Lessons

Last post, I told you about Roberta and Johnny. They have an investment house which is anything but. The value’s plunged by a third in the last three years, and since languishing on the market for a few months, it’s attracted one offer. Lots of hair – major conditions, long closing and weensy deposit. But like my mama always said, an offer in the bush is better than two hands. Or something like that.

Anyway, R&J made a counter-offer yesterday, getting tough. They did this after learning why the deposit was skinny – that’s all the buyer could get on her credit card. Meanwhile the couple’s taking some heat from neighbours for considering an offer a hundred grand less than they think their (identical) units are worth, while down the street new towns are being flogged in a receivership sale.

This is a small vignette of what happens when a market turns. Vultching buyers. Squeezed sellers. Delusional owners. It’s the prelude to an area turning into a frosty little northern version of Phoenix.

So where is this?

A lot of visitors made a guess in the last few hours, but only four got it right. The location is in (formerly) bubblicious BC, a mere 70 km from downtown Vancouver. And if you think what’s happening here ain’t on its way down the Sea to Sky highway as my half-naked Amazonian EA types this, your last name must be ReMax.

The place is Squamish. The posters who got it right were T.N., Q, Bailing in BC and Fred (the last one is obviously a pseudonym). I promised you a lovingly-autographed book, and it’s on the way as soon as you send me an email with your postal address ([email protected]).

Now, let’s do Assad. But we’ll be gentle. He’s an immigrant in Toronto.

I am newcomer to Canada , have a job that pays around 80K, no additional income, family of four ( two kids), saved almost 20-25k (in one year), no RRSP, no RESP. I want to buy a house, however , cannot make 20-25 % down (so consider CHMC), some people say housing market will see a correction by 20% by the end of next year . However some people speculate that even though the housing market sees correction the mortgage rates will go up and one way or the other you will end up paying the same amount over a period of 30 yrs.

I needed advice as to what should be the modus operandi for a buying a house in such a volatile market. Should I wait? I will really appreciate your advice and response, will help me ease my dilemma and focus my mind.

First, Assad deserves a special place on the GreaterFool wall of fame for supporting four people and saving $20,000 in a year on a salary of eighty grand. You would not believe the number of couples I talk to in a week who make twice that, save nothing, and have no clue where it went. They think you go to a financial advisor to get some finances.

But, as smart as this dude is, he’s seriously flirting with disaster.

Hell, even the Toronto Star, which never met a Royal LePage cheque it didn’t like, ran a story this week headlined, “Alarm bells sound over our house prices.”And buried in it was this little gem from my old economist buddy Benny Tal:

“I think the (Canadian) housing boom is over,” says Benjamin Tal, deputy chief economist at CIBC World Markets Inc. who agrees that Canada’s housing sector is “overshooting.” “The only question now is how do we correct? I think the most likely scenario is that the housing market will stagnate over the next three to four years until prices fall back in line.”

Of course, this comes on the heels of The Economist magazine’s prediction Canadian real estate is 25% too pricey, and the fools who live here now have more housing debt than those dumb pre-crash subprimate Americans. Also this week the Royal Bank said it takes over 50% of pre-tax income to afford a house in the GTA even if you have 25% to put down – which means Assad would end up buried in borrowing and feeding his family shrubs.

All this, plus a lousy jobs picture and stagnant household income, suggests whatever’s in the water in Squamish will probably end up in Lake Ontario. House prices are too high for first-time buyers. There are way too many speckers and flippers. And despite the explosive rally on stock markets on Wednesday (I told you not to bet against America) we’re into several years of tepid growth and structural unemployment.

That means, Assad, real estate values will be falling even if interest rates are not rising. It will not take one to get the other, a simple fact lost on too many people who come to this pathetic blog. Of course, when the economy improves and rates do rise, that increase will be enough to stall out any real estate recovery from the weak years at hand. Hence, a lost decade for anyone dumb enough to buy a condo now at pre-construction prices for delivery in 2013.

In fact, the best of both worlds is likely ahead for buyers. Desperate sellers dropping prices, plus cheap money. This, by the way, is exactly the situation in the US at the moment. Mortgage rates are at historic lows (get 4% locked in for 30 years), yet prices are falling monthly. In fact, Vegas, Atlanta and Phoenix have just hit new all-time lows – a full five years after housing started to burst. All three were real estate superstars in 2005. Like Toronto is now. And Vancouver.

Assad, baby. Have you considered Squamish?

154 comments ↓

#1 T.O. Bubble Boy on 11.30.11 at 10:14 pm

Any way to vote for Assad as Finance Minister?

#2 MarcFromOttawa on 11.30.11 at 10:15 pm

What happens when you stay up all night looking forward to Garth’s posts?

FIRST

#3 Darren on 11.30.11 at 10:16 pm

It’s amazing how many people think all the evidence is wrong and we’re going to continue on the path of rising prices.

#4 Eddie on 11.30.11 at 10:21 pm

Werd

#5 Toon Town Boomer on 11.30.11 at 10:23 pm

WOW 4% locked in for 30 years? That’s a sweet deal.

#6 Smoking Man on 11.30.11 at 10:27 pm

What a day

Power has finally figured out that heads attached to shoulders is not a guaranty. Even with nukes, RDF chips, cameras, drones.

First the printing presses are on full speed. Europe and the central banks have decided to allow inflation to run wild for a while in hopes to bringing debt down.

Dubai has just given it’s tax farm slaves that work for gov’t a 35% raise…….

The world is like a three leg stool, Labour, Gov’t, Investment Class. If any one of these grow to much and go out of balance the chair tips over.

Why did I sell all my other properties…………I am a dumb idiot………..

Main stream media pumping doom, can only mean one thing, they trying to put out a fire that is about to get injected with rocket fuel.

Ask for a raise, now is the time……

#7 Charles Ponzi on 11.30.11 at 10:28 pm

Same thing happening here in Australia. Bankers and politicians should be in jail for instigating a classic Ponzi scheme.

#8 HouseBuster on 11.30.11 at 10:29 pm

50% haircut coming soon!

#9 Wasted Opportunities on 11.30.11 at 10:36 pm

Once the main stream media cotton on to the fact that the boom is over, they like to think that prices will “stagnate,” or “plateau.”

Everything that changes from going up to going down pauses briefly at the top.

Unfortunately, stagnant house prices mean speculators and flippers are losing money holding real estate, so a stagnation reinforces a fall.

Either way (stagnation or fall), Assad should keep up his phenomenal savings effort and stay well clear of real estate for a few years at least.

#10 Lorne on 11.30.11 at 10:37 pm

5th?
Now why did I do that??

#11 sam.i.am on 11.30.11 at 10:40 pm

A Hannah Montana housing market!

#12 JO on 11.30.11 at 10:41 pm

Great post Garth. Now that we ‘ ve had the greatest debt bubble in history and a nation of debt slaves, we are facing what i like to call a finanical noose. The massive credit inflation over the last 8-9 yrs inflated GDP (our incomes), asset prices (especially housing), and created the illusion of prosperity. The massive flood of debt inflated aggregate demand, but merely inflated the cost of living for most of us while effectively transferring massive amounts of wealth to the senior execs in the banking and RE and related industries as the inflated asset values are monetized into larger mortgages and huge bonuses.

Now that the inevitable slowdown/contraction of credit has arrived (credit has been growing at about 2-3 times more than GDP – go figure, can anyone say debt pyramid scheme?), authorities are panicking as they realize they have no other game than to manipulate the housing bubble (will fail) in order to keep the mountain of debt growing at all costs. The system relies on a sufficient number of new debt slaves coming in to keep the mountain of debt growing in order to keep the illusion alive.

Alas, all credit booms end in disaster. A mere stagnation in the rate of growth in credit will stall the economy as aggregate demand is reduced, GDP weakens (or goes negative should the rate of change in debt levels go negative), unemployment rises and asset prices begin to decline. This is precisely the situation most of the developed world is in. The debt pyramid is broken at least for now.

These clowns are desperately trying to keep the Ponzi system going. They were very lucky in 2008-2009 and still now that they have found enough fools to take on the massively subsidized debt they are providing.

Make no mistake, even though we’ll likely avoid a US style crash, the housing market is a dangerous market that is very likely to decline or stagnate for years to come. Unfortunately, your gov’ts made promises based on inflated nominal values that they want to pay. Get ready to see property taxes, and other taxes explode over the next 10 yrs – even if homes stay flat, most will see their meagre take home pay reduced persistently over time. In effect, the gov’t is confiscating the home that they overpaid for thanks to subsidies from taxpayers in the first place. Oh the irony.
JO

#13 Ken on 11.30.11 at 10:41 pm

The next one will be in Richmond BC.
Just trying to front run your next contest.

#14 JO on 11.30.11 at 10:46 pm

Should add, the noose is where we now face a huge mountain of debt, weakened AD and GDP, declining asset prices. Authorities reply by lowering rates and injecting money. If they are lucky and it works again, big deal – more people take on more debt at record low rates, temporarily increase GDP and asset prices, and also oil prices which act as a tax on the economy. Within a short period of time, any increase in debt and temporary “improvement” in GDP and asset prices disappears as oil prices and increased debt servicing kill off the economy yet again. Hence the noose analogy.

And the cycle repeats until they can no longer find ways to have more debt added to the system. Massive stagflation is the best outcome, but the risk of hyperinflation or hyperdeflation is also there.
JO

#15 Devore on 11.30.11 at 10:46 pm

Assad makes the typical mistake: looks at the monthly payment. However, a smaller debt is much more preferable than higher debt, even if the monthly servicing is the same. Smaller debt is easier to retire as your income increases (or expenses decrease). And 30 years? No one, and I mean NO ONE, should be looking at a 30 year repayment schedule. Seriously? Think about how much interest you’re paying, as you torment renters with how tirades about much money they’re “throwing away”.

#16 Angela on 11.30.11 at 10:49 pm

…as we all pull up Squamish condos on MLS to figure out which one we’re talking about.

#17 Ron S on 11.30.11 at 11:03 pm

“Toon Town Boomer on 11.30.11 at 10:23 pm – WOW 4% locked in for 30 years? That’s a sweet deal.”

