Losers Part Deux

If there’s one thing the last two weeks should have told you, it’s to get ready. Ben Bernanke said it when he promised US interest rates would stay in the dirt for two years. Markets are saying it with wild daily swings between fear and greed. Central banks are saying it as they cannibalize their own bonds. Politicians say it with their icy inability to cut spending, raise taxes, quell riots or please anyone.

The message: we’re stalled. Going nowhere. Flatlined.

Economies will crawl and jobs stay scarce in a low-yield, low-growth world now before us. The good news is there’ll be no depression, no collapse, no crash, no locusts. The bad news? Stuff is going to grow cheaper and if you borrowed money to get some, you lose. That includes houses.

Governments are about to make this worse, too. All this talk about attacking deficits and debt, austerity, slashed spending and running countries like households is noble, but toxic. Austrian economists, Tea Party nutbars, metalheads and the leaders who espouse the live-within-your-means doctrine have us two steps from deflation. This is why cash, financial assets and debt are all about to get a lot more valuable. Like I said, get ready.

Now this brings us the dangerous part of this post.

Yes, real estate’s the perfect victim of the world I’ve just described. Mortgages may be cheap, but without growth in salaries, jobs or businesses there’ll be no swelling equity for buyers. In fact, with less buyer demand count on lower prices.

So equity falls but debt does not. Suddenly buying a property with 5% down doesn’t look like such a hot idea. House lust fades and real estate gets harder to sell. Either prices fall more, or homes turn illiquid. Either way, owners end up in a vice. And you’d be amazed how many Canadian families will be under water if values trim by just 10%.

I guess this is why we just saw a stock-buying binge. In fact, more snapping up of equities by corporate executives just took place than at any time since the five days which ended on March 9, 2009 – the absolute bottom of the great panic. I guess this might also explain the orgy of bond-buying which has crashed yields and driven prices higher. If deflation does emerge, as some billionaires are betting, smart people will own debt, not owe it

So where has real estate created the greatest danger in Canada? Where have people collectively driven prices to unsustainable levels, assumed huge mortgages to get there, and now face the certain prospect of double-digit declines?

Most places, actually. Yesterday I named a few that are likely to be impacted in a lesser way. Today let’s review a half-dozen where the decline in home values could be devastating to personal wealth.

Richmond, of course. This desperately flat suburban mess south of YVR is so disadvantaged it has only 11 Starbucks. For most of the past year this was HAM central, ground zero for BC’s bubble, and the reputed destination of endless bales of Chinese cash. In January alone home sales jumped by a quarter and prices rose 43%. The average price hit $1,021,500 and perfectly ugly houses were bulldozed for immensely ugly ones.

But all that’s started to change. Sales tumbled more than 35% last month. New jetliners full of horny Asians are rare sightings in the Richmond sky and the people who sold six months ago can’t stop giggling. This market will be our Phoenix, our Vegas, our Lauderdale.

Kelowna, the Mississauga of the Okanagan. A textbook case of overbuilding and inflated egos. Too many cliff-hanging houses on the sides of dusty hills held down by dwarfed trees. More condos that can ever be absorbed and a city with no industry – just a the shameless and endless strip of Big Boxes and Harley dealerships lining the main drag. If it weren’t for the waitresses at Joey’s, I’d despair.

Edmonton, the oil surprise capital of Canada. A tepid America means lower consumption, cheaper commodities and sharply reduced demand for oil. No surprise crude traveled from over $110 a barrel this year to eighty bucks. That could look rich in a year or two, and suddenly northern Alberta will be known only for its deep cultural fabric and balls on Silverados.

Saskatoon, for similar reasons. House prices have risen 25% in the last three years, and while $305,000 may not seem like a lot to pay by BC or Ontario standards, this is a city of barely over 240,000 people in the middle of a wasteland province. But the real problem is attitude. Locals have been fed a steady diet of ‘tomorrow belongs to Saskatchewan’. Even swallowed the story house values are justified because this empty, vast, tabletop of a place is running out of land since everyone wants to move here. Until they get there.

Ottawa, yikes. It will come as a shock to denizens who think the nation’s capital is bullet-proof to see Austrian economics at work. Hell, it’s already started with layoffs at sacrosanct places like Environment Canada (700 jobs). Just wait until vampire Tony Clement gets his incisors into the jugs of the PS. The average SFH is just over $400,000, and the burbs are literally haemorrhaging with the best plastic boxes Mattamy Homes has to offer.

Vancouver, epicentre. Was it a coincidence this place saw the greatest jingoism in national history during that Olympic thingy, and then one of the sickest riots when the home hockey team choked? Vancouver has a bad tude these days, and insanely high real estate valuations have turned it into the house porn capital of the country. With the SFH average over $1 million and areas like the west side now utterly unaffordable to anyone not in the top 1% of the income scale, Vancouver is set to fall, and fall hard.

It will not be quick, with Global TV screaming every inch of the way, and as Michael Campbell and Ozzie Jurock blow sunshine up every orifice they can find. But, fall it must. Maybe one day when it gets both humility and a chemical-free economy, people will actually want to move there.

Bonus city: Victoria. Average price $581,000. One-month drop, forty-eight grand. Five thousand listings. One thousand realtors. Endless sobbing.

Houseageddon. Get ready.

 

192 comments ↓

#1 vreaa on 08.11.11 at 10:44 pm

Unashamed House Porn: Seattle Vs Vancouver

http://wp.me/pcq1o-2M2

#2 pickyguy on 08.11.11 at 10:46 pm

who is the hottie in the photo?

A Bichon Frise. — Garth

#3 Calgary on 08.11.11 at 10:53 pm

Hi Garth,

Do you see Calgary facing the same decline as Edmonton?

Yep. — Garth

#4 squidly77 on 08.11.11 at 10:54 pm

I agree with you, not that it matters. One thing to consider, while the rest of Canada has been seeing annual year over year price gains, prices have been falling in Alberta for 3 years straight already. Edmonton is down 15%, Red Deer down 25% and Calgary is down 12%.

#5 waterloo Resident on 08.11.11 at 10:54 pm

(” Economies will crawl and jobs stay scarce in a low-yield, low-growth world now before us. The good news is there’ll be no depression, no collapse, no crash”):

True; very much the way Japan has been like for the past 20 years.

#6 bsallergy on 08.11.11 at 10:54 pm

Damn it Garth! Where is bubblicious Winnipeg in all this?

No where I guess.

#7 Elmer on 08.11.11 at 10:57 pm

I wish I was that puppy. *DROOL*

#8 squidly77 on 08.11.11 at 11:09 pm

Are there any houses in Toronto or Vancouver that nobody will buy ? No you say.

Well here in Calgary there are and the city has begun to raze them, these houses are very well located and on a direct bus route to downtown.

#9 squidly77 on 08.11.11 at 11:10 pm

Heres the link. http://www.calgarysun.com/2011/08/10/city-targets-derelict-homes

#10 Get Real on 08.11.11 at 11:12 pm

Something really interesting the other day…

I was at the live Wiggles show the other day. The main Wiggles guy asked the kids and the crowd to name one thing/something special and unique about Vancouver.

Awkward confused look on people’s faces.

Someone said “maple syrup”..or “sushi”(??)…until everyone seemed to agree on “Olympics”

Come to think of it, I cannot think of anything either.. except BC bud, million dollar crack-shacks, and good for nothings spending their afternoon sitting at Starbucks with their organic soy lattes and organic granola bars

#11 OttawaMike on 08.11.11 at 11:12 pm

So nothing else in Ontario rates your list?
Besides Ottawa.
Mississauga is a major city, sort of.

Kirkland lake will collapse with the inevitable gold crash.

#12 Flynn on 08.11.11 at 11:13 pm

Was surprised to Saskatoon on the list. I’m in BC but heard it was a relatively cheap and there seemed to be jobs coming from Uranium mining and tech companies setting up shop in cheap office space.

#13 Jake T. on 08.11.11 at 11:13 pm

If deflation is Garth Turner’s hypothesis then the world should use the yen for a global currency and 1.75% 30 year bond yields. Japan is coming for you. Credit card companies don’t live in a Japanese interest rate environment!

#14 OttawaMike on 08.11.11 at 11:13 pm

Oh yeah no gold talk, i’ve been away.

#15 Joe Robertson on 08.11.11 at 11:14 pm

Well Mr Turner I high-five your shout tonight as your advice is bang on…..get ready!!

Confidence is the key… it drives our economies in every sector from jobs-real estate-consumer consumption-equity values and the Central Wankers of the world have no tools left they’ve shot all their bullets as the Bearded Man tossed his empty gun this Tuesday with EMERGENCY level interest rates basicly “zero” to remain inplace for another 2 years…talk about a vote of zero confidence in the American dream = growth, QE1 and QE2 complete waste of money yet QE3 is soon to be announced further devaluing the US$…as planed!

I wonder if all the Americans who have lost their homes, who have seen their home values drop 50%+ who are using food stamps to survive(46 million now) who have seen their 401k’s devalued and huge layoffs from Wall St banks to Cisco’s 10,000 to the Post office slashing 120,000 jobs to prevent Bankruptcy!! …I wonder if they look at the economy as just a recession or a depression?

Get ready Canada its different here….not!

#16 Smoking Man on 08.11.11 at 11:15 pm

Lesson 102—-The Success Secret

In my opinion best invention that was ever created was the blue tooth. I have one, wear it everyday, battery died a long time ago. I know here he goes again……

Confession here, believe it or not I have a bit of a flaw.

When I am out having a smoke and in deep thought about my trades and coding, or what I am going to say on here today my lips have a habit of moving with my thoughts. I can’t tell you how many times I got the strangest looks from passers by.
Now with the blue tooth on my ear I can even raise my voice…bloody amazing……….You see how great my luck is…………I’m perfect now.

Which brings me to the economy, I was in Charlotte during the financial melt down, inside 4 weeks I saw a whole trade floor get completely liquidated. In 2007-2008, do you know the what the biggest best selling book at the time was. “The Secret”
The book said you just got to tap your heals together and voushh you will be rich. Did not quite work out for gazillions Americans that read it now did it.

The real secret is my sh!t don’t stink attitude, our educational industrial complex trains you to be the judge-ee,. But you need to fight it and become the judge-er.
For having money is only a by product of the right attitude, that attitude is. I AM SPECIAL, I AM THE BEST, notice how Canadians don’t like people like that, ever ask yourself why.
It’s been softly programmed deep into the back of your head via the school master who’s job it is to produce happy get along with everyone employ-ees not ruthless make me money beotch, employ-ers.

Been really analyzing posts on here, what jumps out at me is many of you type as if God himself was looking over your shoulder. Nobody really reveals anything about who they what they believe, they are just pumping bets. They are very careful to try and come across as intelligent educated and smart……….why?

Do you actually think that your little blurbs are going to influence anything? Ha.

News flash no one knows who your are, crank open a bottle, become a judge-er, screw being a judge-ee, let it all hang out.

Look’s like the boys down south are going to try and inflate there way out of the debt mess, talking about starting up the money machine….hoping to get 6%….inflation a year for 5 years.

What does that mean for us in Canada….means our dollar is going to surge, if Canada still wants to be an exporter then they will need to follow……if they do, those holding debt on assets like stock or real estate will be huge winners, those who are savers are doomed…..

#17 Debt's Dark Embrace on 08.11.11 at 11:16 pm

You are absolutely right about Kelowna. There is no real industry here other than servicing the retirees with pensions. And it is a very hard place to make a good living if you are an honest working stiff.

#18 Mr. Reality on 08.11.11 at 11:17 pm

So garth how can you call houseageddon but at the same time say,

“The good news is there’ll be no depression, no collapse, no crash, no locusts?”

The erosion of the middle class is the exact cause of an impending recession. When the majority of GDP is due to domestic consumption and the public is indebted up to their eyeballs that equals no spending. That equals GDP contraction. Look at the US right now.

Add in an impending Euro financial disorder, China reeling at lack of demand for their exports (US and EU demand shrinks) then add the lack of demand for commodities impacting Australia, Canada, Brazil etc….

Then you go on to say,

“And you’d be amazed how many Canadian families will be under water if values trim by just 10%. ”

If ten percent of homeowners were under water and defaulted on their mortgage that would erode the equity present in the CMHC and cause a tax payer bailout. Thats ~3 million Canadians not spending.

I agree with your real estate opinions 100% but you are failing when it comes to an accurate assessment of the macro picture and the stock market, bonds etc.. Of course time will tell and settle our opinions once and for all but I’d like to see you quantify your views moving forward. Otherwise this is just noise no better than any other blog.

Give us some meat man, back it up!

Mr. R.

#19 Daystar on 08.11.11 at 11:17 pm

This is one of those usual, average, common times where I have to agree with everything you say, Garth. By the way, have I told you lately how appreciative I am of your services to your readers, our nation and to the world in general? Lets fix that… thanks!

While I’m in complete agreement (and would also like to add that you put it in much better words than I could, again, thanks), I believe I c

#20 vyw on 08.11.11 at 11:18 pm

Garth: “leaders who espouse the live-within-your-means doctrine have us two steps from deflation”

This is the crux of the issue. Austerity measures are deflationary. Consumption will fall, more Canadians will lose jobs.

