros from cold-war Hungary and Karl Marx is Obama’s hero.

Seems as if the FEMA camps have been designed for the ever-increasing homeless in the US. If the heat intensifies on Obama, there may well be a false flag prior to the mid-terms, which result in martial law and the elections being bypassed.

There is a whole heck of a lot more going on than the economy.

#207 Vic_guy on 10.01.10 at 7:30 pm

MSM says lowest Victoria sales in 20 years :
http://www.timescolonist.com/mobile/iphone/news/top-stories/Greater+Victoria+real+estate+sales+year+September/3611119/story.html

Sept and August … October next ?

#208 Evangeline on 10.01.10 at 7:33 pm

#110
((I don’t want Sun TV (aka as Fox News North) in Canada. We have hate laws in Canada. That is what makes us different from the USA.))

Can you please tell me why lefty leaders like Chavez on down to citizen lefties like yourself are so terrified of hearing anything but echoes in their chamber? Why is freedom of speech and the press so terrifying to you? Why do you aspire to a media model like Pravda?

#209 asp on 10.01.10 at 7:35 pm

#160 Bill Gable asked: “Who signed off on this garbage?”

Sam Sullivan.

And he got thrown out on his ass for it.

#210 Mel in Victoria... on 10.01.10 at 7:43 pm

Garth, for some years now there’s been the availability for people to withdraw from their RRSP I believe $25,000.00 max towards the purchase of a house. $50,000.00 for a couple and not be subject to taxation at time of withdrawl however there are repayment obligations..

Why are these withdrawls and tax breaks from an RRSP only for home purchasers?

Why shouldn’t there be some similar withdrawl provisions available for people who want to take money out of their RRSP to help pay their rent??

Don’t renters count??…. only property purchasers??

Is this an outrageous idea???

I’d like to send a copy of this proposal to Stephen Harper..can you assist? Thanks much….. Mel in Victoria

#211 Northern_dirt on 10.01.10 at 7:51 pm

#191 Old_is_Gold

Ok.. And as I said, the TSX is up 20 percent from a year ago.

#212 Jason on 10.01.10 at 7:55 pm

Garth, do we need to register for the Calgary event (or just show) ? Thanks.

Just show. But boots are mandatory. — Garth

#213 Herb on 10.01.10 at 8:06 pm

I know it’s a real estate blog, but you can’t part real estate from the Siamese twin that keeps it alive, politics.

Here is some advice Michael Moore offered the US Democratic Party to-day. Loyal Opposition please copy and get on with the job:

http://www.huffingtonpost.com/michael-moore/five-ways-the-democrats-c_b_746761.html

#214 Spiltbongwater on 10.01.10 at 8:07 pm

There are not jails big enough to contain those whose greed causes financial runs. — Garth

We are building jails for unreported crime. There should be plenty of space in there for some people that caused financial ruin to people, until the crime gets reported.

#215 45north on 10.01.10 at 8:11 pm

Two million,’ she said, ‘but you can come in with less.’

You bet I can.

pretty funny

Canadian households have now collectively run a net financial deficit for 37 consecutive quarters.

holy cow! That Mark Carney says this is a big deal.

Matt Stiles: talking about government trying to make housing more affordable Every attempt to do this has resulted in precisely the opposite.

you’re right Matt Attempts to forestall foreclosures in California played right into hands of the banks who were trying to avoid price discovery. The Canadian political elite are all set to make some speeches about keeping people in their homes and the Canadian banks are all set to play along. A pretend battle.

Grumpy: Taliban Jack

got it!

#216 jess on 10.01.10 at 8:18 pm

…”Most of the document errors involved mortgages that had been bundled into securities sold to investors, Kessler said. At the end of the U.S. real estate boom in 2005 and 2006, about 70 percent of the $6.1 trillion in mortgage lending was packaged into bonds, according to the Securities Industry and Financial Markets Association in New York.

Typically, bundling a mortgage involved three transactions: originators sold loans to companies that packaged them, those firms sold the loans to interim trusts, and then they were put into bonds, Kessler said.

“A mortgage has to follow the proper trail every step of the way, or you have title problems,” he said.

In some cases, mortgages were conveyed using the Reston, Virginia-based Mortgage Electronic Registration System, or MERS, designed to cover transfers among system members. Promissory notes also often were endorsed as payable to the bearer to avoid the need for multiple transfers. Both practices have been challenged in court.

Copies of Documents

Copies of documents aren’t enough to establish rights, just as copies of dollar bills wouldn’t be honored by a bank, said Geoff Walsh, an attorney with the National Consumer Law Center in Boston. In cases of lost or mishandled paperwork, attorneys may file affidavits and other evidence to correct omissions and establish a claim, Walsh said.

