Mama

Once a year the editors of Toronto’s snooty Post magazines leave their luxe condos, drive their Mercedes to The Club and feign interest as a panel of egos discusses the housing market to come. Not that it matters. In their world everything goes up. But one must publish. Sigh.

For comic relief, I’ve been an annual guest, wandering along the rarified corridors, often mistaken as the fish delivery guy. And for the last couple of years I’ve told the likes of Toronto condo emperor Brad Lamb and BeeMo’s shrilly economist Sherry Cooper the market was unsustainable. They snorted, guffawed and gave piteous looks. I gazed off and thought fondly of turbot.

This year as the group assembled in splendour, I was in economy on the way to Halifax. Send me a question for Sherry, the publisher begged in an onboard email. So I did. “The average detached home in 416 now sells for 818,000,” I thumbed.  “That’s 8 times average family income. Meanwhile household debt has exploded and incomes trail inflation. As an economist, having seen the US experience, are you not negligent not to be warning people about this bubble behaviour?”

Cooper responded that everyone was, in fact, being warned by the Bank of Canada, little F, CMHC, OFSI (the bank cop) plus her own bank. But, it’s different in Toronto (and Vancouver).

“So Garth is going to have to wait another year to be right?” asked one of the editors, with the correct amount of wry lip-wrinking and je-ne-sais-quoi insouciance.

 “Well,” she hissed, “a stopped clock is right twice a day.”

Four weeks later, Ms. Cooper awoke and time stood still. Astonishingly, this was shortly after she sold her four-million-dollar house, so close to The Club one could actually get there in limo shoes. The transformation from apologist to bear was a swift one. And, as with everything which matters deeply to her, she called in the media.

“Sherry Cooper was reminded of just how devastating the U.S. housing crisis has been for families and the overall economy in that country after speaking recently with a friend who is having trouble selling his house in New Jersey,” a Toronto Star story reports. “Ms. Cooper, the chief economist at Bank of Montreal, is starting to worry about Canada’s housing market after refuting the arguments of the extreme bears in the past.”

The story she told was of a friend whose $700,000 mortgage free-home is now worth $350,000, but unsalable because of a flood of competing homes on the market. The family is torn up after hubs got a job in a distant city – a fine example of what happens when housing sheds equity, and turns stone-cold illiquid. Which is clearly coming to a Canadian city near you.

“Now Ms. Cooper is looking at the debacle in the United States and the blistering pace of the market here and warning people to tread carefully,” the story shares. “I’m not forecasting a crash landing but it would be foolish to ignore the lessons learned south of the border,” adds mama grizzly.

Nor has this blog been in the crash-landing business. Just consistently calling for a 15% national price correction, followed by a multi-year melt taking values wherever they land. In some markets, that will end up being multiples of fifteen.

The reasons should be clear to any economist. House prices have catapulted higher while incomes have fallen behind inflation. The difference is debt. Piles of it, accumulated largely while interest rates were at historic lows. We’ve suffered asset inflation while the economy flirts with deflation. Saving and investing have crashed. Home ownership has swelled. Family balance sheets suck. Horny young couples trade equity for risk. Boomers boast trophy houses yet have no money.

Mark Carney gets it. He’s a bear now, too. The guy who runs interest rates says he’s prepared to do just what this pathetic blog has been suggesting. He’ll raise interest rates to try and prick a massive and growing credit bubble. After all, Carney understands the economy could be road kill if debt continues to spiral higher, along with house prices.

In a not-too-subtle interview published just in time for the Easter weekend real estate orgy, the guy made it clear where this is headed. Like mama Cooper, he looks south and worries. “If a point comes where house prices adjust downwards, the question is how is that going to impact consumption behaviour. There is history in other jurisdictions where this has a bigger impact on consumption on the way down than it does on the way up. And the consequence of that is consumption slows, growth slows, income slows, debt serviceability deteriorates, etc, etc.”

So if a country collectively gorges on one asset class, using leverage to goose it wildly, when the party ends (it always does), the economy’s screwed. Of course, I’m being technical. Mr. Carney simplifies it, thus: “In exceptional circumstances, if there are issues that threaten financial stability, such as household debt … the bank could use monetary policy for that purpose.”

‘Monetary policy’ means interest rates. And he will raise them. Sooner than you think. The gov is telling you to prepare, because as the cost of servicing your debt goes up, the value of your home will fall. It means folks with lots of debt and no equity need to fix that. This, by the way, is exactly the intent of the new mortgage rules the bank regulator is circulating. They’re desiged to get people out of housing who should never have moved in – the 5% and 0%-down crowd being swept into negative equity.

Rates will rise. Mortgages will tighten. House sales will decline. Listings will jump. Then prices will fall. Incomes will struggle. Inflation hurt. Bears abound.

Sherry Cooper will again summon the media. ‘As I warned,’ she will say.

Do you smell fish, or is it just me?

278 comments ↓

#1 george on 04.06.12 at 9:35 pm

“Central bankers are a fickle breed. On one hand, they are more than happy to take credit for a booming economy and a robust housing market. On the other, they point the finger of blame at anyone and everyone when a fiat engineered boom reaches its unavoidable end. If taking responsibility for your actions is the measuring stick for responsibility, consider central bankers to be children among men.”

There is more of this article at the following link if anyone is interested:

Mark Carney and Some Myths On Inflation

http://www.mises.ca/posts/articles/mark-carney-and-some-myths-on-inflation/

#2 MarcFromOttawa on 04.06.12 at 9:37 pm

1st?

#3 T.O. Bubble Boy on 04.06.12 at 9:42 pm

Australia raised rates specifically to kill the debt/housing bubble, and it is working.

Get on it Carney! At least you can go out with a bang and be remembered for something other than being a Chicken Little central banker.

#4 arbroathscotland on 04.06.12 at 9:45 pm

A friend in the states sent me this.

link.http://www.pacificapartners.com/blog/wp-content/uploads/2012/03/Canadian-Housing-Bubble.png

#5 P & T S on 04.06.12 at 9:45 pm

When the “imaginary money” suddenly evaporates, so does the inclination to spend it.

Generally, high-end discretionary consumer spending gets hit first (less “money”, so we’ll choose the “cheaper model”), then we’ll see the real “trickle down effect” in progressive spending reduction, as the discretionary spending gets eaten up by non-discretionary costs.

Evidence? Just visit Europe – even the “still doing well” countries, where consumer confidence is evaporating faster than the overnight frosts on a sunny Spring morning!

#6 Monster Cookie on 04.06.12 at 9:47 pm

Financial markets going ‘down’ means RE prices in T.O going ‘up’.

Immigrant, rearview mirror investing cannot be over estimated.

The S&P is up 12% on the year and 30% since last autumn. How are markets ‘doing down’? Or did you mean gold? — Garth

I think gold is going to drop too, $1550 at least, maybe as low as $1200-$1300.

But the gold stocks are already cheap and getting cheaper, so start buying now and don’t stop until gold is $2200 in early 2013 on its way toward $3k when the US treasury and USD collapses, then it will pick up speed and be heading to $5k-$6k, then to infinity and beyond as the USD approaches zero.

I remember why I didn’t miss you. — Garth

#7 Stinky the Fish on 04.06.12 at 9:47 pm

“Do you smell fish, or is it just me?”

Yes, I am here. Don’t call it a comeback, I’ve been here for years

#8 $$$BPOE#1 on 04.06.12 at 9:53 pm

Folks, I was taking a well deserved sabatical after leading you to riches but I must jump in here. Carney stated that interest rates at “normal rates” would affect 10% of Canadians. READ CANADIANS. Furthermore normal is 2.99 now. Folks like I stated interest rates are not “rising” You might get a short blip up and then back down she goes. Anyone checked out the Oly Oval in Richmond? WINNING!!!!!!!!!!!!!!!!!

#9 Chris L. on 04.06.12 at 9:57 pm

Compare her here, to here:

http://watch.bnn.ca/#clip609859

http://www.theglobeandmail.com/life/home-and-garden/real-estate/buying-and-selling/toronto-spectator-to-a-neighbours-real-estate-meltdown/article2392923/

Interesting how money influences opinion.

#10 JO on 04.06.12 at 9:57 pm

I have recently got back into lending after being out for several years and have done a rash of mortgage apps in the last 2 weeks. At least half these people are in no way ready to buy another home or buy their first home. The social pressure is enormous and all rationale goes out the door.

One sad case is a young guy who just got his professional life going about 2 yrs ago and already on a second employer making about 85 K/yr. Will put down about 100K but still be left with about 400K mtg. Mtg payments + taxes + utilities + maintenance is about 2700 or so…fricken crazy !!! Will be left with essentially no liquid savings and a massive liability with an offsetting illiquid asset that will very likely be worth 20 % soon…total disaster.

The costs of owning a home are simply going to explode in the next 10 yrs – higher rates, exploding property taxes and utilities and large numbers of boomers who will need to sell large suburban homes to pay for retirement.

Many people going to get hurt real bad. So sad too bad – serves most of them right.
JO

#11 Bigrider on 04.06.12 at 10:04 pm

Garth to Bigrider yesterday #69- The S&P is up 12 % on the year and 30% from last autumn. How is that going “down”. Or did you mean gold.

Seriously Garth, Gold ??. No gold bug here. Find me a post of mine that mentions the stuff. I sure can find a passage or two from one of your past books that do.

And while you’re at it, if you are going to mention S&P results over this year(12%) and last autumn(30%), how about you go back to the autumn of 2000( ?) and measure from there.

Like I said in that post yesterday, immigrant rearview mirror investing means houses in T.O go ‘up’ financial assets go ‘down’.

And may I add, RE assets are “real” while financial assets are “fake” …another fable among the “well healed” investors in this wonderful ‘world class ‘city of ours.

#12 Herb on 04.06.12 at 10:11 pm

When you’re an economist whose job it is to grow and protect a bank, pride or shame are emotions you can’t afford.

#13 Realistic on 04.06.12 at 10:14 pm

Who believes Bank of Canada will hike key rate for stop Canadian mortgage debts madness??:

http://www.theglobeandmail.com/report-on-business/carney-ready-to-step-in-if-household-debt-levels-get-out-of-hand/article2394048/

#14 b on 04.06.12 at 10:17 pm

monetary policy also means qe

#15 Bill Gable on 04.06.12 at 10:18 pm

Sherry Cooper is beneath contempt. Talk about duplicity – I have ignored her bleatings for years.

Maybe she should switch to trying to selling us F-35′s – she’d fit right in.

#16 Bigrider on 04.06.12 at 10:18 pm

Northbound on Yonge St today couldn’t help but notice a hummer parked outside the empty eastside parking lot of the fieldgate project at Jefferson forest.

A lone, bearded man stood beside the pretty portable buildings staring into the already clearcut ‘fields of gold’.

One last soul hoping for one last shot at the ‘dream’ or perhaps a man doing a little introspection.

#17 Painted Toenails on 04.06.12 at 10:22 pm

And the landlord of this lovely, waterfront abode has suddenly taken a pressing approach. Offering “private lending, should I require it”. ”

I should not, thank you.

#18 Bigrider on 04.06.12 at 10:25 pm

I’ve been as bearish on RE for as long as our distinguished host. Still am.

Only difference is that I have come to terms with my incorrectness.

Brick licking and granite grinding are deep, gutteral and primitive emotions that are not easily extinguished.

#19 cool on 04.06.12 at 10:35 pm

from Red deer,

Houses above 475000 are not selling at all.
Market is very active for houses upto 375000
Between 375000 and 475000, it sells only if exceptionally good property

#20 Bigrider on 04.06.12 at 10:36 pm

Ever notice how intense the emotion of a newly betrothed young women becomes when the discussion of the ‘marital nest’ comes into play.

The discussion never centers around price, the verbatim of the newly engaged young women knows no limits when describing the need to ‘have a place’ to ‘buy a place’ and to ‘feather ‘ the place with all the essentials.

Her drive for the nest allows her to take money from parents and fiance’s without forethought, , her drive steam rolls over all logic, anyone for that matter to buy said place. Normal irrationality morphes to montrous proportions.

Houses ever losing there appeal , their ‘center of existence’ here in T.O…laughable

#21 Oil Patch Factor on 04.06.12 at 10:36 pm

Does anyone have the stats for income growth in Alberta? Hard to see the party coming to an end in Calgary when the industry is so hot at the moment. Salaries are getting out of hand in the oil patch – the competition is fierce between companies for help.

From everything I have heard in the industry – there is a massive labor shortage. With such demand and high salaries, I do not see the party ending.

My employer for instance, has ~1600 people working at site and within two years this will be doubled. Same goes for our competition.

It is getting hard not to enter the RE market with the salary I have even though I fully believe the fundamentals of this blog.

On top of that my rent was just increased 40% last month.

#22 The Recondite Richmondite on 04.06.12 at 10:50 pm

3rd para: “having see.” Sorry, I teach English for a living. Seeking help….

You also teach typos. — Garth

#23 Bigrider on 04.06.12 at 10:52 pm

Simple question open to anyone and really not meant to be sarcastic or leading in anyway.

Why do houses in the burbs and T.O proper seem to be getting bigger and bigger?