Fiscal austerity is equivalent to a tax increase – think about it. What we need at this juncture is a massive jobs stimulus, expanded EI programs and infrastructure loans. Heck, some have even suggested direct loans to/equity stakes in companies willing to hire – this might be a better industrial support model than Govt handouts.

But it looks like cuts, then declining growth, then declining GDP, then recession.

But in this “cash is king” economy, people will still borrow @ 2.1% floating and speculate. Asset bubbles will still inflate – that’s why I think Vancouver, Toronto and Montreal sales and prices will still climb (33%, 20%, 10% respectively) at least through to next summer.

#21 Dave on 08.11.11 at 11:19 pm

Windsor is not a good place to move if you are looking.

Full of high taxes, bad city services, no doctors, inadequate medical services (hospital being demolished).

It is like the greatest depression in windsor.

#22 Timing is Everything on 08.11.11 at 11:22 pm

“Michael Campbell and Ozzie Jurock blow sunshine…”

They blow more than sunshine. Thank-you for singling out these two godless creatures from the cesspool of AM radio paid-programming.

#23 Hovering on 08.11.11 at 11:25 pm

Bring it on Garth

There are a few of us in Van who managed to avoid the pot smoking, no money down, million dollar crack shack addiction (well.. the last 2 maybe).

I see so many tear downs in progress; so many idiots paying interest only mortgages; I can barely stand it.

God forbid, I work, I save and refuse to buy at 13 times average family income. I’m alone amongst my friends and colleagues.

Oh, and re Richmond? One word. Liquefaction.

#24 Jake T. on 08.11.11 at 11:26 pm

Do you accept Amerizan loan shark or maestro loan shark platinum card! The world governments and bankers find every excuse to get free money. Japan is what they want the world to be like. If they don’t choose the Japanese economic slowpression Argentina, Zimbabwe looks good. Socialism, big bureaucratic government, too much regulation, taxing every dollar multiple times and finally 0% interest on your money. Deflation exists for economic fools who believe it. First they tell you to save for your future and then they financially repress you by using socialism. Garth what happen to the C.P.P. going bankrupt and not paying retirees?

#25 Peakoilist on 08.11.11 at 11:31 pm

Who’s the good puppy?!who’s the good puppy?

Hamilton should have been no. 6 yesterday..with unemployment at 5.5 % and average house price currently at 4.0 X average family income..it’s a peach !
People here are obviously working and have more money to spend on things other than their mortgage..(unlike gorgeous burlington and Oakville next door, with all their McMansions with beaters parked in the drive and no furniture in the house) and yes, the 5.5 % is accurate. eat your heart out London and Windsor..We have factories here that are actually still making stuff that Canadians use.

#26 Johnny in Ab on 08.11.11 at 11:31 pm

Well, it almost cost me a divorce. But after our lease ran out we found another house down the same street that offered us a 1 year lease because the homeowner got nervous the house isn’t selling. All it took was a phone call to the realtor. The wife is mad, she thought it was a good idea to buy the house at $500 more a month in occupancy costs.

I think I get a one year reprieve before we “have to” buy.

What is it with women, she gets mad at me for buying a 2 year old car because it loses its value when you drive it off the lot. What about a 10% hit on a 350,000 house. That is okay?

#27 HouseBuster on 08.11.11 at 11:34 pm

Smoking Man – You need to stop smoking. Seriously, it’s going to kill you.

#28 Mark on 08.11.11 at 11:37 pm

“I’m in BC but heard it was a relatively cheap and there seemed to be jobs coming from Uranium mining and tech companies setting up shop in cheap office space.”

As a Saskatchewan resident, I can assure you, this is not the case. Tech companies have pretty much left Saskatchewan for dead. One of Saskatoon’s largest “tech” employers, Vecima Networks, had a mass layoff recently after its revenues collapsed. Offices of various tech firms such as PMC Sierra have gradually been moving out.

#29 Debt's Dark Embrace on 08.11.11 at 11:38 pm

And you are also right about Ozzie Jurock and Micheal Campbell. They have a vested interest in blowing sunshine up yer kilt because they own property in Vancouver and want to stay rich and get richer.

#30 2deep on 08.11.11 at 11:41 pm

“Saskatoon…since everyone wants to move here. Until they get there.”

Nail on the head. People who left Sk for Alberta have come back and now are returning to Alberta now that they remember how it really is. A couple of years of ridiculously cold winters and people will lose their Saskenthuasiasm.

#31 BC Bring Cash on 08.11.11 at 11:45 pm

RE vreaa #1 comment.
Nice one. What a screwed up world when down the road to the south $2.85 million can buy a real property. Obviously a similar amount of cash buys a building lot in some areas of Vancouver. (much smaller of course) Real Estate is local they say. Obviously Village Idiots exist everywhere. When will sanity prevail? Vancouver is and never will be a place like NY city.

#32 Carp on 08.11.11 at 11:46 pm

I am not crazy … I was in Richmond this week and everyone was overjoyed of all the for sale signs for new homes – big ugly homes with no backyards and built from particle board selling for $2M+ and lines of townhomes all with for sale signs and the mother-in-law “jumping” back into the market after loosing 100K in West Van ….

Garth, man – this was the best upper a man can get spending a week in Ditchmond and wanting to come back home after a day. I was disappointed my wife didn’t take my offer to stay at a hotel downtown after spending 24 hour in an overpriced home that really sucked.

It was nice to see some of my friends in Vancouver mind you. But they are all selling and buy bigger and more expensive homes – I didn’t event bother mentioning your site – just enjoyed the beer and entertainment.

And my wife coming back to Ottawa Rural agrees that Ottawa is so much greener than Vancouver is … :-)

Next best, is ottawa RE doesn’t look great either … Home built these days are very sad – more plastic than wood and no brick in a climate requiring real insulation in winter and summer.

I hope hobby farms go down too since they aren’t selling but asking for too much …

#33 Joe on 08.11.11 at 11:49 pm

Great post, Garth. That’s what I’m talking about, doomer porn at its best!

I’ll start reading a comment expecting it to make sense and when I get lost three lines in I look up and realize it’s written by Smoking Man and quickly scroll to the next comment. Dude, you lost my attention weeks ago with your recap on your wet fart in the elevator incident. So unnecessary.

#34 justsayin on 08.11.11 at 11:50 pm

Garth,

I know you will point me towards a post to prove me wrong but I swear you used to tell us oil was going to $150 again soon. Now the pullback and you say it was obviously going to come down. You know I am a big fan of yours so I won’t blow anymore smoke up your keister. Hope you can straighten me out on that matter.

Also wanted to say I was talking to a guy at work in Victoria and he told me he has taken full advantage of these low interest rates and traded up houses a few times in the last 5 years. He bought more house each time. The mmost he could afford. His last house he bought with a 40 year amo when they were cool. He is in his mid-fifties with no investments but his house and a solid government pension. I wonder what he thought of the look on my face?

#35 Marco from the bestest place on the smallest part of earth on 08.11.11 at 11:54 pm

Boy does it feel great to be debt free with $700k in the bank, stake holdings in a bio fuel startup a realtor license and a $300k per year job selling software to north American companies to help them become more efficient.

I am diversified in my investments, can move quicky, have my retirement fund and kid’s resp filled up and am RENTING a $ 1.5 m house in van’s west side.

My HAM landlady has begged me to re-sign for another 12 months (offerte me 10% discount for 2 years). If i put down The 700k and took out $800k mortgage asine of the risk and The 12k per bear wasted on strata (townhouse), maint and prop taxes, i would also be paying the bank about 3k per month to rent.

Van may be BPIC (in Canada), but certainly not BPOE. Things chance and tomorrow will certainly be different. What was, clearly is not and the new, post ’08 world tells us that last year, month, week or day’s performance is no guarantee of tomorrow’s result.

A flock of birds changes direction just if a few birds do, so does speculation (not investors). I have yet to meet a real investor in van, though have met tons of speculators who don’t know the difference between those terms.

So with a lot of people buying in greed, I’m seeing the signs of fear at the fringes (those on local incomes, stretched to the brim by debt).

I’ll buy a home in cash in a place that makes sense. Life brought me to van, but will not keep me here as I am looking for somewhere more culturally sophisticated than here, so now I make cash on my day job, I make some additional margin selling homes to greater fools, and have no downside risk…

Why would I want to trade that for owning a plywood box in a place that is no more diverse than it is culturally confused?

This will be the biggest losing RE market, like the 80′s when Japanese money dried up…

#36 dd on 08.11.11 at 11:54 pm

..If deflation does emerge…

It is here. but also inflation. Governments will just keep printing money. But you already know what.

#37 Calgary_renter on 08.11.11 at 11:56 pm

Hi Garth,

What do you think the rate will go after the FED announcement?

#38 Mr. Lee on 08.11.11 at 11:59 pm

Mr. Turner:

With all this uncertainty in our economy, debt, bank issues in the US, bond ratings drop and doomers all over the place. May I ask why you do not see a depression era situation again, now?

Thanks

#39 Kitchener1 on 08.12.11 at 12:04 am

Deflation is coming. Govt’s are all tapped out and not willing to spend anything at all.

Sorry folks, the big boys all bet on a V shaped recovery, hoping that the recovery is going to mask and make up for the stimuls.

We are going to double dip– regardless of what the economists tell you. last quarter growth has been revivised down to 0.3%, after today;s trade number the nimber crushers are saying we will come in a 0.1 GDP growth. To the economists, and politicans even if we bounce on this treadline– not technically hitting 2 negative growth quarters, to the man on the street, it will feel jus the same.

They will adjust their spending the same way.

#40 Utopia on 08.12.11 at 12:04 am

“The bad news? Stuff is going to grow cheaper and if you borrowed money to get some, you lose. That includes houses…..In fact, with less buyer demand count on lower prices….I guess this is why we just saw a stock-buying binge [and] more snapping up of equities by corporate executives just took place than at any time since the five days which ended on March 9, 2009 – the absolute bottom of the great panic” ~~Garth Turner.
————————————————–

And so, the connection has finally been confirmed by the markets exactly as I have been telling you here all along. Certain equities are now very valuable properties in such an environment.

Getting them on sale is a real bonus.

In fact, many just came on the market dirt cheap. Most small investors fled. Others, those with insight and knowledge of markets, stepped in and bought like there was no tomorrow.

Guess who wins.

Productive companies with above average earnings and strong balance sheets have tremendous potential in a world of falling commodity prices. This virtually ensures good upside over the long haul, greater profits and possibly even improved dividends for those stocks as the recession develops.

Share buybacks and other acquisitions that will evolve as strong companies absorb weaker contenders makes it all that much sweeter. Who the hell wants to be swamped by the anchor of ugly unrepayable debt in an environment of declining asset prices anyway?

You need flexibility. You need liquidity too.

I told you all that earnings will start to report above average in the coming quarters. Just watch now. I also told you all that it was because of falling resource and input costs that this would become crystal clear soon enough.

It does not even matter that global growth is slowing. Solid equity investments that pay you to own them are set to become the place to be as governments at all levels sink under the burden of debt and past promises and obligations that cannot be serviced.

This is a corporate world we live in now. That is where the profit and secure incomes will be derived in the future. So fear not profitable solid companies nor rush to debt issues that may ultimately fail as even sovereigns become risky.

Consumption may fall. But it never falls to zero. In fact, for some companies consumption will increase during hard times. Defensives are a great bet right now and many pay a good (and rising) dividend to own them.

I have warned continually on this site that now is a time to buy strength and sell weakness. Some of our companies here and in the US are simply outstanding buys and the forward earnings potential is excellent. Only fools will run from them. Getting these companies on sale is a gift that will not be around forever.

I still expect further pullbacks in the markets, by the way. Take advantage of the chance if you missed it following the Global Credit Crisis. It may be the last time you see such a golden opportunity for awhile.

Corporates meanwhile are going to become the go-to place for security in a very insecure world. You should be seriously planning on investing in cash rich and profitable business’s with global reach and a strong customer base. You need to focus on earnings potential.

Not all are equal though so do some research.

The fearful nelly’s will learn this only after it is all over and done. They will understand the lost opportunity only after that opportunity has long since past and they are nursing their negative real rates and capital losses.

The herd does not flee to so-called risk of course. Instead they shelter in cash, GIC’s, the smelly stinky shorts of the Orange guy or in highly leveraged real estate.

For profit for Gods sake. (Or so they think).

And during times of tumult they leave all the cash on the table for others to scoop up. Executives of some of our biggest and strongest companies understand the fundamentals well though. They know value and opportunity when they see it. They know best where their money will see continued growth despite a long slowdown in the economy.

And they will profit because the herd is almost always wrong.

Dead wrong.