We moved Atlanta from Calgary, AB which is 4 or 5 times bigger city with very hot summer. We are struggling to find home (north Atlanta) which is around 1800-1900 sq ft. because everything starts from 2600 sq ft. (260k). Everyone is saying you can get nice 1800-1900 sq ft. less than 200K but not easy to find small home.
In Calgary 1800-1900 sq ft. starts from 350k….oh yes Calgary has oil and not too many poor people.

#18 Hashnugs Inthebong on 11.30.11 at 11:03 pm

I would have never have thought that people would pay 500K for a townhouse in Squamish. That place is fastfood central and merely a washroom break on the way to Whistler. Good on the people for guessing it right, but WTF where those people thinking buying there. Guess it was the Olympic hype or something.

#19 Hashnugs Inthebong on 11.30.11 at 11:07 pm

HEQ seems to be doing well in the last 2 days. Do you think your recomendation helped Garth?

Dogs come when I whistle. — Garth

#20 sam.i.am on 11.30.11 at 11:14 pm

>> NO ONE, should be looking at a 30 year repayment schedule.

Do you disagree even if the rate is locked for 30 years ?

#21 Van guy smokin now on 11.30.11 at 11:20 pm

In 2007, you could of bought a townhome 1250 sq/ft in Burnaby for 450,000. And that townhome peaked at $650,000. Now, maybe 600,000. Johnny and Roberta got sucked into the Olympic hype. Squamish is a boonie town. The best thing about Squamish us that it has a rare Taco Bell. And if it wasn’t on the way to Whistler, it would be a ghost town.

#22 MixedBag on 11.30.11 at 11:21 pm

Good on Assad and his family. This is how my spouse and I live, family of four, similar savings. And my mother: she worked in hospitality, no high school education, but she did save her money and pay off her mortgage twenty years ago; had a chunk saved and paid it off at renewal time. Now retired, she travels at least once a year. She worked two or three jobs when times were tight, preferring that to the shame of welfare. What we could accomplish with 160K / year!

Sometimes, high salaries are wasted on the foolish.

#23 jess on 11.30.11 at 11:22 pm

the list of 700

Tax Raids on Indian Diamond Firms Related to Swiss Accounts International Diamond Exchange
Nov 29 – “Indian Income Tax authorities raided four diamond-manufacturing firms in Mumbai Tuesday.

France has reportedly passed to Belgian, Israeli and Canadian authorities details about accounts held by citizens of these countries. The list of HSBC clients reportedly includes the details of 24,000 individuals.

http://www.idexonline.com/portal_FullNews.asp?id=36128

#24 Not 1st on 11.30.11 at 11:24 pm

A 400 point move in the DOW doesn’t reafirm anything about the U.S.A. That move came from a consortium of central banks pumping the stimulus again. Doesn’t change a thing for them.

Of course it does. It makes their customers more stable. — Garth

#25 Bottoms_Up on 11.30.11 at 11:31 pm

That is indeed amazing that he is able to save that kind of coin.

Makes me wonder if the CRA is fully informed of his earnings?

Nah, he’s probably a straight-shooter, but must live in a 2 bedroom apartment in Hamilton and bus to work.

Anyway, he should save another 25g over the next year, then he’ll have 50g (20%) to put down on a place like this in the Hammer:

http://www.realtor.ca/propertyDetails.aspx?propertyId=11336192&PidKey=583589115

#26 little wick on 11.30.11 at 11:32 pm

“go to a financial advisor to get some finances”. DREAM ON…THEY ARE ALL OUT TO GET RICH FOR THEMSELVES….THEY SHOULD BE HUNG ON A CROSS TO ROT

I can tell you had a nice day. — Garth

#27 JohnSaccy on 11.30.11 at 11:33 pm

Kudos to Assad for saving up20K in one year.

Garth, I would like to know your views on today’s global bank coordination to inject dollars in the system. Do you think this is sustainable or what would be it’s impact on stagflation? Thanks for your efforts in keeping us informed.

Stimulus is not intended to be long-term, but rather to stabilize unstable situations by injecting liquidity into the marketplace, increasing credit, lowering the cost of capital and, in this case, sending a message that nobody – even the bond market – is big enough to mess with The System. The purpose is to reverse worsening economic conditions and the very nature of such a move is inflationary – but not structurally so. — Garth

#28 Snowboid on 11.30.11 at 11:36 pm

#5 Toon Town Boomer on 11.30.11 at 10:23 pm…

Even sweeter deal, they can deduct the interest payments from their income tax!!

#29 Devore on 11.30.11 at 11:38 pm

#20 sam.i.am

Do you disagree even if the rate is locked for 30 years ?

Frankly, yes. For most buyers that means they will still have a mortgage when they retire. Might as well pay rent, fewer expenses.

#30 @@@@@@@@@ on 11.30.11 at 11:41 pm

Meanwhile in America, prices hit 2003 levels and 12 markets are cheaper to buy than rent.
http://tinyurl.com/77n4pom

#31 TurnerNation on 11.30.11 at 11:44 pm

Garth, it was me (T.N.) – I am quickly using a new, temporary computer on the road, and didn’t type in the full name earlier.

I have a signed copy of your book already, and a copy for someone else, thanks. In the sprit of this magnanimous blog I will donate the copy to charity…

Please dispatch a copy to D.A. (It think he needs one)!!!

#32 sam.i.am on 11.30.11 at 11:47 pm

What’s really going on is globalization. Unit labor costs in developed countries cannot compete with India, China, etc. The developing countries will see their standard of living go up, the established ones (US, Canada, West Europe) will (are going) go down until some sort of economic equilibrium is attained. We’re not there yet.

Why isn’t there more non-commodity inflation in the US? It is because labor is the largest input cost and that cost has not gone up in spite of the US dollar’s decline due to QE and flattened yield curve. The commodity based inputs can double and the end product might go up 5%. Not the case in China where raw materials account for a greater % total cost of production.

Food inflation is a major concern in India right now. How will the Indians solve it – likely by raising interest rates which has the effect of inflating the currency making imports less expensive, but at what cost – exports. It’s a pissing match. It sucks for the west, but it is also a reality, and everyone needs to accept it and move on, because globalization forces are here to stay.

Garth mentioned not to bet against the US and here’s one reason why – the US does not screw around and policies -economic and other – can change very quickly. This is a general characteristic of the US political system. We all like to joke about the political games but the reality is, if stuff REALLY needs to be done it will get done. Canada moves much slower which is one reason it is perceived as a more stable system.

#33 Van guy smokin on 11.30.11 at 11:48 pm

Since Oct 1, Squamish attached listings were at 204 units. In this same time period, 15 sales. Attatched was same at 204, sold were 30 in the same time period. Out of the 15 attatched sales, most these units took about 130 days to sell with little discount. 2 units were sold for over asking. Still, thats an ugly stat for attached.

#34 Manalive on 11.30.11 at 11:57 pm

All depends on the market…Burnaby and New Westminster are still cheap compared to Vancouver..People in Canada like to stick close to the border so anyone coming to one of the safest economies in the world has to live somewhere.It’s amazing how many losers want a crash…they got there crash in the States(which is really nothing like Canada..and Australia has no Asians) and the bigger the crash the less people can afford them because people would kill to get an $8 an hour job there.But keep hoping losers.

#35 BPOE on 11.30.11 at 11:59 pm

Squamish is the recreational capital of Canada. In the late 1990′s a downtown lot could be bought for the low 100′s. Canadians trying their hand at speculation got the prices rockin. Problem is the professional investor from overseas has no interest in this area. Unless this area is discovered by the pros stick with Vancouver. Richmond as well continues to be bulldozed. Best restaurants in the world are located in Richmond. Best cars too!!

#36 Onemorething on 12.01.11 at 12:00 am

It’s only cheaper in the US now to buy than to rent because rents are artificially high ever since the correction. The next step is rents go down, then housing values, then rent etc until we hit a real bottom.

As for the couple noted by Garth, do you have to ask????

Honestly, when the market corrects even if you have 100K to put down, you will be one of the very few so banks will love you, double your down payment if your desired market shaves 50% and if you buy smartly as you seem to be, your mortgage could be paid down in 5 years no matter where rates go.

#37 sam.i.am on 12.01.11 at 12:03 am

Peter NYC from yday…nice question, shows some thought, thanks for following up here.

#38 Uh Oh Canada on 12.01.11 at 12:05 am

Dear G,

What makes your posts so special are the personal examples that you share. These folks are telling us their financial life story for us to disect and learn- and to get advice. Keep it up G!

“A wise person learns from the mistakes of others.”

#39 Cory on 12.01.11 at 12:05 am

Expand the money supply, sucker countries, business, and individuals in for as much credit as they can hack, then contract the money supply ( i.e. 2008/09), call in loans, stop lending, crash the markets while buying during panic….repeat. Banks get richer, steal your business and property etc. for pennies on the dollar, and you’re a slave for life.

I will start my own private central bank such as the private corporation called the Federal Reserve. Better yet, I will start my own Bank for International Settlements the king of all central banks and all the world!!!!!!!!!!!

#40 Squish on 12.01.11 at 12:08 am

Ah, Squamish. The receivership sale is taking place two blocks from where I sit … an enormous concrete monstrosity of townhouses and tower condos built at the edge of the estuary where now crickets in the real estate market are the only wildlife you’ll get a glimpse of. 30% knocked off original asking prices, and still the place sits eerie like a ghost town. You can literally watch the chimneys sway in the breeze.

#41 Raging Ranter on 12.01.11 at 12:11 am

If I were to buy the beautiful 3BR townhome I’m renting right now in Orleans ON it would cost me at least an extra $150 per month in mortgage payments alone right now (assuming 10% down and 25 year mortgage at 4% 5 year term). Then I’d have to add in $45 per month CMHC fees, $200 per month insurance, $250 per month property taxes, $300 per month condo fees, and budget another $200 per month long term for internal repairs, appliances, etc. That’s an additional $1145 per month over and above the $1450 I’m paying on rent right now!