I mean I get the whole house obsession, I get the want for nicer finishes and prettier touches inside and out but why the big size? Whats the purpose?

Can the sizing jokes please.

Unless a family is 16 persons big why 5000 square feet?

Anyone? Garth ?

#24 Uki on 04.06.12 at 10:53 pm

Garth, for myself and my fellows f***ng immigrants here who’s English is second/third language: what is “fondly of turbot” ?

Thanks

It’s a sexy fish thing. — Garth

#25 Onemorething on 04.06.12 at 10:56 pm

#3 T.O. Bubble Boy on 04.06.12 at 9:42 pm

” Australia raised rates specifically to kill the debt/housing bubble, and it is working.

Get on it Carney! At least you can go out with a bang and be remembered for something other than being a Chicken Little central banker.”

He Wont Bro, he’s a bum! Aussies went on a buying spree for a decade when rates were high. I dont see a difference, there are bubbles and run away bubbles (China/Aus/Can) are the last ones to BLOW!

stone-cold illiquid – GREAT COMBO Garth!

8x income with a downside GARTH! Now that’s what you need to comment on!

What happens when 4x income today becomes 2.5x – 3x income when the avg income of a family drops 30%!

Put it this way, it will take 10 years but when a 2.0M property in VAN drops to 750K, or a 1.2M in TO drops to 500K then we’ll have learned our lesson. Not before!

#26 Bigrider on 04.06.12 at 11:00 pm

I mean I have always thought 2500 square feet was enough, 3000 tops ,just like I always have thought 10 was ample.

Never thought of increasing my 3000 sq or my 10i.

#27 FI Guy on 04.06.12 at 11:01 pm

The Sherry Cooper issue is actually larger than most think. Could be a turning point for CMHC news prints.

CMHC uses a “base case” when calculating it’s reserves for future losses. Currently, that “base case” implies flat to rising house prices.

As soon as the consensus estimates of future house prices turn bearish, and (or) we begin to see lower house prices nationally, that “base case” will be required to be thrown out the window and they could begin to record substantial losses as a result of a base case predicting negative equity and future delinquencies for many of their 5% down borrowers.

#28 Katz on 04.06.12 at 11:02 pm

Perhaps, Mr. Garth expects too much from Ms. Cooper.

Few economists are able to apply the knowledge acquired in the university. They can draw a supply-demand curve, may be project a line based on half a dozen observations. That’s about it. There is too much qualitative judgement and intuition in economic forecasts. Hence, the jokes about economists.

There is an argument about how much luck contributes to career growth, especially in such profession as economics. A random guess here and there goes a long way.

Then the whole question of independence of the bank’s economists. They are there to stay employed, not to give good forecasts.

Anyway, the point is… People are weak. Forgive them all. It’s Easter after all.

#29 Bigrider on 04.06.12 at 11:02 pm

Big, gas guzzling hummers..I say their owners have mucho square footage too…No?

#30 Steven Rowlandson on 04.06.12 at 11:07 pm

Some are finding out the folly of paying too much for too little. Always the hard way.

#31 Bigrider on 04.06.12 at 11:13 pm

I’m thinking of downsizing my real assets but..

Surgeon said there were some risks so I think I’ll stay put for now.

#32 Abitibi Doug on 04.06.12 at 11:23 pm

Relax, put your feet up, and enjoy the Easter weekend. There’s nothing at all to worry about, because it’s different here in Canada!

#33 Republic_of_Western_Canada on 04.06.12 at 11:30 pm

Hopefully Kooky Wendy will take a cue from Silly Sherry and finally acknowledge just how bad and ill-conceived that stupid and useless long-gun registration was.

Now that we’re finally FREE from it.

God bless C-19. The Canadian people now should be so lucky to have something similar to reign in excess and stupidity in the housing market.
==
“Cukiers legacy won’t be a failed registry… safe storage or any of that.
It will be that she woke the dragon and now there really is a gun lobby in Canada where one didn’t exist before.

Congratulations Wendy…. you succeeded in creating what the NRA and others couldn’t have done without you.
An organized and politically motivated pro-gun lobby that didn’t exist in Canada before you came along and forced us to need one.
Thank you for being the motivating force that brought a bunch of strangers together to achieve a common goal in the interest of personal freedom.

You got what you wanted… happy now?

#34 Canadian Watchdog on 04.06.12 at 11:33 pm

April 1-6 condo stats from http://tosolds.ca/

https://docs.google.com/file/d/0ByrPFSoPLahJZmJ5T3hhYUVUY0c5VEJ1aHc5bjUzZw/edit?pli=1

#35 Narrowgate on 04.06.12 at 11:37 pm

Yes, Garth, that latest Post “round table” on real estate made me wanna puke. What a bunch of crooked liars spinning candy floss. I read it quite carefully and they were all covering their asses saying that real estate presented a wise “lifestyle” investment. Not one of them wanted to say it was a wise financial investment. Of course they bragged about how stinking rich and smart they all are. PUKE! I was very happy to line the old birdcage with it afterwards.

#36 GTA Girl on 04.06.12 at 11:45 pm

Big rider: 5,000 sqft is a baby house…in Vaughan it 7,000 or more. That’s the new trophy.

Of course if the RE tanks, and developers go belly up…they will also by the white elephant…just as the 3,000 sqft mansions were in the early 90′s

#37 Mark "the talk" Carney on 04.06.12 at 11:46 pm

Mark I am telling you to your useless face for YEARS now that you are useless and you will do nothing but talk. No one cares what you have to say. Canadians have borrow more then they can pay back. Canadians will borrow until they are bankrupt. That is you goal anyways to bankrupt Canada. You are lucky mark that your crimes are not a criminal offense in fascist Canada. In a free county that respects free markets and democracy you would be locked up you useless eater who talks.

#38 Abitibi Doug on 04.06.12 at 11:48 pm

@Bigrider, post #23:
I’ve also been puzzled about these bigger houses since the 1980′s and ask the same question. It does seem odd that family size has become smaller over the last 50 years or so but houses have gotten bigger.

#39 John G. Young on 04.06.12 at 11:54 pm

#8 $$$BPOE#1 on 04.06.12 at 9:53 pm

The last person who kept shouting “WINNING!” was Charlie Sheen on his most recent crack run. He has since apologized, and you should too.

#40 disciple on 04.06.12 at 11:55 pm

Maybe we should go out dancing,
Put the red light on,
Everybody knows it’s over,
We knew it all along,
Tonight in Babylon, Tonight in Babylon.

Can’t get this haunting tune out of my head… help me… mama…. mama…. aaaaaaaaaaaahhhhhhhh!

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

#41 Ron@Delta on 04.06.12 at 11:55 pm

Not sure if anyone noticed this part of the Canadian jobs report on Thursday – “The biggest percentage drops in the past year have been in the real estate, rental and leasing area.” http://bit.ly/GQ7efq Does this mean real estate agents see the writing on the wall and are looking for alternatives?

#42 disciple on 04.07.12 at 12:04 am

I’m not myself tonight… it’s a damn good thing… met a man today who didn’t understand the concept of “FREE”. I couldn’t get him to grasp it. Typical Canadian dumbass. No, my friends, everything has to have a price, eh? I love my countrymen. What we have here is nothing less than frickin’ paradise… why can’t you maroons see it?

#43 oslec on 04.07.12 at 12:04 am

4 Uki on 04.06.12 at 10:53 pm

Garth, for myself and my fellows f***ng immigrants here who’s English is second/third language: what is “fondly of turbot” ?

Thanks

It’s a sexy fish thing. — Garth

It is a BOTTOM FEEDER fish.

#44 Alberta Ed on 04.07.12 at 12:05 am

I smell fish all right, but I think it’s just F hiding behind the door.

#45 Foggy on 04.07.12 at 12:06 am

It’s all about current rates.

You’re a first time buyer. You buy a 550K ish house with 5% down. Your 525K, 30 year mortgage @3% sets you back $2208/month.
Rates go up to 6% – cheap by historical standards. Your house is now worth $371,300. Why? Because that is exactly the same monthly payment ($2208) at 6%. For somebody else with the same net income, this is what they can afford to pay for that exact same house – like you.
That’s a drop in equity of $154,000. The math does not lie. Don’t buy now.Wait a bit.

#46 Salacious Crumb on 04.07.12 at 12:15 am

# 21, Oil Patch Factor

I agree. There’s lots of money floating around out here and the rental market is getting tighter.

I also agree with the fundamentals of this blog, but Alberta has to house all the workers it requires somehow. I suspect the loose lending and over pricing will continue here.

#47 stage1dave on 04.07.12 at 12:15 am

I’m kind of impressed; didn’t realize Ms. Cooper was so concerned about peeps living in a 350K house.

(It has been my experience that most people living in four million dollar properties are somewhat unconcerned, to put it mildly, with the economic misfortunes of people ensconced within domiciles worth a tenth of that. Are they related?)

That would include a great deal of the Great Unwashed north of the 48th, btw. Just wait till they’re all underwater & want to move…I’m sure her concern shall be withering!

Btw, wasn’t her house a THREE million dollar property last fall?

Lets see if she invests her windfall profits within the Canadian Real Estate market, shall we? Say, in the 350-500K segment. Multiple purchases, & the rents can be used to supplement whatever meager pension that can be wrested from BMO…not to mention, of course, the continually appreciating values of these properties bolstering her net worth in years to come. Maybe a couple investment condos in TO would be a smart purchase?

That would prove to be a fair litmus test for her faith in the market…

I’ll be the guy in the corner turning blue, incidentally; while I wait for this to occur.

#48 We Don't Need No Water... on 04.07.12 at 12:25 am

Ha! Is it just me or does Ole’ Sherry look like she could be an EXTRA on The Real Housewives of Vancouver?

#49 City Slicker on 04.07.12 at 12:28 am

The only problem is he won’t raise it fast enough. a quater point here and there won’t be enough to contain what is likely already too late. Just like in the USA.

#50 disciple on 04.07.12 at 12:29 am

You are infinitely special, unique. Nobody knows or can know what you do. You are wild, born free. Nothing or no one can take this cherished treasure from you, now or ever. You are eternal, physical death is only an illusion. You are the only species that can shed a tear. Or hope to fathom the glorious beauty of a sunset. To whom much is given, much is required. You ca

#51 Smartalox on 04.07.12 at 12:30 am

Both. Cooper and Harper are economists. Is THAT why they call it the dismal science?

#52 disciple on 04.07.12 at 12:34 am

SORRY. PFS…. You can only fail yourself. In your heart lie the secrets of the universe. Nothing matters at all, only what meaning you infuse. Your will. Your ritual, your sacrifice, your truth. From the neutral emotion, all others arise, and fall. Only you know the meaning. I can’t take your journey for you. But what I can do, is hold up that silver foil, that mirror. And hope and pray that you will.

#53 disciple on 04.07.12 at 12:35 am

SEE.

#54 Coho on 04.07.12 at 12:37 am

See how all this works? Since the crash of the dot.com bubble, borrowing became cheaper. Then in 2008 the GFC manifested and the cost of borrowing almost became free. This to ‘save’ the economy. And now that people have gorged on debt like a starving person at a buffet dinner, they want to raise the cost of debt — to save the people, of course! Who could make this stuff up? Another example of black made to appear white.

A 2% raise in interest rates could cost many gorged out families an extra $500-$600 or more per month on their mortgage/HELOC payments. That is after taxes, so it would be like taking a $5 per hour pay cut. Of course some will cheer at higher rates either because they have savings, or have been waiting for house prices to correct. However, the cheering may be drowned out by the crying — by those who were fooolish enough to take the shiney lure — personally buffed and polished by the banking elite — of ‘free money’.

#55 Daniel on 04.07.12 at 12:41 am

#6 – Love the enthusiasm, especially to “infinity and beyond” – not sure there is a lot beyond infinity, but if it worked for Buzz Lightyear it can work for you too! :)

Think we are seeing a correction in gold/silver, however if you think it’s going down more, even to 1200-1300, (silver 25ish) perhaps it’s better to wait to pick any up.

Any just to recap, if there is any sort of broad market collapse (like 2008), gold and silver stocks are hit just as hard, even if gold and silver aren’t.

#56 daystar on 04.07.12 at 12:50 am

Its late here, tomarrow is another day and I’ll have more to say upon reflecting on Garth’s piece in my sleep but I’m finding an all too familiar pattern emerging with respects to Mark Carney and the role central bankers play in government. The pattern quite simply is that the harshest critics of Mark Carney’s performance (and/or mere existence of vocation) are generally the least knowledgeable when it comes to economic/monetary systems and the role or job description the governor of the BoC actually has to fulfill.

This lack of knowledge of economic/monetary systems is all to commonly replaced with the assumptions that central bankers belong to the governing political party of the day (when the role of a central banker is to be impartial to political leanings) and is controlled by them (which is not the case but they are meant to work together on systemic issues and economic objectives which generally goes without saying) and that public compliments toward democratically elected government policy means support of the political party itself (this isn’t necessarily the case either. A major role central bankers play is to create justified confidence in bond investors to buy debt at fair bond yields to the borrower relative to market conditions. Confidence is a key factor so credit is generally given where it is due).