#41 harlee on 08.12.11 at 12:07 am

I knew there would be some “Saskatchewan bashing” coming up and sure enough ,there it was: “Wastleland province”. A “wastleland” of grain and lentil fields(a canola field is awesome in bloom),grasslands that feed cattle,lakes ands beaches that are popular with tourists,forest preserves like Prince Albert National Park and Meadow Lake Provincial Park,beautiful valleys like Qu`Appelle,a resurgent in the timber industry near Big River,and…mountains (really..in the Cypress Hills – there`s a winery there in the summer and a popular ski slope in the winter). I just don`t know why Canadians have to be so hard on each others provinces. About a year ago I took a 2 week bus tour of Newfoundland and was so glad I did.I probably had a stereotyped image of that province .That it was nothing more than rocky shores and fisherman. But after the tour I had learnt so much and enjoyed so much that I will have great memories of that province (and it`s people) for as long as I live. I just wish ALL Canadians would take the time to REALLY explore their country.
I`m not going to argue with Garth about the (over)valued housing in Saskatoon.The population is closer to 260,000 but don`t forget all the towns and villages that surrond the city.They contribute to the city`s economy too. How many know that Saskatoon was founded by a temperence group from….Ontario.
I don`t know if tommorrow belongs to Saskatchewan,but I don`t think tommorrow is going to be all that bad either. I`ve been through some tough times,personally and financially but I still look forward to tommorrow.That`s what counts.

#42 six-figure-renter on 08.12.11 at 12:07 am

love this post garth. live in richmond and hope the prices fall soon. drove down granville street in Vancouver yesterday an literally saw 6 houses side by side with for sales signs up. Too late sucka’s!

#43 $froma$ia-(Trees to Paper to $=Mortgage payment) on 08.12.11 at 12:13 am

HOUSAGGEDON PLEASE COME, I am tired of reading the sky is falling for four years.

When Garth is finally right is when they’ve finally stopped pumping stimulous into the mortgage payments… With 70% of Canadians and an average Mort of $400k. Good luck, is all out war on trees.

#44 Financial Adviser on 08.12.11 at 12:24 am

Smoking Man, don’t agree with all you have to say, but nonetheless I like your train of thought. The bearded man down south is left with inflate or die, the bad is that even he is unsure if it will work.

Cheers,

#45 Killer Chicken or Imploding Boomer? on 08.12.11 at 12:36 am

Hmmm. Moving just slightly OT….

Is Amanda Lang hot?

Discuss.

#46 Chaddywack on 08.12.11 at 12:37 am

I was just out for dinner tonight in Vancouver with some friends and they are still convinced that they should cash in all their stocks (ETFs and some solid Canadian companies) and buy a house together for over $1M. My buddy said that interest rates aren’t driving Vancouver it’s all HAM. I made some points to him that are regularily argued on this blog and he just got defensive. He said “Asians are coming here with cash, knocking on doors, and offering much more than asking price.” When I made some good points he just said back “I don’t understand what you mean man, houses don’t go down….no man I just don’t understand what you mean, what you’re saying makes no sense, historically houses are way better than stocks…..and you can’t live in your stock certificates!”

Time for some new friends Garth? :)

#47 Jon B on 08.12.11 at 12:38 am

Some tuff talk there GT. I think it is all well warranted. I’d like to start my own bank so I can create money from nothing and follow your advice to own debt rather than owe debt. Any leads on how I might get chartered bank status?

#48 Joseph [original] on 08.12.11 at 12:42 am

It’s interesting how you assessed the events of the past few weeks by saying “If deflation does emerge, as some billionaires are betting, smart people will own debt, not owe it”. And again, “This is why cash, financial assets and debt are all about to get a lot more valuable.”

The billionaires are saying the opposite. Buffett said yesterday, “Today people who hold cash equivalents feel comfortable,” he writes. “They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value.”

That’s not deflation. That’s inflation. Those of us on this blog and in this country that have supposedly done the right thing by socking money away are beginning to look more and more like suckers.

Owning debt is not cash. — Garth

#49 Only God Can Judge Me on 08.12.11 at 12:42 am

Smoking Man, I agree with all that you said. Most of the people here (myself included) are trying to sell greed or fear, an agenda based on either or both. Most people here are consequently worried about being judged, or being seen as shills, or being seen as tin foil hatters…

You too my friend are trying to sell your own agenda. I’ve heard lots of people try to stick up for you and say, don’t judge his spelling, that guy’s real smart. I’ve also heard you go off night after night about your market guessing prowess. Your advice for the kids.

Know what? The kids aren’t hear. They don’t give a shit about any of this.

Here’s the thing. Any of us can be anything on the net. Garth can be the next Christ. Nostradamus can be the next Nostradamus, Harvard Grad can be the next Michael Ignatieff, I can be the next billionaire Buffet in disquise. Hell, you don’t know what I make, I don’t know what you make… You don’t know where I invested and lost… I don’t know where you invested and lost…

Doomers such as Squiddly and Garth and all the others are funny in that they are “dumpers” who complain all the time about the real estate “pumpers”. It’s the inverse, the polar opposite position of the same thing if you think about it. We all come here to try to sell our views. To push them on others and scare the shit out of the uninformed…

You know what? You are right. No one else gives a rat’s ass… The uninformed don’t either for the most part.

The truth is that Money Road, if you read it, will tell you all you need to know to protect yourself from a RE meltdown. Garth’s blog, as repetitive as it is, doesn’t tell you anything new that isn’t in his book.

Read the book, then skip the blog comments. That’s what I’ve done. For the most part, the blog and comments are just a repeat now. How many times can we say the same thing and think we won’t be judged, or that when we are judged, that our judges will actually be impressed. Spare me.

#50 DG on 08.12.11 at 12:43 am

Garth, got your book the other day, interesting read. Thx.

You eluded to the price of oil dropping and it having an adverse affect on Alberta. I’m in the Fort McMurray oilsands industry. My question is about the real estate price direction here. Although we are no where near as expensive as Vancouver, prices are high. We presently have 3 large expansions going on and 1 completely new oilsands facility being built, our cost of production is around $37 per barrel and we get a premium on our product of 10 to 14% against spot price. Do you think that all this commerce will float the prices here?

#51 Nostradamus Le Mad Vlad on 08.12.11 at 12:44 am

-
“The message: we’re stalled. Going nowhere. Flatlined.” — Out of interest, where are the trillions of dollars, sitting on the sidelines in NAmerica, going to end up? Chindia, Mexico, Thailand, Bangladesh or One Night In Bangkok?

“This is why cash, financial assets and debt are all about to get a lot more valuable.” — Max out TFSAs via ETFs? Plus follow Smoking Man’s tips? This is a great, free advice blog, with lotsa moolah to be made!
*
#15 Joe Robertson — “. . . to the Post office slashing 120,000 jobs to prevent Bankruptcy!!” — Following link — Possible USPS default to feds.
*
Disappearing Act All nine of China’s communist head honchos have exited stage left but Yuan heading up; Along with Greece which banned short selling a day or two ago, plus other links; Bloated Asian bank cuts French credit supply, but France next?

Overnight borrowing surges in ECB; Obama Helping to destroy middle-income families; The Elephant Man And here he is in all his glory; QE3 is coming, and so is Xmas! Keynesiam sucks and QE3 sucks more Japanese bonds vs. US treasuries; Rich Wishes come true (anarchy, disorder); Swiss pegging franc to euro? Both may crash.

10:08 clip Just as in Iraq, the whole war with Libya was manufactured all along; Cdn. view on Cameron; UK With Cameron already laying off several thousand army personnel, an illegal war in Libya, who on earth is he planning on using for the riots? Plus Five Reasons why the US will have the worst riots; Smart Meters Smarter than they look; Fifty Ways To Sue your Lover — Soros.

Harper described; Monsanto Guess this is happening here, as well; m$m quietly speaks of martial law; Eugenics and the FDA.

#52 harlee on 08.12.11 at 12:50 am

Ahh….heck! Where did that extra “m” come from?
The word is t-o-m-o-r-r-o-w. No double “m”,just one.
Also my keyboard was acting up so I had no “?” for awhile and a strange looking ” and ‘. They’re back now. We got to be so…careful on this site.
The markets are going to be v-o-l-a-t-i-l-e on Friday,but I do believe that the sun is going to be shining here on this vast tabletop of a place,so…bring it on!

#53 Kaganovich on 08.12.11 at 12:51 am

Mr. Reality is right. Here, Garth vs. Mr Reality…sort of:

http://www.theburningplatform.com/?p=19783

#54 not 1st on 08.12.11 at 12:53 am

The first thing people need to realize that this time it is different. The economy is not going to just softly bottom and come back like it did in previous recessions. This one is long term, systematic and structural and as soon as austerity hits europe and the U.S.A big time, it will be london riots x100. There is no growth scenario that exists that can discharge the 10s of trillions of debt on the U.S.A. books, therefore default is certain, either by currency debasement or screwing foreign holders of debt. Cash and financial assets are the worst class of assets to be in. Real assets, commodities, gold, even real estate in certain markets, will be the winner.

#55 The Phantom on 08.12.11 at 12:54 am

#16 Smoking Man: “News flash no one knows who your are, crank open a bottle, become a judge-er, screw being a judge-ee, let it all hang out.”

Smoking Man…I think that I rather like your “Fix it or F@*! it” attitude. Uncertain if it will make your life more difficult thereby but sometimes it helps to sprinkle a bit of salt on the tail of the chameleon and watch it change colour…

Garth: ref the photo for today…nice legs! Come to think of it…the woman’s thighs are pretty nice too!!!

Night folks
the Phantom

#56 Bottoms_Up on 08.12.11 at 12:56 am

Garth, I will play tennis with you and disagree with your take on Ottawa.

Being eliminated are empty boxes and contract/term employees and some fogies are being encouraged to take early retirement.

The displaced eager-to-work human bodies will be placed elsewhere in government (isn’t that great for efficiency of service?), and if this doesn’t happen those individuals get first dibs on any job openings (true this will slow the expansion of the Ottawa workforce). But 700 people “losing” their jobs in a city employing 525,000 will likely have negligible impact on real estate.

However, higher gas prices seems to have a great impact on real estate here, decreasing the prices of those plastic boxes in the burbs and increasing the prices in the core.

“Flat” is my prediction for the Ottawa real estate market over the next 1-2 years.

#57 GoRiders on 08.12.11 at 12:59 am

Whoa. Whoa. Wasteland province? What happened to the teary eyed Canada Day patriot post? It seems a little insincere now. Well actually it has for a while now as you are frequently ripping every corner of the country. Cmon show some love GT, we flatlanders don’t like to be teased.

#58 Daystar on 08.12.11 at 1:01 am

cont. (hit the enter key by mistake, ahem…)

I believe I can add to it some (you didn’t write a full page book complete with pictures, after all, thats what best sellers are for). Scratch that, alas, after reading over what I’ve got, I can’t improve on it. Thanks again!

#59 Raincouver on 08.12.11 at 1:01 am

@bc bring cash
I think ppl in vancouver need to at minimum google new york city and look at the images and compare the following:
1) central park = stanley park
2) wall street =dont have one lol
3)4 th avenue =robson street
4) time square =robson square
5) Broadway= Queen Elizibeth theater
6) Restaurants in NY = Cactus club, keg, sammy j’s Red robins, global, milestones.

Not even close in population density
The sheeple need to get out of Vancouver and tour other cities.(probaly can’t afford to with maximum debt load and the belief of BPOE so why leave here)

I laugh when we are compared to any major city, we are considered podunk, back water city compared to New york. Comparing the two is just embarrassing.
No industry no sustainable economy, We are going to see what happens when SHTF.

#60 Gord In Vancouver on 08.12.11 at 1:06 am

BC Hydro to cut jobs, slash proposed rate hike

http://www.cbc.ca/news/canada/british-columbia/story/2011/08/11/bc-hydro-jobs-rate-hike.html

#61 cxcroney on 08.12.11 at 1:06 am

I once spent 3 years in Windsor one weekend in August.

#62 Kilby on 08.12.11 at 1:12 am

I still don’t understand how people like Michael Campbell, Ozzie Jurock and the real estate boards carry so much weight, don’t people do ANY research themselves before spending their money? Everything should seem so obvious when one takes the country and worlds financial situations into account.

#63 Jane on 08.12.11 at 1:28 am

smart people will own debt, not owe it

How?

#64 Aussie Roy on 08.12.11 at 1:32 am

Aussie Update

You could do a lot worse than, living by the rule.

House prices are driven by emotion and debt, house values are driven by wages (rents). When these two separate it’s only a matter of time before the delusion vanishes and prices return to their fundamental values.

Housing market set to feel global wobbles

http://www.smh.com.au/business/housing-market-set-to-feel-global-wobbles-20110812-1iq0l.html

Ardour starts to cool in our frenzied love affair with bricks and mortar

Frenzied, mmm, delusional would be a better description.

http://www.smh.com.au/opinion/politics/ardour-starts-to-cool-in-our-frenzied-love-affair-with-bricks-and-mortar-20110811-1iorx.html#ixzz1UmyIvsuj

However, just as cutting the supply of lollies results in tantrums… and cutting the supply of welfare causes riots… so raising interest rates would lead to short-term pain for the over-leveraged.

And that’s the important thing to remember. There’s no painless solution to this economic mess. All you can do is make sure you’re positioned to protect your wealth.

http://www.moneymorning.com.au/20110812/what-a-childs-tantrum-tells-you-about-economic-recovery.html

Here is one for you Garth after many respected writters noted that Aussie house prices were 7 to 8 times annual income our RBA have decided to add to the average wage our super contributions and all other incomes from investments to goose the median income from $66k to $97k. Of course this is fantasy but it is the latest attempt to dismiss the thought that Aussie housing is expensive because using the new income numbers house prices are only 5 times income. Neat trick I’m sure some will fall for this slight of hand. IMHO all the hedonic data fudging in the world won’t stop this runaway train from derailing sooner or later.