Given the volume of mortgage securitization, it was easy for paperwork to get lost, said Kathleen Engel, a financial services law professor at Suffolk University in Boston.

“Wall Street was very good at packaging loans and making sure the money flowed to the right people, but not so good at keeping track of mortgage documents,” Engel said. As a result, “we have a growing number of toxic titles,” she said. …” (bloomberg)
========

WHY did they have to forge documents in order to foreclose on homes all over the country?
http://mandelman.ml-implode.com/2010/09/gmac-halts-evictions-related-to-foreclosures-in-23-states-when-news-of-forged-and-robo-signed-documents-comes-out/

#217 timbo on 10.01.10 at 8:31 pm

#205 Dark Sad Person,

-Other prices will have no choice but to fall

Interesting, So debasing the currency while you import from now stronger currencies will cause deflation……

I bet all g20 nations are in a game to help the US back on its feet and printing is the order of the day. Lowering interest rates did not work so printing is option b. The only problem is savings. With no interest rate to hold money , it is looking for anything to get a return and the dollar drop is becoming a poison pill. Savings has to go somewhere and what bubbles do you see forming now..

#218 LHHW on 10.01.10 at 8:46 pm

@ #186 Lonely Limey

I posted a few days ago about multi-unit residential apartments as investments and commented that cap rates have been so low over the past number of years that the values are just to high to get a decent return. If interest rates go up it may push up cap rates and lower prices…they may become decent investments. Also, as Garth mentioned, the legilation in Ontario is in the tenants favour…so screening for good tenants is key. At the end of the day do what works for you just remeber Garth’s overall advice about allocation, diversification and negative correlation etc…

#219 Nostradamus Le Mad Vlad on 10.01.10 at 8:46 pm

-
#205 dark sad person — “If Governments stopped interfering in the market-prices would fall much faster–”

Goes with a link from a few months ago, which stated the WH and US Fed would keep stocks propped artificially high until the moment was right, then pull the rug out and the whole thing bites the dust.

#207 jess — Not sure, but wasn’t asbestos the main insulation material for the WTC towers?

If it was, then all the forthcoming lawsuits would have bankrupted the (then) owners.

Insolvent “The Federal Reserve System is designed to suck the real wealth out of the nation and put it in the pockets of the bankers, and now that they have succeeded, the system is breaking down, too cash-poor to operate efficiently, just as it did in the colonies in the early 1770s.” wrh.com.

Missteaks Galore! “The government that hates gold has just announced that they have screwed up the printing of the new paper $100 bill.”

What the elite wants, it gets worldwide.

GW Try extra large winter tires!

Desperation on the cusp of madness, but note that the dead guy is still making the rounds!

S-510 Will also lead to North America’s demise quickly.

Strange “The Vienna daily claimed Swiss authorities have refused to give out any further information on the incident.”

Webmaster’s Commentary: “Meaning it was not suicide or natural causes that killed this 42-year old witness.” wrh.com.

Iran “The West won the world not by the superiority of its ideas or values or religion but rather by its superiority in applying organized violence. Westerners often forget this fact, non-Westerners never do.”

1:45 clip US Fed pushing dollar down. Also, 1,200 workers at NASA are toast today.

Think Obama will get the message?

US interference Batting .500.

#220 CrowdedElevatorfartz on 10.01.10 at 9:02 pm

These two gals are swimming in “Moon Lake” in Ottawa?
Allegorically speaking.
Look over your shoulder, because what’s coming aint pretty…….

#221 GP on 10.01.10 at 9:10 pm

Howdy Garth, you’re doing god’s work. I registered for the Toronto event before the “how many people?” option showed up. Can I still bring a spouse?

#222 dark sad person on 10.01.10 at 10:30 pm

#203 Evangeline on 10.01.10 at 6:40 pm

Dark and sad …

Thanks for the very informative post (and lovely music). I’ll keep it as as a starting point for further research.

Another thing I wonder is … if the economy were bustling, in a true sense: high employment in good jobs and a large market to supply and trade with … could monetary policy alone still mess things up?

