The end

With one sleep left in the decade, will the questions to this tormented blog never vary?

“I really enjoy reading your blogs. Me and my fiance are getting married this May 2011. We have agreed to live with her mom until we find a house and are ready to buy, thinking end of 2011. We have about $110,000 right now and hope to have another 50k saved by end of 2011 that we could put down and our price range is about $420,000-430,000. We make more then $130,000k combined before tax, I am 30 she is 25 and live in the GTA, we are looking in Mississauga or Vaughan. Do you suggest to hold off until 2012? or if we do buy end 2011 will we see some significant price drop thus picking up a good deal. I am just concerned with the amount of drop you anticipate being in the GTA. “

First, get a life. Grow a set. Be a guy, dude. If she’s good enough to marry, she’s deserves a home. No, you don’t have to buy it. And, no, home is not where Mom is. Go lease a one-bedroom condo rental from some desperate spec flipper who’s getting crushed, and carry the throbbing babe over the threshold.

If you think trading that experience for a bigger down payment is okay, check your pants.

Now, as for the market I’ve said my piece. Sales declines in 2010. Check. Price declines in 2011. Coming. How fast and how deep will depend on the psychology of the flighty masses we live among. Right now they’re not expecting higher mortgage rates or a sucky economy, along with structural unemployment, higher taxes or a federal budget realtors will hate. But all that is surely coming, and will ignite the correction in Toronto that morasses of despair (like Calgary) are already grappling with.

Will prices be lower in a year? I expect it. But I also expect it’ll be the beginning of a long move lower, not the bottom of a correction. It might be best to rent that condo for two years, by which time your nest egg may have swollen and towered. Sans mom.

Speaking of weenies, we now flash to Richmond BC, jewel of the Pacific Rim and home of a delusion which threatens to surpass that of neighbouring Vancouver, where there’s actually a culture. One of the local dogs sends this report:

“Approximately 2 weeks ago my friend decided they would sell their home in Richmond, BC and something rather interesting happened.  The house went on the market at a lower price than valued at ($800K) and within the week it sold….for $1.1M.   Seems that a bidding war was started by the low price and the 200+ people that viewed it on one weekend that resulted in almost 50 offers in a 2 hour time frame.  Offshore money from Asia it seems. The thing is, this is not uncommon here.   Yes, the market is down in general, we see it in our business, but wow, how long can this last?”

Then he adds:

“I forgot to mention, another friend of mine is looking at purchasing a new home and a lot in a high end area of Langley and he can get a home for about 15% less than it was listed for a few months back and the adjoining property approx 20% less.  Welcome to BC, home of insanity.”

So why do houses in the most expensive region of the country keep rising in value, while 20 minutes away buyers are treated like visiting deities? Is this all because a bunch of linguistically-challenged Mainland Chinese think ‘Richmond’ means ‘rich man’? Or does it prove the Lower Mainland has found a way of escaping the real estate swamp that’s invaded most of the rest of the continent?

Who cares? It’s the human condition. As I reminded you recently, people lust after things that are hot and expensive (like, say, January Jones) while eschewing those which seem to be out of favour. This is why idiots mount bidding wars for ugly houses they ‘ve been inside for five whole minutes. The more people elbowing their way through an open house, the more offers likely to materialize. Now compare that to the lonely bargain in the next town, where a superior property can go for a song to the contrarian smart enough to sniff it out.

Want proof of the power of sentiment?

Again, look south. Real estate sales in the USA (the place most like this one) are down 25% from last year (which sucked), and the supply of unsold homes is up 50%. When Standard & Poors issued that big housing report this week (showing prices falling at a 15% annual clip, four years into a disaster), the head guy said: “The double-dip is almost here. There is no good news in this report.”

Because Americans can’t sell their homes, many of them can’t move to find work. Because housing values plunged so dramatically and quickly, people who were 10 years into paying off a mortgage found themselves under water. Surveys of people aged 20 to 35 find that a home is about the last thing most would think of sinking money into. Most telling, those folks who can afford to buy aren’t because nobody else is. So everyone expects prices to keep falling. And they do.

However, no matter how many times I try to explain that orgiastic buying is just the flip side of real estate apocalypse, just as fear mirrors greed, most people could care less. They’re busy wanting what everyone else wants, conga-lining their way through life, horny for stuff, oblivious to what looms.

OK, you can go now. HNY.

184 comments ↓

#1 Jay Currie on 12.29.10 at 11:26 pm

I suspect that in Richmond you are looking at “flight capital” from China. The Chinese, not being idiots, realize that their own economy is, to put it politely, over-leveraged all the way round. Offshoring some cash is a prudent move.

Richmond will prosper so long as China does. When China cracks – and it will – Richmond and Vancouver will drop like rocks in socks.

#2 chen on 12.29.10 at 11:33 pm

Money laundering anyone ? I personally am aware of several cases. Think what would happen to the YUAN if it was freely convertible.

#3 1ObtuseObelisk on 12.29.10 at 11:34 pm

“swollen and towered”….
I just about choked on my leftover tortiere, and now I’ve woke the baby up with my laughing/throat clearing. er, thanks Mr. Turner!

#4 specuskeptic on 12.29.10 at 11:36 pm

I’ve been hearing this “Chinese money is driving the market in the lower mainland” meme for years now – even from folks from out of town. I have yet to see externally verifiable and credible data pr stats to support this. It’s a challenge folks. Show me the data!!

#5 Village Whisperer on 12.29.10 at 11:37 pm

Until the crash happens, we are simply dismissed at chicken little’s who believe the sky is going to fall. Primary bull markets always last longer and carry farther than the majority of investors (even the bulls) expect.

All you can do is shake you head at the stupidity.

#6 mikef on 12.29.10 at 11:45 pm

First a belated Happy Holidays to all blog dogs.

Keep up the good work “Le Mad Vlad”.Always informative.

100% right “Moneta”.

When I went to school in Montreal in the late 70s/early
80s we got nothing in terms of “benefits”.

Remember when the teacher would tell that “a nurse was available twice a week but she couldn’t treat
anybody,not even dispense aspirin”.

Flashforward today when I recently got hold of a pamphlet of my old elementary school that had a whole
list of support staff including an “occupational therapist”.

How many 9 year olds are working??

Things have changed Moneta.Big time.
When I played hockey you’d have maybe 3-5 sets of parents in the stands.
Today all the helicopter parents are there and in full throat.The abuse has gotten so bad that leagues have a hard time finding referees.

Oh yeah real estate,spoke to a real estate agent.
In Montreal prices stable,sales solid,but construction down like 35%.

Read that ten thousand people a day in the USA will reach 65 beginning in 2011.

In Canada I heard that someone will reach 65 every 11 seconds. Is this true?

#7 TheBigLebowski on 12.29.10 at 11:51 pm

Once the herd figures out that prices are ready to fall, not climb, there will be a mass shift in perception. Buyers who were once frothing at the mouth to get in at any cost will become looky loo’s. It will begin feeding on itself as more and more people put away their cheque books and regain their common sense. Luckily for me I figured this out about 2 years ago and sold. I took the equity and fully diversified my investments. I now own silver along with gold and related mining shares. A 100% return on investment in 2 years isn’t bad, but this is only stage 1 of a 3 or 4 stage bull market in precious metals.

#8 NFN_NLN on 12.29.10 at 11:52 pm

30 years old and living with his mom… and wife. $20 says he is Asian. Did I win?

#9 Guy_in_Regina on 12.29.10 at 11:53 pm

Boo-urns. Boooo-urrrns.

#10 GBoomer on 12.30.10 at 12:09 am

The attached listing shows that not all expensive real estate in Richmond, BC is moving like grain through a goose.

This is new house. An elderly couple, in their nineties and no longer able to drive or walk very well, sold off the old VLA place on a 60 foot lot for $700000, or more money than they believed God himself had in the bank. Down goes the old place and up goes what is arguably a not particularly attractive bunker not unlike many more in the immediate neighbourhood. It has been for sale for at least six months. The only action I have witnessed is one night in August all the alarms went off
for no apparent reason. First on scene? The listing agent, looking very worried. All was well, and all of the neighbours probably went back to sleep.

Meanwhile, the elderly couple is living in a tiny, one bedroom concrete box marketed as gracious retirement living, still giddy over how very much they got for their old property.

http://www.realtor.ca/propertyDetails.aspx?propertyId=9907057&PidKey=167298656

#11 Cowboy_aka_My_View on 12.30.10 at 12:13 am

RENT, real estate is for the rich. Yesterday poor Carlyle got it. Everyone commented how he is such a moron. One guy even posted that if he rented the same diggs he would be saving big-even though renting was only a couple of hun less. Oh I know being liquid. Cause of impending doom is around the corner you know-rising rates=scary. Hi, I’m 30, I rent have no debt and some savings, am I ok? I figure my rent for the next 25 years will be around 360k and I will have 400k saved up. I wish everyone can be just like me. Sorry for the satire!

#12 Elmer on 12.30.10 at 12:14 am

along with structural unemployment…

Actually Garth, Canada expects steady job growth and pay raises in 2011: http://money.canoe.ca/money/business/canada/archives/2010/12/20101229-095425.html

#13 Oasis on 12.30.10 at 12:17 am

Maybe that’s why gold is going up huh
The fed is buying up gold mines in order to hold the gold price up?
______________________________________

HAHAHAHA… AHHAHAHAH…

no.. gold is going up becuase the fed is buying everything else under the sun. Fannie, Freddie debt, printing money for the Europeans, printing money to buy Obama debt… printing money for AIG, Goldman, Citi, etc etc…

the article was correct in 2005, and it’s correct now.
Bernanke is going to print money until the cows start buying milk. and he’s going to sink the dollar as far down as he can.

and that’s all there is to it.

More fiction. — Garth

#14 Jessica on 12.30.10 at 12:23 am

So when will we see the major price drops in the majority of Canada? When the BoC raises interest rates in May?

What do you people think of Nicole Foss in this video saying there will be on average a 90% price drop in real estate? http://www.youtube.com/watch?v=4fPAx5MEviA

Many people have said she is nuts. Is she really?

Please refer to the earlier Betty Crocker post. — Garth

#15 UrbanCowboy on 12.30.10 at 12:31 am

Haha thanks Garth another entertaining and enlightening post. Keep’em coming and all the best in 2011!

#16 Carp on 12.30.10 at 12:31 am

Richmond is sinking ….

We sold in 2008 not for anything Garth said but because we had a cocaine/crystal meth drug trade in the area. I used to sit on the porch and see the trades happen … I enjoyed talking to the cop but 6 months later the same shit happened.

Also 3 times walking the dog I smelt a truck with lots of MJ and a couple of homes with no one really living there …..

My 2 year old noticed the bad men and the for sale sign went up.

I sold a home in Richmond in 2008. I am happy with the price I sold at and moved to Ottawa, on rock and a non-narco economy.

Richmond, BC is sinking … hell in winter I had a lake in my backyard. Property prices will someday reflect what land is worth when sinking into the sea. I do miss my fig tree :-( but its not worth the fact the city will someday sink into the sea ….

http://www.youtube.com/watch?v=nOuUb1i0oec

Here is the link to Richmond’s answer to the threat:

http://www.richmond.ca/services/rdws/dykes.htm

Notice: “Dykes are built well above the highest flood of record in 1894. ”

Wow what a disclaimer …. 1894 … I’m sure no one was worried about the raising sea!

As well, the airport is close by … I was really tired of all the planes in the area …. Check this out

http://www.youtube.com/watch?v=dRswgz84jSA
http://www.youtube.com/watch?v=kbItIiLEuAk&NR=1

Richmond is not a good long term investment!

Langley may be home to the Hell’s Angels but it sure is above sea level! And although some areas are not great in terms of drugs …. the angels keep things save for their kids and family.

Richmond is great for lots of reasons — Steveston, finns lough and berries!

But it is sinking slowly …. Anyone buy for a future investment should expect lots of flood-related taxes or using canoes to get around.

Carp

#17 Mean Gene on 12.30.10 at 12:36 am

The city of Vancouver demographic is %50 visible minorities, whereas nationally it’s %12.

I am not sure about Richmond (Ditchmond) but I suspect it is quite high.

In my mind Richmond is North America’s version of Hong Kong back before 1997 price wise, so culture more than logic is in play for the short term.

The Chinese just love their Real Estate, maybe it will be their downfall.

#18 Tim on 12.30.10 at 12:38 am

Hmmm that story is almost identical to me – although I am a few years younger and looking for a place in Markham instead of other GTA areas.

Probably live at home for a 6 – 8 months period but in this time, look at the available homes in the area and make a decision whether we found a place we can see us living in for the next 5-10 years at the price where it won’t kill us, OR rent for a year and wait things out a big longer.

Check your pants, Timmy. — Garth

#19 Not nice. on 12.30.10 at 12:40 am

“Is this all because a bunch of linguistically-challenged Mainland Chinese think ‘Richmond’ means ‘rich man’? ”

Not nice.

It is often cited locally as a contributing factor. — Garth

#20 T.O. Bubble Boy on 12.30.10 at 12:41 am

There are still going to be bidding wars if someone prices a house hundreds of thousands less than others in the neighbourhood.

An old (but large) detached house in midtown Toronto sold with multiple offers for well over the $599k asking price, while other completely reno’ed houses sit on the market at mich higher prices like this semi at $789k (reduced from $850k) and this detached at $999k (reduced from $1.15M).

#21 Mean Gene on 12.30.10 at 12:45 am

My numbers where slightly off concerning demographics, these number are from 2008.

http://www.canada.com/vancouversun/news/story.html?id=bb0fee45-b305-490a-b161-a21bcb1d7329

In Vancouver, visible minorities accounted for 51 per cent of the population. In Richmond there were even more immigrants at 65.1 per cent. Burnaby had 55.4 per cent, Surrey 46.1 per cent, Coquitlam 38.6 per cent and New Westminster 29.6 per cent.

Visible minorities accounted for only about 16.2 per cent of Canada’s total population, up from 13.4 per cent in 2001 and 11.2 per cent in 1996.

#22 T.O. Bubble Boy on 12.30.10 at 12:48 am

Speaking of Richmond, Larry from yattermatters.com just published his Richmond stats for the past 30 days:

http://www.yattermatters.com/2010/12/community-series-off-shore-money-affects-richmond-homes/

Sales went off a cliff (down 26% to 87 total vs. 137 one month ago), but average and median prices increased from last month.