The simple jist of this pattern I’ve seen over the years is that most if not all critics of Mark Carney simply don’t know what they are talking about. Its late here, I’m tired but I will have plenty to say about what the role of Mark Carney is as governor of the BoC tomarrow and leave it up to the reader to decide.

#57 Harlee on 04.07.12 at 1:08 am

Bigrider
The greater fools need bigger houses for all their big stuff: big screen teevees,huge computerized refrigerators,large king-sized air mattress beds,and…what-ever other big furniture they covet.
They enjoy it all when they’re not out playing with their mini i-phones and diddling on their small tablet computers.
People are the strangest animals….

#58 Mr Buyer on 04.07.12 at 1:17 am

#20 Bigrider on 04.06.12 at 10:36 pm
Ever notice how intense the emotion of a newly betrothed young women becomes when the discussion of the ‘marital nest’ comes into play.
……………………………………………………………………..
This theme has been done to death and it is not the usual newlywed demand for housing that has brought us here to the monstrosity of a bubble we are witnessing. While the newlywed demand for housing is alive and well it has had to contend with the bubble rather than be the driving force behind it. To tell you the truth nothing gives me as much pleasure as making my wife happy (that is when she is not putting my stuff away in new places so that I can never find it again and then looking at me like I am an unwanted child when I ask her where my stuff is. The thing is my stuff was put away in the first place but not to her understanding of having been put away. Apparently on the shelf is not enough. On the shelf inside a nice colored box is preferable and if said box is not available then someplace out of site is optimal). Before the “grow a set crowd” starts their mantra I would like to say “ANYTIME” and that I still enjoy hearing her laugh and whatever.

#59 Party on Garth on 04.07.12 at 1:17 am

Carney, F, The big 5 banks, the OSFI,….they are all going to do sweet bugger all to stop the madness except run their mouths. Empty threats and cheap talk.

This continues to drag on agonizingly slow as the situation gets worse and worse.

#60 dd on 04.07.12 at 1:22 am

Is the US jobs really recovering?

There is the actually – non adjusted REAL NUMBERS:

•NFP 120k on expectations of 205k
•Unemployment 8.2%
•Birth Death model added 90k
•167k dropped off of unemployment list (no longer counted in jobs market) meaning actual number was
-137k

WOW, so the US economy actually lost massive jobs this month. Recovery?

#61 Ravishing Rick on 04.07.12 at 1:29 am

Sherry Cooper…yeah I’d tap that

#62 Mr Buyer on 04.07.12 at 1:30 am

As for raising interest rates. Whether this happens or not THE BUBBLE HAS TOPPED. NOW IS NOT THE TIME TO BUY A HOUSE. SALES ARE FALLING ACROSS CANADA. BUYER BEWARE. Bubbles have a life path they must follow and following falling sales are crashes in asset values that were the subject of the bubble. Raise rates, bring in rules, do what you like. We passed ludicrous speed years ago and we are headed for a CRASH. Not a melt, A CRASH. All these measures now are like bringing baseball bats to machine gun fights. I like how the head of that bank kept blowing hot air into the market until her house sold. I wonder if the bank head was really looking out for shareholders or if the bank head used the position for personal gain at the shareholder’s expense. There will be no ethics in the absence of accountability.

#63 Mr Buyer on 04.07.12 at 1:32 am

#21 Oil Patch Factor on 04.06.12 at 10:36 pm
Does anyone have the stats for income growth in Alberta? Hard to see the party coming to an end in Calgary when the industry is so hot at the moment.
………………………………………………………………….
Unless the oil patch is paying like 200 or 300K a year I do not see how any salaried position can cope with this bubble. Even in Calgary.

#64 Mr Buyer on 04.07.12 at 1:36 am

#25 Onemorething on 04.06.12 at 10:56 pm…Put it this way, it will take 10 years but when a 2.0M property in VAN drops to 750K, or a 1.2M in TO drops to 500K then we’ll have learned our lesson. Not before!
……………………………………………………………………….
In your dreams. Just watch how fast it happens when we pass from the sales falling to the prices dropping phase. It will be ludicrous speed on NOX.

#65 TRT on 04.07.12 at 1:47 am

Population Growth of selected Metropolitan areas in North America April 2010 – July 2011 (15 months) – census data

Los Angeles 196,000
Dallas 155,000
Houston 140,000
Washington 122,000
New York 119,000
Miami 105,000
Atlanta 90,000
Phoenix 70,000
Austin 67,000

Vancouver 110,000 (estimate) – less than Dallas
Toronto 160,000 (estimate)

Land use policies and scarce land seem to have a huge effect on RE prices. For these to have an affect, you still need population growth as we see is happening in Vancouver and Toronto!

But psychology is the big one!

#66 scib on 04.07.12 at 1:47 am

Garth: Do you have an opinion on Ellen Brown?

http://www.atimes.com/atimes/Global_Economy/ND04Dj06.html

Ellen Brown is an attorney and president of the Public Banking Institute, http://PublicBankingInstitute.org. In Web of Debt, her latest of 11 books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are http://WebofDebt.com and http://EllenBrown.com. The Public Banking Institute’s first conference is April 26th-28th in Philadelphia.

#67 Smoking Man on 04.07.12 at 1:50 am

Like I said a zillion times on this pathetic blog central banks only raise rates when the help. The tax farm slaves are in a better negotiating position. You know great job numbers make the maid and the garder want more. Not acceptable to central banks. As far as fish smell goes been there don that and my post was deleted.

Night two in vegas still up pun intended

I love life

#68 getreal-tor on 04.07.12 at 1:51 am

re: bigger homes

It’s all about the show. If you own a 5000sq ft home then clearly your the bigger man/woman than your 2500sq ft neighbours.

Entitlement also plays a role these days were we believe that every child deserves a room as big as the master bed room. Hell, even master bedrooms have gotten bigger and how often do you use it truly when your working away 24/7 to support your lifestyle?

We’ve become a society obsessed with trying to find our happiness in material things and it’s a vicious cycle if you can’t find happiness with what you’ve got or can truly afford.

#69 scib on 04.07.12 at 1:52 am

RE: my last post. I always thought that governments decided to borrow on the open market so they would not be free to debase their currencies. How could anyone stop governments from just printing money as fast as possible if they were to borrow from their own central bank.
Or is it possible the central bank could be autonomous and by setting the interest rates the government would have some kind of a watchdog above them?

#70 Sri Koerniwati on 04.07.12 at 2:01 am

Sherry: “As I warned”
Sri: “Well, your warning is way too late !!! Damages have been done. Thanks anyway”

#71 furst on 04.07.12 at 2:03 am

FURST! housing prices will go up. I bet against Garth’s opinion. Who’s with me?

#72 scib on 04.07.12 at 2:38 am

Sherry Cooper – Obsequious sycophantic boot licking hypocrite with a narcissistic complex.

#73 CoCo on 04.07.12 at 2:41 am

Calgary prices have already decreased a friend just bought a 2600 sq ft house with all the bells and whistles for 530k. There’s only one way for house prices to go with Calgary’s booming economy and thats up.

#74 Ronaldo on 04.07.12 at 2:55 am

#23 Bigrider – E G O

#75 Cam NO Good on 04.07.12 at 2:55 am

I notice daily that the Vancouver Sun has lots of front page articles extolling the “Fantastic Benefits” of all sorts of different Mortgage products. Today they have added 2 more articles, one hypes joint multi person mortgages for a single dwelling, stating how this method Increases buying power, ughh I wonder how a bubble forms!
Another article Is “First-time buyers have options for that all-important down payment; Suggestions include help from the parents, reining in personal spending, taking advantage of a new $10,000 bonus, or borrowing from your RRSP”
And they have had the same “article” on their front web page for over a week about how fantastic reverse mortgages are for “house rich seniors”
This paper is a big advertorial for the real estate industry, they are really stinkin up the joint

#76 Devore on 04.07.12 at 2:56 am

#10⁠ JO

Wow. I had a mortgage not too long ago, and was also making around 85k, but my monthly nut, all costs in, was 2200, and I was sweating bullets al the time. How can he even qualify for a mortgage like that? What’s the debt to service ratio, housing costs? Little room for savings, and that’s already living modestly. Too many people stretching themselves way too thin. Rates creeping even a little bit will put many in trouble who jumped on the cheap variable rate mortgages to increase their “affordability”.

#77 Aussie Roy on 04.07.12 at 3:03 am

Like mama Cooper, he looks south and worries. “If a point comes where house prices adjust downwards, the question is how is that going to impact consumption behaviour. There is history in other jurisdictions where this has a bigger impact on consumption on the way down than it does on the way up. And the consequence of that is consumption slows, growth slows, income slows, debt serviceability deteriorates, etc, etc.

BINGO – Just what has happen here in Australia. This slowing leads to job cuts and falling govt revenues. It’s this change in attitude by fringe buyers and those smart enough to sell their $4M houses that flows through the market.

Aussie Update

Remember only a few days ago I thought we would by June have a years housing stock on market, a shortage to GLUT. I didn’t have to wait long even that long.

Residential listings increased during March by 5.4% taking the national total to 387,958 properties for sale.

PS. Those who thing immigration will save the day, we have 1 new Aussie arriving every 90mins, this has not stopped prices sliding.

http://www.propertyobserver.com.au/data/march-residential-listings-increase-national-stock-on-market-5-to-387000-listingssqm

Please sir, can I have some more?, more rate cuts that is.

http://www.themercury.com.au/article/2012/04/07/316241_tasmania-news.html

Generation DEBT – Video

http://www.youtube.com/user/AussiePropertyBubble?feature=watch

Knock down and rebuild is always a GREAT idea?.

http://www.macrobusiness.com.au/2012/04/knock-down-rebuild-is-not-always-a-capital-idea/

#78 Debtfree on 04.07.12 at 3:19 am

@24uki cooper is a us carpetbagger from new York . If she smells fishy to you don’t worry shes likely got a gig ready for beijing . She’s bubbilisious in any language till the shtf.or should I say before.

#79 new-era on 04.07.12 at 3:33 am

You can’t tell me Sherry Cooper didn’t know.

She knew thats why she sold her house because she
can see the writing on the wall.

Now that she’s out of the market, you can bet believe she will be cheerleading for the impending crash.

Its just human nature for these greedy bankers

#80 Onemorething on 04.07.12 at 5:21 am

People need more space to do less with each other. You wonder why we dont communicate through traditional means and why parents dont know what going on with their children and why spouses never get to know each other.

I just downsized from a 7500sq footer to 4500sqft and feels better already. My rent dropped 40% as well.

Stone-Cold LIQUID! Gold sold at 1800, Silver at 48, Preferred shares at Banks, playing some 50-100pip a day currency plays. ALL GOOD!

#81 Beach Girl on 04.07.12 at 5:36 am

#38 Abitibi Doug on 04.06.12 at 11:48 pm

@Bigrider, post #23:
I’ve also been puzzled about these bigger houses since the 1980′s and ask the same question. It does seem odd that family size has become smaller over the last 50 years or so but houses have gotten bigger.

____

I am guilty of that, but I rent the sucker out. But why do people need so much space? My parents had a nice home in West Rouge, Ontario. Probably would be claustrophobic in it now.

But on the flipside, how can people live in 400 square feet residences, unless they have been charged with very serious offences.

Besides glass falling out all over TO, that must be the reasons behind lack of balconies. What are the statistics of suicides from these large, ugly impersonal towers of doom?

#82 Aaron - Melbourne on 04.07.12 at 6:46 am

@
#3 T.O. Bubble Boy on 04.06.12 at 9:42 pm
Australia raised rates specifically to kill the debt/housing bubble, and it is working.
*********************************************

Surely, you jest?
Our government has done EVERYTHING to keep the party going.
Rate moves have more to do with propping it up than any tilt against excessive debt, generous tax treatment, irresponsible lending, and so on.

#83 House on 04.07.12 at 6:59 am

Coulda, Woulda, Shoulda! And when prices fall and the economy tanks Markie will look just like Greenspan, an ass who didn’t know what he was doing. Then he’ll go on pension. Priceless.

#84 Beach Girl on 04.07.12 at 7:18 am

#179 Beach Girl on 04.07.12 at 5:15 am

#160 Westernman on 04.06.12 at 8:27 pm

Beach Girl,
How long do they allow you use of the computer at the sanitarium…?

___

I reposted this. I think you are sad and alone. You poor, pathetic creature. You are certainly not superior and are wallowing in your own self induced dilemma. Seriously, go out and help someone, you will feel better about yourself, and someone might actually like you. No JOKE.

_____

That’s funny, as I volunteer at Whitby Shores. You really do think you are superior.

Was trying to get Miss Daisy to be a visiting dog in a Pallative Hospice or Old Folks home, but she is too nasty. All my friends volunteer.

I had a good friend Alice. She died last fall at 97. We used to bring her to the pool parties, put a hat on her, and duck tape her to the lawn chair, so she wouldn’t slide off.

Skinny thing could eat. From some Slovakian Republic crap place. Had her first dime. Used to hit the dog when she thought we weren’t looking.

Westernman, go help someone, you might make “A” friend and have some fun.

Happy Easter, I am getting stoked. This is going to be fun.