Some of those estimates may be on the high side, but I’ve probably overlooked some costs too. And I haven’t even accounted for the foregone opportunity costs of the 10% down payment, nor the huge closing costs. I’d have to be NUTS to buy in this market. When renting is more than $1000 cheaper than owning on a 3BR townhome, something is seriously out of whack. I’ve got a few neighbours who are starving paying for their homes, and mine is nicer than theirs. “Oh but you’re not building equity.” Poor sap, neither are you, you just don’t realize it yet.

#42 Peter on 12.01.11 at 12:12 am

Squamish…ah yeah…that dump on the way to Whistler…
You don’t want to live there…why would you buy an “investment property” there????Now you know.

#43 DonDWest on 12.01.11 at 12:21 am

Squamish?

Garth, it’s bad enough that you exposed them in public of possibly losing 100K to a buyer who is going to fund her down payment with her credit card, but now you’re exposing poor Roberta and Johnny as people who bought in Squamish at the peak? Are Roberta and Johnny over-leveraged mortgaged to the hilt managers working at Taco Bell?

Garth – you are without mercy.

#44 Optimist on 12.01.11 at 12:23 am

So when prices don’t “Crash” 25% or whatever in 2012 will you then write an article telling us all what an idiot you were?

#45 stevenson on 12.01.11 at 12:30 am

They never should of bought anything in Squamish in the first place. That is if Roberta or Johnny do exist and not just some imaginary character. Another post of explain WHY prices should be crashing in places where people actually have demand. It still has NOT shown any signs of RE market correcting where the supposedly largest bubbles exist. AKA Vancouver and Toronto.

Its easy to predict something will happen in the undefined future. Just like how some people believe that there will be a someone returning to earth to take you away. Well keep waiting.

If you can’t afford then move further away, it’s simple. When you make more money or when it becomes more affordable then fill in the gaps.

#46 Westsider on 12.01.11 at 12:30 am

Great interview on Vancouver CBC. We are not alone!!!!

http://www.cbc.ca/onthecoast/episodes/2011/11/30/housing-bubble/

#47 Don on 12.01.11 at 12:35 am

Squamish:

Used to be a nice place, but sadly it’s a washroom, gas up, fast food break for most. Prefer to live there instead of delusional Raincouver though. Vancouver looses the appeal fast these days – it has big city syndrome and you may be caught in gang cross fire or road rage and that’s in the nicer areas.

Assad:
Give yourself some time to research your surroundings and check things out for yourself. Misery loves company – so please do yourself a favour and do some solid research (i.e., wait). Interest rates with always vary over time, but equity will be lost forever if you buy big now. Your worth is not valued by the size of your house. If you can save that much in a year – you are off to a good start. I thought I was frugal.

Assad if you keep on saving like you have been for the next couple of years – you won’t be too worried about interest rates.

I saw this downward slope happen in the 80′s in BC, that’s when I learned what a mortgage was – I was 11-13 yrs old and the general atmosphere at the time is still with me. Check into the past data for your area. It is different this time though – it’s even bigger than the 80′s now.

Your ability to stay mobile will help you in the employment market also. Move around Canada find a place you like. But don’t be pressured into anything.

Take care.

#48 cool on 12.01.11 at 12:48 am

“First, Assad deserves a special place on the GreaterFool wall of fame for supporting four people and saving $20,000 in a year on a salary of eighty grand.”

Garth, I do it in ALBERTA (save 20K a year with 100K income), have 2 vehicles,TFSA full.RESP well funded.

Good for Assad.

Wait for a couple years.Most likely houses will be cheaper.

#49 Will on 12.01.11 at 12:48 am

@JohnnyBravo/InvestorsFriend

“I think definitely credit and money (even fiat money) and debt have been part of the grease and the incentive that has allowed the wonderful standard of living of today.”

Fiat money serves no public good, it’s in fact the only commodity where society is worse off when there is a bounty of it. Few consumers complain when there are record wheat crops, but when more money is sloshing around the system everyone is poorer except those who have the newly created money. I don’t think there’s any reason to believe fiat money has brought prosperity to North America.

“And maybe we need to rethink the whole “growth” paradigm, anyway. High rates of growth are not such a good thing if we can’t accomplish same without destroying the environment.”

The growth is mostly fake in many cases, or greatly over stated. Growth is measured in GDP typically. If the government printed a million dollars and paid someone to dig a hole, and another to fill it the GDP just went up by a million.

#50 Bailing in BC on 12.01.11 at 1:00 am

Looking forward to the book Garth!

#51 JohnSaccy on 12.01.11 at 1:01 am

Stimulus is not intended to be long-term, but rather to stabilize unstable situations by injecting liquidity into the marketplace, increasing credit, lowering the cost of capital and, in this case, sending a message that nobody – even the bond market – is big enough to mess with The System. The purpose is to reverse worsening economic conditions and the very nature of such a move is inflationary – but not structurally so. — Garth

Agree. But is this nothing but putting off the inevitable for a while. Unless there was a epic bank failure or a catastrophic liquidity issue over the past few days, this coordinated step would not have been taken. Also these kind of measures have only aggravated the precarious situations banks and countries are in. Altogether a correct step short term and a catastrophic step long-term.

Bond market will determine the price sooner or later. The system is being held by bankers and policy makers. The day that changes the bond market will make the rules.

#52 Bailing in BC on 12.01.11 at 1:14 am

An appeal to all you blog dogs – can we please refrain from having a massive hate on for Squamish that some people seem inclined towards. Those of us that live here, know that it is not a vast metropolis. There really is no need for people who have never ventured beyond the fast food restaurants on the highway to slag us off.

#53 Devore on 12.01.11 at 1:20 am

#20 sam.i.am

It’s irrelevant though, no in Canada has a 30 year mortgage or tax deductible interest.

#54 Suede on 12.01.11 at 1:22 am

One of the only good things about Squamish is in fact the lonely and rare Taco Bell. Sea-to-sky is a beautiful ride, perhaps one of the best i’ve yet seen from the parts i’ve driven/riden.

Assad, you have obviously brought immigrant values of hard work and saving to Canada. Don’t be sucked into the only cultural melting pot ideals we have in this country other than tolerance – House Lust.

Keep saving, keep supporting and when all the friends around you tell you that “Real Estate is the worst investment ever” and “Don’t buy a house, waste of money” then it will be your time to get your dream place.

#55 InvestorsFriend (Shawn Allen) on 12.01.11 at 1:33 am

JohnnyBravo at 30…

We seem to be in better agreement now…

You mentioned Gold and inflation over the longer term.

Here is a link to the best article on the internet that shows Gold prices graphically since 1926 and inflation and stocks too. This is in real dollars.

http://www.investorsfriend.com/asset_performance.htm

#56 Tony on 12.01.11 at 1:39 am

Great post Garth. Pleasure to read. I am not brave enough to sell. Could you please clarify who should sell now?

#57 April on 12.01.11 at 1:44 am

“We have been deluded into thinking that “fiscal responsibility” is something for our benefit, something we actually need in order to save the country from bankruptcy. In fact, it has simply been an excuse to impose radical austerity measures on the people, measures that benefit the 1% while locking the 99% in a dungeon of debt peonage”. by Ellen Brown, Attorney and President of the Public Banking Institute. http://PublicBankingInstitute.org

#58 Unistar38 on 12.01.11 at 1:56 am

#27
Stimulus is not intended to be long-term, but rather to stabilize unstable situations by injecting liquidity into the marketplace, increasing credit, lowering the cost of capital and, in this case, sending a message that nobody – even the bond market – is big enough to mess with The System. The purpose is to reverse worsening economic conditions and the very nature of such a move is inflationary – but not structurally so. — Garth
__________________
Dear Garth,

What do you mean by “System”? Care to elaborate?

Thanks.

#59 Nostradamus Le Mad Vlad on 12.01.11 at 2:02 am

-
“Should I wait?” — Hell yeah. Two decades should do it. Rent a decent home, use profits from TFSAs to max out RESPs. If there’s any left over, take the family to Garth’s bunker for a Christmas party!
*
UK More than a decade of falling wages, and this; First Solyndra, now in the UK. Seems that things are so intertwined, when one stumbles, the rest topple; UK Banks are preparing for collapse of EU; Newt’s 4Closure More cunning than expected; Megapolitan Areas in US compete globally (nice map); BoA In the news for all the wrong reasons.

China, Iran and Russia Brothers in arms; Beyond Maximum Overdrive; Big Bazooka; The Second Coming Another G7 bailout; Hank Paulson lied Everyone knows; 46:22 clip Next financial crisis; 12:31 clip Transitional economy between 2012 – 15.
*
Russia Missiles in Cuba; Brazil and Agenda 21; One way govts. can use to avoid paying EI; The Invisible Man Obumbler attempting to rule the world by deception. First para. is good; CC Evidently, the planet has been this way for a while, and the climate is always going to change. It’s called evolution; Deficiency Oral steroids linked with Vitamin D def.; Banning e-mails How can we keep in touch with each other? Does anyone remember how to write? Present! Not only for the CRA, but for politicos and lobbyists of all sorts; Bimbo Bachmann “We don’t have an embassy in Iran. Bachmann makes Palin look intelligent.” wrh.com.

#60 Andrew from Saskatoon on 12.01.11 at 2:07 am

#11 A party in the USA?

#61 yama_dawg on 12.01.11 at 2:09 am

In some ways I’m glad that banks don’t make it easy for our native population to take mortgages out on property on reservers. Now, don’t get me wrong I’m not being an ass but can you imagine the shit show that would be going on if you gave someone a 250k mtg. when it tanks for this??

http://www.vancouversun.com/news/Aboriginal+Affairs+takes+over+spending+Attawapiskat+First+Nation/5791386/story.html

And I’m not talking about the house in the background. Bad enough being average joe here and being screwed by the band but add an HELOC to that for 250L. Hmmm..

And we think we got it bad.

#62 Andrew from Saskatoon on 12.01.11 at 2:09 am

“Of course it does. It makes their customers more stable. — Garth”

While making our currencies less stable.

Hardly. — Garth

#63 yama_dawg on 12.01.11 at 2:17 am

Sorry for the bad spelling and grammer. Been following the masters lead (Smoking Man). :P

#64 Makaya on 12.01.11 at 2:39 am

“The purpose is to reverse worsening economic conditions” – Garth

Well, it doesn’t do anything to fix the current problem, it just delays it and the more time it takes, the painful it will be.