#23 watchingthedetectives on 12.30.10 at 1:00 am

So why do houses in the most expensive region of the country keep rising in value, while 20 minutes away buyers are treated like visiting deities? Is this all because a bunch of linguistically-challenged Mainland Chinese think ‘Richmond’ means ‘rich man’? Or does it prove the Lower Mainland has found a way of escaping the real estate swamp that’s invaded most of the rest of the continent?

Perhaps the softness begins at the edge of town and then moves inward?

#24 T.O. Bubble Boy on 12.30.10 at 1:08 am

For those of you that have mortgages with the Orange Guy, check out this policy from ING regarding short sales in the US:

http://blogs.reuters.com/felix-salmon/2010/12/29/vindictive-servicer-of-the-day-ing-direct/

Interesting how priorities change when you disconnect the servicer of the loan from the owner of the loan via securitization.

#25 TheFirstRick on 12.30.10 at 1:19 am

“”So why do houses in the most expensive region of the country keep rising in value, while 20 minutes away buyers are treated like visiting deities? Is this all because a bunch of linguistically-challenged Mainland Chinese think ‘Richmond’ means ‘rich man’?””
——————–
So Garth, are rich Chinese investors inflating the west coast bubble or not? Maybe the Realturds are right and this will last forever? I realize you cannot touch that elephant in the room also know as immigration, should you choose to delve into politics again. We all know that any mainstream politician who has even the slightest criticism of the immigration system can usually say – CAREER OVER, so maybe you can refer to the issue as ‘I’ just as you refer to Fluttery as ‘F’???

But please, stop suggesting foreign money and drugs aren’t the leading edge behind the real estate insanity in the GVRD.

#26 obert on 12.30.10 at 1:24 am

At least the end is clear.. er clean.
HNY to all.
I enjoy the comments as much as GT’s articles. Thanks.

#27 TheFirstRick on 12.30.10 at 1:26 am

I personally know 2 or 3 people who make the mortgage payment due to the “invisible tenant” in the basement. I also know of many homes sold to overseas money. Who cares about your request for ‘data.’ You are asking for stats that are NOT compiled.

#28 nonplused on 12.30.10 at 1:31 am

Good post again tonight, no comments, except: I still don’t see eye to eye on taxes. The government may well try to raise taxes, but they will have no luck actually raising revenue. There isn’t anything left ot tax out here in the real world. Raise income taxes and yes, it will look good in year 1, as revenues rise slightly. Year 2, banks are paying no tax as they write off more bad loans.

We are at a stalemate for taxes, at the high. Tax rates may gyrate wildly as governments scramble for a way out of this mess. But tax revenue is not going up from here. It can’t. Every futher incress in actual tax revenue will be met with a similar decline in GDP, until next the revolution, hopefully bloodless but we won’t promise those bastards in government that. You had better pass that along to your buddies Mark and F.

The working classes already can’t afford their taxes, which is why they are so far in debt. Once interest rates rise, they will be broke. You can’t tax a broke person. Well, you can, but not without competing with the sacred banks for the litttle money the poor have.

Oh sure, we can “eat the rich”, including Aerosmith. But guess what? Eat them all at once and it lasts one year. They seem really rich, and are compared to us, but compared to the budget deficit they have nothing.

Spending cuts are next, followed by a very humorous violent revolution of old folks trying to demand the pension they aren’t going to get. Go back to work, old folks. It’s pay as you go and will be your whole life. The Ponzi scheme was just that, and it’s ending soon due to lack of new Ponzis.

The good news is after this is all over we will only think of economics in “pay as you go” terms. Oh sure, the rich will be able to store up wealth, and so will the poor more modestly. But nobody will ever trust the government to be their money manager again for at least 2 generations.

It’s going to take at least 5 years, probably 10, to unfold. Even Garth doesn’t fully get it. And he’s pretty smart for a boomer.

#29 dd on 12.30.10 at 1:38 am

Another sign-post for gold to go higher –

Derivatives Clearing Group Decides Against Registration – The world’s largest clearinghouse for credit-default swaps, ICE Trust, has had second thoughts about registering with regulators, citing concerns over new rules devised to bring transparency to the $600 trillion derivatives market.

#30 Basil Fawlty on 12.30.10 at 1:44 am

Something good, hard and timely is coming in 2011; an education.

#31 Crash on 12.30.10 at 1:50 am

The Asians also like Richmond because it’s close to the airport. IMO anybody would have to be nuts to buy property on a floodplain. Richmond is only suitable for farming.

#32 Agio on 12.30.10 at 1:56 am

Thanks again Turner-Once again you’ve told a tale that made my eyes bleed and the baby Jesus cry.
I don’t know who I want to slap harder, the ‘kids’ or mommy the enabler. I hope beyond hope things get tough if only for awhile.
The gene pool needs a cleaning.

#33 dd on 12.30.10 at 1:58 am

No economic growth in North America, Japan, UK, and Europe. And we have $92 oil, copper, gold, and silver at record highs. Sound like inflation to me.

#34 Captain Jack on 12.30.10 at 1:59 am

“rich man”…Love it!

#35 Nostradamus Le Mad Vlad on 12.30.10 at 2:04 am

-
Fairies’ Trash, a.k.a. The End.

Avoid Mom like the plague. Doubtless she is a nice lady, but she has her life to live and you have yours. Rent an apt. for a few years and build up a couple of nice TFSA’s for a hefty downpayment, in about five years or so.

“. . . home of a delusion . . .” — For a quick psychological checkup, see Dr. Phil, Dr. Oz, Dr. Oprah or watch Aussie rules football where men are men and women intelligent. Some of them, anyway!
*
#6 mikef — Will do — Merci!
*
Myth Cdn. banking system.

For Scientists Something quirky is happening in The Great Beyond.

Technology transfer to China and Pensiongeddon.

Japan Perpetual Debt Machine, like the UK, Eurozone and North America.

Old Fogies clogging up the pipes. Hell, this is a disposable society so dispose of us like smelly diapers!

Ignore experts; they don’t have the foggiest what they are talking about. Bafflegab. One more reason to avoid experts.

Silver “There is absolutely NO known bacteria, virus or fungus (including household mold) that silver will not kill, and in most cases, within an hour or two.”

No Draft High unemployment is better.

Obama’s Totalitarian Dictatorship “Obamacare must be repealed. It will go down in history as the worst legislation ever passed in of the USA.”

#36 dd on 12.30.10 at 2:14 am

Senator Tom Coburn:

The Fed is debasing the US dollar.

http://www.libertyjuice.com/2010/12/27/senator-coburn-apocalyptic-pain-if-spending-not-checked/

#37 Blobby on 12.30.10 at 2:25 am

What constitutes as a “Big sleep”?

By my reconing, i still have wednesday, thursday and friday left?

Honestly garth – if i cant trust you where sleep is concerned (my favorite topic), how can i trust you on other thingies?

#38 Blobby on 12.30.10 at 2:27 am

@#12 Elmer :

Well I EXPECT to be a millionaire next year.. doesnt mean it’s necessarily going to happen (although it will obviously)

#39 l dubya on 12.30.10 at 2:46 am

“Go lease a one-bedroom condo rental from some desperate spec flipper who’s getting crushed,”

where does one go to find one? examples please?

everything i have seen seems pricey

#40 TryingToGetOutAlive on 12.30.10 at 2:47 am

anyone been to “rich man hill”?
they’re actually building condos up there. why? it’s not like there’s a shortage of space… there’s no where to walk to, there’s no reliable public transit. nothing to do except hang out at chinese strip malls, and shop at big box stores. in fact i’ll bet you most of them drive downtown to work everyday.

but people have fallen for it completely, paying a “low price” to “get into the market” before it becomes the next downtown and be priced out forever… actually, the clever marketers have dubbed the area of warden and highway 7 “downtown markham”…. sigh

#41 Ghost of Tom Joad on 12.30.10 at 2:54 am

Here is why you buy gold and silver:
http://www.usdebtclock.org/

Wake up –> http://www.infowars.com

#42 Ruben on 12.30.10 at 3:00 am

Hey Jessica,

Why don’t you go read Nicole Foss’ website, and compare her data and analysis to what you get here. When Garth started hammering her I asked him to do something as simple as define “Crash” which I have not seen him do. As in, “There will be no crash”.

Garth is starting to look like he makes his salary off financial advice, and doesn’t want the herd spooked.

I make all my money giving free advice on this blog to grateful people like you. — Garth

#43 SophieZombie on 12.30.10 at 3:01 am

It would be interesting to have statistics for Richmond on houses addresses vs bidding wars or period of listing. Apparently, addresses with an ”8” or even better ”88” is lucky-lucky (prosperity). `4` or 44 is death-death. Usually numbers 4 and 13 are avoid in condo building in Richmond. Always rational behavior in the Best Place on Earth.

#44 Dan in Victoria on 12.30.10 at 3:10 am

Since there is a tendancy to find safety in numbers, most people go along with popular opinion.
They feel a sense of security in conforming with the crowd, repeating cliches, parroting catch phrases.

When someone else comes along with a diffrent view point, a new angle or approach to a problem, one may feel his foundation begin to shake.

When one stops and analyzes his reactions at this time, begins to doubt his cherished opinions, takes a long, honest look at himself, listens and heeds that still small voice within, turns his back on the crowd and seeks a new direction, he then begins the beautiful, painful act of thinking for himself.

Raymond Morgan.

It takes courage to listen to that still small voice.
A LOT.

#45 dark sad person on 12.30.10 at 3:17 am

174 Just a Tech on 12.29.10 at 7:56 pm

@155 dark sad money

Yeah the real economy is deflating for sure. theres alot of liquidity in the system though. From a U.S. perspective they have had the advantage of exporting some of their infaltion through the reserve currency. Moreover, if the money velocity picks up i would say watch out. Bottom line though all the debt is going to have to be monetized some how.

***********************
You’re close-but not quite-
There is liquidity but it is not in the system-it sits in banks and collapsing velocity of both cash and credit is proof that it isn’t flowing-
What good does 2 trillion dollars do-when it sits in banks and does nothing-other than get used to speculate in the market-which has a deflationary effect on spending as high prices of neccessities corrals what money consumers have?

http://research.stlouisfed.org/fred2/series/SBASENS

It does nothing to improve the employment situation and in fact diverts money from the broad economy and funnels it into one area-that few benefit from-

I agree that “if” velocity picks up it will create a problem-i just cannot see any way that’s about to happen anytime soon-

http://research.stlouisfed.org/fred2/series/MULT

Sentiment has changed-
Credit worthy borrowers do not want to borrow-
Those who would borrow cannot-because they’re already in debt and illiquid-
Banks are tightening and credit is contracting-

http://research.stlouisfed.org/fred2/series/TOTALSL

http://research.stlouisfed.org/fred2/series/REVOLNNFC

http://research.stlouisfed.org/fred2/series/NREVNSEC

There is just too much debt to monetize-
6 trillion that’s been slid onto FNM’s balance sheet-
More trillions hid on the fed balance sheet-not to mention the assets that are on there marked at 100% on the dollar value-when we know they’re probably only worth 30 cents-

In a fiat credit-based economy, where credit dwarfs money supply-it’s credit that’s important-not changes in money supply and not nominal changes in prices–

50 trillion in outstanding credit-not counting government debt-which last time i looked was in the neighbourhood of another 70 trillion counting all obligations such as SS and other welfare programs-

http://research.stlouisfed.org/fred2/series/TCMDO

Compare that with the (SBASENS) above (Base Money supply) of a measly 2 trillion-

How can they monetize the amount of unsecured credit that will somehow have to be accounted for?

What difference would it make if they printed another 10 or 20 trillion?

#46 dark sad person on 12.30.10 at 3:27 am

3 Oasis on 12.30.10 at 12:17 am

Maybe that’s why gold is going up huh
The fed is buying up gold mines in order to hold the gold price up?
______________________________________

HAHAHAHA… AHHAHAHAH…

no.. gold is going up becuase the fed is buying everything else under the sun. Fannie, Freddie debt, printing money for the Europeans, printing money to buy Obama debt… printing money for AIG, Goldman, Citi, etc etc…

the article was correct in 2005, and it’s correct now.

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

Your article said–
The fed will buy gold mines-

Do you read and understand what you post or do you just parrot what someone else says and swear up and down he’s right?

That guy was clueless–try another one-

#47 dark sad person on 12.30.10 at 3:47 am

Will prices be lower in a year? I expect it. But I also expect it’ll be the beginning of a long move lower, not the bottom of a correction. It might be best to rent that condo for two years, by which time your nest egg may have swollen and towered.

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

G-shouldn’t you be cautioning them about locking into any long term rental contracts?

In fact long term lock in of anything-except cheap money-if they do borrow-

Rent prices along with most prices will be heading south before 2 years if the US experience is any guide-

http://cr4re.com/CRimagesMay2010/FedRentPrice.JPG

#48 Deciding when to sell on 12.30.10 at 4:33 am

For Carlyle, from the previous post:

Since you have high-interest debts while your wife has savings, why not get your consolidation loan from her instead of the bank? Put it in writing and offer her a higher rate of return than she is currently getting, which will still be way lower than you are now paying.

#49 VanLarry on 12.30.10 at 4:44 am

And what’s wrong with living with your mother or mother-in-law?

Should you not take value in taking care of either parents? And should not hope by doing so you’re also setting an example to your own kids the value and expectations that they’re going to take care of you when you’re older?

I’ll vouch that some linguistically-challenged Chinese think ‘Richmond’ means ‘rich man’. Take it from a local Chinese guy. I’m not offended and I doubt a good portion of the local Chinese would be either.

I don’t have the numbers, but the market for the whole Vancouver region is still crazy. Yes, there’s a general slow down in the market. I’ve noticed houses/condos that’s been in the market for weeks and still haven’t been sold. Mostly because the price is set too high. However I’ve also noticed whenever there’s a house that’s priced very low, a frenzy bidding war starts and someone actually buys the place at a much higher price.
Crazy.

And I’m not even looking at the Olympic properties.

Happy New Years Fools!

#50 SquareNinja on 12.30.10 at 4:53 am

Happy New Year, Garth and everyone else!