#65 CalgaryBoy on 08.12.11 at 1:34 am

http://ca.news.yahoo.com/bc-hydro-cuts-1-000-jobs-slashes-proposed-184449798.html Oh oh, more job cuts!

#66 from kits on 08.12.11 at 1:37 am

“Michael Campbell and Ozzie Jurock blow sunshine…”

I’m a fan of Michael and his views on politics..well the rest remains to be seen.

ozzie – he’s as bad as a realtor when you ask him if you should buy real estate or not…he blows sunshine, smoke, anything that’ll blind you. embarrassing that Michael Campbell allows someone like him on such a quality show

still think Saskatoon and Edmonton are off…agriculture and oil boom will continue, look at where the dollars are being invested and where people continue to move. people continue to move from the east to the west (not BC cause we have no real economy) Sask & alberta because of what the future will bring.

Ottawa – Toast, government spending going down the drain! looking forward to this as this soon to be called commodity bubble will finally expose the poor management of ottawa’s finances. Who would run a business like our government! people should stop putting their hand out and get a damn job…wankers

#67 Michelle on 08.12.11 at 1:37 am

Helicopter Ben lost a bet it seems…
http://globaleconomicanalysis.blogspot.com/2011/08/yes-virginia-us-back-in-deflation.html

#68 harlee on 08.12.11 at 1:42 am

Darn again! It’s getting worse….It’s s-u-r-r-o-u-n-d.
It’s back to the third grade for me if I can’t spell better than that. It’s the beer I drank earlier.Only one..but it’s screwing up my otherwise excellant spelling. Time for bed.Read you tomorrow….

#69 dd on 08.12.11 at 1:45 am

…financial assets…

Ya … like US government bonds. How about the Frence bonds while you are at it.

#70 dd on 08.12.11 at 1:48 am

…A tepid America means lower consumption, cheaper commodities and sharply reduced demand for oil…

Maybe. However it seems that all central banks are printing money, and more so in the months to come. So commodities may not be cheap for long.

#71 dd on 08.12.11 at 1:50 am

..surprise crude traveled from over $110 a barrel this year to eighty bucks. That could look rich in a year or two…

Ya, here we go again. Doom and gloom Turner.

#72 Utopia on 08.12.11 at 1:51 am

Todays post suggests there will be overweight declines in real estate values for all of the following cities. House-ageddon is here.

Vancouver
Victoria
Kelowna
Richmond
Edmonton
Saskatoon
And, oh yeah…..Ottawa.

Anyone else notice that the prognosis for real estate values in the West is not so good? Did you also notice that 4 out of 6 worst cities to be during the downturn are all in British Columbia….ground zero for the coming correction?

Real estate might be local but recessions are national. We are headed into a recession. That equalizes all the country.

Maybe it is time to look more closely at the deficit and debt versus revenues, province by province. Let us delve more closely into which provinces have strength and which are weakening. I do not think 416 has any special immunity despite thinking it is the center of the world.

On the contrary. Ontario as a whole is headed for a much bigger correction percentage-wise than Western Canada just based on its losses in manufacturing and the tremendous levels of debt it now carries.

Ontario debt is near epic in case anyone forgot.

No region of the country is safe. None are bullet-proof.

#73 dd on 08.12.11 at 1:54 am

…Austrian economics…

Garth, why are you throwing this stuff around when you don’t even know what it is about. The canadian gov is far from practicing Austrian Econs.

#74 BPOE on 08.12.11 at 1:59 am

Just more ammo regarding my views on Vancouver vs Seatlle from previous nuggets of BPOE wisdom. Folks, do you think a Canadian is paying almost 3 million for that house? WAKEUP PEOPLE. Repeat everymorning 10 times It’s Different this Time times 10. Folks as said many times the weak bids (Canadians) are going to be all mopped up. Vancouver soars like a phoenix over the world. One word sums this place up>UNTOUCHABLE!!!
****************************************
vreaa on 08.11.11 at 10:44 pm
Unashamed House Porn: Seattle Vs Vancouver

http://wp.me/pcq1o-2M2
.

#75 DML on 08.12.11 at 2:08 am

3 month treasuries now yield .01 percent.Here’s why:

http://www.cnbc.com/id/44115892

#76 immigrantvoice on 08.12.11 at 2:17 am

Good with detail, but can’t see the forest for the trees.

#77 Taking stock on 08.12.11 at 2:24 am

Does anyone think the oil & potash in weyburn sk will protect house prices for much longer?

#78 KarlHungus on 08.12.11 at 2:35 am

Sorry garth, your way off on edmonton.

#79 Red Tory Tea Girl on 08.12.11 at 2:41 am

I have to say, I think Edmonton will still fall about as far as you predict due to the automation of the petrochemical industry, and the fact that, as much as we’d like to be, we’re not just a one horse town… that and a rent-price ratio that’s in the high teens when it needs to be in the tweens.

But oil? We’re beginning to look at the beginning of those supply shocks we’ve heard so much about. A thermal depolymerization plant in Cambridge shut down last decade because their costs, after taxes, were $80 to produce a barrel of oil. We’re at that point now. When every American Landfill is discovered to be the economic equivalent of The Shaw Gusher… Alberta is in serious trouble, but the global price of oil will have found its floor.

#80 Jody on 08.12.11 at 4:26 am

“Ottawa, yikes. It will come as a shock to denizens who think the nation’s capital is bullet-proof to see Austrian economics at work.”

Garth, you just made me so sad, I’m hurt, really hurt. Nobody in the Canadian Federal Government, especially Harper, is an Austrian economist. Harper and all his Amerika police state loving buddies are from the Calgary School which took it’s principles from the Chicago School, they are both scummy Keynesian pumpers. None of them would know Austrian economics or true Conservatisim if either one smacked them in the face with a well oiled cricket bat.

Harper wants to spend billions on stupid jets and private prisons, that’s not conservative and it sure the hell isn’t Austrian. The only politician in North America who even comes close tp thinking like a true Austrian is Dr. Ron Paul. A true Austrian will never “lead,” there would be to many people who would lose their free ride. I want to hear the federal government say,

“We’re abolishing MP pensions, cutting MP salaries by 50%, getting rid of all tax free allowances for MP’s, creating an elected senate half it’s current size, allowing ALL politicians to only serve for two elected terms, abolishing political parties, and fixing federal election dates for the next 200 years.”

When I hear that I will stop promoting the break-up of Canada, maybe. A true Austrian would look at the federal government and say, “The federal government, yea, right, get rid of it, all of it!”

#81 Imstupid on 08.12.11 at 4:27 am

The market today is going to get a hair cut. I believe this for two reasons

1. The day trader in this volatile market will sell at the end of the day, so that they will not hold stock over the weekend. As everyone knows bad news comes Friday when the market closes.

2. Euro zone preventing short selling of certain companies, shows weakness. Hedge fund managers with short bets will pull from market.

I may be wrong, I don’t believe it’s justified but markets like real-estate move irrationally in the short term and fear and greed have captured this one.

#82 Dark Man on 08.12.11 at 5:43 am

With no where else to make money, banks will continue to hand out mortgages like candy canes at a Santa Claus parade. 3.5% on a 5 year mortgage will look like a great investment to them. I call no housing correction until rates increase, there will only be continued easing of lending rules.

#83 timo on 08.12.11 at 6:28 am

http://www.marketwatch.com/story/greek-economy-shrinks-69-in-a-year-2011-08-12?link=MW_home_latest_news

austerity is a great tool to fuel growth and ramp up confidence.

http://www.washingtonpost.com/politics/usps-proposes-cutting-120000-jobs-pulling-out-of-health-care-plan/2011/08/11/gIQAZxIM9I_story.html

hmmm? and healthcare too?

#84 detalumis on 08.12.11 at 6:53 am

#25 Sorry to bash Hamilton but I don’t think so. The unemployment rate is lower because the participation rate for employment is also lower – you have a plethora of old and poor people and the largest concentration of overweight, diabetic, smoking scooter people I have ever seen in one place. The largest employer is the hospital system and 20% of people working full-time earn less than 25K.

Your city is run as a giant social services agency and you have councillors that think giving seniors free bus passes regardless of income is more important than say fixing water pipes. Property taxes for an equivalent bungalow are about $1,200 more in Hamilton than in uber-rich Oakville.

The other thing I noticed was that houses are not that cheap unless you want one in a crack zone surrounded by half-way houses. A 1960 bungalow in Hamilton actually ends up costing as much as the equivalent one in Oakville after you factor that you need almost 100K in renovations. It seems like in your town people never keep their property up-to-date; every one I looked at needed a huge amount of upgrades. I would not buy in Hamilton at today’s prices.

#85 Neo on 08.12.11 at 6:59 am

Garth,

The U.S. has spent $4.5 trillion dollars and backstopped there financial system untold trillions. The Fed has bloated there balance sheet $2 trillion dollars and what do they have to show for it so far this year, three years later.

Q1 GDP 0.4%
Q2 GDP 1.28% (about to be revised to 0.6% – 0.9%)

So basically 0.5% growth the first half of 2011. And you think the third quarter (July – September) with all that’s gone on with be much better with all the headwinds? The U.S. will basically be revising itself into a technical recession it never left. And without the G component of GDP propping it up to 0.5% because of a lack of will for more stimulus and austerity their GDP will be outright ugly for many years to come. Have you seen the recent Eurozone numbers. Every nation other than Germany is under 1% or not much above. Now that’s almost half the global GDP struggling at the same time. All in a period you acknowledge as deflationary. Where’s the beef Garth. I already told you Global GDP was 1.8% from 1914-1945 even with a Great Depression and and two World Wars so please stop with this contention that just because we have positive GDP, as meager as it is, it means a depression can’t happen. We already had the crash/collapse part in 2008. What we will have the following 10 years is the anemic growth part. Now rather than attack my grammar and give a stock answer “never bet against the U.S.” Prove me wrong. In others words, I continue to challenge your macroeconomic assertions.

#86 The InvestorsFriend (Shawn Allen) on 08.12.11 at 7:29 am

QE-3 IS ALREADY STARTED?

New York Fed Open Market Operations show they bought $3.7 billion in bonds the week ended Wednesday August 10. About the same the prior week. The week prior to that they were selling.

http://www.newyorkfed.org/markets/soma/sysopen_accholdings.html

I understand the Fed conducts bond buying (which is quantitative easing) through the New York Fed.

So, it looks to me like QE-3 is already upon us… more pushing on a rope… it puts cash in the hands of banks in the hopes they will lend it out.

But the banks find few borrowers… Well maybe at the margins there will be a few buyers, their interest rates are even lower than ours and they can lock in for 30 years. (With an option to re-finance if rates drop).

With a 2.3% yield on a 10-year bond, and super-low line of credit rates, the real strategy may be to borrow and invest in safer stocks, including bank preferred. But that takes guts and you better have a safe job. Don’t overdo it.

#87 Gord In Vancouver on 08.12.11 at 7:35 am

More West Coast Kool Aid Drinking

This article almost makes Cameron Muir look like a real estate bear. Make your own judgement on the interviewed realtor.

http://vancouver.24hrs.ca/News/local/2011/08/11/18541761.html

#88 Shane on 08.12.11 at 7:38 am

Garth, Do you think markham will decline much

Shane

Which streets? — Garth

#89 Back to 1989 on 08.12.11 at 7:51 am

Now this brings us the dangerous part of this post.

Yes, real estate’s the perfect victim of the world I’ve just described. Mortgages may be cheap, but without growth in salaries, jobs or businesses there’ll be no swelling equity for buyers. In fact, with less buyer demand count on lower prices.

1981- entry level manufacturing job $10.50/hr
1989- skilled press operator $15.25/hr
2004- plant moved $24,25/hr
new job, same position—-
2011- 30 years, skilled pressman $15.25/hr

#90 T.O. Bubble Boy on 08.12.11 at 7:56 am

But – Ottawa has a diverse economy with that big tech sector. You know, like Nortel!

(oh…. ya… forgot about that)

Anyone want to buy some Will & Kate Canada Day 2011 memorabilia?

In all seriousness – Ottawa won’t be that bad near-term:

1) The price run-up wasn’t as bad as other cities. And – the house porn culture isn’t as bad either. Yes, Ottawa does have the “it’s different here, so houses will always go up” mentality, but not at all like Vancouver/Toronto.

2) Even Clement can’t cut everyone’s job at once. Yes – everyone not working at near a G20 resort in his home riding should be a bit worried, but the Federal Government is not forecasting to cut more than a few percent.

#91 timo on 08.12.11 at 7:57 am

dd on 08.12.11 at 1:48 am

…A tepid America means lower consumption, cheaper commodities and sharply reduced demand for oil…

Maybe. However it seems that all central banks are printing money, and more so in the months to come. So commodities may not be cheap for long.

shhh! your telling secrets.

Now go stand in the corner until you hear old grandpa Ben fire up the water bomber. Unfortunately the helicopter is down for needed repairs.