#85 Sebee on 04.07.12 at 7:20 am

Interesting.

http://m.theglobeandmail.com/globe-investor/investment-ideas/behind-the-numbers/the-reward-for-todays-investor-think-26-per-cent-a-year/article2393582/?service=mobile

#86 John on 04.07.12 at 7:48 am

That article was great writing…really entertaining.

What a bloody game that has gone on in Toronto and elsewhere in Canada. It’s a good lesson to anyone who picked up “authority sickness” from their childhood family and cultural indoctrination. The people have wanted to be hoodwinked….remained children…and thus gotten screwed.

The cast of characters in this drama have no intention of protecting the public from themselves as reality dawns. They’ll create a fake “dot connect” as “reasons” for the depression, but the main event will be protecting their own.

As a Goldman Sachs technocrat, and a person directing his policy from Europe ( mainly seat of the pants exit strategy), he really has no choice now.

It’s done now. And once “it” happens, people are going to feel a lot better. Some are going to listen to these guys when they trot out the lame “dot connect” on “what happened”, and Carney will bleat out a few “I told you so’s” ( the guy who fasciliated it, and helped implement it..complete with brazen, cold, political finesse).

The principles are old. One: “Absolute power corrupts absolutely.” A group of people with literally tons of casino money, stolen in a rigged game….built on dupes, don’t RESPECT or CARE about the dupes.

Another: “A man’s tendency is to believe his own bullshit”. So, with the “absolute power” comes the illusion of control. There’s maybe a 20-50% possibility that Carney and the groups he represent actually BELIEVE they can ride it all out and end up controlling millions of people who are going to wake up without “assets”.

Actually, they like that people who have supposedly “woken up” are still talking about real estate. The illusion of control seems to still be in place.

The Toronto Star…what’s going to happen inside that place? Authority sickness is going to reach the terminal phase. Like it or not, it’s going to become obvious to people what the dynamic has been.

…..and power holders will want control in THAT context. They won’t back down.

The Toronto Star article…not that it’s. Necessary to read it. Check out cynical Mark:
————————————
“There are also worries about consumer spending and sky-high household debt levels – reiterated by Bank of Canada governor Mark Carney.

Other reasons for caution include the still-simmering sovereign debt crisis in Europe and continuing worries over the U.S. recovery, the latter brought into focus on Friday by a disappointing jobs report.”
—————————–

#87 rosie on 04.07.12 at 8:01 am

#50 disciple. Where,s the picture of the kitty hanging from the curtain rod” I,m Special”.
#83 House. That’s how it works.

#88 Kaganovich on 04.07.12 at 8:07 am

#21 Oil Patch Factor

You wrote “Does anyone have the stats for income growth in Alberta? Hard to see the party coming to an end in Calgary when the industry is so hot at the moment. Salaries are getting out of hand in the oil patch – the competition is fierce between companies for help.

From everything I have heard in the industry – there is a massive labor shortage. With such demand and high salaries, I do not see the party ending.

My employer for instance, has ~1600 people working at site and within two years this will be doubled. Same goes for our competition.

It is getting hard not to enter the RE market with the salary I have even though I fully believe the fundamentals of this blog.

On top of that my rent was just increased 40% last month.”

I can’t disagree with your anecdotes, since I see the same stuff around my area as well, but I must ask you what is driving this sustained demand/exorbitant price of oil? What do your coworkers and fellow industry people use to rationalize $100-$110 per barrel oil?

http://globaleconomicanalysis.blogspot.ca/2012/04/another-plunge-in-3-month-rolling.html

http://globaleconomicanalysis.blogspot.ca/2012/04/china-manufacturing-pmi-decreases-at.html

http://globaleconomicanalysis.blogspot.ca/2012/03/excellent-document-on-decoupling-and.html

These reports and commentaries should at least give pause to unconditional bullishness on commodity prices.

#89 FTP - First Time Poster on 04.07.12 at 8:08 am

The only part of this posting Garth that suprised me is that a BeeMo economist has a multi million dollar property! It shows how Canadian Banks are gouging consumers. I always thought the idea behind “amortization” was a farce, now I’ve seen the proof!

#90 Chris L. on 04.07.12 at 8:21 am

With wheezing, shrilly Sherry sounds like a balloon deflating in the absents of a prick!

Feel free to add that to your blog post Garth. ha!

#91 Kam on 04.07.12 at 8:40 am

I heard the stoy from my friend whose Agent told him that few people in Mississauga area are doing fisy things.Seller gives letter to a Buyer that he has received X amount from the Buyer.Buyer takes this letter to Bank and show that he already paid 20% downpayment and now needs mortgage for the balance amount.He gets the mortgage and property sells for more than list price……………. Any comments about this Scheme Garth?I do not fully understand this scheme but thought may be someone in Greater fool .ca will be abl to explain this. Surprisngly two similar properties in the same area are selling for diiferent prices.One at normal price and anohte at premium.Who controls this type of fishy activities?How banks are approving loans for properties which are selling for over 20% of list price? AT THE END EVEN IF WE WILL NOT BUY THE PROPERTY BUT WE WILL HAVE TO PAY THE TAXES FOR FRAUDULENT PEOPLE AND SPECULATORS. ALL THE PROPERTIRS SOLD OVER LIST PRICE SHOULD BE AUDITED AND BACKGROUND OF THE BUYERS SHOULD BE CHECKED. IN VANCOUVER CHINESE ARE BUYING PROPERTIES AROUND SEA.WILL IT MAKE HUMAN SUMMUGLING EASIER OR IS IT A PLOT FROM CHINESE GOVT TO TAKE OVER CANADA AS THEY PALNNED TO TALE OVER AUSTRALIA FEW YEARS BACK?? IT SEEMS THAT CHINESE GOVT’S SURPLUS MONEY IS BEING USED TO SPECULATE ON HOUSING IN CANADIAN RE.MOST OF THE HOUSES IN NORTH TORONTO ARE SELLING FOR OVER 150K.

#92 Canuck Abroad on 04.07.12 at 8:48 am

There were several cautionary comments in the Post article, but the roundtable was trying not to be alarmist maybe. Sure there was utter stupidity (“the Manhattanisation of Toronto”, pulleeeeze) and the usual “we’re in a totally new paradigm” rubbish. However, amongst all the real estate shilling was both Cooper and Kalles pointing out that a house you live in is not an investment. (I have pointed this out many times):

Sherry Cooper: Exactly. I don’t think anybody should buy a house for five per cent down. I always say this: buying a house is not an investment decision, it’s a lifestyle [decision].

Elise Kalles: You own a home to live in. I’ve presented offers where [clients have said], “I’ve been here for 25 years, and you think I can only double my money? What’s happening out there?” And I say, “But you’ve lived there for 25 years. You can’t just use it as an investment house if you’re going to live in it with your family.”

And there was confirmation that Toronto is not a good place to buy as an investment:

Gil Blutrich: I think for investment purposes, there are better alternatives south of the border or north of the city. If you want to buy a residence for yourself, it’s a lifestyle decision, so sure.

Harry Stinson: I’m going to agree with two comments: first of all, as a personal acquisition, yes, I would — and there are always deals out there, even in the Toronto market, there are always deals out there. Just keep your eyes open. But in terms of investment, I absolutely agree with Gil. The Toronto market right now is not an investment market.

So there you have it, straight from the shills mouths. Also it looks like from the article that yes Sherry has sold her house but she spent even more on a condo to replace it, just FYI. And the piece de resistance:

Sherry Cooper: People also want to have public transportation for their cleaning lady.

#93 Market Bull on 04.07.12 at 8:54 am

Well, it looks like the “craziness” continues in the GTA. TREB MLS weekly stats are out (to April 5):

Sales: 2,664 Average price: $517,495.

Sales are on track to easily eclipse last April which saw 9,041 sales.

CRAZY!

#94 Ben on 04.07.12 at 8:55 am

#21 Oil Patch Factor on 04.06.12 at 10:36 pm

Don’t know about Alberta real estate but oil stocks haven’t been doing to good.

#95 Can it be? on 04.07.12 at 9:10 am

Weekend house watch… No major changes in prices however all the same homes are on the market… I’ve seen, reduced by a million dollars, reduced by 100 k so that the buyer can finish the basement. Things are only moving quickly in select neighborhoods. For many the pressure to sell obviously isn’t going to happen until rates go up. I’ve decided that people clearly have issues with math… Because if they calculated how much these properties were costing then to sit on each month, they would be more anxious to sell. People calculate their “profit” without including their costs. Not the way I do my math :)

#96 Yuus bin Haad on 04.07.12 at 9:16 am

“As I warned”? The next thing out of Sherry’s mouth will be “suckers!”.

#97 Bigrider on 04.07.12 at 9:17 am

# 74 Ronoldo to Bigrider-” E G O.”

J O K E

#98 Benny Hill on 04.07.12 at 9:19 am

Sherry Cooper,Abby Cowen Joseph they got it right once…
than is 50% less than a Timex.

#99 Blasé on 04.07.12 at 9:32 am

i had a couple jobs during university where i got a look into rich folks houses. many times kids left alone while parents working late. also, people with vast areas with nothing to fill the space. huge developed basements that were totally unnecessary. giant kitchens but people just order in or eat out. huge rooms that are too big for furniture. just people indulging their egos. most rooms dont get used. a nightmare to heat in canadian winters. just silly, foolish homes. usually miserable people inside, desperate for happiness and hoping the new do-dad will fill the void for a little while. the correction will be painful, but many people will find a calm after they lose their mansion that is missing now.

#100 eaglebay - Parksville on 04.07.12 at 9:33 am

#60 dd on 04.07.12 at 1:22 am
“Is the US jobs really recovering?”
_______________
How about the thousands of people retiring everyday in the US?
Are you forgetting the demographics?

#101 eaglebay - Parksville on 04.07.12 at 9:38 am

#61 Ravishing Rick on 04.07.12 at 1:29 am
“Sherry Cooper…yeah I’d tap that”
___________
Yuk… Pretty hard up aren’t we.

#102 LS in Arbutus on 04.07.12 at 9:44 am

“so close to The Club one could actually get there in limo shoes. ”

Garth – you slay me! :-)

#103 Soylent Green is People on 04.07.12 at 9:52 am

I can’t believe Sherry flogged real estate just until her own house sold. These people are beyond dirty.

If someone spends hours a day on their clothes and looks and grooming, right off the bat you know they’re not doing a hell of a lot of reading and they just follow along with whatever they are told to do. Brainless.

………………….

p.s. To that poster above re the Long Gun Registry:

AN OPEN LETTER ON VIOLENCE AGAINST WOMEN AND THE LONG GUN REGISTRY FROM YWCA CANADA

As the nation’s largest single provider of shelter to women and children fleeing violence, YWCA Canada knows the long gun registry is a public safety tool that makes women’s lives safer. Across the country, our shelters tell us the long gun registry is useful and needed. Our rural shelters tell us police consult the long gun registry every time they go to a domestic violence incident. These are not automatic checks, but deliberate and specific searches for the presence of firearms in the home, especially long guns.

http://ywcacanada.ca/en/media/press/41

.

#104 Yuus bin Haad on 04.07.12 at 9:53 am

“Suckers!”? Oops – take that back … looks like Sherry’s drinking Brad’s Kool-Aid now.

#105 Daisy Mae on 04.07.12 at 9:56 am

jess on 04.06.12 at 7:33 pm

“Finance Minister Jim Flaherty has tried to deflate the housing “balloon ” three times in the past six years by tightening mortgage lending rules.”

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

You mean….rectifying his past mistakes. Let’s be honest. And now his newest tactic is to push the blame onto the banks….

#106 Daisy Mae on 04.07.12 at 10:02 am

Sherry: “Well,” she hissed, “a stopped clock is right twice a day.”

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

Well, THAT’S getting tiresome…. * sigh *

#107 Ronaldo on 04.07.12 at 10:05 am

”Sherry Cooper: People also want to have public transportation for their cleaning lady.”

Shows how totally out of touch with reality these people are. That’s the 1% alright. Flaunting their wealth as the middle class disappears and the younger generations after the boomers choke in debt. Pathetic.

#108 Daisy Mae on 04.07.12 at 10:22 am

“…but it would be foolish to ignore the lessons learned south of the border,” adds mama grizzly.”

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

Why wasn’t the Canadian government paying attention to the USA sub-prime debacle before they started tampering with Canadian amortizations, creating our very own version of sub-primes? That was pure ignorance.

#109 Don on 04.07.12 at 10:28 am

To #102
All police assume there are guns/weapons
at all calls registered or not!!!

#110 Daisy Mae on 04.07.12 at 10:28 am

CARNEY: “And the consequence of that is consumption slows, growth slows, income slows, debt serviceability deteriorates, etc, etc.”

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

How profound…

#111 Daisy Mae on 04.07.12 at 10:35 am

“Like mama Cooper, he looks south and worries…”

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

I’m beginning to think the average ‘Joe’ on the street has more sense than these well-paid yahoos….