#51 SquareNinja on 12.30.10 at 5:04 am

Don’t worry, Garth – Richmond does sound like “rich man” to Chinese people and they love it! They also love Richman Hill in the GTA. Why do you think so many Chinese people live in both these places? I am Chinese, just in case people think I’m being racist.

#52 Victor on 12.30.10 at 5:17 am

#20 TO Bubble Boy

How do you know those two properties have had their prices reduced as the listing pages do not show this info? Is it because you personally followed the property histories or is there another way to get historical info like that?

#53 Alan on 12.30.10 at 5:30 am

Say what you want about the chinese moving money over from China to Vancouver and other parts of the country. Let’s give some credit to the 5000 years of experience and knowledge that has served them in the toughest of economic environments. It is fully understood that land will feed your family, provide a roof over your head and is far safer than any bank in the world as long as you have undisputed title to your land. If you need to move money from one country to another, real estate is by far the easiest way to achieve this goal. Small cycles of real estate boom an busts only hurt those that are over leveraged and don’t have the cash flow to wait it out. And yes, this could mean a full cycle 5-7 years. They don’t care because they invest intergenerationally. “its for my children and grand children”.

#54 BigAl (Original) on 12.30.10 at 6:38 am

Completely disagree with the “grow a set” comment, forcing people out of their parents’ homes and into the world of rent / mortgages, when they could save tons of $$$ and strengthen family ties.
This talk of some perceived independence is hazardous.
If the parents are fine with it (and don’t automatically presume that all parents aren’t), what business is it of anybody else’s about a family’s living arrangements? Why all the social pressure, stigma, etc. Is it jealousy about the low expenses? I just had a wonderful conversation today with a girl in her late 20’s who’s going to get married next year, and absolutely loves the idea of living in her in-laws’ basement for the next few years while they save $100K plus per year so they can live mortgage free the rest of their lives.
I know of two other young couples who are doing just that right now – early 30’s and looking for new homes with cash. And, one of them is bringing the parents with them and planning an in-law suite – no old-age homes for these loving parents.
So, is it jealousy, or just plain meanness?

#55 Thetruth on 12.30.10 at 6:45 am

What happened to the “Wi-Key” guy??

#56 grantmi on 12.30.10 at 7:36 am

“Is this all because a bunch of linguistically-challenged Mainland Chinese think ‘Richmond’ means ‘rich man’? ”

Not nice.

It is often cited locally as a contributing factor. — Garth

True! Where do you live Not Nice?? Certainly not in the Lower Mainland of Vancouver… you would know this to be true! Do your own DD!!!

#57 bigrider on 12.30.10 at 8:30 am

Marc Pinsonneault senior economist with National Bank went on record yesterday as saying RE prices could drop 5% over next two years but prices will remain at pre recession peaks and no drop like US in the cards.

Is this guy a paid shill as well?

#58 T.O. Bubble Boy on 12.30.10 at 8:44 am

@ #52 Victor on 12.30.10 at 5:17 am#20 TO Bubble Boy

How do you know those two properties have had their prices reduced as the listing pages do not show this info? Is it because you personally followed the property histories or is there another way to get historical info like that?

>> I live in the area, and walk by these 2 on a daily basis (they are 1 block apart). The $599k older detached house that sold in days with multiple bids was 1 more block down the same street.

#59 T.O. Bubble Boy on 12.30.10 at 8:45 am

oh – and guava.ca can show you price reductions for a property *IF* the realtor doesn’t re-list on realtor.ca to hide them.

#60 T.O. Bubble Boy on 12.30.10 at 8:46 am

(or, any realtor can provide all historical selling/listing prices on a property for you — since they have all the data in the mls system)

#61 Mark on 12.30.10 at 9:07 am

To the guy mad about the living with parents comment…

Honestly, living in the parents’ basement at 30 is a bit sad as it is, but somebody else doing it WITH you is even worse. There’s a big, wide line between saving money and doing well, that. If somebody expects to transition from being coddled by their mother(probably still having their cooking and laundry done for them) to the real world to be easy, they are dillusional. But rather than renting and learning what real expenses are…jumping right into home ownership. Not to mention, him and his fiance don’t even know what it’s like to have their own privacy at this point and to truly live together, alone. It’s a bad idea on so many levels.

I’m renting right now with my girlfriend and combined we’re saving 50k/yr and we’re making the average income in the gta. Not so bad, and I wouldn’t trade the 12k/yr saved for living with my parents again. Not a chance…

#62 luketheduke on 12.30.10 at 9:25 am

Gath you are running out of fairy tales are you?

Please keep your sexual issues off this blog. — Garth

#63 Ben on 12.30.10 at 9:50 am

The Great Bond Selloff: Outflows Getting Bigger.

By far, the most stunning news coming out of weekly fund flow data was the massive outflows from fixed income portfolios. In aggregate, retail investors withdrew a net $8.6 billion from bond funds during the week ended 12/15/10, well above the $1.7 billion of outflows in the prior week, and the highest level of attrition on record. Outflows from both muni and taxable bond funds surged last week coming at $4.9 billion and $3.8 billion, respectively. Most of the redemptions likely reflected falling NAVs, as long-term rates continued to trend higher, and credit spreads widened (particularly on the muni side). Assuming investors continue to reallocate away from fixed income, we expect some of those dollars to find their way into equity funds.

http://blogs.wsj.com/marketbeat/2010/12/23/the-great-bond-selloff-outflows-getting-bigger/?mod=yahoo_hs

This is why it pays to be contrarian. — Garth

#64 john m on 12.30.10 at 10:23 am

Rich Chinese–yea right…a large percentage of these purchases are funded by “dirty money” (drug money) smuggled out of the country then brought back in ..invested in real estate and cleansed. IMO

#65 Svend on 12.30.10 at 10:29 am

So immigration and financial globalization has the twin benefits of driving down wages and driving up the cost of the most expensive asset most of us will ever buy?

#66 Paolo on 12.30.10 at 10:35 am

“Canadian home prices drop again”

http://www.moneyville.ca/article/913260–canadian-home-prices-drop-again

But article goes on to say we will be OK and not to expect any USA style drops…

“Canadian housing prices dropped in October for the second straight month, but experts say it’s not the start of a precipitous decline like the plunges seen in the United States.”

Always been a question of ‘when’ and not ‘if’ when emotions are taken out of the equation and the economic realities hit home.

#67 Sand Piper on 12.30.10 at 10:36 am

To back up Garth on the Richmond comment – I have heard that similar reference 20 years ago with respect to north of Toronto’s Richmond Hill area –

It’s a cultural thing – I don’t regard it as disrespecting the Asian Community!

On the past few blogs from G-Man – I have to admit – reading how 20 & 30 year old couples are making in excess of $100K, often just one making that income – and I am floored – I have a wide circle of friends and family and only one member of my family makes in excess of $100k (family doctor) –

Am I missing something – our family budget is nearly 1/2 that and we are managing our mortgage / debts in a fashionable sense – these turds should be living it large – yearly vacations to exoctic places (we even managed to take a once in a lifetime trip to Fiji on a very tight budget)…so cry me a river folks – get a life, living with Mom – what a knob!

So you live outside of town, add 30-45 minutes to your travel could save thousands + a bit of space is welcomed too. I really must of missed the gravey boat – I have struggled in making even an average wage but have a car paid off – house with just under 7 years remaining on my mortgage (bought our first house 8 years ago) and a few extra dollars to boot each year for a little get away –

Manage your money people and stop whining to Garth about “your big worry” – what you need is a good kick in the %&#$%#’s…..

If the avg. family income is $60K, these knobs are way above the curve and shouldn’t be wasting blog space -

#68 Ottawa Young One on 12.30.10 at 10:38 am

In need of some advice Garth, pretty please!…

Both my husband and I are 26 with one child, we have recently increased our household income by a substantial amount, however we are used to living and budgeting off the former.
I have a $24,000 student loan (now down to $17,000 after working hard to pay it down for a year and a chunk from Dad).
If we keep the lifestyle we have been living I could have my student loan payed off in 9 months. Do you think that we should be piling all of our extra cash into paying down my student debt (which I pay prime + 2.5%) or putting it somwhere else? We are both clueless when it comes to this kind of stuff. Can you also reccomend a fee based advisor in the Ottawa area, so I don’t get stuck with any more RRSP’s in the Orange guys shorts and RESP’s that pay nothing.

Thanks…btw…love the blog, a colleague introduced we to it months ago and I have been reading it ever since, you stopped me from wanting to upgrade my home…well maybe not stopped me from wanting but definitely stopped me from doing!!!

If you have just come into more income, then us it to trash debt. The student loans are at 6.5%, a rate which will likely increase next year, and this is non-deductible debt. Toxic. And pay your dad back. — Garth

#69 Lori on 12.30.10 at 10:42 am

#14 – Jessica

Watched an 80 minute lecture by Nicole Foss last night, called a Century of Challenges. Interesting points however she explains the 90% comment differently than on youtube? She points to the price of a house in Detroit, even thou you would not want to live there and states 90% does not apply across the board. Take a look at The Automatic Earth website.

Betty needs to learn that extreme statements undermine solid reporting and analysis. I think she got all juiced sitting close to mad Max. — Garth

#70 jack on 12.30.10 at 10:45 am

severe debt scarcity coming
http://english.alrroya.com/content/severe-debt-scarcity-coming-us

#71 Willa on 12.30.10 at 10:53 am

Don’t diss the extended family home option.

Since the Industrial Revolution, the West has been obsessed that when you “grow up” you “leave home” (i.e., uproot yourself to follow the jobs). The calved-off “nuclear family” was easier to float from factory to factory than the anchored extended family.

Now Western culture thinks the nuclear pair is normal and the extended family is weird. Psychologists have dreamed of disorders about it, like “failure to launch.” We even get creeped out by the idea of having sex in a house where the parents could be having sex.

But in most cultures of the world, the extended family under one roof is the NORM. We’re the weirdos, not them.

So living with parents doesn’t mean you lack a pair. It doesn’t mean you aren’t grown up. It’s one option on the table, and it comes with the benefits of having more than two adults to do all the work (including childcare).

Get a condo if you really want one. But don’t go out and get one just because a grumpy guy in a hummer said you’re not a man. Just like you disregard your friends telling you you’re not a man for not buying a house.

Sticks and stones.

Thanks mom. Hug. — Garth

#72 dogman01 on 12.30.10 at 10:57 am

Thought I would post these links; great look at the really big picture. May help when deciding how and where to invest portions of your liquid assets.
The first is shorter but has the “cool” higher production values.
http://www.youtube.com/watch?v=jbkSRLYSojo&feature=player_embedded
As an “Xer” in conversation with my tip of the boom father, I note the mindset with which he views the “backwards” places like Chindia.
If the “trend is your friend” this second link illustrates where the macro trend looks to be going.
http://www.ted.com/talks/hans_rosling_asia_s_rise_how_and_when.html

The BBC clip is a good reminder of why the doomers on this site are dead wrong. We are entering into a time of challenging adjustments, but no depression. — Garth

#73 dd on 12.30.10 at 11:06 am

Don’t bet against the states / US dollar? Actual proof that you can:

ROBERT SHILLER: If House Prices Keep Falling This Fast, The Economy Is Screwed

Housing guru Robert Shiller says the decline in October’s Case-Shiller house-price index was much worse than expected (over 10% annualized).

He also says that if house prices keep falling this fast, the economy will face “serious reasons to worry” (which, for Professor Shiller, is an apocalyptic statement).

6 of the 20 cities in the index have now hit new lows, below the lows reached in 2009 before the “recovery” in house prices. In several cities, prices are back to where they were 10 years ago.

If prices continue to fall at this rate, Shiller expects the panicked Congress will issue another home-buyer tax credit or other emergency measure to stop the fall, despite the fact that it’s an unfair gift of taxpayer money from renters to home-buyers and homeowners. When the ship is sinking this fast, Shiller says, you do what you have to do.

#74 bullion.bunny on 12.30.10 at 11:09 am

Betty needs to learn that extreme statements undermine solid reporting and analysis. I think she got all juiced sitting close to mad Max. — Garth

If I told you on Sept 1,2008 the S&P would crash to 666 and the entire system would melt down you would have made the same statement.

To be accurate, in early September of 2008 this blog warned: “The stock market will be hammered, eroding the value of every investor’s portfolio, RRSP and pension. This brings household wealth down, drops confidence and is nothing but negative news for real estate as liquidity is drained away in financial losses.” Try not to embarrass yourself in public. — Garth

#75 Carlyle on 12.30.10 at 11:13 am

Talked to my wife about selling last night. She might be willing to do it although obviously she’s upset. If we decide to go this route, are we better to wait until F changes mortgage rules in the spring and hope for a “bounce” in demand?

Or should we get out of Dodge now?

List now, I would say. You could be buried with competition in six weeks. — Garth

#76 Bottoms_Up on 12.30.10 at 11:30 am

#61 Mark on 12.30.10 at 9:07 am
——————————————
Totally agree. I was out of the parents home at 18 (14 years ago) and never looked back. I wouldn’t trade my 20’s, being on my own, learning about ‘real’ life, and gaining independence, for any amount of money (and I really love and get along well with my parents).

#77 bullion.bunny on 12.30.10 at 11:40 am

To be accurate, in early September of 2008 this blog warned: “The stock market will be hammered, eroding the value of every investor’s portfolio, RRSP and pension. This brings household wealth down, drops confidence and is nothing but negative news for real estate as liquidity is drained away in financial losses.” Try not to embarrass yourself in public. — Garth

Can you point to the archive? I doubt very much you envisioned the carnage that ensued. Your warning was of a correction that many had warned of and not armageddon. Please stop with the revisionist history, it seems to be your forte of late!

I’m not your librarian. Just your conscience. — Garth

#78 Rich Renter on 12.30.10 at 11:41 am

#75 Carlyle.
It’s only a house, sell it, rent, pay the debts and enjoy life. We rent in Calgary have a 2 year old daughter and are debt free, life can be good.

#79 C on 12.30.10 at 11:42 am

So will December 2010 gta real estate stats show a yr/yr price drop? Prices have been clinging to +3 to +4% yr/yr gains for the past few months. I’ve noticed listings here in Burlington, Ont have collapsed. I know it’s the holidays and this is normal but they have declined big time.