@JohnSaccy

If you want to have an idea of what’s coming in the future (and it’s not pretty), may I suggest you to read what Kyle Bass has to say about it?

http://www.scribd.com/doc/74335711/Hayman-Nov2011

#65 Vancouver_Bear on 12.01.11 at 2:50 am

As BDopeOE noted here Fucnouver is NOT BPOE anymore and continues slipping down the drain with the never ending rain…..Nice rhyme :).
Will it stay in top 10 next year…..most likely not. In 5 years will be even worse.

http://en.wikipedia.org/wiki/Quality_of_Living_Survey

British Lifestyle Magazine Monocle puts Vancouver already on 20th place on the list of the the most livable cities….Definitely NOT BPOE anymore and never was!

#66 The patient on 12.01.11 at 3:00 am

Our current problems concern debt.

In the U.S. it can be traced back to the 2008 bad-debt bomb triggered by their sub-prime mortgages, and of course the actions taken by the U.S. Federal Reserve Bank in covering all this debt. The Yanks simply printed more money to issue more IOUs to foreign bondholders, principally China. The US national debt is more than $15 trillion (http://www.usdebtclock.org/)

The current Eurocrisis is all about unsustainability of sovereign debt. The European Central Bank doesn’t have money-printing power, so it can’t print it’s way out of this mess. Today, what happened was that sovereign central banks (the U.S. Fed, Canada’s BoC, and many others) said they will sell reserves of their U.S. dollar (the de facto standard currency) at a discount to struggling Euro countries (that is, the European Central Bank).

What I can’t get my head around is how this will prove a lasting solution. The Rest of the West is essentially extend a line of credit to Europe at favourable rates, pushing Europe into yet greater debt.

If debt is the problem, as it is in our everyday, workaday lives, it is never made better by piling on yet more debt.

What goosed today’s astounding 400-point-plus market gains was a cartel of non-Eurozone Western governments promising that their banks would help pay the tab for teetering Eurozone debt.

But our own national debts (Canada, the U.S., etc.) are going to need a white knight eventually, too, to rescue themselves once interest rates rise. It will be deep trouble if the interest rates rise and people start to default on mortgages they probably should never have signed onto in the first place (they should have rented). Add in an economic slowdown and the killer, unemployment, and the default curve spikes.

One consequence, locally here in Canada, is that the value of real estate will plummet. Boomers have about 80% of their net worth tied up in their principal residences. Once those values start to fall, we’ll have a bunch of aging boomers unable to sell their biggest and most illiquid asset (their homes) at a price that comfortably finances their golden years of golf, Florida winters, club memberships at Extreme Fitness and teeth whitening paste. If they can’t sell their home and are strapped for cash, they must opt for the reverse mortgage, an insidious fool’s bargain that will provide them with the cash equivalent of up to 50% of their homes’ current value but at an usurious interest rate that may keep them fed and warm for many years but maybe not see them to their death. That’s when cat food comes on the menu.

So, in a nutshell, the current problems are caused by debt. The current solution is to incur more debt to help the indebted become more indebted.

It’s kind of crazy. But, I could be wrong. Maybe I just don’t understand those economists who say don’t worry be happy it’ll all work out we have it under such control. Seems like the mother of all debt bombs is being built as we speak. When it pops, most will lose. A few (those with “you’re crazy” investments in bunkers, ammo, water, solar, firearms, propane, canned food, porno mags and heaters) will pop their heads out of their fox holes to witness the latest horrors. It’ll be the new TV. The rest of us will be getting tutored with some force in Darwinism.

#67 smartalox on 12.01.11 at 3:00 am

Garth, I’m getting a virus warning tonight when I try to access the site on my pc. Better check your traps, it looks like the doomers are trying to shut you down again

#68 OV Renter on 12.01.11 at 3:20 am

Sqeemish FYI in case you didnt notice the Taco Bell/KFC went t*ts up recently, the only thing booming there is Timmy Ho’s

#69 Aussie Roy on 12.01.11 at 3:57 am

Aussie Update

As if on cue.

ANZ bank chief says “housing affordabilty in Aust is just fine” – LOL.

http://www.watoday.com.au/wa-news/housing-is-as-affordable-as-the-80s-20111130-1o782.html

Nice map of Australia,
Revealed: The places where houses won’t sell

http://www.news.com.au/money/property/australian-suburbs-towns-where-houses-wont-sell/story-e6frfmd0-1226211025944

Auction results – help, we are sinking.

http://www.myrp.com.au//showNews.do?id=511

GREAT NEWS FROM THE RE LOBBY, HOORAY !!!

The worst is nearly over

http://www.news.com.au/money/property/boom-times-loom-for-property-prices/story-e6frfmd0-1226210850432

#70 Foggy on 12.01.11 at 4:15 am

This is still a good video to watch. Peter Schiff in 2006 explaining about the coming recession, overvalued US real estate and the coming correction. His reasoning was sound and articulate and, of course, was dead on. Listen to the other “experts” trying to belittle him as well as their arrogance – and complete lack of any credible analysis.
Looks a little familiar looking at Canada, doesn’t it?

http://www.youtube.com/watch?v=v1YhJRXqnXI&feature=related

#71 Pat on 12.01.11 at 5:09 am

not structurally inflationary? All the banks know is to print. Maybe because they are political arms trying to make it look like they can fix things. Or maybe it’s the booze talking. inflation is all they know. won’t save houses, but golds good for me

#72 Jimbo on 12.01.11 at 6:11 am

#21 Van guy smokin now

>The best thing about Squamish us that it has a rare
>Taco Bell. And if it wasn’t on the way to Whistler,
>it would be a ghost town.

For years and years BHF (before having kids) I drove up the Sea-to-Sky practically every non-winter weekend. But I wasn’t going to Whistler. I was heading to Squamish, home of some of the best, and most diverse, mountain biking in Canada. And, of course, it also has endless amazing hiking trails and mountain/rock climbing (“The Chief”), river rafting adventures, fishing, dirt biking, cross country skiing, a large Bald Eagle populations, as well as kite boarding.

If you drive up the gravel Squamish Valley road in springtime, you can witness a hundred waterfalls cascading down from towering snow-capped granite monoliths. It’s a site to behold. Dozens and dozens of diverse creeks and rivers converge in the town, and if your venture out you can find countless magical alpine lakes, cataracts, and diverse rock formations. Bears, cougars, and other large beasts?… I’ve seen them all in the beauty surrounding Squamish. I’ve climbed to the tops of mountains with panoramic views of the earth and ocean fiord below, and I’ve explored networks of hidden gold and copper mines.

Whereas Whistler is the world-renowned “touristy” outdoor mecca, Squamish is the lesser-known favorite outdoor sport destination of many Vancouver locals.

But I still wouldn’t pay $350K for a townhouse there. ;-)

#73 detalumis on 12.01.11 at 7:07 am

#25 commuting from the Hammer to TO will put you in an early grave sooner than you think, everyone I know who did that looked about 10 years older than their chronological age. I also do not suggest it unless you are looking to live on the dole or a senior wanting great services paid for on the property taxpayer’s dime, things like free transit and such. If you move there be prepared to pay substantially more in property taxes for the priviledge of living in a city run like a giant social services agency.

#74 Ralph Cramdown on 12.01.11 at 8:35 am

Get your 14% raises! For today’s Toronto home at 5x income to become worth 3x income in Benjamin Tal’s 4 years, all without dropping in nominal price, we’re all going to have to get raises of 13.5%/year for the next four. w00t!

#75 Regan on 12.01.11 at 8:46 am

Assad, congrats and welcome! No one really knows for sure what the housing market or interest rates will do. I think houses will get cheaper, but I’ve been thinking that for 5 years now. Why not try working with tried and true facts:
The costs of buying and selling a house need to be added to their overall cost, and it’s expensive if you do it more than once. Don’t buy until your family is complete, you’re in a job you want to stay in, and you’ve got a really good sense of where you want to settle. Otherwise, transaction costs will eat about 8% or more of the total cost of your house, but you pay most of it when you sell. The real estate market supports the idea of a ‘starter home’ that you’re supposed to sell in a few years and buy a bigger one – but that just makes them richer, not you.
Whatever the interest rates are, at some point you actually need to pay back the loan. Making annual downpayments on the loan saves a lot of the interest cost, and a smaller loan that carries higher interest can be paid down faster if you’re a good saver – and we already know you are.
Buying CMHC insurance makes the house more costly – wait until you’ve got the 25% down payment. It will get you a cheaper house in the long run.
When you are looking for places to live, compare equivalent rentals and homes for purchase that suit your needs. Think about buying when it’s actually cheaper than renting – that way even if the housing market goes down, you’re still living in a place that suits your needs and is within your budget.

#76 fancy_pants on 12.01.11 at 8:48 am

#12, #14 JO on 11.30.11

great posts

#77 TurnerNation on 12.01.11 at 9:12 am

We all know F has this pathetic weblog bookmarked on his government issued iPad.

I bet even the junior staffers sneak a peak on their Blackberrys while in the parlimentary can.

But, ideaology and confirmity trumps all. They are locked into a system of thinking (or should I say non-thinking). Every regime is based upon dogma and group-think. It’s a safe bet, if you are a follower.

Blog dog Carney is becoming increasingly irrelvant admist overall global financial engineering. I think he knows it, taking another job on the side as we saw in the news.

#78 Rex on 12.01.11 at 9:21 am

Just came back from a vacation in Florida. Some intreesting things to point out.

Check out this property in Sarasota, just down the street where we stayed. 5000 sq ft, ocean frontage, 16 car garage, $699.000, on the market for 629 days. Someone vaulched it in 2010 for 1.2 mil oooops.

http://www.zillow.com/homedetails/312-Hernando-Ave-Sarasota-FL-34243/45783543_zpid/

A few other notes:

-Gas $2.99 a gallon in Ohio
-Drywall at Home Depot $6.29 (Canada $12.00)
-Nobody cut me off or gave me a finger for the entire 3,00 mile trip.