#112 Mr Buyer on 04.07.12 at 10:36 am

#73 CoCo on 04.07.12 at 2:41 am
Calgary prices have already decreased a friend just bought a 2600 sq ft house with all the bells and whistles for 530k. There’s only one way for house prices to go with Calgary’s booming economy and thats up.
………………………………………………………………………..
I do not think you understand the extent of the over extension of credit and the inflation of house prices. They are already well past their real value and …. forget it man. I am going to bed. BUYER BEWARE. NOW IS NOT THE TIME TO BUY A HOUSE. THE BUBBLE HAS TOPPED. HOUSES ARE WAY WAY WAY OVER PRICED. SALES ARE FALLING ALL ACROSS CANADA. BUYER BEWARE.

#113 stage1dave on 04.07.12 at 10:45 am

Re: the US jobs report, I see only one salient point.

Canada “created” 80,000 jobs…the USA (with an economy & population more than TEN TIMES as large!) “created” only 120,000 jobs?!

I wouldn’t be surprised if that “jobs” # could actually be turned into a net loss by the time demographics are taken into account, as one poster already noted.

Unfortunately, it looks like the overall economic picture in the USA has gone so far down the crapper that no one will have to bother to even flush!

#114 Daisy Mae on 04.07.12 at 10:48 am

#53 TO BUBBLE BOY: “…Chicken Little central banker.”

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

Instead Carney can be the Bank of Canada Chicken Little. Too little, too late.

#115 Tony Right on 04.07.12 at 10:57 am

Why would any intelligent person even read what bank economists have to say? These salespeople, er, I mean economists work for companies trying to make profits (jaw-dropping ones at that) and don’t give a crap about you or your well being (that’s why it’s smart to invest in them, like Garth advises, not believe them). #thinkforyourself

#116 Pounding sand in Peachland on 04.07.12 at 10:58 am

What are limo shoes?

#117 Canadian Watchdog on 04.07.12 at 10:59 am

#92 Market Bull

Sales: 2,664 x Average price: $517,495 = $1,378,606,680 Volume

April 2011 Total Volume: $4,316,236,999/4= $1,079,059,249 Volume

You better hope this picks up. I’m cheering for you.

#118 CrowdedElevatorfartz on 04.07.12 at 11:00 am

@ # 8 BPOE
re your statement……
” Winning”

Ahahahahahahahahahaahahahahahahahahahahhaa

I dont know which is more laughable.
The fact that you think that the hideously overbuilt stripmall communiy aka as “Ditchmond” is where “winners” live and drive like spastic alzheimers patients on prozac( ie no common sense or courtesy when behind the wheel).
OR
The fact that “Richman” is a flood plain surrounded by dykes….. A DISASTER waiting for the overdue 8.0+ earthquake and tsunami. Perhaps the images of the 30+ foot high wall of mud, water, crushed homes, cars, ships and all other detrius that Mother nature could crush Fukashima with have faded out of the limited gourd you call a brain….
Either way just Pray Cam Good will arrive at the last minute with one of his yellow helicopters to pluck you to safety.
Personally, I hope to ride out the Earthquake in my debt free home in Burnaby and when I watch Richmond sink beneath the sea and New Westminster becomes the new beach fron for the Lower Mainland I will remember you and pump my fist in the air and saw “Losing”!

#119 Scalgary on 04.07.12 at 11:17 am

“Sherry Cooper will again summon the media. ‘As I warned,’ she will say.”

Wish mama reads this blog…shame on her and fellow economists.

There is a difference between futuristic, responsible advise (which Garth does) and predictions that serve short term popularity & and money to those economists.

Sherry,

I am so irritated to hear that ‘stopped watch is right’ thing… It makes you look more ugly…

Sherry you are preaching all this after selling your million dollar house? Is it a coincidence or a well planned one? Because US housing market didn’t fall yesterday. Its a 4 year old news…

Shame on you Sherry…

#120 dd on 04.07.12 at 11:20 am

#21 Oil Patch Factor on 04.06.12 at 10:36 pm

Don’t know about Alberta real estate but oil stocks haven’t been doing to good
;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
Oil stocks are off because of the “deflation” scare being bantered around the last month. Suncor & CNQ all off a good amount … However oil is trading at an all time avg high. YA. Great time to buy.

#121 Canadian Watchdog on 04.07.12 at 11:21 am

Repost:

#92 Market Bull

Last week you posted this on Canadamortgagetrends.

Appraiser said…
Weekly TREB stats are out as of Mar.29, 2012:
Sales for the week: 2,452
Mean Sale Price: $518,613.

Sales: 2,452 x Average price: $518,613 = $1,271,639,076 Volume

April 1-5: Sales: 2,664 x Average price: $517,495 = $1,378,606,680 Volume

More sales, lower price. This is what happens when inventory starts coming back to the market as smart money begins to bail.

A reminder for you as to what happened last month with 2.99% mortgages.

Detached 416 $816,169 -0.3%
Detached 905 $563,157 -0.9%
Detached GTA $631,509 -0.7%

Semi Detached 416 $569,319 -2.7%
Semi Detached 905 $391,143 1.8%
Semi Detached GTA $455,392 -0.9%

Condo 416 $361,800 -2.6%
Condo 905 $275,826 2.1%
Condo GTA. $337,309 -1.1%

You better hope this picks up. I’m cheering for you.

#122 Ronaldo on 04.07.12 at 11:21 am

From a year ago.

http://canadabubble.com/bubble-watch/2072-signs-point-to-a-severe-housing-correction-in-canada.html

#123 Tim on 04.07.12 at 11:33 am

Carney is all talk. He’s taken no action, and his hands are tied by the fact that the US has almost guaranteed rates won’t rise significanly over the next 4 years

The Fed said two years, not four, of which 20 months remain. The BoC will move in advance. — Garth

#124 Market Bull on 04.07.12 at 11:45 am

Raising interest rates independant of the U.S. doing likewise can be a very tricky business. There could be serious repurcussions, not the least of which is a soaring loonie, reduced exports and a drop in consumer spending, as more money leaves the economy to service debt.

In addition, contractionary monetary policy is normally utilized to cool inflation. Inflation, notably core inflation, remains tame in both Canada and the U.S. with most economists, including the BoC, projecting lower inflation moving forward.

#125 Timbo on 04.07.12 at 11:47 am

http://www.guardian.co.uk/commentisfree/cifamerica/2012/apr/07/america-hall-mirrors-recovery-robert-reich?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+theguardian%2Fcommentisfree%2Frss+%28Comment+is+free%29&utm_content=Google+Feedfetcher

“American consumers, in short, are hitting a wall. They don’t dare save much less than they are now because their jobs are still insecure. They can’t borrow much more. Their home values are still dropping, and many are underwater – owing more on their homes than the homes are worth.

The economy has been growing, to be sure, but almost all the gains have gone to the very top. This is the most lopsided recovery on record.”

http://news.firedoglake.com/2012/04/06/hidden-dangers-makes-fiscal-cliff-more-treacherous/

Great video dedicated to all those Canadians standing on a cliff saddled with debt. It’s a long fall and it does not end well

#126 raider on 04.07.12 at 11:53 am

http://www.youtube.com/watch?v=kdvTkddp1F0
It looks like a lot of Canadians will be “Zhou-Tonged”. A somewhat related concept that is now getting popular in different circles. Is it a coincidence that both concepts have to deal in-part with HAM.

Background:
http://www.reuters.com/article/2012/04/02/us-traders-bitcoin-idUSBRE83108120120402
(This is probably even more odd than the canned tuna & gold camp, but it is interesting to see these developments from a distance)

#127 VICTORIA TEA PARTY on 04.07.12 at 11:53 am

IT’S THE WEATHER…CLIMATE CHANGE?!

“Great” employment stats in Canada along with so-so ones in the US, both reported earlier in the week, may have been given a boost by good ol’ Mother Nature. And not by economic “improvement.”

Warmer weather, it seems, may have brought forward demand for economic activities that would normally occur later in the year in the US.

This from the Washington Post about the latest US stats:

“Mild winter may have artificially inflated jobs data, economists fear.

As most Americans basked in the warmest, sunniest March in half a century, economists stared at the skies with dread:

Could good weather portend bad news for the economic recovery?

Economists say the mild winter has artificially inflated job growth. February alone stole as many as 72,000 positions from March and future months, according to Macroeconomic Advisers.

Translation: The surge in hiring early in the year may not be as strong as it appeared.

“When the weather does not follow a normal seasonal pattern, then the seasonal adjustment cannot adjust for it,” said Chris Varvares, senior managing director and co-founder of Macroeconomic Advisers.

Varvares’s firm estimates that 30 percent of the 227,000 jobs added in February were the result of warmer weather…

Economists are quick to note that even the revised numbers aren’t bad — they’re just not great. And that may help explain why recent data on consumer spending…looked rosier than actual economic growth would suggest.”

The US data also indicate that a record number of unemployment Americans have simply dropped off the “looking for a job” category.

HERE IN CANADA

Our brighter jobs picture was attributed to expanding economic activities in Central Canada, which also had a warm winter, but that “factor” was not part of TD Bank’s PR guy’s chatter about it:

“…To a large extent though, the March madness was simply of job statistics aligning themselves with economic reality, said Craig Alexander, chief economist at TDEconomics.

With the economy growing at about two per cent it should have been creating about 20,000 to 25,000 jobs a month, Alexander said. So considering there was no reported job creation in January and February, the March data — averaged over three months — shows a gain in line with economic growth of 27,000….”

SO…

Back in reality we have a monetary policy tsunami in the works here, with unknown real estate consequences; Europe which is, economically, functionally dysfunctional; and, China with an actively imploding real esate market, huge labour cost increases and a pissed-off proletariat.

IT’S NOT HUMAN!

Therefore, GLOBAL WARMING IS having an effect on us, an UNINTENDED consequence, here in Canada and the US, resulting in economic fiction being placed ahead of economic fact.

And I’d been brain-washed into thinking that Polar Bears were the “only victims!”

It’s not the bears, it’s my WALLET!

#128 mousey on 04.07.12 at 11:54 am

I thought Turbot was a sardine like fish that yeilded tremendous amounts of oil and that was ultimately overfished to the point of extinction on BC’s west coast. Friend wrote an obscure, but interesting paper on it. Did you read it Garth?

#129 Timbo on 04.07.12 at 11:55 am

http://www.nytimes.com/2012/04/07/business/economy/some-dreary-forecasts-from-recovery-skeptics.html?_r=1&ref=business

“The bears point to weakness underlying current numbers. Disposable personal income, a measure of how much money Americans have left over once they have paid their taxes, has barely been increasing of late, raising questions about how much spending the debt-soaked American consumer can contribute to the recovery. The shock of growth at the end of 2011, which gave a shot in the arm to economic confidence this spring, came mostly from wholesalers restocking their inventories as well. ”

http://viableopposition.blogspot.ca/2012/04/slowing-velocity-of-money-what-is-it.html

“Now, let’s look at what has happened to the velocity of money over the past few decades and its relationship to recessions starting with M1 followed by M2. Note that the velocity of M2 has dropped to lows not seen since the early 1960s.”

the velocity of m2 is heading for the basement and that is where a recession lives.

#130 Kris on 04.07.12 at 11:57 am

I know people on VRMs who recently took the 3%-for-5yr deals as a lifeline. Conceivably majority of Cdns are coasting on variable rates, waiting and watching for Carney’s first 0.25% rate increase – Then they’ll lock in.

Higher rates (+ OSFI LTV rules) will impact new buyers as well as renewals in 3-5 years time. Don’t expect rates to drive people outta their homes immeidately, like in the US. Garth is talking about a slow melt, I believe.

#131 Form Man on 04.07.12 at 12:08 pm

#107 Daisy Mae

If it was ignorance, I would be slightly reassured. Unfortunately, it appears to have been ideology mixed with a cynical ploy for votes. I believe Harper and Flaherty knew their policies would juice the market, creating jobs ( and votes ), and they also figured they were smarter than George Bush, and could manage it so no bubble would be created. They are not smarter than anyone, and now we will follow the U.S. down exactly the same housing crash trajectory, proving the old adage that a ‘ conservative’ is someone who keeps trying the same thing over and over, hoping for a different result. ( not unlike the foolishness espoused by westernman, eagle bay, and DA )

#132 Ronaldo on 04.07.12 at 12:22 pm

#64 – Mr. Buyer – ”Just watch how fast it happens when we pass from the sales falling to the prices dropping phase. It will be ludicrous speed on NOX.”

Below is an example of what happened in 1974 to average house prices in West Vancouver beginning in January.

January 91,618
February 102,392
June ”Peak” 106,362
July 101,805
August 97,933
September 82,138

From the peak in June, average house declined by 24,224 or 22.8%. However, given mathematics the way it is, it would have to gain 29.5% to get back to its high in June.

Do I think the same could happen now. You betcha.

#133 Ronaldo on 04.07.12 at 12:30 pm

#63 Mr. Buyer – and there are these possibilities.

http://www.cbj.ca/business_news/canadian_business_news/28_12_firm_says_thousands_of_oilsands_jobs_could_lea.html

#134 Westernman on 04.07.12 at 12:33 pm

Beach Girl @ # 84,
First of all I would like to Congratulate you on your expenditure of time/effort and money for absolutely no return…
And number two, I don’t think I am superior, I KNOW I am, my results prove it…

#135 truth hammer on 04.07.12 at 12:47 pm

Garth I think you’re wrong about ‘Carnage’ Marc Carney. He has stated that monetary policy as it defines his mandate as BOC Gov is not his concern….not inflation…nor orderly exchange of the countries currency……he said yesterday that he was only concerned that sheeple would stop spending if he ratcheted the spigot even a notch.