I was at a wedding last night, and again when people asked where I was living I said my wife and I sold our condo in April and we are renting. They still look at us with confusion, and ask why are you renting? So funny, yet so pitiful that the majority have no clue about what’s going on economically. I then talked to another couple who are friends of mine. The wife said she is on board with renting but that when she tells people “it’s so embarrassing”. I said when it’s come to being embarrassed to rent, that is a great indicator that this bubble is toast. I then said if you lived in the States, people would be envious of you because you are renting. I told her to be patient and she will be rewarded.

2 other couples have bought a house with a closing dates around May 2011, and are going to be listing in a couple of months. Looks like there is a good chance we will get that explosion in listings come spring as Garth is calling for.

Someone also brought up that renting is a waste of money. I then said well how about if you buy a $400,000 house, and have a 4% fixed rate mortgage on it for $300,000. That would be approximately $12,000/yr in interest. Add on another $3,000/yr in property taxes, and all the other upkeep. Never mind if that house goes down 20% and is worth only $320,000 in a few years.

Basic math that the average Canadian should be doing before going into the biggest purchase of their life.

#80 dogman01 on 12.30.10 at 11:44 am

#71 Willa – Totally Agree

Noticed a theme going on:
First, get a life. Grow a set. Be a guy, dude.”
#8 NFN_NLN – 30 years old and living with his mom
One of the advantages of Canada is seeing how approaches from a variety of cultures cope.
My WASP culture: – get out of house, on your own, “be a man”. Spent my twenties establishing myself, education, vehicle etc, – from zero…builds character perhaps.
With university now a prerequisite, House prices starting at $400K, and jobs disappearing to Chindia, it is a war on the middle class. Starting from zero gets you kids in your 30’s and debt servitude well into your 40’s. I have seen these guys at work, the boss puts the screws to them- can smell the fear; two kids, child care and a wanking big mortgage – if they have a set they can’t bring em to work.
Other cultures manage this, the family builds wealth.
Save $100K in your twenties, invest in a diversified balanced liquid portfolio paying 7%… in your 40’s Whamo; you will have a “big set”, can take career risk, your own business start up. Lots of options.
Our economy is changing; debt has become the only way to maintain a “lifestyle-status-quo”. Multi-generation houses each generation supporting the other is starting to look like one of the few strategies for the middle class to attain Wealth. Accepting a lower standard than your parents is tough to take…other choices may look a lot better going forward and become the norm.

#81 avenirv on 12.30.10 at 11:55 am

#4 specuskeptic
garth posted the proof a couple of weeks ago. not all but some “crazy” tranzactions at least are because of the asian people.
so the urban legend has some legs.

#82 allisun on 12.30.10 at 12:05 pm

Does anyone recommend selling by owner vs listing with realtor? It annoys me to consider how much most realtors want in commission: 6%-7% for the first $100,000 and then 1% for the remaining. Currently, the FMV for my property is approximately $575,000, so after all is said and done, listing with a realtor plus closing costs etc. will cost me about $15,000. Any ideas out there?

#83 Wendy on 12.30.10 at 12:05 pm

Renting is the way to go. When we were living in Calgary we were paying a fabulous rent for a house downtown. All the yard, space, convenience and comfort we needed without the cost as there was no way we could have afforded to buy the house we were in at the current value. Fortunately our landlord had bought the house before the boom and therefore did not have a huge mortgage on it. Probably would have signed a 20 year lease had we decided to stay there.

#84 allisun on 12.30.10 at 12:07 pm

Also, listed on Craigslist a month ago, and have only had a couple of visits. Maybe just the time of year, or maybe I am not being low enough in pricing?

#85 ralph on 12.30.10 at 12:13 pm

#71 Willa:

I would think the reason most extended family members are forced to live under one roof is not by choice.

#86 T.O. Bubble Boy on 12.30.10 at 12:15 pm

@ #79 C:

I am in an almost identical situation, and trust me, the confused looks never go away — since the day my wife and I sold our condo, we’ve been asked repeatedly by every friend/relative/co-worker when & where we’ll buy a house! (we’re now renting a house)

The most shocking part: some of the same people that constantly ask “when are you buying again?” are also very knowledgeable on real estate market! i.e. they know the stats, and reference current news stories on the housing market. So, it’s not like the anti-renters are living in the dark ages without access to information… more like, even with all of the statistics presented to them, they still stick with their beliefs.

#87 Utopia on 12.30.10 at 12:25 pm

What the heck does HNY mean? I must be out of touch.

#88 eddy on 12.30.10 at 12:26 pm

i phone real estate app

http://www.digitalhome.ca/2010/12/iphone-app-helps-canadians-find-a-home/

#89 Bottoms_Up on 12.30.10 at 12:33 pm

#73 dd on 12.30.10 at 11:06 am
————————————
Buy when others are fearful.

I would say maximum fear toward real estate has hit the US. Right now is probably the best time to buy.

#90 Mr. Plow on 12.30.10 at 12:37 pm

#75 Carlyle…

Sell now! You have a small window (4-6 weeks) to get it sold. Find the lowest comparable sale price in your neighborhood and list below that.

Don’t follow the herd mentality that you will get more for it in the spring, you will be faced with likely 4-5 times the competition as well. List now, and take advantage of the “prices will be higher in the spring” mentality of buyers right now.

Lastly, some unsolicited marital advice. If your wife truly is unhappy about selling and moving make this as easy and seamless as possible. You better bust your ass getting stuff packed, cleaned etc… You would also do yourself a favor by finding some really nice rentals so she can see that renting isn’t equated to living in crap. I would also recommend doing something for her when this is all done to show your appreciation. Doesn’t mean you have to buy her something fancy, but maybe make a nice 4-5 course meal for her for your first night in your new place.

Good luck, I hope everything works out for you.

#91 greg on 12.30.10 at 12:37 pm

Most on this blog are wildly optimistic in regards to what is really going on.

Of course residential real estate is going to decline by about 90 %……just as “betty crocker” predicts. She is wrong in her prediction of a deflationary depression however (at least in the next 5-10 years).

The hard core reality is that humanity writ large, hit a wall in 2005/2006 called the energy peak (peak oil if you will). That is a FACT…wild eyed faith in cornucopian fantasies matter not one whit now….

The effect of a global agroindustrial behemoth (thats human civilization folks) hitting an absolute energy barrier is terminal.

The effect on a global economic system that is premised on eternal growth (recessions and depressions have historically been currency/politically driven) is catastrophic and unending.

BUT…..there is always a but……it takes time to be felt.

As passengers sitting in the rear seats (canadians) we are just feeling our collective asses rise out of the seats as our bus impacts the wall. Our american breathren (and I use the term loosely) have already recieved a facefull of glass shards and feel their heads hitting the windshield.

The obvious effect of hitting the energy wall is that worldwide, governments, vested interests, collective parasites of all types will try and hide the FACT as long as possible (extend and pretend). the collective effect will be a MASSIVE release of fiat currency from TPTB to try and paper over the uncaring reality of energy restriction. This is by nature INFLATIONARY.

We are heading into a massive inflationary environment that will be quite beyond anything that has gone before.

It will only end when total collapse of respective nationstates ensues.

Then we will see Nicole Foss’ deflation take effect. But the “valued” currency of the day will not be US greenbacks (or singapore dollars). It might be gold….it might be silver……it most probably will be beaver skins and turnips up here in the great white north.

Economists (and financial planners) are idiots because they honestly believe that their extremely limited view of the world is in fact reflective of reality…..

it ain’t…….paper (fiat) is finished…..and with it the hopes and dreams of billions of people….

But it takes time, and that is what creates greater fools of almost everyone.

#92 Mean Gene on 12.30.10 at 12:46 pm

Carlyle old boy, if you sell the house make sure you take your lady on a nice vacation for a couple of weeks.

Check out the Cook Islands, I’ve been there a few times and it’s as nice as it looks… and no casinos or ugly mass tourism

http://www.ck/

#93 Pr on 12.30.10 at 12:52 pm

Well , Teranet house price index shows second straight monthly decline! The Teranet index has not recorded consecutive monthly declines since the housing market tanked back in 2008 to early 2009. Its a funny time of the year to say that, but, Real estate, its your final count down!

#94 Kris on 12.30.10 at 12:58 pm

HNY?

I googled the acronym and found http://www.hotnudeyoga.com

Please say it isn’t so…….

#95 Sue on 12.30.10 at 12:59 pm

You have a good woman. Make sure she knows that every day and that it turns out to be profitable and a “win” for her financially.
You can find beautiful places to rent and like “rich renter” says, ENJOY LIFE. You can be a RE vulture in 3-5 yrs. That’s what I plan on doing..not proud of it.but so be it.
McMansions will be on SALE and every woman loves a sale.
Good Luck!
Good luck!

#96 Sue on 12.30.10 at 1:00 pm

woops…remove 1 Good Luck! lol

#97 dd on 12.30.10 at 1:01 pm

#74 bullion.bunny

…To be accurate, in early September of 2008 this blog warned…

Please, driving next to a cliff I get premonitions of crashing too. There are a few people out there that were predicting of the crash back in 2004 – 2006.

#98 Corey on 12.30.10 at 1:17 pm

I have also heard that the Chinese like Richmond because if you look at it on a map, it is the pearl in the dragon’s mouth. Good feng shui!

#99 Jeff Smith on 12.30.10 at 1:17 pm

I heard the horses has left the barn a long time ago. lol

http://www.mortgagebrokernews.ca/news/harper-hints-at-tighter-mortgage-rules-in-2011/75859

#100 Rafael Minuesa on 12.30.10 at 1:19 pm

“Is this all because a bunch of linguistically-challenged Mainland Chinese think ‘Richmond’ means ‘rich man’?”

Not only you spread knowledge but you also have a great sense of humour, Garth. Confucius would be proud of you.

Happy New Year!

#101 Dawn in Calgary on 12.30.10 at 1:28 pm

Happy New Year (HNY) to Garth and all denizens of this lovely blog.

Here’s to 2011!

#102 dark sad person on 12.30.10 at 1:41 pm

#91 greg on 12.30.10 at 12:37 pm

The obvious effect of hitting the energy wall is that worldwide, governments, vested interests, collective parasites of all types will try and hide the FACT as long as possible (extend and pretend). the collective effect will be a MASSIVE release of fiat currency from TPTB to try and paper over the uncaring reality of energy restriction. This is by nature INFLATIONARY.

We are heading into a massive inflationary environment that will be quite beyond anything that has gone before.

It will only end when total collapse of respective nationstates ensues.

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

Unreal-
“If” that were to happen-it would be deflationary-
How does a shortage of energy increase the money supply?
How could “unleashing” massive amounts of fiat “paper over” a shortage of oil?
It would constrain industrial growth world wide-

You hyper-inflationists have to be dropping acid to come up with these wild conclusions-

#103 kitchener1 on 12.30.10 at 1:41 pm

In regards to married couples living at home with their parents.

I was on my own at age 21, brought a condo, paid for school, worked 2 jobs, life was hard.

I watched the majority of my friends either live for free or maybe pay $300 a month for rent to their parents. These are the guys that now have or had 100-200K plus downpayments for there houses. Cant blame them, if I had a choice, i would have done the same.

I wouldnt look down on married couple that did that. Weddings are expensive and if they can if fact save 50-60K a year, then why not. From my experience, friends, co-workers, there is ussually more to the story. That parent may need extra care or have mobility issues and its not something that people will just come out and admit.

Even if you just look at the $ they save on rent (lets assume $1500 x 12) thats 13K, thats a great head start on paying for the future kids education etc..

Personally, I wouldnt do it, no way, it would be too much of an adjustment after living on my own all these years, but I do understand the concept and wouldnt hold it against anybody.

A lot of single guys/gals do the same thing when buying a house, rent the top part and live in the basement, once again, i wouldnt do it but who am I too judge. If it allows them to pay their mortgage off in 20 instead of 25 then great.

One thing is for sure, its a lot easier to sacrifice when your just married or single to save 50-60K then it is to actually save that same amount of $$ when you are older, have kids etc… never again will people save that much $

#104 prairie gal on 12.30.10 at 1:45 pm

HNY = Happy New Year!!!!

#105 Carlyle on 12.30.10 at 1:55 pm

A couple quick questions about selling …. does it matter when we set the close date (would a longer close date in say March or April screw us over if the housing market collapses? — do we need a “fast” close)

Should we use a Realtor or try to sell ourselves? The equity is already minimal (about 65k) a realtor will vulch 15 k of that not to mention lawyer fees and breaking our mortgage fees.

I’ve been thinking about it since yesterday and realized that the 407etr alone is costing me 400 – 450 a month , plus another 400 mth on gas. Plus the money to service my debt which is about 300 – 400 mth on top of the 1k a month + in payments to principal … probably losing close to 2k a month that we will no longer have to pay.

#106 Painted Toenails on 12.30.10 at 2:00 pm

Well, well, well. The boyfriend can be convinced after all ;-) A little wine, a little massage, a little ….well, nevermind that part.

He’ll list next week, hopefully sell quickly and may well escape the roiling mess that is gathering steam and beginning its descent towards Victoria.

I’ll keep ya’ll posted Dawgs.