I used to bash Americans…rethinking that now

#79 Renting in leaside on 12.01.11 at 9:54 am

Some actual unbiased reporting from CBC Radio:

http://www.cbc.ca/hereandnowtoronto/episodes/2011/11/30/toronto-housing-bubble/

#80 John saccy on 12.01.11 at 9:55 am

@JohnSaccy

If you want to have an idea of what’s coming in the future (and it’s not pretty), may I suggest you to read what Kyle Bass has to say about it?

http://www.scribd.com/doc/74335711/Hayman-Nov2011

Thanks Makaya. I have done a lot of reading including from Kyle Bass. But sadly nothing makes sense anymore. At one end we have large scale monetary infusion by central banks in the name of stability and at the other end we have people least bothered and ignorant as to know that they are getting screwed.

#81 Kip on 12.01.11 at 9:58 am

Mayor Ford has the Toronto engineering dept. Working on a plan that will fit all of the 100,000 people coming her next year under the Gardiner Expressway!

It’ll be alright Garth, really.

Long live Canada, there is nowhere I’d rather live!

Kip

#82 T.O. Bubble Boy on 12.01.11 at 10:00 am

Maybe a Vancouver RE Developer set this fire to try and clear another property for new condos?

http://www.vancouversun.com/news/Fire+Penthouse+strip+club+downtown+Vancouver/5789211/story.html

#83 Aussie Roy on 12.01.11 at 10:17 am

Aussie Update

The Melbourne building bubble bursts.
Building approvals hit the canvass, TKO?.

Pop. That’s the sound of the Melbourne building bubble bursting, down 18% mom. I suppose there’s some upside to this, that oversupply won’t be as bad. But it’s far too late for it not to be dreadful anyway. Looks like developers just woke up to that fact.

http://www.macrobusiness.com.au/2011/12/the-melbourne-building-bubble-bursts/

Roy Morgan has released its weekly consumer confidence and confirming today’s lousy October retail sales number, the post June confidence pulse is just about exhausted.

http://www.macrobusiness.com.au/2011/12/roy-morgan-consumer-confidence-slumps/

Household goods got smacked from 1% in September down to 0.2% in October. Eating out fell from 0.9% to 0.2% and department stores just look like they’re going out of business.

That’s a clear drawing back from discretionary spending.

http://www.macrobusiness.com.au/2011/12/retail-pulse-fading/

#84 disciple on 12.01.11 at 10:25 am

JohnnyBravo… what were you thinking? InvestorsFiend is on here to pump his site, he doesn’t actually believe the nonsense he types. Give your head a shake, I want to introduce you to something you fail to recognize: INTEREST. All of you debating fiat money versus gold ALWAYS without exception do not consider the role that interest plays in the central banking fraud.

There is nothing wrong with a fiat money system, anything can play the role of currency (fancy-coloured paper, diamonds, yellow shiny metal). The problem is that these 300 banking families suppose themselves to have a divine right to command interest for the right conferred on us poor subjects, the privilege to use the capital they PRETEND to provide. This is not capitalism, this is not equitable, this is outright fraud, and is a form of tax slavery that would make the barons of feudal medieval times blush.

The reason is that the interest is NAKED. It is not associated with any labour or technology, there is no “demand pulled forward”, it is indentured servitude, and DOES NOT serve to elevate the standard of living of society, rather it is designed to siphon off that wealth like a giant octopus on the face of humanity, as the new saying goes. This interest is added to the system fraudulently, and can never be repaid unless it is hidden in future tax liabilities or extortion of true capitalist enterprises through credit squeezing: (Europe now)

Instead, interest should be meted out by “promises to pay” (bonds) that are associated with wealth-producing businesses, NOT wealth-destroying parasites (central banks). This is INCLUSIVE capitalism, where everyone benefits, not just a supposed trickle-down-please-sir-may-I-have-some-more-central-bank-as-puppeteer type of fake economy.

Are there any lightbulbs turning on out there on the lurk-o-sphere? Education is the answer to the world’s problems. The solution to everything is right there in your minds. Every moment, this is where the battle rages. Don’t be afraid, you can win.

#85 Aussie Roy on 12.01.11 at 10:26 am

Aussie Update

The Occupy movement is broadening. I was just alerted to the existence of “Occupy Economics”.

“They are calling for more academic and professional economists to sign up, which I have done”, Steve Keen.

http://www.debtdeflation.com/blogs/2011/12/01/occupy-economics/

#86 Fiat Freddy on 12.01.11 at 10:31 am

This will tickle the hearts of all ye blog dogs. Good ol Secretary Treasurer Hank Paulson tipped the hedge fund world of the Fannie May bailout in 08.

http://www.bloomberg.com/news/2011-11-29/how-henry-paulson-gave-hedge-funds-advance-word-of-2008-fannie-mae-rescue.html

#87 Burnt Norton on 12.01.11 at 10:33 am

#54 Bailing

Yup. Like Nanaimo, a little lifestyle gem.

Gotta chuckle at all the potshots today. You guys are like lonely ravenous internet piranhas waiting for someone to take a dump over the side of the SS GreaterFool as it chugs up the Amazon in search of new recruits for the detailing crew.

#88 sam.i.am on 12.01.11 at 10:35 am

@Rex – FL totally on sale. Did you see the DIY Vanilla Ice series?

http://www.zillow.com/homedetails/10775-Versailles-Blvd-Wellington-FL-33449/67167189_zpid/

I’m waiting for the Canadian equivalent.

#89 robert james on 12.01.11 at 11:26 am

Regarding Squamish .. I remember reading the BC Real Estate Talks forum awhile back before the Olympics and a lot of flippers were hyping Squamish and patting each other`s backs for buying there because of the Olympics.. One idiot bought some old building in Pemberton which is on the opposite side of Whistler and of course the rest of the idiots thought he was a genius.. I suppose if enough people missed the turn off at Whistler and kept going to Pemberton and bought property in the few minutes they were in town it may have been brilliant to speculate there..lol

#90 Junius on 12.01.11 at 11:26 am

#47 Stevenson,

You said, ” Its easy to predict something will happen in the undefined future. Just like how some people believe that there will be a someone returning to earth to take you away. Well keep waiting.”

It is easy to predict that you and your fellow realtors will continue to come to this blog to work out your denial issues.

#91 Cake on 12.01.11 at 11:27 am

Lived in squamish since 1968. Lots of industry like pulp,logging and bcrail. None of which exist anymore. Soo what’s left??

No community
High taxs

And poor town planning.

#92 Cristian on 12.01.11 at 11:33 am

“despite the explosive rally on stock markets on Wednesday (I told you not to bet against America)”
Garth

“Don’t bet against America”…
The cheesiest line brokers ever used, but it didn’t stop them using it. The theory is that American stocks were the “best”, and had always offered the best returns and the greatest safety.
But U.S stocks and the U.S. economy have turned out to be very different things. Over the past two years, for example, the stock market is up about 10%. Yet the real economy has shown little such improvement, if any. A smaller share of the population is working. And average wages, adjusted for inflation, have actually fallen by 1%.
As for a lack of the alleged better returns? Over the past decade, according to FactSet, the U.S. stock market has been one of the worst performers in the world. It has been left in the dust by emerging markets. Among developed markets, only Belgium, Greece, Ireland and Italy have done worse.

So, Garth, go back to writing about real estate, you make more sense there.
Oh, and here’s a cloth to wipe that egg off your face…

What egg would that be? I am correct. Those who believe the US will decline, default or fail, and act upon the belief, will wish they had not. — Garth

#93 TaxHaven on 12.01.11 at 11:37 am

…the explosive rally on stock markets on Wednesday (I told you not to bet against America)…

Only you’re not betting ON America either. This is all courtesy of central bank stimulative printing.

Years to go yet. You’re still too optimistic. There’s no “growth” coming – only more paper “money”.

Don’t bet on that either. — Garth

#94 Ex-Cowtown on 12.01.11 at 11:48 am

Hi Garth,

Sorry, but I’m having a tough time buying your line that the massive intervention by everyone and his dog yesterday was positive in anyway other than to a seller trying to get out.

To me it smacks of utter desperation and an undisclosed Lehman moment. I still believe that we are in for a de-leveraging process. The only question is whether it will be a painful, controlled and slow deleveraging or a massive and bloody (figuratively speaking) one.

I vote for deflation and debt destruction. A huge haircut to the institutions stupid enough to keep lending these nations money is the only thing that makes sense, if only for the reason that they have no hope of ever paying it back.

#95 steve on 12.01.11 at 12:09 pm

Squamish is a really nice place. We’ve been renting here for 3.5 years, and the nature is beautiful, outdoor recreation is amazing (though wasted on me), and the commute to Vancouver is nice because the traffic moves the whole time.

But it’s awfully expensive, which is why we rent.

Oh, and I don’t think anyone’s mentioned yet – the TacoBell/KFC franchise closed a number of months ago.

#96 Van guy smokin now on 12.01.11 at 12:19 pm

#37 BPOE on 11.30.11 at 11:59 pm

I figure you live in Ditchmond. Richmond got that nickname many years ago because it was full of ditches. It still does have many ditches. It will live up to the name once again. If you look at sales-list ratios, it does look similar to Squamish. Prices, yes sticky. But no upward pressure. This trend cannot continue as sellers get worried and will eventually cut prices.

Do you see the mass over building in the attached market? Olympic oval area has about 4 developments, quintet is another huge one. This is a small sample of over building. There are many more I’m not going to list because you know there’s many attached being built. And for sfh, 65% of listings are over 1 mil. How sustainable is that? Wait and see

#97 Not 1st on 12.01.11 at 12:31 pm

BPOE, how on earth can you go on about Van being so great.

- terrible weather, I will take a cold clear day on the prairies than cool and rainy.
- terrible traffic, too many pedestrians, can barely drive the downtown.
- dirty downtown, never so saw many condoms and needles and pizza boxes in my life when I went there.
- east hastings, imagine a whole subdivision of drug addicts.
- expensive, gas 20 cents higher than anyplace in Canada
- foreign criminal gang element

City looks great from a distance but there is a lot of warts on it when you drill down. Its no different than any other place on the planet, just unaffordable.

#98 Junius on 12.01.11 at 12:31 pm

#68 The patient,

You are 100% correct that the problem is debt. To be specific, aggregate debt that includes corporate, sovereign and personal. It has been building up for decades but really took off in 2001.