As you pointed out in the Cooper example…the mandate of the mucky mucks is to be as two faced as possible in order to profit as much personally as possible.

But still they pimp the poo….as in this article about how horny young pups should be learning to whine and coerce parents and grandparents for the ‘all important down payment’…which without the kvetching…and the whining…..and the tantrums will sink a boatload of new applications.

http://www.vancouversun.com/business/First+time+buyers+have+options+that+important+down+payment/6419013/story.html

The pimps have learned from advertisers how this works…many major retailers use the same tactics against parents by teaching the kids tactics on how to act when wanting to coerce a parent into a favorite restaurant or toy purchase.

#136 Ronaldo on 04.07.12 at 12:48 pm

This is what Sherry had to say on Feb. 27, 2009 a week after the banks lost 50% of their value and started their tremendous comeback.

http://bmonb.com/economics/bottomline/20090227/bottomline.pdf

Check out her latest articles:

http://www.sherrycooper.com/

#137 Canadian Watchdog on 04.07.12 at 1:02 pm

Broker Raises Red flag On Collateral Mortgage Abuse

http://www.mortgagebrokernews.ca/forum/broker-raises-red-flag-on-collateral-mortgage-abuse/123609/

“I have noticed on many power of sale docs that we have received that when the client has a collateral mortgage the bank has been including all unsecured debt such as overdrafts and credit cards,” Paul Mangion, principal broker of The Mortgage Centre -

“They are even refusing to lower their collateral charge to let the clients seek financing from other sources,” he said Thursday. “The main big banks are the worst offenders, and I have even seen CIBC use balances from customers’ lines of credit to pay a credit card and then cancel it.”

Beware.

#138 Ronaldo on 04.07.12 at 1:10 pm

A possible scenario for cost cutting in the oil sands.

http://www.im-mining.com/2012/01/01/automation-remote-mining/

This is the sort of thing that happens as prices and wages escalate and companies have to find ways of cutting back.

#139 brainsail on 04.07.12 at 1:20 pm

#115 Pounding sand in Peachland

“What are limo shoes?”

You wouldn’t see them at Macdonalds.

#140 Sherry Cooper on 04.07.12 at 1:31 pm

Oh Garth……I was wrong…please take me back !…I will even leave the guy in the orange shorts !

#141 Daisy Mae on 04.07.12 at 1:51 pm

Form Man on 04.07.12 at 12:08 pm
#107 Daisy Mae

“If it was ignorance, I would be slightly reassured. Unfortunately, it appears to have been ideology mixed with a cynical ploy for votes. I believe Harper and Flaherty knew their policies would juice the market, creating jobs (and votes) and they also figured they were smarter than George Bush, and could manage it so no bubble would be created. They are not smarter than anyone, and now we will follow the U.S. down exactly the same housing crash trajectory, proving the old adage that a ‘ conservative’ is someone who keeps trying the same thing over and over, hoping for a different result…”

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

You’re absolutely correct. I just don’t have a devious mind and so, don’t pick up on this. LOL

I do know, however, I have never trusted Harper and his cohorts — they are not ‘smart’ as the situation they’ve created it’s now back-firing.

#142 Market Bull on 04.07.12 at 1:54 pm

@Canadian Watchdog wrote: “More sales, lower price. This is what happens when inventory starts coming back to the market as smart money begins to bail.”
_____________________________________________

You must be a sucker for ridicule Watchdog.

The week over week price drop you espouse amounts to a statistically insignificant .002%, which I can’t believe you are actually trumpetting. Talk about a desperate.

As for active listings, months of inventory are at a nine-year low! See for yourself: http://guava.ca/indicators.html

#143 Mark W on 04.07.12 at 1:55 pm

http://www.winnipegfreepress.com/business/fixer-upper-attracts-unprecedented-72-offers-selling-prices-around-the-city-146514615.html

OK, everyone knows that prices are out of control in places like Vancouver and Toronto.
The basic position given by the real estate industry is demographics and land pressures, etc.
That is a given.
But look at this story out of Winnipeg.
This really makes no sense.
Is there real population growth in Winnipeg?
Not that I am aware of.
Is there a critical shortage of land in Manitoba?
Let’s see, the answer to that would be NO!
In fact Winnipeg is a rust belt city in decline, but people are lining up to bid more than $80,000 over asking price in an inner city neighborhood, which is not really that nice of an area quite frankly.
I used to live in Winnipeg in an area that could be described as quite rough similair to this one.
My parents sold my Grandmothers home for $31,900.00 there in 2000.
Now the prices in this area have gone up by about 250% to 300%, and I was thinking maybe this area is getting better.
So I am in Winnipeg and I go into the old area, and find that it has turned from a dump to a real dump.
Yet the prices have gone up by this amount.
Really makes no sense.
When all these baby boomers born from 1947 to 1954 retire in a few years in Winnipeg, a city with zero growth, who are they going to sell their homes too?
I suggest this to people living in Winnipeg and they get angry with me.
Drinking the cool aid in the Peg.

#144 Beach Girl on 04.07.12 at 2:10 pm

#133 Westernman on 04.07.12 at 12:33 pm

Beach Girl @ # 84,
First of all I would like to Congratulate you on your expenditure of time/effort and money for absolutely no return…
And number two, I don’t think I am superior, I KNOW I am, my results prove it…

___

Alright, give us a few examples of your superiority. What are you worth, what do you have, and what do you do? What do you aspire to?

What exactly are your results? No bullshit, reveal yourself. If you are all that. I somewhat doubt it. But, give us the benefit of judging your elevated existence on this planet, where we mere mortals exist.

#145 The American on 04.07.12 at 2:16 pm

Wow, now that is some horrible facial work. I’d say she should consider going to Dallas, TX, or Los Angeles, CA the next time she needs something nipped, tucked, stretched, injected, pulled, or tattooed.

http://www.google.com/imgres?q=sherry+cooper&um=1&hl=en&sa=N&biw=1107&bih=608&tbm=isch&tbnid=z2xH4cuf0F-STM:&imgrefurl=http://www.bmo.com/home/about/banking/corporate-information/executive-bios/sherry-cooper&docid=DBSSjTBgcLzfRM&imgurl=http://www.bmo.com/bmo/files/images/4/1/Cooper_Jan2011highres919.jpg&w=1500&h=2100&ei=kIKAT7PaG8XPiAKf3-2zAw&zoom=1&iact=hc&vpx=111&vpy=140&dur=3757&hovh=266&hovw=190&tx=134&ty=156&sig=110157640156755528364&page=1&tbnh=115&tbnw=92&start=0&ndsp=21&ved=1t:429,r:0,s:0,i:83

#146 Ronaldo on 04.07.12 at 2:30 pm

#127 mousey – do you remember “Turbot Tobin”, premier of Newfoundland.

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

#147 Incubus on 04.07.12 at 2:55 pm

While in Spain :

“Santander, the eurozone’s largest bank, was responsible for the frenzy in Sesena. It offered two-bedroom apartments around a communal swimming pool for 65,000 euros (US$86,100), with 100% mortgages over 40 years, costing as little as 242 euros a month to service, about a sixth of the average Spaniard’s monthly income.”

http://business.financialpost.com/2012/04/06/bank-stampede-keeps-spanish-real-estate-on-the-ropes/

#148 Ronaldo on 04.07.12 at 3:00 pm

#117 – CrowdedElevatorFartz – ”just Pray Cam Good will arrive at the last minute with one of his yellow helicopters to pluck you to safety.”

Or you could have this guy pick you up in his.

http://www.youtube.com/watch?v=IkAK6gzc3Kw

At least when Donald is flying around with his fellow billionaires, he does it in style. Cam needs to update his yellow helicopter if he is going to make any impression at all with all those Chinese billionaires is supposedly flying around with.

#149 Westernman on 04.07.12 at 3:05 pm

Beach Girl @ # 143,
As I once informed Form Man and Herbie ( friends of yours, no? ) I don’t have to justify myself to anyone – especially to the likes of you.
As my Father once told me, ” Never argue with idiots son, they’ll just drag you down to thier level and beat you with experience “…
I have always lived by this ( it’s served me well ) and see no reason to break a working protocol …

#150 Canadian Watchdog on 04.07.12 at 3:14 pm

As for active listings, months of inventory are at a nine-year low! See for yourself: http://guava.ca/indicators.html

2.99% mortgages, all time low inventory with an early spring season; this was the best prices could do with every favorable market condition possible? An imbecile is one who touts bearish news thinking it’s bullish. You are the greater fool.

#151 Makavelli on 04.07.12 at 3:53 pm

#139 Sherry Cooper on 04.07.12 at 1:31 pm

Oh Garth……I was wrong…please take me back !…I will even leave the guy in the orange shorts !
****************************************

Garth is now Interested in young Asian hotties. Dr Cooper is too old and not quite as fresh anymore. Damn I love them Asian cuties, God made the most of them for a reason.

#152 Harlee on 04.07.12 at 3:55 pm

#143 Beach Girl
As you can see by his answer @ 148 there is no use trying to get anything out of ” Occidental homo”. He has to pump himself up because ,sure in hell, nobody that comes with-in his presence is going to do it. They’ve got too much sense and intelligence to lower themselves to such an action. Sorry BG, but getting a guy like him to “share” is impossible. Arrogant stubborness. He’s not even going to tell us when he plans to get that #2 kerosene going! From now on, ignore him and maybe he’ll just fade away (like General MacArthur….). We can hope anyway.

#153 NoName on 04.07.12 at 4:24 pm

maybe i am getting it wrong, but what $heririli did looks to me like classic pump and dump example from text book…
market is good…
nice doing bussines with you…
market is not good any more…

shame on you BOOMERS…

#154 Randy on 04.07.12 at 4:29 pm

“So while American prices dropped quickly in 2008, I expect Canadian prices to drop even more rapidly, particularly if their is upward interest rate pressure as a result of more trouble in Europe.”

“Anecdotal evidence from the town I live in, suggests the bubble has already burst. A small, older house not far from me was listed at $140,000 by a real estate firm that has the reputation to list close to market value. It just sold for $116,000 – 17% below list price.”

http://whatisthatwhistlingsound.blogspot.ca/2012/04/canadas-bursting-bubble.html

#155 jess on 04.07.12 at 4:41 pm

pathetic shell game online payday loans banking

a multilayered façade…and tribal immunity

http://www.iwatchnews.org/2012/04/02/8581/impact-tribal-payday-lender-sued-federal-trade-commission

#156 Westernman on 04.07.12 at 5:00 pm

Harlee @ # 151,
Attaboy Saskquatch, to the rescue of the fair damsel menaced by the evil Westernman… feel like a hero now? I guess living in Sask. makes you desperate enough to try anything to salvage what’s left of one’s self esteem…
I think you were another one I had to spank with the ” I don’t have to justify myself ” retort…
How’s it feel to be in the same catagory as Form Man and Herbie…?

#157 Market Bull on 04.07.12 at 5:03 pm

Canadian Watchdog wrote: “An imbecile is one who touts bearish news thinking it’s bullish. You are the greater fool.”
_____________________________________________

So the latest TREB stats are “bearish?”

Let me guess. When you were little, your mama dropped you on your head, right?

#158 Ben on 04.07.12 at 5:13 pm

Low interest rates is cutting into the feds tax take.

People have HUGE HELOC’s and are using 100% of them for investments. They’re making income each and every month from dividends, more than the cost of interest on the HELOC’s. They get a tax write-off every year to boot, which lowers the tax they pay.

If interest rates go up, they can just sell all of their investments and close the HELOC.

#159 Herb on 04.07.12 at 5:19 pm

#148 Westernmoron,

As my Father once told me, ” Never argue with idiots son, they’ll just drag you down to thier [sic] level and beat you with experience”

That was a smart man! So who was your real father?

In case you hadn’t noticed, I gave up arguing with you weeks ago. It’s just that the devil makes me slap you down when you lead with your chin.

#160 Westernman on 04.07.12 at 5:27 pm

Herb @ # 158,
I imagine you did give up debating me … you showed up with nothing except an alleged mind filled with socialist, do-gooder, new-age, politically correct gibberish…
Don’t try floating your willful ignorance as an attack on my common sense and logic … you’ll lose every single time…

#161 Country Girl on 04.07.12 at 5:53 pm

#114 Tony

Yes, I agree. In this article BMO are selling (using scare tactics) the idea of locking into a 10 year mortgage.

#162 Kam on 04.07.12 at 5:56 pm

ECONOMIC INDICATOR REPORT-TORONTO-FEB 2012

NEW HOMES SALES – TORONTO[ -42%] [JAN 11 VS JAN 12]

http://www.toronto.ca/business_publications/indicators.htm

#163 maxx on 04.07.12 at 6:07 pm

#1 george on 04.06.12 at 9:35 pm -

“….reckless policies of manipulation over the laws of supply and demand ultimately create more harm than good.”

Absolutely fascinating article and well worth the read. Thanks for sharing.