#107 Dorothy on 12.30.10 at 2:08 pm

In response to #82 – Allisun, yes you can sell your own home without the assistance of a Realtor with the following caveats:
1. Make sure your home is priced correctly. Most FSBO homes that don’t sell are overpriced. Homeowners frequently have inflated ideas about what their home is worth in today’s market. Follow the advice given by Mr. Plow (#90) and ” Find the lowest comparable sale price in your neighborhood and list below that. Note that I say “comparable”, not all homes in the same neighbourhood are in equal condition. If possible, try to get a look inside some of the homes you are using as a comparator.
2. Many FSBO homes are inadequately advertised because, not content with saving thousands of dollars on commission, many homeowners are too cheap to pay for decent advertising. Run a slightly larger ad than most of the other FSBO homes in your local paper, and include a picture. Change the picture periodically. Also, take advantage of free advertising on sites such as Kijii and openrealestate.ca and include the web address to those sites in your newspaper ad.
3. Have all the information buyers are likely to want to know typed up in the form of a handout you can give them when they come to view your home (e.g. square footage, age of roof, age of furnace, average heating costs etc.). And just in case they want to make an offer, include the full legal description of the property.
4. Allow viewings “by appointment only” in order to avoid all the lookey loos and nosey neigbours you might get. Anyone who is serious about buying your home will wait a day if they really want to see it.
5. Put away all valuables that could easily be popped into someones pocket (this applies even if you list with a Realtor)
6. Prepare your house ahead of time by completing all minor repairs and touching up paintwork etc. Steam clean the rugs and wash the windows. Tidy up the yard to increase curb appeal.
7. Keep your house clean and tidy (and this includes inside the cupboards because prospective buyers WILL want to look inside them).
8. Try not to take it personally when someone criticizes your home. (Remember, as long as they buy it doesn’t really matter whether or not they like your choice of carpet colour).
9. When someone makes an offer, and after haggling you agree on a price, insist that they get their lawyer to write up a formal Agreement of Purchase and Sale which all parties will then sign. The offer should include a clause allowing the Purchaser approx. 7 business days to obtain both financing and a home inspection satisfactory to the Purchaser.
10. If there is anything in the offer that you don’t understand, make sure you get your own lawyer to read it over before you sign it.

I’ve sold 4 homes by myself, and in each and every case I priced it lower than comparable homes that were listed on MLS, and in each and every case I wound up selling it for MORE than those listed homes. So go ahead and try selling your home yourself. You can always list it later if it doesn’t work out.

#108 Trev on 12.30.10 at 2:21 pm

Well,
A nice summary of the underlying factors in our house of cards real estate situation in today’s Yahoo Canada Finance site, titled:
Could a US-style collapse happen here?

http://ca.finance.yahoo.com/news/Could-U-S-style-collapse-yahoofinanceca-2480210207.html

Seems on all accounts, the logical conclusion is… don’t bet against long term trends!

#109 brynn on 12.30.10 at 2:31 pm

#4 specuskeptic – you’re funny! you want proof? you obviously havent been to the west side of vancouver or richmond have you?

and sorry garth – a 1% drop in toronto and calgary for a commodity that has risen 6% in the last year is not remotely catastrophic. ( vancouver prices are still up)
your frame of references are once again terribly misleading – the arbitrary illustration of a house selling in asian heavy richmond in a bidding war and a place in langley down 20% is a joke. You dont know anything about the two properties that were likely as different as pizza and wine. i wouldnt live in richmond for all the tea in precious china ( and yes garth is right, the chinese do equate the name of the city with luck and wealth) however, langley is a sleepy little dump with a terrible commute to vancouver. Anyway, prices are not down in langley…the properties your minion speaks of are likely dumps, poorly marketed, overpriced etc.

and puuuhleaze…dont bring up the tired USA thing again…different animals…absolutely no connection.

i want real estate to plummet believe me, but its not going to happen -so quit holding onto false hopes – your newly wed should buy a property. We’ve seen the end of the massive boom, so the kid isnt going to get rich, but its the only way to make tax free cash and not worry about getting kicked out by some greedy landlord. Be the greedy landlord…

#110 kitchener1 on 12.30.10 at 2:35 pm

regarding my comment #103

I meant to say that $1500 x 12 = 18k, got my numbers mixed up. Sorry $13K would be $1080/month, not going to find a condo in Toronto for that, maybe an apt, but condo– no.

#111 greg on 12.30.10 at 2:41 pm

102

It IS constraining growth worldwide now…that is happening. The Baltic dry index has never recovered from 2007/2008 and it won’t now.

It IS deflationary LONG TERM…..but that is not how human economic systems operate when premised on continual economic expansion.

Human power structures will try anything to escape the ultilmate deflation at the end of the road…..and that is where wild money printing enters the picture (think of it as Mayan priest kings invoking the gods from the top of pyramids in view of the masses…..or may be think the roman senate consenting to continual coliseum games and “free” bread and beer to all citizens of rome)

You confuse reality with political/economic subterfuge.

The human enterprise HAS been flatlined now…we are at peak energy production of all time….but the EROEI ratio is now in sharp and exponential DECLINE….and that is where the demons live.

“Artificial” inflation (and hyperinflation in places) and then final crushing deflation.

Just wait a while…..you will see….or perhaps not, but you WILL pay more for food and fuel to the point where you will not be able to afford the incredibly cheap plasma screens and ipods….

confusing ain’t it?

#112 Bottoms_Up on 12.30.10 at 2:58 pm

Happy New Year to all, and welcome to 2011, the year the first 40/0’s renew…..

#113 SRV ES339 on 12.30.10 at 2:59 pm

#10 – GBoomer

A (very wealthy) friend bought a high $400s house in St Pete’s a few of years ago (uses it 6 months a year) for just over $200k (“they’re giving them away”).

He bought a larger one in the same upscale gated community (over 4000 sq ft, 4 BR with all the toys originally selling for over $600K) just a few months ago… for $121K… and they’re still dropping!

Richmond 2012?

p.s. Anyone notice how many McMansions are up for lease (“renting” is for losers) in the west end of Toronto for $5K to $10K a month? Check out mls.ca… change sales to rent, go to Mississauga and scroll west between QEW and the lake… interesting!

#114 Bill Grable on 12.30.10 at 3:07 pm

Peter Schiff –

“With a bleak economic prospect stretching far out into the future, I feel that a 10% dip below the 100-year trend line is a reasonable expectation within the next five years, particularly if mortgage rates rise to more typical levels of 6%.

That would put the index at 114.02, or prices 28.3% below where we are now. Even a 5% dip would put us at 120.36, or 24.32% below current prices.

If rates stay low, price dips may be less severe, but inflation will be higher.

http://tinyurl.com/23gsly8

#115 Linda Pearson on 12.30.10 at 3:18 pm

I was at a wedding last night, and again when people asked where I was living I said my wife and I sold our condo in April and we are renting. They still look at us with confusion, and ask why are you renting? So funny, yet so pitiful that the majority have no clue about what’s going on economically. I then talked to another couple who are friends of mine. The wife said she is on board with renting but that when she tells people “it’s so embarrassing”. I said when it’s come to being embarrassed to rent, that is a great indicator that this bubble is toast. I then said if you lived in the States, people would be envious of you because you are renting. I told her to be patient and she will be rewarded.
…………………………………

I can’t believe the number of posters on this site who willingly reveal that they listen to criticism from friends and family, or strangers for that matter, about their living accommodations. Just once I wish they would have the gumption to reply something like, “The very first minute I think this is ANY of your business, how about I give you a call.” If you want to rent, own or squat, do it without regard to what others may think of your arrangements.

Where, with whom, and for how long any of us lives somewhere should be of no concern to anyone but those involved, and this includes Mom, Dad and Grandma, as long as one is a self-supporting adult. For Pete’s sake, grow up people!

#116 Adele on 12.30.10 at 3:24 pm

Re: mikef who said his “old elementary school had a whole list of support staff including an occupational therapist. How many 9 year olds are working??”

Occupational therapists (OTs) help children with disabilities become more independent – “occupation” is meant to be more than a job – its the things that you love to do, have to do or need to do ( http://www.caot.ca/default.asp?pageID=3610 )

and probably the OT is part-time – I have a young cousin who had to wait over 1 year to see an OT in the school system.

#117 Sue on 12.30.10 at 3:29 pm

@Carlyle
If you have a firm deal (accepted offer and conditions waved), you are free. You can watch the market collapse and laugh. Go for a long close so you have ample time to find a nice place. Don’t be stubborn though, a sale is more important and you’ll find something regardless.
There’s lots of info on FSBO on this blog (see above). I think realtysellers.ca (or.com) offers a full service agent for 0.5%. I would go that route. You still have to negotiate with buyer’s agent though. You might want to offer buyers without agents 2K for closing costs etc because it will be waaay better for you if they don’t have an agent.
Sue

#118 dd on 12.30.10 at 3:37 pm

#111 greg

…confusing ain’t it?..

No. We will pay more for the things we need and less for the things we want.

#119 rifles on 12.30.10 at 3:39 pm

“high end area of Langley ” is an oxymoron

#120 hobbitt on 12.30.10 at 3:45 pm

more racist comments………. I think the Chinese influence on the Vancouver market could sustain it longer than other areas of Canada.
The reason- compared to Chinese cities, Vancouver is very small. A small city in China is 5 million people. It doesn’t take many investors as a group to sustain a location of 500k.

The example- When the Japanese RE market rocketed up in price, many began investing in Hawaii. I remember the stories of bitter locals not able to buy on their own island. Hotels were selling for double their income value. When the Japanese RE market reset, sellers needed their money back and there were no buyers. In the following years prices returned to their normal range and the Japanese lost a lot of their investment money.

The prediction- The Chinese will continue to distort theVancouver market until their own market corrects and they need the money to repay their loans. Then Vancouver will return to it’s normal state of delusion.

In the mean time, don’t think of” Rich man” to be a normal” Canadian” market.

#121 Daystar on 12.30.10 at 3:49 pm

#28 nonplused

Can’t agree with you on everything all of the time. We are overtaxed? The working classes already can’t afford their taxes, which is why they are so far in debt? Let me remind you that our richest tax bracket in the 90’s peaked at over 51%, corporate tax rates peaked at 28.5% and capial gains were 75% taxed. Today, our personal tax bracket has been dramatically reduced at all levels including raising the bar on entry levels, corporate tax rates are at a paltry 14.5% and capital gains are 50% taxed. We are over taxed? Sounds popular to say it, but compared to where Canadians came from a mere 15 years ago, doesn’t ring true.

And this tax thing, being the reason why we are so far in debt, is also untrue. Debt didn’t visit the working man because of high taxes. Debt visited the working man because banks lent the working man way more than the working man is able to afford. Look around and ask yourself why it is that banks are lending individuals up to 10 times their earned net income with real estate at or near the peak zenith height of valuations… tell me, does make any business sense at all to you? Can the average reader tell me what is wrong with lending huge amounts of cash to the average Joe who is on average non too bright with investments as it is to buy high and later sell low (the recipe for bankrupcy) and logically where it will all end?

Indulge me. What is so brilliant about lending people money they can’t afford (as interest rates rise) to buy an asset that is highly overvalued and has nowhere to go but down? Seriously, why are our banks lending money to the average working man to buy high with the general outcome in time being forced sale low? Seriously… why are our banks doing it? Because CMHC takes all the risk. Thats why. Because our banks and our CEO’s and managers care more about market share then they do you and I and everyone else.

Isn’t it obvious?

We’ve had a government that rang up over $450 billion worth of mortgages through lax CMHC regs, grotestically long 35/40 year amortizations and basically nothing down or essentially expanded credit by over 40% in a mere 4 years while incomes flatlined. Banks, realtors, developers and media put them up to it and being as weak and dullard as they have been, our federal government bent over willingly. You want to put blame accurately where it is, there it is. A weak, stupid government, media pimping lies for money, banks exploiting the system for greed and then, finally, the average Joe who in his own ineptitude, either couldn’t see whats coming or wouldn’t. In the end, everyone will be to blame, innocent or not, public debt will swell from bailouts (but think, how much more can it swell?), 1 in 7 to 1 in 10 will lose everything they have and our currency and future will be in doubt.

You are right about one thing, nonplused. Interest rates will rise and when they do, it will expose the ponzi scheme for what it is… but lets face it. Where is the wisdom in lending to the average person that which they cannot afford to buy an asset at or near its peak values? Thats a recipe for wide scale financial ruin and its already happened here. The only thing left to expose the stupidity and greed for what it is, is the rise of interest rates of which, is there but a one of you readers who believes that, with $100 billion being borrowed by our federal/provincial/municple governments annually (with a mere 1.45 trillion dollar GDP pie to sustain it) last year, this year and possibly next… followed by trade deficits that are clocking in around $20 to $30 billion annually… that the bond markets won’t react to this elevated risk with the demand for higher returns?

Naturally services will be cut. Pay as you go has always been the plan meaning, there is no plan for those who can’t afford services. If governments continue to run the deficits they have been for a mere few more years, public debt now at 73% of GDP will approach a hundred (its now annually rising intergovernmentally at 7% per year). At the rate our public debt is rising (not counting bailouts), we should be approaching 100% public debt to GDP ratios… something similar to where Greece was before their crisis emerged around 2014. Can someone tell me what Greece’s bonds rates are now? (don’t indulge me, I already know, indulge yourselves and prepare. Clearly, most of the rest of Canada is not prepared for what comes next)

Not picking on you nonplused, just gotta vent. You understand why…

#122 Todd on 12.30.10 at 3:54 pm

Twenty one years ago my wife and I married and were given the opportunity from my parents to live rent free in the basement for a year as a means of saving a down payment for our first home. The deal was that we would buy the bulk of the groceries for everyone and cook at least half to the meals – both of which we did. Oh, and we did our own laundry.

We used the opportunity to sock away every last dime of our disposable we could and managed to save the $32,500 we needed to buy our first home, which cost $120,000. That opportunity set us on the road to financial independence at a very young age to the point where we are now in our mid 40’s and mortgage free in a (different) house worth about $800K (coming down in price soon, according to Garth). I feel we were very lucky to have the opportunity – but not coddled – and that by making the most of it, we are in a very sound financial position today. We would have been morons to not take that opportunity and go out and rent. I’ll do the same for my daughter if she wants that opportunity.

#123 GregW, Oakville on 12.30.10 at 3:56 pm

Hi Garth, fyi 3 article and a links to find them at http://www.infowars.com/

Baby Boomers Start To Turn 65: 16 Statistics About The Coming Retirement Crisis That Will Drop Your Jaw
The American Dream | The moment when the first Baby Boomers reach retirement age has arrived.

Underneath the Happy Talk, Is This As Bad as the Great Depression?
Washington’s Blog | Even though the government’s spending on the economic crisis dwarfs the amount spent on the New Deal, our economy is still stuck in the mud.

More Dollar Declines in 2011?
CNBC | The US dollar is likely to fall further during 2011, but the stock market could perform well, according to Peter Cardillo, chief market economist at Avalon Partners.

#124 grantmi on 12.30.10 at 3:59 pm

Wow.. looks like the CN$ might finally close above par today to the US$ Greenback!

If it does.. watch out!!