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

You touch on a most important subject–
“monetary policy–

Understand money-”real money” (gold) needs no policy-
it is self governing and self correcting–
The only thing money needs from government-is protection of “law”

For example–Money does not need to be Gold-
The system we have would work but-it doesn’t-because governments have control over the “amount” that can be brought into circulation-by issuing credit/printing–
More money in the system drives prices-to the temporary benefit of asset holders-home buyers in this case-
Prices rise and people “feel” like they are becoming wealthy and as is well known on this board-they “act” rich-they become irresponsible-they act irrational-their Psyche changes-they believe prices will not go down and they can continue to subsidize an unrealistic life on growing equity-they live far beyond their means-
This all happens in “mass” (the herd)
Any flake in Government-looks good-when asset prices are rising-
I know you know this–

The monetary problem is–
Money supply is not stable-in this present system-
It is expanded at the whim of governments who want re-elected–
This is why gold works so well as a money base-
It cannot be printed-it must be earned-through labor and through fair trade-
With a stable money supply-with the exception of “inflation/deflation” through free trade (your question) prices do not have to do anything-they remain relatively stable-because your buying power (money supply) is more or less stable-
If money supply is locked/stable-prices float around its availability-

If for example-on a GS–something we made or had in Canada was in high demand and we could produce it and sell it-we would experience Inflation (increase in money supply) as we sold/traded it–
The euphoria i mentioned above–would enter the mass mind and people would spend more and demand higher wages and all this new money spending would drive up prices-but-as i mentioned “free trade” would have a say-because-
Prices would also be driven higher for foreign buyers and free market being what it is–allows them to look for cheaper products elsewhere-
This would hit our industrial and labor markets as trade diminished-industry would scale back-unemployment would rise-our available purchasing power (not buying power) would decrease and we would “gradually” go into deflation and prices would fall-but- eventually-foreign buyers would come back for our low prices and once again we would “gradually” tip back into inflation-
This is the yin and yang of the free market-
Under a stable-self correcting-money supply-responsible people can “save” and prosper-as their world buying power-never decreases-their supply can increase or decrease-but the money they do have-always has real world buying power–

my god–what a friggen novel
which speaking of–
if you want to understand this better from much more savvy people then me-i can suggest a few books-
Goldbug–Jim Dines
Gold Wars–Ferdinand Lips-

They cover gold/currency and trade in very simple-easy to read format–

Dines is quite expensive-$100 or so-but he goes quite deep into other areas of the market-

Lips is a paperback–much cheaper and covers most all-

Both these writer said–when Nixon cut Gold loose (defaulted) in 1971-

“Gold will run wild and when the inevitable flight to safety occurs-Gold will destroy every currency in the world ”

If you decide to read any of these books-you will understand what the above sentence means–

http://www.youtube.com/watch?v=86wME5d_yZM&feature=related

#223 dark sad person on 10.01.10 at 10:51 pm

#219 timbo on 10.01.10 at 8:31 pm

#205 Dark Sad Person,

-Other prices will have no choice but to fall

Interesting, So debasing the currency while you import from now stronger currencies will cause deflation……

I bet all g20 nations are in a game to help the US back on its feet and printing is the order of the day. Lowering interest rates did not work so printing is option b. The only problem is savings. With no interest rate to hold money , it is looking for anything to get a return and the dollar drop is becoming a poison pill. Savings has to go somewhere and what bubbles do you see forming now..

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

You are correct about everyone printing in sync-which makes all currency strength-relative to each other and not really lose in floating value-

Bubbles?
Likely most commodities and stock markets right now-then-eventually it will be bonds–then gold–

#224 bullion.bunny on 10.01.10 at 11:22 pm

There are not jails big enough to contain those whose greed causes financial runs. — Garth

Agree 100%, we must all look in the mirror first!

#225 Cameroni on 10.02.10 at 1:26 am

To: #157 Prof ANON.

You and I have been around this site for a long time now. We both know the facts about R/E and so this should be an easy decision for you.

In the simplest terminology, housing is at it’s literal peak and has nowhere to go but down. We are at the top and so buying now will just assure that if you don’t suffer outright losses down the road, you will still have paid too much.

I can see your points though and it is a compelling argument from the perspective of privacy, ownership rights, dogs roaming free and extra space but give it a second thought.

Your G/F got a promotion that brought about a move.

What about the next promotion and move? Have you considered that if you leave the humble abode in 5 or 6 years you will very likely not recover what you paid?

Or that most of your invested savings will get flushed. All you’re labour and efforts to maintain and build the home will probably yield a big zero and you might even end up in the position of having to pay the bank the difference between your purchase price today and the sales price down the road. Hunh?

I just cannot understand for the life of me why anyone would buy at the absolute top of a market knowing full well that they will be financial losers.

So my opinion? Rent. Use your labour productively in other ways for your own personal gain, not someone else. Keep your money in your pocket where it belongs and start to save-up for the big opportunities 5 years down the road.

You will be wealthier and wiser for having done it. And your girlfriend will love you all the more. Women nest. Men shelter and protect. Our biology and genetic makeup is what we are at war with when we are forced to confront modern financial realities with purely rational and cerebral decisions about the most basic urges in life.