It might take a while as it seems the hand crank is missing. Thank god there is still power to the 8-track so we can listen to the bee-gees while they get this fixed.

welcome to deflation…good times
;-)

Ben this is for you and your banker buddies.
Life goin’ nowhere.
Somebody help me.
Somebody help me, yeah.
Life goin’ nowhere.
Somebody help me, yeah.
Stayin’ alive
http://www.youtube.com/watch?v=QkEiplH59uk&NR=1

#92 travelite on 08.12.11 at 8:00 am

Your mention of Austrian economics brought a tear to my eye…

#93 bigrider on 08.12.11 at 8:33 am

#46 Chaddywack.

Sounds like your friends are all Italian. You should listen in on some of te conversations in and around Woodbridge.

#94 Aussie Roy on 08.12.11 at 8:36 am

What might be worth considering is the extra spending power pushed into the ecomony as a by product of a housing bubble. Not just the obvious, home renos, building etc, but the proceeds, the extra income which comes from rising prices.

Many in Australia have used their houses as ATMs but just as common is holding on to some of the proceeds from selling. These proceeds often go towards buying a new car(s), maybe some tech gadgets or simply kept and used to supplement their income.

This extra money clearly has an effect in the economy creating extra demand. This extra spending power comes from ever increasing house prices. Do those who say house prices won’t fall just be stable for an extended period of time understand that this lack of extra spending power will effect the local economy.

How much of the house price appreciation has been pushed out into the economy as extra spending in both our countries?.

Of course governments also benefit from the bubble.

Housing sales are down 21% here in my state, 35% of the state governments revenue is generated by the housing sector.

#95 TurnerNation on 08.12.11 at 8:40 am

“Sell-Off Was Another ‘Flash Crash’: Barton Biggs

Barton Biggs, a managing director with Traxis Partners, dismissed Thursday’s sell-off as “another Wall Street flash crash panic” and said that, despite the recent spate of weak data, he still believes the U.S. economy could show real growth over the next couple of quarters.

“I’m sorry I can’t get bearish here,” Biggs told CNBC Friday. “There’s too much fear and too much panic selling. There’s too much momentum-oriented selling, and I don’t think the global economy’s going to collapse.

Tight stop-loss limits and high frequency trading contributed to the selling once the market started to cascade downward, Biggs said.

“This another Wall Street flash crash panic, and I think it’s overdone,” he said. “Any long-term investor ought to be buying stock.”

Art Cashin, director of floor operations for USB Financial Services, has also called the market’s steep drop “a classical technical breakdown” and said high frequency trading was contributing to the decline.

Biggs said he remains optimistic about the U.S. economy going forward, citing a pick-up in retail spending in certain areas, good news in Friday’s employment numbers, and the rise of real incomes due to low inflation as evidence that the economy could exhibit growth during the next few quarters.

He added that he thinks the market could rally 5 to 7 percent in the relatively short-term, and if the economic data is more encouraging, the market could increase even further. “

#96 jeremy beal on 08.12.11 at 8:44 am

Deep cultural fabric, thanks for indulging my latent Eastern snobbery. Oil Thigh!

#97 Bottoms_Up on 08.12.11 at 8:49 am

#45 Killer Chicken or Imploding Boomer? on 08.12.11 at
—————————————–
Yes. And she has a twin.

Although she dresses a little too conservative for my liking.

#98 Robert Dudek on 08.12.11 at 8:53 am

No deflation on the horizon. There will be deflation in some sectors: housing and iPads might become cheaper, but the developed nations will continue to print money to stave off generalized deflation because everyone knows that debt deflation is the ultimate economic death trap.

They will do everything to avoid it. Some governments may talk austerity, but as soon as there is a sufficient weak patch in the economy austerity will be forgotten and they will turn on the monetary taps.

#99 Bastiat79 on 08.12.11 at 8:55 am

Garth,

Now that you are picking directly at Austrians, I am curious to know more about what exactly you are insinuating.

Do you think their cycle theory (ABCT) is right, but that you somehow would have preferred the hyper-inflationary consequences of perpetual can-kicking?
Or do you simply live in Keynesian fantasyland and cannot see the consequences?

I live in this world. Wrong monetary policy moves will create deflation, a lesson the 1930s proved worth learning. Time you did. — Garth

#100 Helicopter Ben on 08.12.11 at 8:56 am

I dont see Oil Staying low, not in the age of printing money to offset Deflation. Everything we need is getting more expensive, everything we want is getting cheaper. There’s a shortage of Energy not TV’s

#101 BrianT on 08.12.11 at 9:05 am

#85Neo-Yes-the way GDP is calculated, increasing debt equals increasing GDP. It would be like a person increasing their spending via increased debt and claiming this showed their income or “GDP” had increased. Obviously with this accounting “system” debt cannot even stay flat without a major impact.

#102 BrianT on 08.12.11 at 9:07 am

#84Deta-Overweight smoking scooter people-classic.

#103 John on 08.12.11 at 9:21 am

No more asset deflation, price inflation argument? Won’t governments simply print more money as a least painful solution, causing inflation?

#104 Canuck Abroad on 08.12.11 at 9:26 am

Garth I know you don’t think there will be a repeat of 2008. And I really do appreciate your work and agree with a lot of what you say, however, I do actually think that we are headed for an exact repeat of 2008, with one of the large European banks reprising the role of Lehman. Let’s say SocGen for example, with its massive derivatives book. The EFSF is not sufficient to cope with anything beyond peripheral Europe defaults in my opinion. So in the event there is a reprisal of 2008 would your opinion of Toronto real estate change, i.e. if there is a Bay Street bloodbath?

No 2008. This time the bulk of the problem debt is sovereign, and countries always have the power to tax and create capital, which corporations do not. There is no straight-line similarity. — Garth

#105 kimi on 08.12.11 at 9:28 am

Question: If Canadians are using thier money buying up realestate in the US. When the crash comes close to bottom in Canada… Who is gonna buy here?

#106 squidly77 on 08.12.11 at 9:30 am

#71 DD

surprise crude traveled from over $110 a barrel this year to eighty bucks. That could look rich in a year or two…

Ya, here we go again. Doom and gloom Turner.

You are one backwards person, the majority of us would welcome cheaper gasoline prices, but not you. Most of us would prefer that our kids pay less for shelter, but not you.

#107 jerry on 08.12.11 at 9:35 am

Hi Garth

Renting now, great bonds, cash, retired, have revamped my will to include “in lieu” of any inheritance, instead please injoy copies of the “Money Road Ahead” (10).

Thanks for the continued insights!

#108 You never know... on 08.12.11 at 9:48 am

Correction…1400 realtors in Victoria.

#109 Don on 08.12.11 at 9:53 am

Garth, any thoughts on neighbourhood differences? I’m certain house values in Barrhaven, Kanata, and other burbs will decrease and have been researching historical prices on average in Ottawa (and they do go down, contrary to popular Ottawa opinion). But what about central areas? I can find no data on the impact in the core of Centretown, Hintonburgh, Westboro, etc.

#110 Ret on 08.12.11 at 9:54 am

You mean that the RE in all of those places will take a bigger % hit than the thriving NOT metropolis of Hamilton?

The industry has left and nothing happens without government handouts to hospitals, McMaster or Mohawk, all of which pay no property taxes. Dreams of a billion dollar LRT to carry around the poor won’t save the city either.

We are following the Detroit model of de-industrialization and demand to be included on today’s list.

#111 Kilby on 08.12.11 at 10:12 am

Richmond. 2,234 active listings today.

July 14, 2011-Aug. 12, 2011
312 completed sales.

July 14, 2010-Aug. 12, 2010
314 completed sales.

Virtually the same!

Wait. — Garth

#112 Daisy Mae on 08.12.11 at 10:16 am

“Are ya in? I’d like to hear your reasons for selecting a city or two which you feel will be reamed or spared by the approaching real estate correction. I have yet to decide on a suitable prize, but I’m leaning towards awarding a small community in the Okanagan. Yes, you can renovate it, play with the remaining inhabitants, or market it in Guangdong. Free choice. Details to come.”

Would that ‘small community’ in Southern Okanagan be…..MIDWAY, B.C.?

#113 Live Under Your Means on 08.12.11 at 10:21 am

#60 Gord In Vancouver on 08.12.11 at 1:06 am
BC Hydro to cut jobs, slash proposed rate hike

http://www.cbc.ca/news/canada/british-columbia/story/2011/08/11/bc-hydro-jobs-rate-hike.html

………….

Just learned that our electricity rate will increase 20% over the next 3 years. We already have one of the highest rates in the country. We’ll be adding another Electric Thermal Storage heater on the main level this fall.

#114 Linda Pearson on 08.12.11 at 10:23 am

#41harlee on 08.12.11 at 12:07 am

A great post Harlee. And you’re so right…we all live in a beautiful country full of wonderful, friendly people. We won the life lottery for sure!

#115 Peakoilist on 08.12.11 at 10:24 am

#84 detalumis on 08.12.11 at 6:53 am

#25 Sorry to bash Hamilton but I don’t think so. The unemployment rate is lower because the participation rate for employment is also lower – you have a plethora of old and poor people and the largest concentration of overweight, diabetic, smoking scooter people I have ever seen in one place. The largest employer is the hospital system and 20% of people working full-time earn less than 25K.
====================================

thanks for your unfair assessment of our city. Obviously, you spent ten minutes here one day.. btw Canada, folks in this area of southern Ontario love to bash our diamond in the rough..they are mostly suburban types that escape the “pressures” of the urban environment to move to suburban sprawl areas to buy cheap particle board shacks that will be falling apart in 10-20 years..if you want to mention spending money on renovations, detalumis.

In my comment , I was comparing Hamilton to other comparable cities on Garth’s list.(not suburban “fake” cities) the reason you are being unfair is because Hamilton has big city problems, because it IS A CITY., pop. 720,000,and has been for a long time..once was the cultural capital of Ontario….if you don’t believe do some homework) (http://shawnpt.wordpress.com/2011/04/04/population-of-metropolitan-cities-in-canada/…this must include our suburban towns of Grimsby and Burlington.
Yes , we do have poor people. but so do the other cities on Garths’s list. With the coming Austerity, there will be more everywhere. That is kind of the point brought up here often. Are we going to keep on being a “I’m entitled to my entitlements” society. Are we all entitled to brand new McMansions with SS and granite?
Can we settle for a modest “home” again in a pretty neighbourhood with friendly neighbours?(that’s what I have in west Hamilton here..modest homes in the 250-300K area, clean, quiet, and yes with some occasional big city problems…but maybe those problems are ready to pounce on Uber-rich Oakville,detalumis…just think about when austerity kicks in real good and folks in suburbia begin to lose their homes or are hopeless in a shack that they can’t sell to any greater fool..

Folks in clean, sterile , soulless suburbia will not be spared.( it will not look so clean a few years from now)
Just take a drive through the wastelands of Pheonix and
Fort meyers…uncut lawns everywhere with Bank owned signs blowing in the wind..
sorry for my rant ..just a voice of reality this lovely morning

#116 Kilby on 08.12.11 at 10:25 am

One more.

Victoria, (Just city including Victoria West) Last 3 days.
12 residential sales, 8 condos and 4 SFH.
Average 32 days on market.

16 price reductions average between $10K and 20K.

Did somebody confirm 1,400 realtors?

#117 Peakoilist on 08.12.11 at 10:31 am

this is the proper link for population of Canadian cities in my last posting…I hope. and if anybody really cares.

http://shawnpt.wordpress.com/2011/04/04/population-of-metropolitan-cities-in-canada/

#118 Daisy Mae on 08.12.11 at 10:35 am

Midway, B.C.:

CASTENET: “If they can’t make a $1M payment by the end of the month, they’ll lose their investment and the mill will not re-open. And, until 2X4′s start rolling off the Green Chain, residents won’t be breathing easy.

#119 BrianT on 08.12.11 at 10:53 am

#115Peak-Deta is accurate when she states that Oakville has a very low % of dependent people compared to Hamilton. That doesn’t mean it is better, it is just the way it is.

#120 BrianT on 08.12.11 at 10:55 am

#115Peak-Like I said, I am not sure exactly what % of the Oakville population lives in public housing projects, but from what I have seen I would expect it is very low.

#121 Timing is Everything on 08.12.11 at 10:57 am

#45 Killer Chicken or Imploding Boomer?

‘American consultants helped in CBC makeover’

“But some changes, such as anchor Amanda Lang’s clear glass desk with view of her legs, surprised industry watchers.”

http://www.torontosun.com/news/canada/2009/10/26/11534351-sun.html

http://i45.servimg.com/u/f45/12/95/88/96/lang6_10.jpg

#122 Harvard Grad on 08.12.11 at 10:57 am

I was reading GTA Girl’s post the other day regarding the “other” pitfalls of owning a condo in the Big Smoke. Very intriguing piece GTA, I have dream’t of owning a apartment along the waterfront to have whenever I stopped into the city (hockey games or night out) – but you raised some excellent points that had me thinking. I realize prices are insane – but luckily I held off buying these past few years…I try to keep as far away from renters as possible – underclass, wankers!

Excellent post – from an excellent mind (sounds like I am buttering her up – yep, with canola oil to be precise)..you go girl!

#123 BrianT on 08.12.11 at 10:59 am

#110Ret-IMO going forward all large cities are facing fiscal challenges. It is simply easier to run a place like Burlington than a place like Hamilton-less people to take care of.