#125 David B on 12.30.10 at 4:01 pm

#105 Carlyle on 12.30.10 at 1:55 pm

I have always used a Realitor …. if you know a good one with lots of experience and are confortable with that person … it’s the only way. Selling on your own can be an experience and it is not for the faint of heart.

It appears you have decided on plan “B” becoming debt free and building a nest egg is not wrong! Once y’all aquire cash in bank you will be surprise how more you stop and think before parting with it.

#126 GregW, Oakville on 12.30.10 at 4:01 pm

Hi Garth, Were will it end ‘up’?

Gasoline price hikes continue

30/12/2010 12:42:46 PM
CBC News
The average price of a litre of gas in Canada rose by a cent on Thursday to bring the national average to nearly $1.12 per litre. That’s an increase of five cents per litre in just one month and 14 cents over the last year…
http://news.sympatico.cbc.ca/consumernews/gasoline_price_hikes_continue/4dc5818b

#127 Oasis on 12.30.10 at 4:04 pm

How does a shortage of energy increase the money supply?
______________________________________

maybe you weren’t alive in the 70’s?? lol
classic. you don’t even understand monetary events from 40 years ago.

#128 dark sad person on 12.30.10 at 4:16 pm

#111 greg on 12.30.10 at 2:41 pm

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

I understand peak oil and yes the price of oil will go up but that does not constitute hyper-inflation-
We already have hyper-inflated-if you look at the credit markets-
We are now going into deflation and will be in deflation until we either get the cash to credit ratio back to around 10/15-1
We are around 90-1 here-
Or we default-which i think is the more likely scenario-

Sure-some countries could blow their currencies up if they do not follow the US limitations-
Also to your point–

“Human power structures will try anything to escape the ultilmate deflation at the end of the road…..and that is where wild money printing enters the picture”

Isn’t that what they’ve been doing?
Little of that money circulated in the economy-it did nothing but recapitalize banks and they’re just sitting on it-
Japan did it for 20 years-how did that work?
Japan is back in deflation-
Did the JPY hyper-inflate?
No-it got stronger-although it did go carry trade-

Look for the USD to head into the 90’s and watch oil go to $30-50 before it goes past $100-
All you’re seeing is speculation driving prices-
That-like credit has an end game and when that happens-overall prices will fall-

When deflation ends-likely by default-
Then inflation and possibly hyper-inflation will be a problem if they cannot sop up liquidity fast enough-but that is a problem not to be concerned with today-maybe 10 years out-
A World War could make everything we say today redundant-

#129 Mike Turner on 12.30.10 at 4:17 pm

Peter Schiff sees another 20% correction in house prices for the US:

http://www.cnbc.com/id/40853858

#130 GregW, Oakville on 12.30.10 at 4:17 pm

Hi Garth, 3 electrifying news articles

A Less Mighty Wind
Three reasons wind power could wane
“Wind turbines wring energy out of a free-flowing fuel ­supply that may be losing some of its punch. Surface winds appear to be weakening across the Northern Hemisphere, including in the United States, Western Europe, and China—the world’s top three markets for wind power. And climate change threatens to weaken them further during this century as faster warming over northern ­latitudes trims the temperature gradients that energize airflows…”
http://spectrum.ieee.org/green-tech/wind/a-less-mighty-wind

Electronics on Anything
Chemical trick puts solar cells and other electronics on rice paper, Saran wrap, and more practical things, too
http://spectrum.ieee.org/semiconductors/materials/electronics-on-anything

Printed Power Sources for Cars and Consumer Gadgets
Two firms say their printing tech can make cheaper batteries and ultracapacitors
http://spectrum.ieee.org/semiconductors/nanotechnology/printed-power-sources-for-cars-and-consumer-gadgets

#131 Cookie Monster on 12.30.10 at 4:21 pm

#211 Aussie Roy on 12.30.10 at 3:05 am

I think it might help if you look at the bigger picture. I did read your defaults doesn’t cause deflation which I don’t agree with if defaults are wide spread enough.

and

As such I think this statement is false.
“The only way we can get deflation is if people stop spending and start saving, and it’s a long slow process, one in which government will be trying to prevent to get their 2% CPI.”

IMHO it should read. The way we can get deflation is if people stop increasing the demand for debt (current additional spending above their income) and start deleveraging or saving, and it’s a long slow process, one in which government will be trying to prevent to get their 2% CPI. In such circumstances the govt will attempt to fill the falling private debt demand with govt debt demand (as per the US during great depression).
————–
Aussie Roy from yesterday, if you disagree with what I said about how default is not deflation, then please point out my error. I run a business, I do bookkeeping, double entry accounting and corporate taxes. I know for a fact that bad asset losses are expensed off the balance sheet. Expensing an asset is not deflation, contraction of money and credit, it’s spending.

and

I don’t see much difference, but the way you said is more clear and explicit, it’s what I meant. Saving implies not borrowing so I didn’t think to express that.

No, I’m not interested in debating this anymore, I’m busy. I come here for fun and I’ve had enough for one week! Thanks.

#132 realpaul on 12.30.10 at 4:22 pm

Civil service pay gouging strips seniors of their last pennies.

http://www.vancouversun.com/health/seniors+face+rate+rises+care+homes/4041395/story.html

F’s ZIRP and the onerous CRA have raped the rest away and seniors can now only wish for an early non pensioned death…unlike the fat sucking union pricks at the heart of the cost hike disaster.

#133 GregW, Oakville on 12.30.10 at 4:25 pm

Hi Garth, 3 electrifying news articles can be found at
http://spectrum.ieee.org/

A Less Mighty Wind
Three reasons wind power could wane
“Wind turbines wring energy out of a free-flowing fuel ­supply that may be losing some of its punch. Surface winds appear to be weakening across the Northern Hemisphere, including in the United States, Western Europe, and China—the world’s top three markets for wind power. And climate change threatens to weaken them further during this century as faster warming over northern ­latitudes trims the temperature gradients that energize airflows…”

Electronics on Anything
Chemical trick puts solar cells and other electronics on rice paper, Saran wrap, and more practical things, too

Printed Power Sources for Cars and Consumer Gadgets
Two firms say their printing tech can make cheaper batteries and ultracapacitors

#134 nonplused on 12.30.10 at 4:32 pm

Thank goodness this won’t happen in Canada (for those who haven’t seen it):

http://online.wsj.com/article/SB10001424052702304173704575578190261574342.html?mod=googlenews_wsj

#135 pessimisticprof on 12.30.10 at 4:34 pm

Richmond BC is perhaps the one region in Canada where the old “immigrant money will keep prices up” myth is actually true. Starting with the influx of Hong Kong money in the 1980s, Richmond took off. The reasons for the continued growth in property values is simple – the first factor is chain migration. Chinese from Greater China (HK, Taiwan, PRC) tend to purchase where they feel comfortable or where their family (or their agents) have experience, which leads over time to the creation of ethnic enclaves as subsequent waves of immigrants follow in the footsteps of those who came earlier (given the money involved you can’t call them ghettos!). This explains why Richmond has such a high concentration of immigrants. The second factor has to do with lot sizes – most lots in Vancouver are 3000-4000 sf, while Richmond still has a large number of lots with 7000+ sf, so if you want land value and potential for subdivision down the road, Richmond is a better deal. There is also the proximity to the airport. Many immigrant families have breadwinners who still work in Asia, so commute time to the airport is more important than commute time to downtown Vancouver. There is also the ridiculously lax enforcement of bylaws and tax rules. All over Richmond you can see monster houses that are built to the limits of the zoning rules, with every sf taken up by the house or paved over. Why does a house with a 3-car attached garage need so much parking space? Because the garage is actually cover for an illegal suite, and you need the outside parking for all the tenants. Of course, those suites are in addition to the 2-3 suites built into the main house. Richmond is slowly being paved over as mature trees are cut down to max out square footage and parking for tenants. And this does not even count the high rise condo developments that are being marketed exclusively to the overseas Chinese market – Richmond will soon have more ghost towers than Yaletown (highrises where the majority of the units were sold to foreign investors and sit empty). But hey, for the oldtimers who own property, this is all good stuff. Sell off the rancher to a developer and walk away with $800K in tax-free profits. And don’t worry if your kids can no longer afford to buy a house in the neighborhood they grew up in – they can rent a suite in one of the new monster houses!

#136 Wilde_at_heart on 12.30.10 at 4:45 pm

@ BigAl (Original)

It’s about maturity. I’ve yet to meet someone who still lives with their parents over the age of 30 who isn’t emotionally stunted.

There’s a degree of humility that comes with struggling occasionally in life, and with that humility comes compassion and empathy for the struggles of others, treating others with respect and consideration and being able to manage conflict and all the little daily challenges.

Those who’ve had a free ride with their parents tend – even the nicer of them – to be fairly arrogant, spoiled and self-centered, but worst of all, are poorly equipped to deal with even minor difficulties or disputes all that well. There’s something to be said for what in the past was termed ‘character building’.

#137 Brandon on 12.30.10 at 4:47 pm

Oops! I worked full time and lived with my parents for 3 years after graduating and then I moved my fiancee in with me for a year after that. We bought a few months ago at 25. Guess I need to check my pants, too …

However, the plus side is we had a 50% down payment on a house we could afford at 0% down. The monthly payments are so small that our total expenses are the same compared to living with my parents! (It’s good to be out though!)

With a temporarily great mortgage rate my attention is now focused on investments. Knowing your outlook on the Canadian housing market, what is your outlook on other Canadian investments?

#138 Painted Toenails on 12.30.10 at 4:48 pm

Dorothy – great advice, good post.

#139 bill on 12.30.10 at 4:51 pm

thanks dogman

#140 dark sad person on 12.30.10 at 4:57 pm

127 Oasis on 12.30.10 at 4:04 pm

How does a shortage of energy increase the money supply?
______________________________________

maybe you weren’t alive in the 70′s?? lol
classic. you don’t even understand monetary events from 40 years ago.

*******************
You’re such a mixed up little dude-lol

Actually-i was alive in the 70’s and i know what happened in the 70’s but-there’s no point going through that complicated story with you-
“hint” it had something to do with gold-

So-if you know how to interpret a chart of base money supply-here’s the 70’s for you-
Show me the “monetary events”
Looks pretty benign to me-lol

http://research.stlouisfed.org/fred2/series/AMBSL

#141 nonplused on 12.30.10 at 5:03 pm

#128 Dasystar

I agree, we were even more overtaxed in the past than we are now! And look what happened! A steady loss of manufacuting jobs and a lackluster economy for years.

We can’t have both a robust economy and robust taxes. The 2 don’t go together. Instead, the conversation ahead will be about which services the government provides we can live without (or in the private sector), which ones we insist be government funded, and then minimizing the cost of those services somehow. If we don’t do it in an organized fashion now, the market will do it for us in an unorganized fashion some distance down the road.

PS – Cheap labor is seldom the determining factor in relocating a factory. Afterall that is a lot of capital to deploy and another lot of capital to sit idle afterward. Tax rates, energy costs, and regulation also factor in. If we try and tax businesses 50% again, they will leave again.

#142 Carlyle on 12.30.10 at 5:13 pm

Called a realtor, he’s coming over on on Saturday. Guy sold 2 homes on my street in less than 6 days each.

He did say in the case of a long close we would need a signifgant down payment from the buyer (at least 10k) … because the buyer can still walk but will lose that downpayment if they do.

#143 dd on 12.30.10 at 5:25 pm

#124 grantmi on 12.30.10 at 3:59 pm
….Wow.. looks like the CN$ might finally close above par today to the US$ Greenback! If it does.. watch out!!…

What? Will something happen the minute it hits par?

#144 Alex on 12.30.10 at 5:29 pm

109, Brynn…truly a bad post. Firstly, you give no evidence/proof of anything you say. Langley prices are NOT down…there’s no connection at all between the US and Canadian housing markets…two properties that are as different as pizza and wine…the properties are dumps…real estate isn’t going to plummet. All suppositions on your part that seemingly just shot out of your fingers and onto your keyboard. Sounds just like a few realtors I know.

I’m no expert, but I can tell you this. Richmond IS crazytown when it comes to real esate. Not a single detached home in the entire soon-to-be literally-underwater community for under a half million dollars? Not even the most decrepit tear-down? It truly IS a mania there right now.

Langley, on the other hand, where you say prices AREN’T down, is in fact the closest thing to a true buyer’s market this close to Vancouver. I’ve watched homes languish on the market for months at a time and seen price reductions galore over the past few months. In fact, I’m on two realtor hot sheets in the area, and can say authoritatively that the three most recent alerts out of Langley (yesterday and today) were ALL price reductions. I’m not saying Langley’s “crashing,” nor do I have enough insider info to make any sweeping claims at all. All I can go by is what I see, and what I see is that some of the deflating pricing so evident further out in the Valley (Abbotsford, Chilliwack) appears to be inching its way ever closer to the Rainiest Place on Earth.

#145 Timing is Everything on 12.30.10 at 5:32 pm

Off topic, but car sales are way up in Mexico (good news)…
Supply and demand…Free market…Ha!

http://www.msnbc.msn.com/id/40844073/ns/world_news-americas/

#146 David_Ricardo on 12.30.10 at 5:35 pm

Montreal’s resident goofball journalist Jay Bryan mentioned you in this morning’s Gazette:
“Even big American newspapers that usually give Canada about as much coverage as Iceland became interested. The Wall Street Journal ran a front-page story in February under the headline Housing Rebound in Canada Spurs Talk of a New Bubble.

Where was the talk coming from? The most prominently quoted source wasn’t an economist or a real-estate expert; it was Garth Turner, a former politician who had been promoting a book predicting a housing collapse.”

I read his pollyannish trash 2-3 times a week. It’s non-stop positive spin. He should be employed at CNBC.

http://www.montrealgazette.com/business/solid+basis+scary+speculation/4039586/story.html

#147 Live Within Your Means on 12.30.10 at 6:42 pm

Well, well, well. The boyfriend can be convinced after all A little wine, a little massage, a little ….well, nevermind that part.

He’ll list next week, hopefully sell quickly and may well escape the roiling mess that is gathering steam and beginning its descent towards Victoria.

I’ll keep ya’ll posted Dawgs.

……………..

Funny!! I have a SIL – 18 yrs younger than I who uses those tactics to get her way. It’s amazing what a little ‘nookie’ will get ya :-)

#148 Mister Obvious on 12.30.10 at 7:15 pm

#9 Guy In Regina

Did you think anyone here would be likely to catch your obscure reference to an episode of “The Simpsons” from several years ago? Just asking.