Like housing. Like nests.

#226 Cameroni on 10.02.10 at 2:00 am

#167 Bill Gable said:

“World War I to finally end for Germany this weekend. The Germans have finally paid the whole tab”.
———————————————————–

Thanks Bill. That was a really interesting link.

This story is amazing really when you consider how much has changed in the world and how much water has passed over the dam in all those intervening years.

And yet Germany still made good on it’s debts and paid the prescribed penalty to remain a part of the global community.

This story should say something meaningful to all those who suggest the US will default on it’s Treasury obligations. They need to seriously think harder before concluding that issuing funny-money bonds does not come with real long term consequences.

So. Debts do need to be paid. Even by strong countries.

#227 Soylent Green is People on 10.02.10 at 12:44 pm

Dear Sun Readers,

Last week I signed a petition (with 80,000 other Canadians against SUN TV). Here are some of the spins, smears, and whoppers:

re AVAAZ

SUN: George Soros “funds” Avaaz, a U.S. organization. By signing its petition, I have “sold out” to both Soros and the U.S.

FACT: Avaaz is international, and funded 100% by members. Once, George Soros gave 5%.

FALSE NAMES

SUN: The Avaaz petition was stuffed with signatures from people who didn’t sign it.

FACT: Someone in Ottawa stuffed; Ex-Quebecor v-p Kory Teneycke has admitted he knew, almost as soon as it happened. The RCMP has been asked to investigate: Maybe it’s fraud.

AL JAZEERA

SUN: “Al Jazeera lover.”

FACT: I was once interviewed by Riz Khan about my writing. Many folks associated with the Sun appear on CBC TV shows. Does that make them “CBC lovers”?

POLITICAL LEANINGS

SUN: Leftie pinko Green.

FACT: Swing Voter. We look for values, not labels. I’d vote for a turnip if it was accountable, transparent, a parliamentary democrat, and listened to people. “Green” is not the same as “Left,” many people like the outdoors and don’t want their kids killed by chemicals.

THE ACTUAL PETITION

“As concerned Canadians who deeply oppose American-style hate media on our airwaves, we applaud the CRTC’s refusal to allow a new “Fox News North” channel to be funded from our cable fees.

We urge Mr. von Finckenstein to stay in his job and continue to stand up for Canada’s democratic traditions, and call on Prime Minister Harper to immediately stop all pressure on the CRTC on this matter.”

The “Fox News” comparison is from the Sun’s own CRTC Application # 1.

Is it “American-style hate media?” You judge.

The CRTC refused Sun TV News’ request for a special licence that forces all cable and satellite distributors to offer the station, thus generating almost automatic income.

Application #2 — almost the same deal as #1, but for three years — will be considered.

The Sun says it needs this special deal for its “business plan.” Should it get one? Should anyone? Can I have one too?

AM I A PROPONENT OF “CENSORSHIP”?

Nope. Read the petition again.

Now Konrad von Finckenstein has said he isn’t under pressure from Stephen Harper to grant the special licence (unlike his fired CRTC deputy), and will judge Application # 2 on its merits. Good!

REAL CENSORSHIP INCLUDES

Book burning, murdering, jailing and exiling writers, and shutting down newspapers, publishers, and TV stations. If you are against this, support PEN International and Index on Censorship.

Calling the Avaaz petition “censorship” is beyond cheap.

LAST WORD

Folks to left and to the right have been attacking me for 40 years. But smearing me is hardly an argument in support of Sun TV News’ special licence.

Is that what Sun TV News has in mind: Smear early and smear often?

Would you want that to happen to you?

Could you afford to sue them?

Neither can I.

http://www.torontosun.com/comment/columnists/2010/09/17/15388296.html

#228 Evangeline on 10.02.10 at 6:47 pm

Soylent

You’ve probably noticed there is a pretty active political blogosphere out there. The leftie blogs spend all their time debunking the lies the right wing press tells and the rightie blogs spend all their time debunking the lies in the the left wing press.

Who are YOU to decide who gets to say what or what others should hear or read? Wanting to be other peoples’ nanny takes a lot of hubris.

Better to let everyone duke it out communicatively speaking, and may the best side win, but never silence the other side. If you silence people you disagree with, you never know when it will be your turn to be silenced.

#229 Evangeline on 10.02.10 at 6:54 pm

Dark and Sad,

Again, I appreciate you’re taking the time to answer my question. So what you are saying is that economic cycles don’t need to be controlled, that if the markets are unleashed they will self regulate?

That was a beautiful version of Mr. Bojangles, one I’d never heard before.