#124 Rs on 08.12.11 at 11:06 am

So you don’t think prices will come down in Toronto’s Harbourfront Condo Market? I’ve been renting at Harbour Square for half the price of owning but I desperately want to buy because I don’t want a landlord to have control over me. Ie; has the ability to kick me out. I want a secure home but the prices have skyrocketed out of my range!

What do you think? Will Harbourfront prices come down?

signed depressed!

#125 John on 08.12.11 at 11:18 am

Thanks Garth..

“This is why cash, financial assets and debt are all about to get a lot more valuable.”

Could you please elaborate on debt getting more valuable? Is it referring to inflation?

#126 jess on 08.12.11 at 11:19 am

Kevin Griffiths, the city’s chief building inspector, said the cost of demolition work is passed on to owners through the property taxes.”

===========
9 squidly77 -thanks for the link..

…”the tax lien business opportunity for banks, who have access to very cheap money, to come in and buy these debts. …The economics work out in favor of the banks because many of the debts owed are for utility bills under $1,000. Homeowners know they can lose their homes if they don’t settle their debts so they try to pay — but legal fees and other payments can quickly become burdensome, Schulte says.

Last May, Schulte reported that one woman in Baltimore lost her home because of an unpaid $362 water bill. After her bill was sold to a lien holder, double-digit interest rates and fees increased the bill to more than $3,600 — which she couldn’t pay. The city evicted her.

=

Wall Street Quietly Creates a New Way to Profit From Homeowner Distress..
Gladys Walker, a retiree on Social Security, owed less than $1,000 in overdue property taxes on her modest Florida home. So why did Bank of America and a major hedge fund bid thousands of times for the right to collect it
http://huffpostfund.org/
=

News for banks buying tax liensBailed-out banks snap up tax liens

Arizona Daily Star – 5 days ago
Banks aren’t buying tax liens to throw people out of their homes, said attorney …. Pima County is one of many places where banks are buying up tax liens. …

#127 Shane on 08.12.11 at 11:21 am

Garth, All of Markham downtown area and Unionville?

Shane

#128 foolsrushin on 08.12.11 at 11:27 am

Okay, governments are on guard for thee, but they are also running out of bullets and IMO are shooting blanks now. What they have tried so far has failed miserably. Each wave of bad news that comes out will take us down another notch. No flat line here. I think they have used up most of their pixie dust. You can spin optimism, pessimism, depression, Great Recession all you want but the only thing present here is a good dose of reality and it’s too late to turn back the page. Enjoy the relief rally while it lasts, I am, but when things start to turn I’m more than willing to hand all this stock I recently bought back. Options expire on August 20 and I think somewhere between then and the 30th we will top out. September and October are well on their way. We will see where things look in November and it’s going to be a lot worse for RE and the stock market.
Where is all the good news going to come from to hold this economy in place? The growing list of unemployed or the 44 million on food stamps who plan to start buying furniture and new cars. Consumer, Municipal, State and Federal debt is not going to go away. Cutting employment across all levels of government isn’t going to help either. Cheap money just buys them time and pushes the can down the road a bit further. Pretty soon it will be time to start selling off public assets to corporations in volume. By the way corporations might have a pile of cash but they are also carrying a pile of debt too. Strip away the goodwill and intangible assets on many companies and many have pretty ugly balance sheets. Should their earnings take a hit their price/earnings multiple will contract like … well you know what I’m thinking? What are corporations going to do in round three now that sales are continuing to slow and they have cut costs to the bone through letting people go and lower rates? Continue to look overseas? I would think the Chinese would want to put their own corporations in place at some point. If sheeple are cutting their cable out (as I read yesterday) then they will be become less brand conscious and generics will be the choice of the day. At least it will be a healthier source of food. Corporations will take their turn at the plate. No where to hide.

http://ca.finance.yahoo.com/q/bs?s=K&annual

#129 Grampa Hindsight on 08.12.11 at 11:34 am

I hear the argument that people are still buying so therefore there is no bubble. A bubble is not defined by how many suckers continue to perpetuate the game. A bubble is defined by unreasonable prices driven by mania and not underlying economic valuations and fundamentals. Bubbles by definition pop.

#130 dd on 08.12.11 at 11:45 am

#106squidly77

…You are one backwards person, …

No squid. A realistic that knows oil is still to cheap to change our ways. Cheap oil gets us no where. Grow up buddy.

#131 Snowboid on 08.12.11 at 11:56 am

#74 BPOE…

“Vancouver soars like a phoenix…”

Don’t you mean “…like Phoenix…”?

I finally figured it out, all of your posts are sarcastic – how could I have missed this? You are so obvious!

#105 kimi…

It’s easy, most Canadians are spending a small percentage of the proceeds from their Canadian home sales.

They still have more than enough liquid investments to get back into Canadian RE when or if they want.

#132 dd on 08.12.11 at 12:00 pm

#104Canuck Abroad

..This time the bulk of the problem debt is sovereign…

Ya created when governments bailed out the banks. This time defaults will be apart of the game and not just cutting services and raising taxes.

#133 Tony on 08.12.11 at 12:04 pm

There’s a very good chance the cities where the buyers are the most leveraged will fall the most. Those two cities as everyone already knows are Brampton and Mississagua. Both these cities could fall harder than both Victoria and Vancouver.

#134 fancy_pants on 08.12.11 at 12:20 pm

ok. was venting yesterday with the prospect of low rates holding out.

Happy to be mortgage free in a mid-sized average home in one of the best countries in the world.

A global reality check reminded me I don’t need to live in a bigger house to be happier. Already living in a palace per global standards.

Sooo easy to get caught up in the “keeping up with the Jones” games the middle aged like to play. well, screw the Jones so-to-speak.

#135 Mike in Etown on 08.12.11 at 12:20 pm

I’ve always considered Midway to be more West Kootenay than Okanagan. It has a great gas station. I hope the mill remains open.

#136 O.R. on 08.12.11 at 12:35 pm

“Stuff is going to grow cheaper and if you borrowed money to get some, you lose. That includes houses.”

Sad to say, but I’d *really* like this to be true, to be what’s going to happen. Right now, I feel I have been punished by the market for 15 years of responsible budgeting and debt management/limiting.

But with money staying free, and QE3 around the corner, they are going to dump even more cash in the money pool and dilute the dollar. How can we expect things to to grow cheaper?

My parent house cost $30k about 30 years ago. Today it costs $300k. Government are consistently kicking the can down the road and nothing changes, why would rampant inflation stop? I’m not an economist and I have limited understanding of the mechanisms at work under the hood here, but plain observation leaves me distraught and pessimistic about the future. I have a balanced portfolio, a solid liquid base, basically no debt, and year upon year, I see the value of what I have diluted and my buying power diminished.

Gas was 0.50$ when I started driving, now it’s 1.30$. But the 200$ I started saving back then is still just 200$ (actually, 360$ with compound interest but that’s still bellow inflation). As a simple investor, I basically don’t know how to store my value and protect it against inflation / currency devaluation. And I’ve talked to “financial advisers”, only to be told to invest in RE, Mutual Funds, etc. Basically “Buy into what you are sold boy…”.

My employer contributes and matches 40% of what I invest in my RRSP, so I’ve been doing that. But if taxes end up doubling to rescue all the dummies (or country) drowning in debt, he’s me getting screwed again. And to get that contribution, it has to be in the compagnies collective RRSP program which allows me 3 investment options:
- Fixed term 5y deposits @ 1.5%
- Blackrock bond index fund
- Various mutal funds
And so I buy into what I am sold… This is the reality of the man on the street. And believe it or not, friends and family come to me for financial advices… since it seems I’m the least ignorant… Many of them don’t understand that debt is costly (with good reason, it hasn’t been in quite some time)…

PM people say “gold!” but it’s been at 200$ for a hundred year, now it’s 1700$. That’s scary. I don’t want risk, nor do I want greedy profits. I just want to not get screwed by the way the money pool is managed… right now, I have a hard time managing even that…

#137 pjwlk on 08.12.11 at 12:39 pm

#16 Smoking man: “crank open a bottle, become a judge-er, screw being a judge-ee, let it all hang out.

Dude, like it or not you are a “judge-ee” as well.

#138 arctodus on 08.12.11 at 12:42 pm

http://www.financialsense.com/contributors/gail-tverberg/2011/08/12/recession-we-are-hitting-an-economic-growth-ceiling-caused-by-limited-cheap-oil

read and learn grasshoppers….all you really need to know is laid out.

#139 squidly77 on 08.12.11 at 12:42 pm

dd

I bet on cheap oil, in at $29.99 out at $33.01
http://finance.yahoo.com/echarts?s=SU+Interactive#symbol=su;range=5d;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=;

Works like a charm!

#140 SRV ES339 on 08.12.11 at 12:47 pm

“The good news is there’ll be no depression, no collapse, no crash, no locusts”

Kirland Lake comments notwithstanding, you’re a very knowledgeable guy Garth… interested to hear your take on the possible outcome of…

$1200 Trillion notional value in derivitives (locusts anyone?) with less than zero transparency, fueled by trader bonus based on forward earnings…

IMHO this can not end well.

#141 Joy B. on 08.12.11 at 12:58 pm

Had to chuckle this morning – I posted this on my FB and awoke to find a sour grapes snarky comment about “It’s different here in Vancouver! This guy’s just an angry renter pissed cause he can’t afford to get into the market!” from someone I know is in for a 5/35 mortgage they can afford only by the skin of their teeth til the rates jump. Said individual also has a historical record of being, shall we say, “reality impaired” to the point of what they think is a good idea is always the opposite of what any sane person would do.

Me, I could afford an old-fashioned 25% down payment (6 figures in this town!) but I have yet to see the ugly clapboard townhouse or concrete box in the sky that could convince me to part with the cash. But of course I get lectured as though I have no clue how things work in whatever parallel universe it is where Vancouver won’t pop.

I look forward to the coming house apocalypse.

#142 arctodus on 08.12.11 at 1:03 pm

http://www.youtube.com/watch?v=EQqDS9wGsxQ&feature=player_embedded

The basic reasons why we are finished with growth economics….it does not matter what we might want….we are going to get hard times regardless…

#143 Smoking Man on 08.12.11 at 1:17 pm

My crazy voice in side my head is talking to me right now.

This is what it said.

VOICE
“Smoking Man I like you, going to give you some advice
Leverage huge and buy up as much energy and bank stocks…as you can.”

ME
“are you insane look around look at what all the bubble heads are saying”

VOICE
“Thier is no one left to play monoply with, the only way to get a new game going and keep the heads of the winners still attached to there bodies is for a new game, we will print money and inflate, other wise we will have no head to enjoy what we have, plus you know we make rules and we will win again”

ME
“Your nuts, but you have never been wrong yet.”

#144 AM on 08.12.11 at 1:18 pm

Could you explain this phrase to me: “And you’d be amazed how many Canadian families will be under water if values trim by just 10%.”
Thanks.

#145 Smoking Man on 08.12.11 at 1:27 pm

Sad news to report Bubble Heads

Banks just forcast no rate hike till way next year…..2nd or 3rd 1/4

the voice was right yet again…..

Real eatste has nine lives up here babey….Let party begin..

#146 pjwlk on 08.12.11 at 1:37 pm

#89 Back to 1989: “2011- 30 years, skilled pressman $15.25/hr”

One of my buddies lost his Quality Manager’s job in Milton a while back and his comment to me at that time was pretty much the same as yours — there’s only $15/hr jobs left out there now.

#147 timo on 08.12.11 at 1:54 pm

#138,arctodus

Do you really believe that all developed economies would allow a small faction to dictate the price of a strategic resource that would collapse their economies?

the $200 oil or $150 oil price is dead no matter how much it costs to get it out of the ground. It would be nationalized and under price control.

#148 O.R. on 08.12.11 at 1:56 pm

@ #144

“If houses prices drop 10%, a lot of Canadian family will end up with a debt/mortgage higher than the cost of the house.”

If they sold the house and gave the money back, they would still owe some money. So they are ‘under water’.

This happened because they were able to borrow pretty much 100% of the cost for the house (0 down) so their equity (value of what you own – what you owe) is very susceptible to house price variation because for many family “what they own” means “the house”.

#149 City Slicker on 08.12.11 at 2:02 pm

#82 Dark Man on 08.12.11 at 5:43 am With no where else to make money, banks will continue to hand out mortgages like candy canes at a Santa Claus parade. 3.5% on a 5 year mortgage will look like a great investment to them. I call no housing correction until rates increase, there will only be continued easing of lending rules.
———————————————————-
Near zero rates didn’t and aren’t saving US housing – City slicker

#150 harlee on 08.12.11 at 2:02 pm

Linda Pearson @ 114
Thanks Linda. The one thing I’ve learnt about myself as I’ve grown older is that I have so much more to learn. Travelling and taking time to educate oneself is money well-spent. My next trip will have to be to Montreal and the Maritimes.My French is lousy,but it’s not too late to learn . It’s important to make money,but it’s important to spend money too.

#151 squidly77 on 08.12.11 at 2:24 pm

timo

the $200 oil or $150 oil price is dead no matter how much it costs to get it out of the ground. It would be nationalized and under price control.