If you want a proximate cause it startednwith the deregulation of the US banking sector in the late 90s and the failed attempts to regulate financial instruments such as derivatives. However this only created the climate.

The proximate cause was George Bush’s war in Iraq and on terror everywhere combined with tax cuts. US deficits ballooned but Greenspan’s approach of stimulating through low interest rates put the debt cycle into high gear.

The US was in trouble and began deleveraging in 2006 which eventually lead to the crash in 2008.

In answer to your question about all the debt being repaid the only answer is thst it cannot be. At some point we need a massive global write-down in debt. Otherwise we are looking at following Japan for the next 20 years or so.

#99 Form Man on 12.01.11 at 12:33 pm

#237 westernman yesterday

Wow, it is evident you have the reading comprehension of a 2 year old. If you had been following my posts, you would not be making such an ass of yourself. I am a builder/developer. In the last 20 years I have built some $150 million worth of ski hotels, strip malls, low-rise and hi-rise condos in B.C. I know a bit about the industry. What have you done in the last 20 years westernman ? The sadness with which we view your pitiful posts knows no bounds. You are a tragic figure, caught up in bigotry, anger, and unresolved issues from your childhood. The immaturity which you demonstrate is alarming. What is it that drives your anger, hate and fear ? is it poverty ? is it lack of a mate ? perhaps it is all of the above. We will likely never know, as you churn away in your childish denial.
I urge you again to seek help. It is never too late………

#100 Not 1st on 12.01.11 at 12:37 pm

Garth premise on America is that its the only place deflating fast enough to get back to a reasonably sound economy. That may be true, but they are going to take on extreme debt to get there because stimulus must continue. And when things do fall enough, what will lead them out? Good chance their financial system will be a shadow of what it was. Will manufacturing be repatriated? Globalization may die in this crisis and the U.S. is planning for a firewall economy and lets the rest of go to hell in a handbasket.

Not what happened yesterday. — Garth

#101 Manalive on 12.01.11 at 12:47 pm

Well just about every smart business owner I’ve met in the last few years has purchased their home..I guess we’re all idiots…we’ll see I guess.And remember home prices don’t “Burst” in a vacuum..prices drop when thousands lose jobs..wages drop..Banks are scared to loan..etc. Wishing for a crash is a fools game.

#102 Ian on 12.01.11 at 12:52 pm

I’m willing to bet that “rentals” in central locations with upgrades are going to become the new demand. I’m seeing it in Ottawa, where the vacancy rate has dropped below 2% across the city and less than 1% in the more trendy neighbourhoods. This of course excludes the private rentals (basements, overpaid condo’s acting as investments). With rent control, I’m seeing the dividends paid monthly by staying put! Already $250 dollars a mth below market for my bldg, with everything inld, heat/water/hydro. People are starting to notice the benefit of renting. The rental office at my bldg and friends are getting lots of calls and people asking, but no units available! Soo. I’ll stay put for many more years, as any new condo down the street costs about $1800 to $2200 a mth just to own. Where my rent is less than 50% of that! Thanks Garth :) Appreciate reading the updates!

#103 Denisa on 12.01.11 at 12:54 pm

@#93 “soo what’s left?”

Nine months of rain, 24/7, annually. SAD (seasonal affective disorder)?

#104 Trev16 on 12.01.11 at 1:06 pm

Cristian #94,

There is no point arguing with garth when it comes to the markets……..He does not want to point out any of the illegal acts which are being committed by Banks in the states or Wall Street. No….he only wants to rip people working in the real estate sector. From his point of view its all good in the financial sector and the plunge protection team doesn’t exist. No….its perfectly OK to print money and add debt upon debt as long as you own some preferred shares that pay a dividend.

Cheers,

Trev16

#105 Beach Girl on 12.01.11 at 1:09 pm

#256 disciple on 12.01.11 at 9:53 am

#254 Beach Girl… I’m surprised at your question… Garth, as a God among men, has explained this so many times, did you miss all 666 times he has mentioned this in the past year?

And regarding work, newsflash, some people actually enjoy their work or vocation, I trust that typing your blog posts is enough daily work for you (which you obviously enjoy), but I’m sure you still think you do not owe anybody anything. I know, I know, those turkey dinners you give out are probably really great… please if you could help out some of Rob Ford’s victims and their families… but I don’t want to put you out, because I know it’s so hard collecting the rent every month, eh?

_____

I know you are jealous of me. At least I don’t get my knee pads out for the G Man.

Yes, I collect my rent and live a quite comfortable life with Daisy, my nastier than me Jack Russell.

And, I don’t owe anybody, anything. Of course I feel that way. But am also not a sniveling whiner, who expects people to look after me. Yes, I am a volunteer, get great enjoyment out of that.

Go back to your cubicle and get to work. WINNER.

#106 Macrath on 12.01.11 at 1:12 pm

Have a listen to Annn Barnhardt who is so disgusted with the wall st. sociopaths and psychopaths she closed her commodity brokerage firm Barnhardt Capital Management .

http://www.financialsense.com/financial-sense-newshour/guest-expert/2011/12/01/ann-barnhardt/entire-futures-options-market-destroyed-by-mf-global-collapse

#107 disciple on 12.01.11 at 1:19 pm

Hope you enjoyed your lunch today. The following article by Nicholas Kristof will help you cherish tomorrow’s. Where sweatshops are a dream:

http://www.nytimes.com/2009/01/15/opinion/15kristof.html?partner=permalink&exprod=permalink

#108 sam.i.am on 12.01.11 at 1:30 pm

#101… Derivitives

3 part series:

http://www.youtube.com/watch?v=zm9VrKlXT_A

(apologies if this has already been posted)

#109 tran, Calgary on 12.01.11 at 1:40 pm

My antivirus program detected viruses at
greaterfool.ca. Anyone else?

#110 Form Man on 12.01.11 at 1:40 pm

#101 Junius

excellent post. nails it.

#111 disciple on 12.01.11 at 1:44 pm

#109 Beach Girl… “But am also not a sniveling whiner” You’re right, you’re not sniveling. Is this the creature that has to put up with you all day (Photo 3 of 399)? Aaaawwwww, poor thing!

http://www.theglobeandmail.com/multimedia/camera-club/your-best-pet-photos/article1891753/

#112 young & foolish on 12.01.11 at 1:44 pm

How does the saying go?

If I owe you $1000, then I sweat,
but if I owe you $1000000 you sweat ….

and so, the printing presses are working overtime again
sooner or later, it will take a lot more dollars to buy a loaf of bread

#113 Humpty Dumpty on 12.01.11 at 2:00 pm

Dr. Doom has a few wise things to share…

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/11/30_Dr._Marc_Faber.html

The wisdom of a prudent man is to discern his way, but the folly of fools is deceiving.

It appears conventional wisdom is also lacking within this pathetic blog…

#114 Brad in Calgary on 12.01.11 at 2:07 pm

“Don’t bet against America”…

It’s funny how Garth says too much consumer debt will bring down housing in Canada. Yet, too much debt for a country apparently means nothing to him.

And America’s debt situation is far worse than our consumer debt problem. Far worse.

Time will tell. Garth will be hiding in his bunker when it’s time for us to yell at him “we told you so!”

#115 young & foolish on 12.01.11 at 2:10 pm

RE is not the problem (we all have to pay someone to live somewhere) …. debt is

#116 poco on 12.01.11 at 2:10 pm

Squamish–what’s wrong with their housing market???
A little comparison of prices quickly shows how many delusional people are out there !!
This may be the townhouse complex portrayed in the privious post.

1202 Village Green Way–1347sq ft.–listed at 369k
1205 Village Green Way–1173sq. ft.–listed at 395k
1212 Village Green Way–1386sq. ft.–listed at 479k

now here are the listings for a condo complex at 1211 Village Green Way
#303–640sq. ft.–listed at 299k
#505–625sq. ft.–listed at 319k
#311–1075sq. ft.–listed at 369k
#316–880sq. ft.–listed at 369k
#415–937sq. ft–listed at 415k
#511–1075sq. ft.–listed at 450k
#603–1197 sq. ft.–listed at 519.9k
#605–1071sq. ft.–listed at 559k

which would you buy??? lets get back to a little reality here

I wonder if the loss for our poster is really just a “paper loss”–are they that far underwater?

my pick for the foreclosure is 14–2404 Main st.

#117 Brad in Calgary on 12.01.11 at 2:20 pm

For those interested in why some of us believe the U.S. “empire” is destined for collapse, here’s just 1 chapter of an excellent crash course by Chris Martenson.

http://www.chrismartenson.com/crashcourse/chapter-12-debt

Ever notice how Garth never says WHY you shouldn’t bet against America? Why is that debt unimportant to him?

The US can service its debt, and always will do so. American will not collapse. — Garth

#118 GregW, Oakville on 12.01.11 at 2:33 pm

Hi Nasta, Here are some links you and others may be interested in?

Today Dec 1, on BBC Hardtalk ~2min video
Fund manager ‘worried and scared’
Mohamed El-Erian is one of the most respected fund managers in the US and says he is worried, as a “fund manager and as a parent”, about the state of the global economy.
http://news.bbc.co.uk/2/hi/programmes/hardtalk/default.stm

on CBC radio Ideas show ~1 hour audio (I could down load it yesterday, anyway??)
http://www.cbc.ca/ideas/
Wednesday, November 30
EMPIRE OF ILLUSION
Writer Chris Hedges argues that North American culture is dying because it has become transfixed by illusions about literacy, love, wisdom, happiness and democracy. Jim Brown explores Hedges’ ideas about the mechanisms that keep us diverted from confronting the collapse around us.
http://www.cbc.ca/ideas/episodes/2011/11/30/empire-of-illusion/

(This is worth thinging about, I think. )
The Chain of Obedience ~2-1/2min video
The death squads and concentration camps of history were never staffed by rebels and dissidents. They were were run by those who followed the rules.
http://www.infowars.com/the-chain-of-obedience/

And at their home page you can find other articles, for instance. (If interested?)
TEPCO Again Underplays Severity of Situation at Fukushima

#119 Nemesis on 12.01.11 at 2:36 pm

“This is my town.” – TheRock [WalkingTall - Filmed in Squamish]

http://tinyurl.com/ch68tw8

#120 Nostradamus Le Mad Vlad on 12.01.11 at 2:42 pm

-
The Darwin Awards 2011, cont’d . . .