#164 Pr on 04.07.12 at 6:51 pm

One his a hair dresser they other a nails beauty specialist, both 25 years old, and now, in their free time, they flip house! They arrive in a broken car, no cash, and no economic knowledge. I ask them; Do you know what is The bank of canada, Mark carney, compound interest, fractional reserve, Jim Flaherty. Clueless both,like millions of Canadians! We are,like greece,spain,ireland,portugual, usa…finish!

#165 Mark on 04.07.12 at 6:55 pm

#21, “From everything I have heard in the industry – there is a massive labor shortage. With such demand and high salaries, I do not see the party ending.”

From everything I’ve heard, the industry isn’t really going anywhere at the moment. The Calgary economy is deflating because it was driven by the RE bubble, not by oil in the past decade. People are so broke that the oil companies can barely even give away their stock right now. The uncertainty over the pipelines, and the lack of competitiveness of oilsands oil (versus Bakken and other US sources) have brought the sector into a state of stagnation.

But, looking on the bright side, since Saskatchewan’s prices are now higher than Calgary’s in many circumstances, there’s no longer a huge arbitrage play by selling Calgary RE, and moving to Saskatoon/Regina.

#166 betamax on 04.07.12 at 7:33 pm

#148 Westernman: “I have always lived by this…”

You argue here constantly — in just about every post you’re arguing with someone.

And refusing to justify your argument is just arguing badly.

#167 South of 49 on 04.07.12 at 7:58 pm

Now that Sherry Cooper has sold her house, is she now renting and invested her house profit in a balanced portfolio of income producing investments?

#168 Westernman on 04.07.12 at 8:12 pm

betamax @ # 162,
Wrong. I don’t argue… I make accurate, truthful, insightful observations and comments.
Then I leave the sheeple to argue among themselves over said entrys…

#169 Onemorething on 04.07.12 at 8:13 pm

#64 Mr Buyer on 04.07.12 at 1:36 am

#25 Onemorething on 04.06.12 at 10:56 pm…Put it this way, it will take 10 years but when a 2.0M property in VAN drops to 750K, or a 1.2M in TO drops to 500K then we’ll have learned our lesson. Not before!
……………………………………………………………………….
In your dreams. Just watch how fast it happens when we pass from the sales falling to the prices dropping phase. It will be ludicrous speed on NOX

If you mean pace and you think I’m dreaming on the 10 years then I’d like nothing to do but agree however there are back pocket tricks to slow the pace, just like in the US which puts us 4 years to 33% National avg down and another 4 years likely to squeeze the last 15-18% out, so that’s a total of 8 and then bulldozing the shadow inventory and endless trying to find a bottom.

In Canada we might see the first 15% national avg come off pretty quickly but in individual markets like VAN and TO the 40-50% will take some time (maybe not the condo market).

The last phase into the 10 year program is the last 15-20% down in those markets. Takes time! Boomers wont want to leave those homes until they do the ‘I cant afford to retire’ math and have no choice.

#170 Onemorething on 04.07.12 at 8:18 pm

The Sunshine Coast (AUS) Property Owner I know just asked me if I wanted to consider the property I looked at over Xmas.

You may recall it was valued at 2.2M AUD and I said I would wait for 900K. It has already gone down to 1.8M so just another 50% to go on this absolutely gorgeous property!

Just waiting for that same Whistler and Okan props I’ve got my eye on to start doing the same, but wait it has!

#171 Herb on 04.07.12 at 8:26 pm

#159 Westernmoron,

it’s spelled “flouting”, Dummy.

#172 jess on 04.07.12 at 8:33 pm

daisy mae

…next will come the we were duped defense.

Price Waterhouse India /Satyam
http://retheauditors.com/2011/04/11/not-over-until-its-over-price-waterhouse-india-settles-satyam/

In auditing Satyam’s financial statements, PW Bangalore and Lovelock used a procedure to test Satyam’s cash balance that did not comply with the PCAOB auditing standard governing the confirmation process. Contrary to their own audit plan and PCAOB standards, PW Bangalore and Lovelock relied on Satyam management to send confirmation requests to Satyam’s banks, and relied on Satyam management to return purported confirmation responses from the banks to the auditors.
http://pcaobus.org/News/Releases/Pages/04052011_DisciplinaryOrders.aspx

#173 AG Sage on 04.07.12 at 8:34 pm

Fascinating what a blindside she had with ownership. Or she’s the queen of duplicitous. Take your pick.

#174 Poorboy on 04.07.12 at 8:39 pm

#167 Westernman

Wrong. I don’t argue… I make accurate, truthful, insightful observations and comments.
Then I leave the sheeple to argue among themselves over said entrys…

Lol. Internet all-star (in his own mind). How’s the eFame working out for you?

#175 Westernman on 04.07.12 at 8:40 pm

Herbie @ # 170,
I typed floating and I meant floating – what are you – a spelling Nazi?

#176 Fleabitten Monkey on 04.07.12 at 8:52 pm

#122 Tim
BoC does not necessarily follow the Fed. Carney has indicated as such in the past. BoC will move ahead of them guaranteed.

#177 Westernman on 04.07.12 at 8:56 pm

Poorboy @ # 173,
eFame? I don’t know anything about that but it’s an amusing way to to pass a day when your all caught up with your chores and the weather’s crappy.
Like I’ve said before, there’s no better value for one’s entertainment dollar than poking fun at the indignant Canadians… it’s kinda like teasing the monkeys at the zoo…

#178 coastal on 04.07.12 at 9:06 pm

Sherry Cooper’s turkey neck and raspy shrill voice is enough to make me hit the mute button. She’s Canada’s answer to Joan Rivers over zealous silicone infatuation. Ever since her call that Canadian currency will get taken over by the USA back at 60 cents the woman has turned herself into the joke of the Canadian business media.

Almost as bad as the Victoria housing blog who are now spewing more anti-Garth bits wrongly claiming that he touts stocks, while they pathetically argue about useless percentage points of GDP and income growth and the local real estate ho pumps his “everyone is stupid but me” factoids about everyone in Victoria is mortgage free. This blog is such a blessing.

‘This blog is such a blessing.’ Then don’t screw it up with ‘turkey neck’ talk. Stick to what matters. Bless you. — Garth

#179 SE Asian Expat on 04.07.12 at 9:16 pm

#72 Scib

“Sherry Cooper – Obsequious sycophantic boot licking hypocrite with a narcissistic complex.”

OUCH! ;)

#180 jess on 04.07.12 at 9:18 pm

159 Westernman

states created markets and markets require states
t or f

and using your logic and history as your guide could you please explain your answer

#181 John G. Young on 04.07.12 at 9:20 pm

#174 Westernman on 04.07.12 at 8:40 pm

“I typed floating and I meant floating – what are you – a spelling Nazi?

#167 Westernman on 04.07.12 at 8:12 pm

“…then I leave the sheeple to argue among themselves over said entrys…”

So I assume that because you typed “entrys”, you meant “entrys”, which of course is not a word — although “entries” is, Dummy.

I’m a proud spelling Nazi.
And I’m an American.
And you’re a troll and a waste of space.

#182 coastal on 04.07.12 at 9:22 pm

2012 Proving to Be Tough Year for Victoria Real Estate So Far

http://www.youtube.com/watch?v=1E0vkG6J1oo

#183 John G. Young on 04.07.12 at 9:25 pm

#176 Westernman on 04.07.12 at 8:56 pm

“…it’s an amusing way to to pass a day when your all caught up with your chores”

That’s “you’re”, Dummy.

Keep ‘em coming, loser.

#184 coastal on 04.07.12 at 9:26 pm

‘This blog is such a blessing.’ Then don’t screw it up with ‘turkey neck’ talk. Stick to what matters. Bless you. — Garth

OK, I take that part back, we’ll all have one sooner or later.

#185 Westernman on 04.07.12 at 9:38 pm

John G. Young,
You seem awfully concerned with punctuation… are you sure you’re ( hope thats spelled right ) not a little light in the loafers and have a somewhat unnatural interest in home decorating as well…?

#186 Blog Dog Carney on 04.07.12 at 10:03 pm

162 Maxx wrt the link 1 George posted. Due to my heavy workload, I only read a portion and prepared this brief
rebuttal on the first item listed – deflation.

The author immediately confuses “deflation” with
market “corrections”. Markets have always corrected when they overshoot. I expect the RE market to correct,
and at some point, the stock market to correct, gold
market, oil market etc. I also expect prices to fall on items where improved technology increases productivity, other factors being equal.

Our concern – and it should be yours too – is a deflationary spiral, similar to the great depression,
where consumptions is put on hold with the anticipation
of products and services being lower in price, and lower still the longer you wait. If you know anyone who lived
during this time aka the “dirty thirties” they can explain
to you the widespread economic ruin this causes.

In the meantime, I ask for your patience (as mine is constantly tested as well). The rate rise will occur.

Garth – I bought some new leathers for our ride. Sweet!

#187 BC Bring Cash on 04.07.12 at 10:11 pm

Off topic a bit. Newt Gingrich one of the GOP candidates fortheir nominee promises $2.50 gasoline per gallon. Meanwhile he proposes bombing Iran into the stone age. I wonder if he has considered that Iran supplies 20% of the worlds oil and the Strait of Hormuz transports 40% of the worlds oil supply. If his wish came true then the price of gasoline in the US could become for example $10.00 a gallon or more. What a wacko. The scary part is that he was a serious contender.

#188 John on 04.07.12 at 10:40 pm

Being a Canadian who has paid very little attention to what’s been happening in Canada for a long time…the last two months have been startling. Plus, any truthful discussion about politics or the economy was pretty much non-existent. I’d read The Toronto Star on-line a couple of times a year.

For important times like these, you’d hope there’d be some key actors who are at least somewhat saavy…independent of their beliefs and actions.

Then I come across this little video on youtube of Sherry giving an opinion. I just don’t know what to think now.

She’s clearly on medication and not well…and that’s in no way disrespectful or putting her down. She’s not healthy at all. And this is a key actor in “Canadian” finance? Wow. That’s amazing.

http://www.youtube.com/watch?v=zA-EwGYrzhw&feature=youtube_gdata_player

#189 truth hammer on 04.07.12 at 10:59 pm

#117..CEF…..you’re wrong about Richmond being ‘surrounded by dykes’…..it is enclosed on three sides only…..East Richmond, quite clearly shown on the boundary map, is entirely exposed to inundation from the Queensboro/New Westminister section of the Fraser River. If any type of flood, tsunami or freak tide should ever rush up the mighty Fraser……The city of Richmond would fill up like a wet bag with no way of allowing water to receded except for natural percolation either through the current drain system……thats the really deep ditches Richmond is famous for….or a massive pumping triump over the walls of dykes now standing….North, South and West of the city.

Sorry to correct you….but I was sure you’d like this little factoid…as it is a common misconception that Richmond is in any way prepared for a disaster.

The other hugely funny thing is too look at the sub soil geology…….thats a doozy…….rivulets of semi solid clay…..packed with not so solid organic materials. If you fail to see any large structures east of #4 Rd…..you know why……….they don’t make pylons long enough to reach bedrock on which to build a foundation for any permanent structures……………….now you know why all those temples, churches and places of worship along #5 Rd….Richmonds ‘HGy to Heaven’ are considered ‘impermanent structures’ and are allowed to occupy ALR land….temporarily. …….it’s because the city can’t insure the engineering certs it would need to issue any building permits.

If the big one hits…….Richmond reverts back to a bird sanctuary…….and wetland.

#190 disciple on 04.07.12 at 11:03 pm

2012 Something is Going On – Earth Changes. I’m starting to get bad vibes, I don’t want to acknowledge my intuition but I found this compilation: If you are afraid, do not click.
Please.
http://www.youtube.com/watch?feature=player_embedded&v=Hk-3MU-rc0M#!

#191 disciple on 04.07.12 at 11:07 pm

Has anyone else out there lost the taste for meat? I’m hearing it’s a sign… sorry, possible sign, of some impending/approaching… thing.

#192 brainsail on 04.07.12 at 11:25 pm

We just finished watching a great Sci-Fi called “In Time”. It made us think about people are who drowning in debt.

Imagine a society whose currency is based on how much time you have to live. When you are born you are given 25 years. When you work you are paid with additional time to live. If you need to pay for something time is subtracted from your balance of time to live. If you run out of time you die instantly.

It is a very stressful society to live in because the government wants inflation so they can add more time to their pockets. One day your transit fare costs one hour of your life and the next day it is two hours. Sound familiar?

Happy Easter Sunday. Here in central Texas we will drive to visit out boat using $3.75/gal gas and return home to cook our $5.99/lb fresh boneless leg of lamb.

#193 John G. Young on 04.07.12 at 11:46 pm

#184 Westernman on 04.07.12 at 9:38 pm

“You seem awfully concerned with punctuation… are you sure you’re ( hope thats spelled right ) not a little light in the loafers and have a somewhat unnatural interest in home decorating as well…?”

Not concerned with punctuation, just with supporting the most basic level of civility on this blog, something you are clearly not interested in and/or capable of.

At 6’5″ and 235 lbs, I’m definitely not light in the loafers (Rockports actually). If your reference to interior decorating is your coy way of asking me out on a date, sorry, you’re not my type.

Now why don’t you go shoot something so you can feel like a man — like a Westernman!