#43 SophieZombie

If 4 is bad, why is 8 not twice as bad? This has always puzzled me.

#149 Mister Obvious on 12.30.10 at 7:33 pm

#54 BigAl (Original)

Completely disagree with the “grow a set” comment, forcing people out of their parents’ homes and into the world of rent / mortgages, when they could save tons of $$$ and strengthen family ties…

Myself, I tend to fully agree with the “grow a set” comment. Many years ago, my father was willing to pay for my higher education while I lived at home. My response was to throw it back in his face.

You see Big Al, I hadn’t grown a set yet. Dad’s response was ‘Ok pal, get out and let’s see how you fare on your own’. This was absolutely the very best thing my father ever did for me and I still respect him for it long after his death. He tossed my lazy, unappreciative, inexperienced naive ass out the door.

Behold! My ‘set’ started growing almost immediately.

#150 dark sad person on 12.30.10 at 7:48 pm

#133 nonplused on 12.30.10 at 4:32 pm

Thank goodness this won’t happen in Canada (for those who haven’t seen it):

“As a result, the trajectory of home prices has tremendous economic significance.”

********************
I couldn’t open the page so i don’t know if Schiff mentioned it or not-but he isn’t exaggerating about the “tremendous economic significance” part-

(i know you know this)

In fact what’s happening to the defaulting homeowners loss of personal money supply is peanuts when you look at the big picture –

Those mortgages are the base for the whole CDO/CDS market-
Hundreds of trillions of dollars are leveraged to the price of homes/mortgage value through CDO’s (bundled mortgages) that were grade rated by Moody’s/S&P etc. and we’ve now found out there was no due diligence done and that the rating agencies had a clause in the small print-stating that they were not obligated to do DD and if things went south-they were not liable-
US banks sold them to other banks all over the world-who levered them even higher-some as much as 120-1 and paid a high risk premium and they were then sold to corporations and pension funds and into almost all money markets-

Well-house prices did what they did and when they did it-it was discovered the world was insolvent-
So rather than letting the peasantry know their world was f–ked-they moved/hid them in “Level 3 assets” -printed some money and declared solvency but in Level 3-sits what was once the worlds economic driver-

Levered at 120-1 means-if the price of the CDO went down-for every dollar it went down the holder of the leverage lost 120 dollars-
If it went down $10,000 dollars-the holder lost $120,000
If it lost $100,000 the leverage holder was underwater $1.2 million

Those figures i used would be about the amount of only one mortgage inside the CDO and there could be as many as 10 or 20 mortgages inside of 1 CDO there were thousands of CDO’s and thousands more CDS’s wrote with no known backing-
Now we can see the magnitude of this cluster F-

#151 specuskeptic on 12.30.10 at 7:49 pm

Over 146 posts and I’ve heard only what is tantamount to anecdotal evidence for the mystical beast known as the Asian investor. The old “drug money” canard was thrown in for good measure.

Thanks #81 avenirv, but I need the data. I read this blog everyday and I haven’t seen it. Until I see the data I will continue to doubt:
1) Asian investors drive the lower mainland market
2) Drug money drives the lower mainland market
3) RealPaul is capable of posting a comment without some union reference juxtaposed with a scatological one. ;-)

Add “Asian Investor” to the pantheon already occupied by the likes of the Yeti, Ogopogo, and Chupacabra.

#152 Devil's Advocate on 12.30.10 at 7:50 pm

THIS WILL BLOW YOU AWAY!!!

Central Okanagan sales volumes for December 2010…

Drum roll please…

already up over that of 2009, 2008, 2007, 2006, 2005, and 2004.

And…. the month ain’t over yet.

Seriously… I’ll post the finals for you to cry over on Jan 1, 2011

#153 realpaul on 12.30.10 at 8:07 pm

Canada is designed after the wacko mind set of Pierre Trudeau and the Liberal Party he created. His plan was two fold….destroy the country of Canada and give birth to the new nation of Quebec. And two destroy the manufacturing base of the country so as to adhere to the ‘globalization theory of sustainable development’.

Trudead needed people to depend on the government so he went about plowing into the established constiuencies of urban centers and replaced them with tightly controlled immigrant ghetto’s.

He mandated a minimum seven percent unemployment with ‘the seven percent solution’. Unemployed people are beholden for benefits and don’t talk back. His most successful experiments were the Maritimes and GTO. By carving up neoghbourhoods into ‘parliamentary seats’ he controlled the parliament for thirty years.

He destryoyed traditional manufacturing by embracing ‘globalization’. Not because he wanted to expand business for Canada, he wanted to ship western weath to the third world so that all economies around the globe would resemble one another. He couldn’t have that if some countries stayed more affluent than others. he was in a position to wreck the Canadian economy and he went about doing just that.

Inside the Grunfelf Document there was also a side item they had named the Kyoto Accord…..dreamt up a decade before by the same Prime Minister of Holland. The climate change story was a tactic that was embraced so that these governments could tax the rich west and ship the money off to the east. They called it ‘sustainable development’…it was sustainable as long as the west would keep shovelling money to the dictators. We got spun to us as ‘ a carbon tax’. But it wasn’t a carbon tax at all. it is a bleeding hearts guilty reaction for having been born into the efficient cultures of the west as opposed to the dumbocracies of the third world where religions, civilizations, technology and society has spent the last two thousand years raping and murdering each others goats and stealing the women they thought they’d hidden under big black sacks. Why the westerners should feel bad about having gitton themselves organized in the same time frame that the third world has no is a topic of conversation to some, a foregone conclusion to others.

We still have the entrenched bureaucrats trying to wreck the country by forcing egregious taxation on citizen and business. The waste of taxpayers dollars is in the trillions and still the civil servants gorge on the excess that they seem to think they’re entitled to.

Canada has been around about the same amount of time that many other experiments that have bitten the dust…all because of incompetance and careless malcontents in government.

When the taxes hit 100%……you’ll be able to surf the emigration wave out of the country. THEN who’ll be left to pay the taxes???

Certainly not the waves of excited immigrants and the tens of thousands of settlement programs funded by the taxpayer.

#154 Coraline on 12.30.10 at 8:10 pm

DA: Since November 2010 sales were down about 35% from November 2009, that’s quite the recovery you’re boasting about. Oh wait, I get it, you’re talking about the total $ value of the sales. You can call it what you like, but I call it lying.

#155 S.B. on 12.30.10 at 8:32 pm

FYI Garth, still flying?

Here is an amazing article that looks at the effects of flying while flouridated!!
.
.
.
:P

Arghhhh! — Garth

#156 Nostradamus Le Mad Vlad on 12.30.10 at 8:32 pm

-
Time Traveling Zombiehoofs are almost as tasty as melt-in-the-mouth Crunchy Frogs!
*
“Please keep your sexual issues off this blog. I think she got all juiced sitting close to mad Max.” — Garth (it’s Mad Vlad!)

The Black Bra (as told by a woman)

I had lunch with two of my unmarried friends. One is engaged, one is a mistress, and I have been married for 20+ years.

We were chatting about our relationships and decided to amaze our men by greeting them at the door, wearing a black bra, stiletto heels and a mask over our eyes. We agreed to meet in a few days to exchange notes.

Here’s how it all went.

My engaged friend: “The other night when my boyfriend came over he found me with a black leather bodice, tall stilettos and a mask.

“He saw me and said, ‘You are the woman of my dreams. I love you.’ Then we made passionate love all night long.”

The mistress: “Me too! The other night I met my lover at his office and I was wearing a raincoat, under it only the black bra, heels and mask over my eyes.

“When I opened the raincoat he didn’t say a word, but he started to tremble and we had wild sex all night.”

Then I had to share my story: “When my husband came home I was wearing the black bra, black stockings, stilettos and a mask over my eyes.

“When he came in the door and saw me he said . . .

“What’s for dinner, Zorro?”
*
#26 obert — “I enjoy the comments as much as GT’s articles.”

Ditto. I learn lots from comments and Garth!

#43 SophieZombie — ” ‘4’ or 44 is death-death. Usually numbers 4 and 13 are avoid in condo building in Richmond.”

Correct. My better half is from Canton (right across the sea from HKong), and said that Chinese try to avoid buying homes with the # 4 in, eight is good. Superstitious babble from my POV.

#115 Linda Pearson — “For Pete’s sake, grow up people!”

Agreed. Unwanted (and unwarranted) advice always will go in one ear and out of the other. I would rather take chances on myself, make mistakes and learn from them than listen to advice from someone who is not in my shoes.

#128 dark sad person — “A World War could make everything we say today redundant-”

Correct. It would get rid of a lot of the unnecessary deadwood (politicos and their ilk) who enjoy screwing up peoples’ lives; maybe it’s time for the tables to be turned.

#157 Increasing that 1% on 12.30.10 at 8:55 pm

#141. Carlyle

Good you and wife are thinking about your options, and your priorities, and what things are worth to you both.
=====================

Re: …”Is this all because a bunch of linguistically-challenged Mainland Chinese think ‘Richmond’ means ‘rich man’?”-Garth

Worked with a lady from China, new in Canada, who’d just bought a big new house in Richmond Hill when McMansions were just starting there– she’d said the reason they’d picked the area was from looking at a map, and seeing ‘Rich’- they thought that was a good thing, a good sign, they might get rich, riches in their life…
====================

Family traveller tidbits:
-Chinese-in China- talking about real estate is overpriced by at least 30%
-Ireland is seeing young people leaving in higher numbers than in the ’50’s
-Greece real estate not going down so much yet, as the people still have money, the Government doesn’t
-jobs sparse in Ireland (incl. for experienced workers and older grads-second career), many cutbacks starting for all

and, conversation with someone happy to be home, as:
-delays with flights in London were ‘horrible’, like a ‘war zone’…hotel prices shot up 500%,.. no water provided, pilot hours (of awakeness-or what-ever) getting timed out..salt budget used by November..

#158 Oasis on 12.30.10 at 9:00 pm

Show me the “monetary events”
Looks pretty benign to me-lol
___________________________________________

of course it would look benign to you. you’re looking at your charts on an arithmetic scale, not a log scale.

not sure you do it on purpose, or you don’t know better. but considering all the charts you post are arithmetic, you probably don’t know the difference. lol. most likely a poor background in mathematics to boot.

#159 Daystar on 12.30.10 at 9:10 pm

#140 nonplused

I agree with what you are saying about spending. Its out of control but where do we cut? Do we need to be in a war right now? Do we need new war planes? Is our soil under threat? Did we seriously need to overspend on development (economic action plan)? Did the feds need to spend $100 billion on mortgage backed security buyouts for no other simple reason than to keep 5 year term rates artificially low further driving real estate valuations to unsustainably high, bubblicious levels just to see banks expand their market share which includes a good chunk of present customers who will later go broke as a result?

What part of health care are we paying too much for? All of it? Are nurses paid too much? Will administrative costs suddenly become cheaper along with municiple taxes, power, heat and health supplies under private care? Doctors are under contract (private), should we renegotiate? Everyone knows about our chronic doctor shortages. Are we paying too much for patented drugs? I think so. Where do we cut? We can start there…

As far as taxes go, I likely differ from your views here. I believe we made too many tax cuts, its hit revenue in a major way and we’ll have to brace for higher taxes without question from all three levels of government but mainly from the feds. Thats just how it is. Revenue has to come from somewhere, the sooner the better or higher interest rates on ballooning debt will kill us all.

From 94′ to 06′, we doubled our GDP. Thats where all the mysterious revenue came from last time ’round to get us out of the last currency crisis/debt mess we found ourselves in. We shouldn’t expect a repeat, especially with a government who, acting in their own self interests encourage banks/people to lend/borrow for assets at their peak values with interest rates having nowhere to go but up. we both know that when interest rates do rise (and they will, our governments have made it 100% certain with the unsustainable borrowing spree they’ve been on), the phisod will be over and dumb assed federal policy will be seen for what it is. Sadly, why can’t Canadians see it for what it is right now? Do we seriously need to see valuations crumble and personal equity vanish first at our own doorsteps to see it for what it is? We are like frogs in a soon to be boiling pot of water, somehow still claiming to be smarter than all the rest.

I guess… thats karma.

#160 Edmontonian on 12.30.10 at 9:12 pm

I don’t hear much talk about Housing building issues throughout other parts of the Country like we have here in Alberta! Dozens of Condo Projects have been leaking & rottening due to no “envelope” standards set here in Alberta. There is no membrane material (like Tyvek) being put over the chip board when they buil thses condo projects. So, after a few years the building gets water infiltration and the balcony & walls slowly start to rot. MAny newer buildings are getting Engineer assessments to try to fix the problem. SOme assessments have been around the $40,000 range, other only in the $15,000 range. This coupled with rising interest rates, rising personal Bankruptcies & historically high foreclosure rates (worse than the early 80’s when we had 22% mortgages in Canada!
The condo & housing market is going to get punched in the stomach!

#161 serferdude on 12.30.10 at 9:13 pm

@specuskeptic

You may not believe in the “asian investor” until you see data.

However, it really doesn’t matter if they actually exist or not. The fact that people BELIEVE they exist is really what matters.

What’s probably happening is that rich asians do in fact buy some of the houses…the problem is, the rich ones can afford to pay high prices…it’s the sheep locals who are taking big mortgages to compete with the small handful of asian buyers that’s the problem.

So indirectly, the rich asians do drive the market..because the less wealthy locals are willing to take so much debt to “keep up”.

And no, I don’t have hard stats and facts. However, when the last two open houses I’ve been to are attended by 99.9% asians, its safe to assume there is some asian demand out there.

I’m a RE bear like most on here. However, at some point we gotta differentiate between what we “HOPE” to be true and what is in fact REALITY.

I HOPE prices go down, but in reality they have not. I HOPE the asian investors are a myth…but who knows…

#162 Aussie Roy on 12.30.10 at 9:31 pm

Thats great Cookie, so we both know a high level of defaults leads to a rationing of credit (credit crunch) which is deflationary.