Semifinalist #4
A man in Alabama died from numerous rattlesnake bites. It seems that he and a friend were playing a game of catch, using the rattlesnake as a ball.

The friend — no doubt a future Darwin Awards candidate — was hospitalized, but lived.

Semifinalist #5
Employees in a medium-sized warehouse in west Texas noticed the smell of a gas leak.

Sensibly, management evacuated the building, extinguishing all potential sources of ignition; lights, power, etc.

After the building had been evacuated, two technicians from the gas company were dispatched. Upon entering the building, they found they had difficulty navigating in the dark.

To their frustration, none of the lights worked. Witnesses later described the sight of one of the technicians reaching into his pocket and retrieving an object that resembled a cigarette lighter.

Upon operation of the lighter-like object, the gas in the warehouse exploded, sending pieces of it up to three miles away.

Nothing was found of the technicians, but the lighter was virtually untouched by the explosion.

The technician suspected of causing the blast had never been thought of as ”especially bright” by his peers.

Tomorrow — The Winner!
*
A new scientific discovery (I tried it myself) — When I was about to sneeze, I forced my eyes to stay open and my brain flew outta my ears.

After cleaning the mess up, I’m now in less than normal health. I do not recommnend attempting this. You may end up as a semi-finalist in The Darwin Awards!
*
#30 JohnnyBravo — “Money management without risk leads to recklessness. Of course, the risk is still there, it was just explicitly shifted onto the tax payer and investors.”
– and –
#86 disciple — “The problem is that these 300 banking families suppose themselves to have a divine right to command interest for the right conferred on us poor subjects . . .”

Therein is the crux of the problem, to socialize the losses (put losses on the backs of taxpayers to increase taxes), while privatizing the profits (keeping the tasty treats for themselves).

TPTB may be enjoying themselves at our expense right now, but the one thing they will not be able to prevent is the cycle change. It will also lead to a good clean-out of the garbage we have accomplished here.

As Steve Jobs finished his lifecycle recently, his last words were “It’s so beautiful, oh it’s so beautiful . . .”, proving the reality of the continuation of life.

You are right, Johnny — Go east young man.

#112 GregW, Oakville — G’day Greg, and thanks for the links.

“. . . Hedges’ ideas about the mechanisms that keep us diverted from confronting the collapse around us.”

That’s what TPTB are so efficient at doing — creating diversionary tactics, because they realize we are stoopid sheeple.

By being engrossed with the m$m, Dancing With The Stars, etc., we have made ourselves oblivious to what is happening around us.

#121 Brad in Calgary on 12.01.11 at 2:45 pm

The US can service its debt, and always will do so. American will not collapse. — Garth

For now.
But with a Debt to GDP chart on viagra? And growing higher every year…
Absolutely unstainable.
I can agree with you only if something drastically changes. And the odds are that won’t happen. As Peter Schiff often says… “they refuse to take their medicine now, even though they know the illness will only get worse .”

#122 Timing is Everything on 12.01.11 at 2:51 pm

#80 Rex

‘Made in Canada’*

http://tinyurl.com/cpcgg2t
http://tinyurl.com/897avzt
http://tinyurl.com/cm7ph8l

*Sulphur is extra…

#123 Rex on 12.01.11 at 3:00 pm

#108 Trev16

Well said.

Notice that whenever the subject of of central banks and money creation, unrepayable debt, more debt on unrepayable debt is raised….there is only silence.

#124 Van guy smokin now on 12.01.11 at 3:02 pm

#113 tran, Calgary on 12.01.11 at 1:40 pm
My antivirus program detected viruses at
greaterfool.ca. Anyone else?

Even the antivirus producers don’t want anyone poking around this site. The truth is being hidden. Du ma mi!!!

#125 Lostinthewilderness on 12.01.11 at 3:07 pm

“But like my mama always said, an offer in the bush is better than two hands. ”

LOL, great play on words Garth ! I’m seriuosly worried about what your Mother taught you. I learned this gem later but not from my Mother.

#126 Devore on 12.01.11 at 3:19 pm

#120 poco

Just a nit pick (well, kinda a major issue maybe) with your use of “underwater”. Underwater means you owe more than it’s worth. You don’t know this, because you don’t know how much they put down and how much they paid off.

#127 kilby on 12.01.11 at 3:41 pm

Squamish BC.
408 active listings, including all outlying areas.
Last 7 days, 5 completed sales. Average 132 days on market (one 5 days, one 356 days)

I would be “squeamish”

#128 Mister Sanity on 12.01.11 at 3:50 pm

#80 Rex

Too bad that Sarasota ‘mansion’ is next to their international airport, lol.. Interesting that the tax assessment is implies the price has a ways to drop yet..

#129 Mister Sanity on 12.01.11 at 3:51 pm

Hmm not sure why the post did that. After “is” I had “less than $500,000″ written with a ‘less than’ symbol. Somehow got filtered out..

#130 Not 1st on 12.01.11 at 3:53 pm

Garth, why suspend your financial logic for the U.S. Its no different there and they are not special.

Let me give you a primer on how it goes;

1. No resolution on budget cuts in the foreseeable future.
2. Budget deficit climbs towards 20 trillion in a few years, more than 120% of GDP.
3. Additionally the U.S. fed and U.S. treasury have several trillion of unpayable debt on their books as well.
4. Medicare, SS, and entitlements under water to the tune of 10s of trillions.
5. Ratings agencies finally capitulate and lower the U.S. rating to where it should be, less than A for sure. Paying bonds back with more borrowed money is not solvency. Its insolvency.
6. Borrowing costs go up so the portion of debt servicing becomes burdensome. Dollar weakens, bonds spike.
7. Stimulus runs out because anymore would create Japan 2.0. Several major U.S. banks fail or are bailed again.
8. Real austerity hits the U.S. in terms of tax increases, service cuts, reduced military and entitlements.
9. Jobs don’t come back and unemployment naturally stabilizes at 10% or more.
10. Boomers start to liquidate 401ks, real estate for survival cash.
11. Indebted consumers finally give up, malls and commercial real estate tumble.
12. Companies make less, stock market takes a 40% haircut as a result.
13. Depression ensues for any country that services the U.S.

Print that and post it on your wall. Unless there is a major policy shift, it will come to pass because its undeniable mathematics.

You are free to be wrong. Enjoy your depression. The US economy is showing decidedly stronger signs of growth and in a year your words will provide a nice chuckle. — Garth

#131 Westernman on 12.01.11 at 4:20 pm

Form Man,
You’ve built 150 million dollars worth of ski resorts etc,… suuuuuuuuurrrrrrreeeeee you have… that’s why you spend time on here arguing with me. B.S. – plain and simple.

#132 Timing is Everything on 12.01.11 at 4:40 pm

#126 Timing – Mr/Ms Moderator…You can nuke that post. wholesaledrywall.ca can BUY an ad on this site if they want…. ;)

#133 poco on 12.01.11 at 4:41 pm

#129 Devore
my point was trying to show the discrepancy between square footage in the condo bldg. and the asking prices (comparables)
my question was “which would you buy?’—referred to the condos compared to the townhomes–of course you’ld go with the 369k townhouse

underwater does basically mean as you state:
” Underwater means you owe more than it’s worth. You don’t know this, because you don’t know how much they put down and how much they paid off.”

For me “underwater” means–” you sell for less than you paid”–you’re in fact taking a loss–regardless of your down payment or what you paid off–and you include in your equation—land transfer tax–lawyers fees– taxes– realtor fees–etc)
again, why are these two going to take a 150k+ loss on a rental property –i’m just wondering –not saying they didn’t pay 499k–i’m just not convinced on this one
as you know i’ve posted many properties i’ve found that have been selling for more than 150k less than the owner paid–maybe the posters who live in Squamish can fill us in –have townhomes dropped this much??

#134 Tony Chan on 12.01.11 at 4:41 pm

Here’s a house cost less than $500,000 if you have 10% down-payment. MLS #1127607 address is 11857 83A Ave. Delta, only 32 km from Downtown Vancouver. Between RRSP and spousal RRSP, that’s $50,000 down payment. Cost to buy RRSP is around $35,000 after tax money. I used all RRSP money as down-payment for my first home. Easily done if your household income is $80,000 per year, just need some smart financial planning.

#135 Canned Goods and Buckshot on 12.01.11 at 5:05 pm

Junius said:

“At some point we need a massive global write-down in debt. Otherwise we are looking at following Japan for the next 20 years or so.”

How does a saver prepare for either outcome? If one anticipates a write-down of debt, in what ways would this be accomplished? Steven Keen has proposed how this might unfold on BBC’s program “Hardtalk”

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

Any comments are appreciated, original or shared.

There will be no massive global write-down of debt. Yesterday should have made that clear. — Garth

#136 Beach Girl on 12.01.11 at 5:37 pm

Form Man on 12.01.11 at 12:33 pm

#237 westernman yesterday

Wow, it is evident you have the reading comprehension of a 2 year old. If you had been following my posts, you would not be making such an ass of yourself. I am a builder/developer. In the last 20 years I have built some $150 million worth of ski hotels, strip malls, low-rise and hi-rise condos in B.C. I know a bit about the industry. What have you done in the last 20 years westernman ? The sadness with which we view your pitiful posts knows no bounds. You are a tragic figure, caught up in bigotry, anger, and unresolved issues from your childhood. The immaturity which you demonstrate is alarming. What is it that drives your anger, hate and fear ? is it poverty ? is it lack of a mate ? perhaps it is all of the above. We will likely never know, as you churn away in your childish denial.
I urge you again to seek help. It is never too late………
____

I have some compassion for this idiot. Only time will heal this. Or heavy meds. This is not going to end well.

I actually help out CAMH.

Over the holidays I get all my inmates (tenants) together plus my 2 idiots and we volunteer, cook, clean, stock, generally help out.

He should help out, if he is lonely. Cause sounds like he is gonna be.

Honest, not being mean here, but you need a bit more socialization. This will benefit you. And improve your sorryful existence.