Undeniably true.

#152 Witheld on 08.12.11 at 2:35 pm

I would almost be happy about houseaggedon in Victoria… which I live in and am renting until I can buy something here!

The only caveat, Christy Clark, and her rampage to try and save families money by cutting BC Hydro operating costs. Thank you government review panel for suggesting 1000+ job cuts. Of course Hydro pushed back and said more like 350 cuts over the next 3 years, but you don’t see too much of that in the news.

Of course there are many ways of saving money for rate payers of a Crown Corporation, such as reducing the water rights payments to the BC Government to something more in line like Hydro Quebec. To name one way to reduce operating costs rather than turfing people… Anyways, now there is the air of uncertainty for young hard working professional fellows like myself who still have student loans and other family bills to pay. Regardless of what happens, Victoria housing prices will continue to drop, and there may be a few more unemployed people looking for work in the capital region.

One can hope and put his/her faith in the system and their employer, or housing market, or stocks, or bonds, or gold or or silver or whatever it may be physically. In the end none of it will guarantee you security or true life. There is something you can put your faith and trust in, something you can really build on. But I am not going to tell you what that foundation is, well unless you ask me.

#153 arctodus on 08.12.11 at 2:40 pm

#147

#138,arctodus

Do you really believe that all developed economies would allow a small faction to dictate the price of a strategic resource that would collapse their economies?

the $200 oil or $150 oil price is dead no matter how much it costs to get it out of the ground. It would be nationalized and under price control.

It is not about price my friend it is about actual physical energy returned over energy invested (eroei)….the actual physicality of it.

That fact garantees a wholescale pull back in the global economic enterprise…there will be no winners long term….only temporary reprieves for certain power bases short term…

But you can forget about growth economics forever now…that is over.

I agree that high oil prices do not last…spiked prices occur….but they collapse because the economic forces that drive them are in retreat globally.

#154 Daisy Mae on 08.12.11 at 2:47 pm

Mike in itown:

You’re right….”Midway is a village located in southern British Columbia in the West Kootenay region. It is located 13 km west of Greenwood and 51 km east of Osoyoos along Highway 3.”

#155 disciple on 08.12.11 at 2:54 pm

I strongly believe that the world is not anywhere close to running out of crude oil. At the same time, with most of it coming out of the catalytic converter anyway, I’m not promoting use of gasoline in vehicles; in fact, I am actively working on alternatives in my spare time with promising success.

The US must attract 15% of the world’s capital every single day to service its debt. That is theft. The proceeds are going straight into the coffers of only a handful of people. I think this is why hyperinflation won’t happen, because any new money that is now created to service the debts will go straight into these few hands, and will never flood the market. Just a thought…

A postage stamp used to cost 5 cents, it now costs 59 cents. Is this inflation? Maybe not, look at it this way: maybe the stamp is worth more now? The assertion is that nothing has any intrinsic value. If you don’t like the price, then don’t pay. That’s what the world’s biggest bully does. You don’t like the price the Taliban is asking for oil-field access? Well, then take Canada along and just take what you want…Support our troops. Bring them home…

Here’s my manifesto on Negotiable Instruments:

Cash and cash equivalents, like currency are not a good store of value because they are a promise by central bankers to pay you back for the labour and profits you have deposited with them. They will betray you with the help of their agents placed in government positions. So don’t hold them or use them. Instead store your money in wealth-producing vehicles like public and private equities, corporate and government bonds, and individual companies that you believe in because they produce actual useful commodities unlike the financial parasite class that produce absolutely nothing.

Do you understand the difference? Corporations use their own form of currency and they issue these to you in the form of paperwork promising to repay you and proving that you own a part of their assets. Picture this paperwork as the equivalent of those currency bills in your wallet, only much, much better. Now you are beginning to understand what money really is…eventually, you will come to the conclusion that YOU ARE MONEY.

#156 disciple on 08.12.11 at 3:16 pm

Why do regular people do seemingly stupid things? Such as rioting through the streets like hooligans? Like leverage to the hilt on a family home? It isn’t all HGTV:

Cellular Wave Frequency Communications facilities may be erected and utilized by the Intelligence Community to sedate, excite or initiate a variety of physical effects and ills to implement population control or elimination at the time it is deemed necessary.

Individuals who have access to or regularly use marijuana or opiates on any regular basis also represent a problem in control and manipulation. This is due to the reaction and stimulus in the human brain that occurs with the use of these substances, which provides an immunity of sorts to these operation techniques.

The government’s attempts to eradicate this problem in its War on Drugs is having some success in supply rates of marijuana and opiates.

It is interesting that the so-called Drug War has had little effect on the supply of cocaine and methamphetamines as these can only enhance the effects of the manipulation instead of decreasing it as opiates will.

Chemical control bases in public population will be present in 95% of the population base. Those individuals who may not be affected by Frequency Control due to the useage of certain drugs will most likely negate their immunity with the chemical base they have built up over the years in their everyday use and exposure to those agents on the Chemical and Biological Control Base listing (C.B.C.B.)

#157 Peakoilist on 08.12.11 at 3:24 pm

#120 BrianT on 08.12.11 at 10:55 am
Yeah I hear ya//I wasn’t really arguing with Detalumis…i get that Hamilton is poorer than Oakville..and I admit that I joke with people about all the scooter people.but I was merely rebutting him because My intent of the first post wasn’t to compare Hamilton to Oakville , but compare it to similar cities on Garth’s list yesterday, that too have big city problems…
Also just look at our largest city, Tronna..a shining example and with a 700 mil shortfall for the next year already, but people are happily living there beside all the homeless. Every big city across this land have urban problems but us city dwellers still love the flavour and diversity.

#158 disciple on 08.12.11 at 3:24 pm

Saudi Arabia sells their oil to the men that sit behind their computers in New York and London every day and they are representatives of the World Bank and the IMF and they determine how much oil Saudi Arabia gets out of the ground.

It costs $5 to get a barrel of oil out of the ground. Who gets the difference between that and $80 or $130 a barrel? Saudi Arabia sells it to the oil bourse, not to Shell or Exxon.

They sit behind their computers in New York and London and tell everyone on the face of the earth what they’re going to get for a barrel of oil. OPEC has nothing to do with it, neither do the oil companies. Supply and demand has nothing to do with it. It’s controlled by the representatives of the World Bank and the IMF.

They take the big cut right off the top before the oil companies ever get theirs and they can forgive the loans of every third world country because you paid for it as a tax at the gas pump.

#159 dd on 08.12.11 at 3:30 pm

#147timo

…the $200 oil or $150 oil price is dead no matter how much it costs to get it out of the ground. It would be nationalized and under price control….

Ha. Price controls. When was the last time managed price controls worked out well?

#160 Peakoilist on 08.12.11 at 3:45 pm

#142 arctodus on 08.12.11 at 1:03 pm

thanks for that video and the earlier article..everyone should watch and learn. It’s really the Root cause of why we’re experiencing this financial contagion. Do most people want to consider root causes, even in their own health matters? sadly most do not..most prefer to examine the symptoms only and go for the quick fix.that’s more fun and satisfying in our “me want it now” world. We could mitigate this whole thing by deciding as a whole that growth is over, we can live on less and still have a good life.
However, it won’t happen. I don’t think we’re programmed for that as a species. Survival of the fittest is built-in and it’s every man for himself.. Let’s use up every last drop of everything..and then we’ll see.
thanks for keeping the peal oil message alive here..hopefully more will begin waking up.

#161 Pat on 08.12.11 at 3:49 pm

#155 disciple:
“I strongly believe that the world is not anywhere close to running out of crude oil.”

Strong beliefs are for Sunday morning prayer.

#162 Moneta on 08.12.11 at 4:10 pm

We have BAC on the verge of going under and Wells Fargo with all kinds of less than stellar stuff still on its books trading at near 2007 peaks just a couple of weeks ago.

It just seems to me that there is still a lot to come.

What I find intriguing is that, IMO, investors are still a lot more scared of missing the upside than losing theri shirt.

Right now the world is calling the rioters entitled looters. When bankers are finalled seen for what they are, entitled looters, and both extremes are put in their place, I’ll now our system will be on the mend.

#163 Cookie Monster on 08.12.11 at 4:23 pm

I’m only halfway through your post and I already know what to say, like my mother always said, if you don’t have anything nice to day then do not say anything at all, well, I rarely listen to mom anymore.

All I’ll say is Austrian economics is economics, the same as saying modern physics is reality, versus witch craft, prayers, or holy will. Galileo was right and so is Peter Schiff and Ludwig Von Mises. Others are wrong.

Prepare as you see fit, but if you misunderstand reality you will fail to prepare correctly, unless it’s by dumb luck. Good luck.

#164 Moneta on 08.12.11 at 4:27 pm

The US must attract 15% of the world’s capital every single day to service its debt. That is theft. The proceeds are going straight into the coffers of only a handful of people. I think this is why hyperinflation won’t happen, because any new money that is now created to service the debts will go straight into these few hands, and will never flood the market. Just a thought
————–
I was in Philadelphia on vacation while they were negotiating the debt ceiling. It was interesting. One morning, the paper came in with a huge real estate section… all about buying your own island. There were a few in Canada which I thought kind of surprising.

Anyway, that’s probably why the CEOs want hundreds of millions. They know that’s the amount they’ll need to save their heads when the guillotine comes out.

My husband is convinced that all those with less than 10-20 million will end up at the same level when the whole crisis is over, and that people are snobbing and one upping eachother for nothing.

Time will tell.

#165 Cookie Monster on 08.12.11 at 4:29 pm

Say what you want about the tea party but remember the most basic tenant of the tea party is a moral issue. It’s the right to keep what one earns rather than having one’s wealth striped for government causes.

Causes like proactive war, eves dropping on citizens, subsidizing corporate cronies, funding the IMF or the UN and other econimic hitmen.

When the next civil war breaks out in the US it will be to regain personal freedoms and civil liberties. It will be a moral war and the tea party is on the side of morality and so will I.

#166 Dr. Fred on 08.12.11 at 4:29 pm

I’ve often wondered how it would feel to be wrong as often as the posters on this blog. Most of my patients would be dead over the course of the last 3 years if I had the same scorecard.

Must be why you have time to post here so often. — Garth

#167 Bastiat79 on 08.12.11 at 4:47 pm

I live in this world. Wrong monetary policy moves will create deflation, a lesson the 1930s proved worth learning. Time you did. — Garth

Well I guess that answers my question. In the world I live in, the wrong monetary policy moves were done in the 1920s, not the 1930s.

#168 Moneta on 08.12.11 at 4:52 pm

We have BAC on the verge of going under
———-
I should have probably written rumored to go under…

http://www.ritholtz.com/blog/2011/08/speaking-soothing-words-vs-truth-bombs/

http://www.nakedcapitalism.com/2011/08/bank-of-america-death-watch.html

http://www.zerohedge.com/news/bank-america-cds-update

#169 Cookie Monster on 08.12.11 at 5:05 pm

#80 Jody on 08.12.11 at 4:26 am
—–
Easy there, many good points but don’t get carried away with the push for anarchy, that’s not quite what main stream Austrians espouse, unless you happen to be Murray Rothbard.

I think the accepted norm for government as by Ron Paul is small and limited as per their constitution. Not abolished altogether, many departments should be abolished but not the core, national affairs, federal law etc…. but yes, the term career politician should be abolished, they should be paid nothing and receive no benefits. This way only people who run are already successful or willing to sacrifice their own personal gains to serve their country for the honor, not the money. We also need to end lobbying, there must be separation of government and economics.

#170 Mister Obvious on 08.12.11 at 5:48 pm

To rent or own in an urban environment:

With each passing year our world becomes increasingly antisocial. If someone else’s life style choice interferes with the peaceful enjoyment of your space, it’s clearly you that has the problem. Examples:

Neighbours with unruly, dangerous dogs whom they consider their “good buddies”

Mental midgets who barbecue meat of questionable origin 20 feet from your bedroom window

Proud parents who think the hours-on-end fever-pitched screeching of their uncontrolled children is a gift to the neighbourhood

Eighteen-year-olds who’s Dads have bought them lethal high performance automobiles with which to tear down your street

The world now brims with marauding yahoos including (but not limited to): Illiterate foul-mouthed punks, drunken partiers, hockey rioters, vandals, muggers, taggers, thieves, aggressive panhandlers, road-ragers, transit seat hogs, pushy salespeople, and rude oblivious cell phone jockeys.

Regardless of the state of the economy (or perhaps because of it, I don’t know) it’s not getting any friendlier out there folks. So… set the economic questions aside and ask yourself: should one rent or own in an urban world of rampant self-centeredness and disrespect?

You can easily buy into a disagreeable neighbourhood (or building) even if it looked pristine at the open house. It’s getting easier to find such places since anyone with a heartbeat can now qualify for a mortgage. (And of course, our southern neighbours are going to force us keep things that way for quite a while yet)

If property ownership saddles you down I see only three choices: (1) Suck it up (2) Stand up and fight, or… (3) Go through the pain of selling and all it entails.

But if you are a renter escape is just a month’s notice away.