#163 john m on 12.30.10 at 9:41 pm

I get so tired of hearing about these thousands of wealthy Chinese immigrants…….do your homework people-most live far below what we call the poverty level in Canada..there really is not masses of wealthy Chinese ! Welcome to BC the money laundering capital of canada and the politicians know and turn a blind eye

#164 Nostradamus Le Mad Vlad on 12.30.10 at 9:49 pm

-
Geithner Revenge of the nerd.

Bills C-36, S-510 and this. TPTB are (temporarily) having their way. Here too.

DSP – “…And the US is NOT preparing for conflict “in every direction”?!? wrh.com. Plus this.

Not true (at least I think so).

Obama’s Police State “It will start with DUIs, then move to anti-terror, meaning anti-patriot.” wrh.com. Plus — Different country, but the same thing.

Satirical Predictions “The dollar will collapse and old burned-out ipods will become the new hard currency.”

Didn’t Harper say Canada is out of the Af’stan war in 2011?

Survival Info. for those who would like it.

GW Isn’t summer marvelous at -20C?

‘Net Control “The Internet, while impossible to control, is also an excellent recruiting ground for sympathetic or easily-convinced “bloggers” who will quickly disseminate official dissemination for pay or public acclaim.” “Like Wikileaks! ;-) ” wrh.com.

Couple of clips New Jersey / St. Paul, Minn. 20 inches = 20 hours. Where is Pope St. GoreAl of The Mythbusters? Also — 300 Years.

1:40 clip WH on the board of directors of Goldman Sux.

4ClosureG8 in Hollywood.

Belgium – Country without status. Plus — Protests in Tunisia — wot a surprise. It’s spreading like hot butter.

#165 Cookie Monster on 12.30.10 at 9:49 pm

#152 realpaul on 12.30.10 at 8:07 pm

That’s right. It’s like religion’s aim for the destruction of mans mind to destroy thinking and reason of independent men rendering the proletariat blind and dependent on autocratic demagogues without question. Ignorance is bliss for those who are in power. Yet they fail to see the benefits of what will never be under such repression.

The altruist mentality and the sucking of wealth from the capitalist nations to the poorer nations in the 1960’s is critiqued without mercy by Any Rand in her book ‘Capitalism the unknown ideal’.

The altruist sacrificial ideology was praised by the pope at the time and the business community of the USA became apologetic and indefensive. A sad state of affairs. This is likely the same mentality taken on by Trudeau at the time.

This is the danger of socialism and too much government control, bad ideas and ideology can fester in the minds of men with grandiose delusions of utopia if only everyone would cooperate, and then out come the guns!

#166 allisun on 12.30.10 at 10:01 pm

Thank you for your very insightful response, Dorothy #107, to my questions regarding my post # 82 with regard to FSBO vs Realtor, and also to Mr. Plow’s advice (#90). Dorothy, I am going to put into action your 10 Points on selling without a Realtor. I was already rather committed to the idea, and have bought and sold 3 homes with one, but feel that I am ready for the challenge on my own (with a good Lawyer, of course). For anyone else interested in selling their property I recommend reading the post as it is clear. I have done some preliminary research into similar properties, however this was done in August. I have advertised, being greedy, AT the similar values of $579,000 for similar properties (I actually compared to 3 of them in my area, and as we are rural and on acreage, there aren’t too many with which to compare).

What do you all think? Should I list for $550,00 and see how it goes? Is that sharp enough or should I go lower? I hate to sell but I am committed to sell because I fully agree, from reading this site as well as doing a lot of my own research, that prices will fall and I will KICK myself for not selling.

Thanks for the support.

#167 Devil's Advocate on 12.30.10 at 10:04 pm

#153 Coraline on 12.30.10 at 8:10 pmDA: Since November 2010 sales were down about 35% from November 2009, that’s quite the recovery you’re boasting about. Oh wait, I get it, you’re talking about the total $ value of the sales. You can call it what you like, but I call it lying.

Sorry Coraline but you are wrong.

Sales volumes in November of 2010 were 120 units (SFD). For the same month 2009 they were 159 units (SFD). That equates to less than 24.53% fewer units sold in November this year over that of last not 35%.

But you will be happy to know, for what it is worth, the average price this November was just $433,838 compared to $465,352 last November. ;-)

#168 Devil's Advocate on 12.30.10 at 10:14 pm

#153 Coraline on 12.30.10 at 8:10 pm

However, further to my last post, Coraline; last year in November there were 5 of the 159 homes sold for over $1,000,000 where this year there were only 2 of the 120 sold for over $1,000,000. That might have influence on that “average” don’t you think? What say you Coraline?

#169 T.O. Bubble Boy on 12.30.10 at 10:14 pm

@ #110 kitchener1:

There are plenty of condos in Toronto for around $1100/month… for example:

http://toronto.en.craigslist.ca/tor/apa/2103782633.html

http://www.realtor.ca/propertyDetails.aspx?propertyId=10199737&PidKey=-1460357228

#170 Cookie Monster on 12.30.10 at 10:17 pm

#158 Daystar on 12.30.10 at 9:10 pm
Good post, you raise a lot of good questions. And the answer is ‘open all services to private competition and profit motive and let business men who need to separate people from their money figure it out’.

I don’t have the answers and neither do you and neither does the government. Recognition of this fact is step 1.

Good doctors, nurses, teachers, police, fire, garbage, etc. will all get their just deserts in a free market and bad ones won’t!

Good people will rise to the top in an open fair market without government intervention. Government’s job would be to make sure the field is level by only implementing and enforcing objective laws and regulations that can be backed by science and ethics and common law and fairness.

Look at all the good doctors that fled Canada in the 60’s or 70’s to the USA. Good people must be able to excel. In a private for profit setting they can, they can innovate and deliver top services at lower prices where business success is built on reputation and incentive to help people live better.

A socialist healthcare system is an innate conflict of interest. It’s cheaper if you die fast than live when the government has to foot the bill. In a private system the incentive is exactly the opposite.

#171 Devil's Advocate on 12.30.10 at 10:20 pm

#153 Coraline on 12.30.10 at 8:10 pm

I might make the occassional mistake… to that I will confess as I am even at my age still learning, but I never lie Coraline… NEVER.

Watch Wallstreet, Money Never Sleeps “Stop telling lies about me and I will stop telling the truth about you” Gordon Gekko. ;-)

#172 Kaganovich on 12.30.10 at 10:23 pm

#149 DSP

JHK called the financial the financial products derived from the American real estate boom/bust a 1.4 quadrillion black hole. Can anyone can fathom how much a quadrillion is?

#173 Cookie Monster on 12.30.10 at 10:24 pm

#161 Aussie Roy on 12.30.10 at 9:31 pm
Thats great Cookie, so we both know a high level of defaults leads to a rationing of credit (credit crunch) which is deflationary.
————
No it’s not. This is an erroneous conclusion. It’s the end of the current expansion, but not a contraction. Even if there’s a raft of defaults its still not deflation.

The question is what will happen once the expansion is halted, will deflation be permitted or will government lend a hand to keep the party going?

#174 dark sad person on 12.30.10 at 10:36 pm

157 Oasis on 12.30.10 at 9:00 pm

Show me the “monetary events”
Looks pretty benign to me-lol
___________________________________________

of course it would look benign to you. you’re looking at your charts on an arithmetic scale, not a log scale.

not sure you do it on purpose, or you don’t know better. but considering all the charts you post are arithmetic, you probably don’t know the difference. lol. most likely a poor background in mathematics to boot

****************
You’re finally right about something at least-
I do have a poor background in mathematics-

But what rankles you the most is-
I can and do-boot your dumb ass around in economics every step of the way any time you come against me-

You and your assbackward goldbug “theory’s” that prices drive money supply are becoming a board joke-

So-show the board your version of the proper charts on the correct scale and show them where I’m wrong-

Funny-every economist i read and “learned” from-uses the same charts i do-
It’s only you that i know of who can’t interpret them –

Anyone else having problems with them?

#175 stellamonkey on 12.30.10 at 10:42 pm

Brynn, you are a certifiable freakin idiot….. suprised you have time to type with all that koolaid you are chugging… might want to go easy on that vodka additive…. :-o

#176 john m on 12.30.10 at 10:50 pm

It’s not easy to find but from my searches the average wage in China is approx. $6,000 US………..get a grip folks BC is not “shangri la”…just a hell of a good place to launder money .With the billions of dollars generated in the drug trade one can also control the market………pretty sweet huh

#177 Coraline on 12.30.10 at 11:07 pm

DA: You said you were talking about Central Okanagan, where sales are indeed down 35% YOY for November. It appears you’re talking about a smaller area, but you didn’t make that clear.

Regardless, you are attempting to mislead people by talking about total $ volume rather than unit volume. You are picking the only statistic that allows you to pretend that the market is something that we will “cry over” or that will “blow us away.” I fail to see how even a 25% decline in unit volume will blow this board away.

As I said above, you might not call that lying. I do, and I suspect many others feel the same way. But I’ll let them decide for themselves.

#178 dark sad person on 12.31.10 at 12:16 am

163 Nostradamus Le Mad Vlad on 12.30.10 at 9:49 pm

DSP – “…And the US is NOT preparing for conflict “in every direction”?!? wrh.com. Plus this.

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LMV–from your link-

A recent analysis in China’s Global Times detailed how the U.S. employs the sale and provision of military hardware – from firearms to armored combat vehicles, warships to warplanes and other military aircraft, missiles (including interceptors) to entire weapons systems – to advance its global geostrategic objectives:

“The Cold War political map is being redrawn. Arms sales are helping the US extend its influence in the Asia-Pacific region and pave the way for a new global hegemony.”

“After the Cold War, apart from a few rogue states, the US targeted almost every country in the world for arms sales and is also keen to sell military technology to Russia. High-tech weapons – including missile defense systems – are the main items on the list of US arms sales.”

“The US is unabashed about using high-tech weapons to expand its sphere of influence. In Europe, the US has continued to entice Eastern European countries into NATO and to squeeze Russia’s traditional sphere of influence.” [10]

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The biggest gun runners on the planet-pushing arms into all the places that will need them when we finally engage in the big one on the African continent-

Alignments are not cemented yet-that part will fall into place on its own but matters not to sociopaths who control-

Somewhere ahead of us-likely later this new decade-
First we must engage in small mass psychological provoked religious wars-which are now underway and the alignments will develop from there-

To the winning side goes the spoils of war-the rebuilding and developing of the last of the words resources on the great continent of Africa who will tower above all nations as the richest and most powerful country ever-before it too eventually tips into the dustbins of history-

Whichever side wins is immaterial to the sociopaths and to them as always-goes the wealth of the resources and the labor and the blood-

Granddaddy Bush did well in WW#2 as he was the main oil broker for both sides-documented evidence of that and Hess and Kissinger and Rothchild and all of them-they’re all still there-

We’re all still here-the only change is the fresh faces-
Same game as always-

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SINKING OF THE “LUSITANIA”

The assasination of the Austrian Crown Prince started the war, but the sinking of the passenger liner Lusitania by a German submarine escalated the war by contributing (together with the furor over the Zimmerman Telegram) to United States involvement in the war. The arrival of American troops later in the war would tip the balance decisively in favour of the Allies. The sinking of the unarmed vessel was generally regarded as an outrageous act of murder by the American public and British propaganda exploited the sinking to the fullest.

Twenty minutes after the torpedo had struck the ship she had disappeared beneath the surface of the sea.

However, the sinking of the Lusitania was perhaps more morally ambiguous. Firstly, the Germans had published notices in the American newspapers (America was the then neutral) warning that any vessel entering a military zone around the British Isles would be subject to sinking. Secondly, it was the practice of the British to fly the flags of neutral countries in order to avoid attack, so the German submarine could not have known for certain that the ship was American. Thirdly, the Lusitania was in fact carrying munitions and other supplies for the British war effort.

http://www.worldwar1gallery.com/history/lusitania.html

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The official version-which reeks of lies-
I’ve looked much deeper-
I know you have as well-

JPM was long US Industry-
ie: short German industry
Germany was kicking ass industrially-

#179 brynn on 12.31.10 at 12:38 am

#143 Alex

he he you are very funny…suggesting I am guilty of conjecture when that is all this blog is..you finger me as a bad guy because I dont buy into the same ideas that the rest of you do that real estate is a terrible investment.
we both totally agree that richmond is a dump and the prices are crazy.
langely is also a dive, the sellers are greedy and the prices are just adjusting accordingly…however, good properties sell all over the lower mainland including the dismal langley…the sellers in langley will still make a profit, they just wont make the profit their starry eyes hoped…

#180 TD69 on 12.31.10 at 12:40 am

#82 go to a place as in Vcr like “oneflatefee.ca”. There are places like it all over the country now popping up finally. Realtors provide zero value and are done. Get a good lawyer. You are right- 7% plus 2.5 balance works out to close to 10% “take” of what’s left since most people have mortgages. These new places such as one flate fee are what “1% realty” was 10 years. MLS visability is the key and new anti competition finally broke that down back in April. You list and putin a buying agent commiss. but adjust accordingly at deal time. They will all take the deal. The $600 course relators take never came with a “when people wake up clause to the scam of opening a door and waiting for the check from the lawyer “.
They are useless. Ask one.
In the US 30% of sales are fsbo’s. Before the crash of course.
PS Garth you are bang on about the Lower mainland.

#181 dark sad person on 12.31.10 at 12:46 am

#171 Kaganovich on 12.30.10 at 10:23 pm

#149 DSP

JHK called the financial the financial products derived from the American real estate boom/bust a 1.4 quadrillion black hole. Can anyone can fathom how much a quadrillion is?

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No-but looking at the size of 1 trillion sends a quiver up my spine-

http://www.methodshop.com/picts/trillion/

#182 Patz on 12.31.10 at 2:43 am

From post # 72
The BBC clip is a good reminder of why the doomers on this site are dead wrong. We are entering into a time of challenging adjustments, but no depression. — Garth

Ever heard of a bell curve or the “limits to growth?” Just because so many countries have made it up to the “healthy, wealthy” corner tells you nothing about where they’re going. Plot oil consumption over the same period.

#183 Victor on 12.31.10 at 3:37 am

TO Bubble Boy, thanks for the responses. Appreciated.

#184 GregW, Oakville on 12.31.10 at 4:35 pm

Hi #164 Nostradamus, Thanks for the 2nd links.

We are quickly loosing the choice to have good health, by having access to natural food and meds.