#137 Form Man on 12.01.11 at 5:41 pm

#134 westernman

sorry to disappoint you, but you are wrong and I am right. now go and find something productive to add to society instead of being a parasite. and get some help for your anger and frustration toward women (amongst others). you are tiresome and pathetic.

#138 Beach Girl on 12.01.11 at 5:50 pm

#115 disciple

Actually that is a nice photo. My Jack Russell, Miss Daisy is better looking than that though.

They have their own personality and do not tolerate much shit.

I appreciate the photo. They have a Russell Round Up were all the dogs race to the finish, hilarious.

I also own horses. We ride them in Caledon and Creemore with all the beagles.

Have a nice day. That is also on the internet.

See I am being nice.

#139 earlymidlifecrisis on 12.01.11 at 6:06 pm

Dam! no autograph. I knew it was around van somewhere. I have my eye on an 80 acre homestead with creek, no power though. Any thoughts? It’s near my aging mother and i can afford it. Ive heard ‘don’t buy, and don’t buy w/o revenue, but one could be self sufficient here as well as a personally desirable location within and hour of town. I’m not quite a ‘doomer’ but this is doomer heaven! I’m already imagining tilling the massive garden ala horse power. I’d appreciate thoughts on this b/c my shrink is in Japan. thanks.

#140 Okanagan Renter on 12.01.11 at 6:17 pm

#113 tran, Calgary:
“My antivirus program detected viruses at
greaterfool.ca. Anyone else?”

The only viruses here are stealth real estate shills posing as thoughtful commenters.

#141 Van guy smokin now on 12.01.11 at 6:29 pm

#137 Tony Chan on 12.01.11 at 4:41 pm

“Easily done if your household income is $80,000 per year, just need some smart financial planning.”

Smart planning would be not to buy it. With that income, you won’t have a life. You won’t save any $. A fixed 5 year & amortized @30, and throw in all other expenses, you’re at $3000 a month. Rent for basement will fetch you $800 max for 2 bdr. So cost for now is 2200 a month. When it’s time ti renew the mortgage, rates are higher. And oh yeah, u still need to pay back the RRSP. 80k income will buy you this home, yes. With the sacrifice of freedom. Come on Tony, you’re Chinese. Be smarter financially.

#142 young & foolish on 12.01.11 at 6:32 pm

more liquidity (a.k.a. printing) will likely result in higher stock prices

#143 Herb on 12.01.11 at 6:37 pm

Smoking Man,

where are you when we need you? What’s happening at/to the markets? Any signs of Batman anywhere?

Please line up a few drinks and fill us in.

#144 Westernman on 12.01.11 at 6:42 pm

Form Man and Beach Girl,
Form Man… you make things up – like your 150 million dollar construction empire – purely made up… has the stink of total B.S. all over it.
And you Beach Girl, from the content of your posts if anyone needs mental help it’s you…stay on your medication.

#145 Steven Rowlandson on 12.01.11 at 6:54 pm

Mr. Assad should keep saving 25% of his income and eventually he will pay cash for a house and pay nothing a month. In my opinion any kind of large debt at this point in time is dangerous and should be avoided.

Maybe they can move in with you. — Garth

#146 Nostradamus Le Mad Vlad on 12.01.11 at 8:03 pm

-
Thought Fir The Day! — “Politics is the womb in which war develops.” — Carl von Clausewitz (wrh.com)
*
Euro sovereign credit ratings risk; 3:18 clip US Fed printing money to bail out Euro (it’s getting funnier as time flies along, watching two sinking ships bail one another out); BoA The saga continues, and here; France’s credit rating downgraded; The Other 1% Corporate psychopaths and the fiscal takedown; Co-ordinated Moves solves diddly-squat (lots of cheap talk); 3:27 clip US cops defect to OWS.

Kyle Bass Chart of the day. “Looking at the chart at the bottom of this article, the one word that comes to mind is, “YIKES!!!”. wrh.com; 0:48 clip ECB chief talks of downsized risks; Factories stall worldwide, unemployment up and Weekly jobless claims up; GS Jim O’Neil — “We love welfare!” Italy Broke but spending billions; Mervyn King (BoE) has had a ‘Eureka’ moment; Government Sachs Conspiracy theorists were right all along;
*
UK – Iran The UK’s youth unemployment is so high, this may be a reason why they want this; Good Comparison Obomba; 3:59 clip Seven or more days of food supply, and one is labeled a terrorist; Libya “The country has been violently ‘liberated’ and left up for grabs.”; Worlds Rockefeller, CFR and Trilateral Commission; 6:25 clip US military could detain citizens indefinitely; Global Occupation It would be quite interesting to see what may happen from this; Climategate 2.0 FOIA started.

4:01 clip China reiterates it will protect Iran, and Russia “This is about to get very nasty for NATO and the US, very quickly, particularly if Pakistan refuses to allow the US and NATO to use their air space.” wrh.com; 5:43 clip US poker, Iran chess — Lies vs. strategy; Proposed Amendments “1916: all acts of war should be put to a national vote. Anyone voting yes had to register as a volunteer for service in the United States Army”; Fukushima Worse than expected? Neocon Conspiracy Theorists Preoccupied; War on Drugs Complete hoax and a waste of money; Fluctuating Sea levels will always go up and down; Deceased The PC has almost run its course; NAU – SPP Border Deal Cdns. concerned.

#147 Form Man on 12.01.11 at 8:26 pm

#149 westernman

you display a profound lack of knowkedge about the construction industry. I did not say I had an empire; I said I had overseen the construction of some $150 million worth of projects over a 20 year span. Obviously these projects were sold as they were completed. One ski hotel will cost around $20 million. I am just winding up a 100 home SFH development that has a construction cost of about $40 million. Those numbers are gross cost.
I am sorry you are still evading the root causes of your distress. Bobbing and weaving, avoidance and denial, anger and bigotry. Those are your hallmarks westernman. You would do well to attempt some personal growth. The others have pointed this out as well. Childish name calling and immature pouting won’t earn you anyone’s respect. Time to man up, see a counselor, and get moving forward with your life.

#148 JeffinPickering on 12.01.11 at 8:32 pm

While savings are obviously better than blowing it all, this seems to be the extreme opposite of the $160K family with no savings. Extremes can prove a point, but they don’t provide many lessons for what TO DO for those between the extremes.

He’s living in Toronto, family of four, one $80K income, and saved +20% of pre-tax income (more like 1/3 of his after tax income)? In Toronto, that could only be done through some pretty stiff circumstances/sacrifices.

Anyways, the no-brainer (maybe I shouldn’t say that, given how many have done it) to his question is DO NOT BUY A HOUSE IN TORONTO ON AN 80K INCOME.

Using the 3X income rule – and for smarties, it would be 3X of after-tax income – that means don’t spend more that $180-200K on a house. That might get you a really shoddy row townhouse in Scarborough, and who wants to OWN that?

Live Assad…live, damnit! (That also means spend some money on some fun once in a while)

#149 Canned Goods and Buckshot on 12.01.11 at 8:55 pm

There will be no massive global write-down of debt. Yesterday should have made that clear. — Garth

You refer to the co-ordinated efforts of non-European central banks to shore up Europe. Many, myself included, have a hard time buying into the idea that we can collectively kick the can down the street ad infinitum.

Johnny Bravo #140 and not 1st #134 offer a dialogue of this issue.

The stock market rebounded. So what? You have stated we are in a period where we expect greater market volativity. We expect volativity in oil prices, too, on the march around peak oil.

Hope for the best, plan for the worst. Or have you forgotten Exurbia.com?

#150 Paul on 12.01.11 at 9:06 pm

Some help for Victoria real estate.

http://www.vancouversun.com/business/technology/Microsoft+plans+open+Victoria+gaming+studio/5795809/story.html

#151 Live from Squamish on 12.01.11 at 9:12 pm

Just moved to Squamish in October and have been renting a nice big house from a local property management company. Since Oct, I have asked their non-broker staff “how’s the market these days?” and I have gotten a worsening message each time. Today, I asked the receptionist when dropping off rent and she said this; “They’re starting to worry about how to pay their xmas bills. No much is selling out there. But if you ask them, they say things are picking up… But then again, they kinda have to say that…”

Over 365 properties on the market and no one is buying here at these prices.

#152 Westernman on 12.01.11 at 11:31 pm

Form Man,
You seem to know a lot about counciling….perhaps Mr. Cementhead has spent some time getting his head adjusted … hmmm?

#153 Aussie Roy on 12.02.11 at 7:04 am

Aussie Update

Oops, there goes the Aussie banks credit ratings.

Australia’s big four banks had their credit ratings cut by Standard & Poor’s as a result of major changes in the criteria it uses to assess risk.

http://www.theage.com.au/business/big-four-downgraded-as-sp-changes-method-20111202-1o9pp.html#ixzz1fNF0pHZS

Big four banks’ credit downgrade threatens December rate cut

http://www.news.com.au/money/banking/big-four-banks-credit-downgrade-threatens-december-rate-cut/story-e6frfmcr-1226212179113#ixzz1fNFBfjO1

Searching for house price clues

The search phrase “real estate agents” broke out of its four-year decline beginning at the start of 2008, temporarily rising to 33 in February 2010 as home prices in the Australian market peaked.

Capital city home prices peaked in the June quarter of 2010, according to the Australian Bureau of Statistics. The phrase “real estate agents” then resumed its decline.

http://www.theage.com.au/business/searching-for-house-price-clues-20111202-1oafq.html#ixzz1fNFYJtUw

The Real Estate Institute of Australia has slammed the Labor government’s proposal to cap rents in Australia

REIA president Pamela Bennett said capping rents would be “disastrous” for rental affordability and the property market.

http://www.macrobusiness.com.au/2011/12/labor-to-cap-rents/

#154 JL on 12.02.11 at 2:45 pm

so Garth where is your next book on how to negotiate the vulture deal based on the true value of property? I need that one now in Kelowna!! One month ago there was 6 listings in my neighborhood, this week there are 29!!! It is too exciting to think of buying right now as the store keeps getting new merchandise. Any book or tips on getting that perfect deal as the market bottoms out? Right now my thoughts are mexico style bartering :)