#171 Harry on 08.12.11 at 6:14 pm

Saskatoon?
c’mon Garth!
- low unemployment
- 220000 population is fastest growing in Canada
- houses way cheaper than the national average
- there are jobs here
- among the best in wage gains
-

Saskatoon is not running out of land, but there are problems down the road in having enough land serviced for demand. Short term this will raise prices, long term it will be sorted out.

This is great beautiful province.

No bust here.

#172 Dclipse on 08.12.11 at 6:31 pm

Someone mentioned that Mississauga and Brampton will see one of the biggest RE drops. I agree with that especially considering the demographics. I lived in Mississauga for 15 years, was a CNC Machinist. That and other trades have been decimated in the last 5 to 10 years. I eventually left it altogether cause I was sick of changing companies every 6 months. With the industry slowing and companies closing down, even the $15 an hour jobs will disappear. Then watch out.
Been talking to a friend of mine about all this for a while, and now I found out he bought a house in Georgetown for $530.000. To be built in a year and a half. Few years ago, him and his wife were barely able to pay for a $240.000 townhouse in Mississauga. From 20 year mortgage he’s going to a 35. “Cause it always goes up”. On top of that $20.000 of $30.000 he’s putting as deposit is coming from HELOC. Crazy!!!!
Feel sorry for a lot of people that are gonna get screwed with all this.

#173 Ozy - False, 905 decline will be 25% and 416 decline 25% percent too on 08.12.11 at 7:01 pm

False, 905 decline will be 25% and 416 decline 25% percent too

“416, where real estate will be among the stickiest in the country. Sure, the GTA as a whole could be in for a 15% haircut, but the epicentre of a region of six million people and a robust economy (despite a growing pile of bodies on Bay Street) is likely to see only marginal declines. There’s a reason the average SFH here in the centre is $800,000, and it’s called the 401.

#174 Victoria Tea Party on 08.12.11 at 7:26 pm

GREAT DAY ON THE US MARKETS. WHAT’S NEXT MONDAY LOOK LIKE?

It’s just so darn tough to see how stock markets, and their CNBC boosters as an example, can seem so positive and happy (today being a classic example) while outside in the “real” economy there is such dross and upset.

The reason is this, as far as I can figure:

Great Big Business, as represented in the markets, is doing business! No, really?

On the other side of the equation, Big Government is flat-assed broke with huge debts, along with their pathetic citizens. It’s flat-line time in Gotham, Pilgrim!

Government, unlike its business nemesis, is not doing business. It dithers because our public sector “betters” who caused the problems are the same people who are now trying to solve them! Won’t happen! Insanity!

Business knows that. So what’s it supposed to do? Run into a cave and hide?

Or do what it’s used to doing, namely doing business which also means finding customers and shoving their competitors aside whenever the opportunity arises. In response the stock markets are, therefore, doing OK except for the recent few weeks of rough patch.

So the two leviathans of this world, big business and big government travel on different tracks in various directions. The only possibilty of a collision and, thus, another 2008 shake-down is if government decides to regulate business more than it already does. That would include higher taxes.

IN THE MEANTIME…

The only hope for investors IS the stock market since real estate, that other great industrial-strength hope of bitching voters everywhere, is getting pounded into the ground, ESPECIALLY here in this city of 2.5 million sidewalk cafes!

WITH THAT IN MIND THEN, THIS IS WHAT INVESTORS DO NOT WANT TO READ AT THIS TIME…

…the opinion of John Hussman, a market oracle who attract a wide and loyal following. Today’s article posits that a new US recession is virtually upon us:

“…As of last week, the Market Climate for stocks remained hostile, coupling overvaluation with stark weakness in market internals. We continue to see evidence of significant complacency, with bullish sentiment still well ahead of bearish advisors. From a Bayesian standpoint, the likelihood is that stocks have entered a bear market, and that last week was an opening salvo, not a parting shot. On the economic side, I am very hopeful that the composite of evidence for an oncoming recession is utterly wrong. Still, that hope is pitted against data that has always and only been observed during or just prior to economic downturns…”

If his forecast comes to pass, what THEN do investors do?
How can investors separate a recession from jsut rying to “do business?”

Go to “ground,” I say, buying securities offering customers metals, energy and banking and maybe consumer perishables like food, stuff even the dying can’t do without.

While I’m basically an economic perma-bear, I have to have SOME faith in those hoary old sea captains of capitalism.

They’ve “sailed” through some mighty heavy financial seas in their careers.

And the storm-of-storms, which always seems to be just around the corner, only to NOT show up, when we all thought it would, is still out there, apparently.

Bottom line. Market forecasting always includes one’s experiences, perceptions and, especially, prejudices. In the worst case not everything will go to zero. But the day will arrive, I don’t know when, when Zero will seem to have arrived!

Hello squirrels!

#175 Devore on 08.12.11 at 7:32 pm

#156 disciple

It is interesting that the so-called Drug War has had little effect on the supply of cocaine and methamphetamines as these can only enhance the effects of the manipulation instead of decreasing it as opiates will.

No conspiracy required here, as every War on [whatever] has had little effect, in fact, achieves precisely the opposite. The fact that they are continued, and new ones spring up constantly may be seen as a conspiracy, but the results should not be surprising to anyone.

#176 timo on 08.12.11 at 7:40 pm

Ha. Price controls. When was the last time managed price controls worked out well?

world war 2 .
http://answers.yahoo.com/question/index?qid=20080914090406AAccXEA

when faced with a crisis the world will wake up fix the problem and then go back to lazy procrastination.

#177 jess on 08.12.11 at 7:41 pm

128 foolsrushin
” I would think the Chinese would want to put their own corporations in place at some point.”

How about the socialist collective . Google the village of Huaxi

#178 Devore on 08.12.11 at 7:43 pm

#163 Cookie Monster

All I’ll say is Austrian economics is economics, the same as saying modern physics is reality, versus witch craft, prayers, or holy will. Galileo was right and so is Peter Schiff and Ludwig Von Mises. Others are wrong.

It does not much matter who is right and who is wrong, but who is left, as it were. The predictive powers of Austrian economics may be 100% right, but it cannot predict what will happen next, because central planners do not read from the Mises playbook. By all rights, the western economic system should have ended in 1970s, and anyone who “prepared correctly” missed out on 4 decades where the world did not end.

What are you preparing for anyways? Do you know what will happen next?

#179 jess on 08.12.11 at 7:50 pm

Friday, August 12, 2011
New Zealand Company Registry Whack-a-Mole!

Fired up by my recent posts about dodgy New Zealand companies, Nick Shaxson asks what the hell is going on at 369 Queen Street, Auckland?

http://www.nakedcapitalism.com/2011/08/new-zealand-company-registry-whack-a-mole.html

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

Ms Port-Louis, who has not replied to phone calls or emails, is a director of at least 338 New Zealand companies.

She attracted the attention of Barack Obama when he was a senator for the way she headed up at least 100 companies in Wyoming.

Her companies, with names like Petro Tex Ltd, El Mondo Ltd, London Group and Nelson Trading Ltd, are based at Level 5, 369 Queen St, Auckland.

Beauty and ‘lord’ keep shady company
BY MICHAEL FIELD Last updated 05:00 09/01/2010SharePrint Text Size A HEAD FOR BUSINESS: Stella Port-Louis is a director of hundreds of companies registered in New Zealand.

http://www.stuff.co.nz/national/3216821/The-many-titles-and-jobs-that-make-up-Geoffrey-Taylor

#180 timo on 08.12.11 at 7:53 pm

http://www.youtube.com/watch?v=F-QA2rkpBSY

#dd, good video

I don’t want too push the thread to much off topic so we shall wait and see what happens. I still got the farm in Sask and know how to can,trap and fish so as long as I stockpile enough ammo I should be prepared.

have a good one .
:)

#181 OkanaganInvestor on 08.12.11 at 8:06 pm

Garth!
“I’d like to hear your reasons for selecting a city or two which you feel will be reamed or spared by the approaching real estate correction. I have yet to decide on a suitable prize, but I’m leaning towards awarding a small community in the Okanagan.”

I’m guessing either Enderby (pop.3134), in the North Okanagan or Cherryville (pop. 614), up Coldstream Valley, east of Vernon.

#182 Nostradamus Le Mad Vlad on 08.12.11 at 8:11 pm

-
Great posts today. I rebirthed in the 43rd century, and ended up a little outta my depth. Now I have to hitch a ride back to the 25th century to get a greater perspective on where I am!
*
CC (consumer confidence) and work force are at a 30-year low. Coincidence? Mad Max Yep, it’s Mel Gibson all over again; PMs “Because when you convert earnings into gold, the politicians can no longer steal from the product of your labor.”; US Elites Gone off the deep end, and taking us with them.

Streetlights being removed to save money; 13:35 clip 50 Minutes shows offshore tax havens; 8:32 clip Black Swan? Banxters are the Black Swans; Good example of the preceding 8:32 clip; From yesterday — Yuan “Those Chinese manufactured products you have become dependent on because the US Government and Wall Street thought US manufacturing just too icky to have to deal with, just got a bit more expensive to buy.” wrh.com; It’s the US$, not S&P; Bring Out Your Dead! Can’t afford to bury them.

Our man Harper “Honduras is just another lovely little sweatshop, and Harper is there to support Canadian business, not “democracy”, as the Sun article obliquely suggests”; 1:49 clip Why cops are detested in UK? ObamaCare unconstitutional (and bloody expensive); Crime “Sounds very much like how the British government was describing conditions in London, Manchester, Liverpool, etc. only a week ago!” wrh.com.

2:44 clip More US soldiers have died from suicide than by war; Syria “Making the world safe for compound interest.” wrh.com. (The IMF, NATO, WTO, UN and other organizations of like mind.); War Inc. Start with video games for kids and progress from there; Chinese riots underway; US plans when UK riots come home to roost.

#183 Timing is Everything on 08.12.11 at 8:12 pm

#156 disciple said – “Individuals who have access to or regularly use marijuana or opiates on any regular basis also represent a problem in control and manipulation.”

Do synthetics count?

#184 Kilby on 08.12.11 at 8:16 pm

#166 Dr. Fred

Are you the veterinarian from Swift Current that mucked up my cat?

#185 Cookie Monster on 08.12.11 at 9:26 pm

#178 Devore on 08.12.11 at 7:43 pm
I don’t know what I’m preparing for exactly but it sure as hell ain’t unabridged peace and prosperity.

No, you’re correct, economic understanding is not a crystal ball and can not predict the future, but it can give without a doubt, to those who understand it, a sense of confidence and conviction in their actions toward how they prepare for and handle events that might come to pass or are needed to deal with the effects caused by the of actions of others and government.

#186 An Cat Dubh on 08.12.11 at 9:30 pm

Even former BC NDP party socialists know where the money is\was. The guy was a former mayor of Nelson, B.C. and formerly a journalist and a NDP party member. He could have wrote for Pravda in the Soviet days according to his credentials. He left BC in the 90s when the economy was slow and went to Alta. to sell condos. He doesn’t mention his NDP roots on his site however. That may not look good, as Alberta was the BC left’s favourite punching bag.

http://condosincalgary.com/

#187 disciple on 08.12.11 at 9:55 pm

#157 Peakoilist…I believe detalumis is a woman…fyi

#175 Devore….good point. I agree that war’s fruitless, that was actually my point, with that patent disciple twist of course.

#182 Nostradamus…great find concerning more suicides than fatalities among US soldiers. War is totally diametrically opposed to the human consciousness, a conspiracy concocted by those who play both sides.

#183 Timing…no, synthetics do not have any ORMUS properties, so are useless in sustaining the life force. How do budding roots of a typical plant know which way is down? The seed will literally re-orient itself if necessary. Somehow it is obtaining information from its environment and processing it, and making a decision and acting upon that decision. Light years ahead of any AI that we can come up with. Our understanding of the life force, or ORMUS is only beginning.

#188 BrianT on 08.12.11 at 9:55 pm

#157Peak-I see your point-other than TO, Hamilton is pretty well the only large old urban area in southern Ontario. IMO most would be surprised by the architectural beauty of many of the neighbourhoods.

#189 disciple on 08.12.11 at 10:08 pm

#161 Pat…sorry, mate, almost forgot about you…more often than not, when a business falters, there is a church ready to take up its spot. Tax-free income, instant credibility but no accountability, harbouring enslaved and twisted minds all under one roof, serving the agenda of the State, the best business model ever on a grand scale, and every type of flavoured denomination you can dream up to customize the experience. But I think I’m preaching to the choir.

#190 Stanley on 08.12.11 at 10:41 pm

Owning debt is not cash. — Garth

If you get close to zero percent interest rate on it then it is like cash.

#191 TurnerNation on 08.12.11 at 11:14 pm

This line would be funny and even more poignant if you mixed metaphors and wrote:

“This market will be our Phoenix, our Vegas, our WATERLOO”.

(“The defeat at Waterloo put an end to Napoleon’s rule as Emperor of the French and marked the end of his Hundred Days’ return from exile”).

And a double entendre to the Waterloo ON R/E market.
:)

#192 arctodus on 08.13.11 at 7:57 am

#160

thanks…I don’t post online much anymore….but I do get a kick out of Garths site…Canadian slant and all that.

The World Made by Hand is coming fast and most will never even know what has happened as their world slowly fades away from beneath them.