#194 Monster Cookie on 04.07.12 at 11:56 pm

#179 jess on 04.07.12 at 9:18 pm

159 Westernman

states created markets and markets require states
t or f

and using your logic and history as your guide could you please explain your answer

People make the market and the state is made of people.
Any more questions?

#195 John G. Young on 04.08.12 at 12:02 am

#187 John on 04.07.12 at 10:40 pm

Just watched that video. I’ve never seen Ms. Cooper on video before so I have nothing to compare it to, but I would agree that there seems to be something more than just personal mannerisms at play here. For example, her voice seems weak and tremulous, and the frequent lip-licking suggests that her mouth is dry; these behaviours might be anxiety-related, or possibly side effects of medications.
And regarding the content — we’re not even going to go there.

#196 Mr Buyer on 04.08.12 at 12:03 am

#185 Blog Dog Carney on 04.07.12 at 10:03 pm…Our concern – and it should be yours too – is a deflationary spiral, similar to the great depression,
where consumptions is put on hold with the anticipation
of products and services being lower in price
………………………………………………………………………..
Nice little circular bit of rational. Kind of like a hamster wheel. So if I am not mistaken you would have people buying houses at these horrendously inflated prices to stave off a depression (I am being purposely obtuse here as you are, that should be one of the definitions of a politician). If people continue consuming houses at these prices there will be nothing left to consume other goods with. DO NOT CONTINUE CONSUMING HOUSES AT THIS TIME. SALES ARE FALLING ACROSS CANADA AND YOU WILL NOT BE ABLE TO GET YOUR CASH OUT OF THE HOUSE YOU BUY NOW AS THE BUBBLE HAS TOPPED. YOU MUST WAIT AND CONSUME HOUSES AT A MUCH LOWER PRICE IN THE FUTURE. IF YOU BUY NOW YOUR FAMILY WILL FALL INTO A DEPRESSION THAT WILL LAST MUCH LONGER THAN A DECADE.
PS. I picked up some Kevlar gear and a rice rocket so I will tag along . On second thought, if you ride anywhere near the same way you run the economy I will stay home.

#197 MM on 04.08.12 at 1:03 am

#184 Westernman

you’re a bit of a lightweight yourself, always floating the rules of grammar, and skirting the difficult questions

#198 blase on 04.08.12 at 1:15 am

Westernman,

Your bigoted comments reflect badly on Western Canadians, and enforce stereotypes that don’t apply to most Western Canadians.

Try to attack the message of your opponent, and not make bigoted remarks. It’s not difficult, as I’m sure you wouldn’t make such comments to Mr. Young in person. Try to treat the internet as not something to hide behind, but something to enhance communication and broaden your mind. Thanks.

#199 Canuck Abroad on 04.08.12 at 2:13 am

Garth, there is a website I visit occasionally because it has nice pictures and I like to follow the zeitgeist of real estate from several different perspectives (no offence). It is:
http://themashcanada.blogspot.co.uk/

Anyway, here’s the thing. It seems not only are prices in Toronto not falling, but vendors are putting their prices UP. And it seems everything is selling for well over asking because buyers have bid and lost several times and are now so desperate they will pay anything, ANYTHING.

I know I like to mock the “Manhattanisation of Toronto” but could TO become a destination for cash fleeing political unrest (e.g. Iranian money)?

Also, what is your opinion of Montreal prices? Due to correct as well? Montreal has greater unemployment problems I think, so logically it should, although it hasn’t had the same run-up as other cities.

Finally, why has there been no coverage in the press that now if you want to travel between Canada and the UK you must now get permission from the Americans, even if you are travelling on a Cdn or UK passport and even if you are not flying over US airspace? I would love to know which politician threw Canada’s sovereignty under the bus.

http://www.independent.co.uk/travel/news-and-advice/planning-a-trip-to-canada-or-the-caribbean-us-immigration-may-have-other-ideas-7584912.html

#200 Timbo on 04.08.12 at 3:17 am

http://www.therepublic.com/view/story/dfe56d9995934f98b5269c35def766ce/CA–LA-Budget-Woes/

“Without cutting costs and coming up with about $150 million in new income, “we’re facing the complete devastation of city services, including public safety,” he said.”

http://www.timesheraldonline.com/ci_20302376/city-fairfield-will-be-asked-declare-fiscal-emergency

“Quinn is asking the City Council to approve a plan to cut millions more from the city’s budget by closing, or severely limiting, operating hours at most, if not all, community facilities and reducing police and fire services. He’s also proposing to eliminate most, if not all, code enforcement and crime, drug and gang prevention activities and resources for street maintenance. Also proposed is outsourcing the city’s entire planning and building inspection activities.”

Now for a moment, imagine what it is going to be like when the boomers ,retiring in droves, pull back on spending.

#201 Harlee on 04.08.12 at 4:48 am

That guy at #155
Saskquatch ,is it ? Actually my heroic inclinations lean more towards Zorro and King Arthur . And when I’m in my Canadian “socialist ,do-gooder,new age ” mood then I’m Robin Hood (without the green tights !).
Now that we’ve got that cleared up I’m still waiting to hear about this fetish you have for #2 kerosene . Come on, man-up and tell us why you’d want to light fire to your genitals. You can tease us “indignant” Canadians all you want (who…cares?)but what really interests us Canucks are crazy Americans like you that want to set a bonfire to their privates. Now…that would be an interesting post….

#202 Timbo on 04.08.12 at 6:01 am

http://theeconomiccollapseblog.com/archives/19-signs-of-very-serious-economic-trouble-on-the-horizon

” We should enjoy these last fleeing moments of tremendous prosperity for as long as we can, because when they are gone they won’t be coming back. As I noted the other day, all of this false prosperity in the United States has been financed by the 15 trillion dollar party that we have been enjoying. We are adding about 150 million dollars to our debt every single hour so that we can continue to enjoy an inflated standard of living. Unfortunately, nobody in the history of the world has ever been able to keep a debt spiral going indefinitely, and our debt bubble will burst eventually as well.”

http://market-ticker.org/akcs-www?post=204336

“Exactly where the corner is — where the people of this nation, or those of Greece — decide that peaceful revolution and reformation of their government and enforcement of the rule of law through political means has become impossible is in and of itself impossible to determine with certainty”

Its not over yet…

#203 daystar on 04.08.12 at 7:41 am

It seems as though some commentors have a disconnection between what roles BoC play in our economy, what its very identity is as an institution and its full responsibilities to the government of Canada and ultimately every single Canadian from the taxpayer, to the voter, to those who are dependent on the very systems who make this nation strong so I’ve decided to take a little time (4.5 hrs) to shine some light on just what the BoC does to serve Canadians and for this, I need some help. I need for readers to take some time and familiarize themselves with the information provided in the links.

http://www.bankofcanada.ca/about/who-we-are/

Canadians take note: You all own the Bank of Canada as its a crown corporation of the government of Canada. As such, each taxpayer and voter including those who cannot independently support themselves financially or otherwise has a stake in the Bank of Canada. Essentially, the Bank of Canada is in service to all Canadians. As such, its role is to work in harmony with Canada’s elected representatives and systems of democracy and finance within the parameters that are outined on its website.

Lets not kid ourselves about the role of the BoC in terms of its responsibility and service to Canada and its evolution developed through service throughout Canada’s history since 1934. Elected governments come and go but the BoC has remained throughout the decades of economic growth and change in Canada
with the duty to serve all Canadians through the changing times. The Boc as an institution in service to Canada has evolved from the ages with but one goal which is to serve Canada by strengthening Canada’s financial security, stability and stewardship through the evolving dynamic changes of our national and international economies. Simply put, the Boc serves us all, its systems evolving through the decades from hard work of hundreds of thousands of talented and loyal Canadians with this noble goal so… so lets respect this truth and heritage and not take their efforts for granted, giving their efforts and sacrifice the honor it deserves.

The responsibilities of the BoC are clearly outlined in the link below:

http://www.bankofcanada.ca/about/what-we-do/

Of the four main responsibilities to Canadians: Monetary policy, currency, financial system and fund management… ,monetary policy garners the most attention. Changes to currency, financial systems and fund management evolve more slowly than the changing variables of monetary policy and as such, garner less attention. While one cannot minimize the importance and challenges of currency issues, financial systems and fund management or their evolution through the changing domestic and international economies, monetary policy has a more intimate connection to all Canadians in the form of setting interest rates which effect all Canadians in the form of debt service from public debt (government) to household and private debt. As the BoC sets interest rates to meet inflation targets, the impacts of such moves are felt immediately and are well known so the rest of my efforts will focus on monetary policy, the challenges that the governor and the rest of the directors and employees within the BoC face and a conclusion to what lies ahead for Canada.

Before I begin with this, I just want to point out what may not be obvious to some. When people complain about the decisions made by the governor (Mark Carney) of the BoC to the point of asking for a change in governor, they are in reality, undermining the decisions of the board of directors who voted Mark in as governor… and here they are:

http://www.bankofcanada.ca/about/corporate-governance/board-of-directors/

I advise critics to think carefully about what they are doing when they challenge the policy decisions made by the BoC. Such challenge is not directed to just one man but to senior management on down. Choices on monetary policy don’t evolve overnight. As one can see, directors have help:

http://www.bankofcanada.ca/publications-research/research/economic-staff/

… and as one can see quite clearly, the BoC is transparent in terms of where this help comes from. Some of our finest economists born and educated in our universities and abroad in this nation serve Canada through the BoC so I suggest, kindly, to give this institution and employees the respect they deserve and for those who don’t give our civil servants the respect they deserve, y’know who I’m talking about… the ones who offer little to no evidence to support their arguments… with nothing to add but rude slurs… what have they done with their lives that makes them in any way shape or form credible? Lets educate ourselves before attempting to choose such an unsavory path:

http://www.bankofcanada.ca/about/faq/

Lets get back to monetary policy because its crucial to understand what the impacts are of raising interest rates (they have nowhere else to go now but up).

What has given Canadians the opportunity to low debt service is a combination of several factors coming together at once. We’ve had a history of a federal government from 1996 on that has made major strides in two areas: rapid GDP growth & federal surplus’s. From the beginning of 1995 to the end of 2006 in 12 short years, Canada’s GDP doubled. The reason for such rapid GDP growth was threefold. Canadian currency appreciation against the U.S. dollar, increased demand for commodities and federal government policy creating federal surplus’s (also supporting a rising loonie) and enhancing commodity development.

The consequence to such rapid GDP growth has been the dilution of federal (and intergovernmental) debt to GDP ratios improving dramatically, Canada’s balance sheet and allowing Mark Carney’s predecessor, David Dodge, the ability to move towards a lower interest rate policy due to the dramatic reduction in the need to borrow through the bond markets in a reduced risk climate. As a consequence, Canada has enjoyed a period of lower interest rates which our present BoC governor has inherited in 08′ and continued through the financial global crisis spawning low interest rate policy from the central bank of the U.S..

Lower interest rates world wide since early 09′ has helped dramatically in lowering our government’s ability to borrow through the bond markets. For monetary policy purposes, such an economic climate has been a Godsend for the BoC through this timeline for the most obvious of reasons. This strengthens our currency which gives our nation more buying power for imports and helps the BoC meet inflation targets much more easily but now… that has all changed.

Our elected federal officials are now running deficits by introducing budget shortfalls of 10 to 20% over the last 3 years. Public debt to GDP ratios is growing both federally and intergovernmentally. Focus has shifted by our elected officials at the federal level away from manufacturing and commodities toward housing which has lowered productivity and increased household debt. At some point these collective factors will effect the BoC’s ability to meet its inflation targets with lower interest rates and rates will go up to reflect this change.

The reason why Canadians aren’t experiencing higher rates due to federal budget deficits (and to some extent provincial/municiple) is the central banking policy direction taken with our cousins south of the line. Once interest rates rise in the U.S. in conjunction with an economic U.S. recovery, the BoC will be forced to raise rates to compete with lender capital and to reflect the increased risks associated with elevated federal deficit spending in Canada. As debt grows, so does risk and as risk grows, interest rates adjust to attract buyers of Canadian debt with the alure of greater bond yields and adjust to the inflationary effects of downward pressure on our currency.

And here’s the rub! Pay attention to this point!

The collective assessment of our #1 domestic risk to Canada’s economy identified by the BoC is household debt and our governor has been saying this for a while now!
http://www.castanet.net/news/Canada/73501/Household-debt-a-risk-to-Canadians

Readers should be familiar to this story by now. Its message is clear and I believe the most significant point illustrated by Mark Carney is this:

“Carney reiterated that broad-brush Bank of Canada policy should be the last resort to correct what is essentially a specific problem. Other policy-makers in government have more finely-tuned instruments.”

Here’s why:

http://credit.bank-banque-canada.ca/householdcredit

Consumers aren’t the only borrowers. Business borrows too and so do our governments.

http://credit.bank-banque-canada.ca/businesscredit

http://credit.bank-banque-canada.ca/financialconditions#tikr

As interest rates go up, credit growth the cost to service debt doesn’t just increase for homeowners, it increases for the rest of us which reduces economic growth and development. How can it not? And how can Canadians not see that our businesses need lower debt service costs to remain competitive with the rest of the world, especially with a higher dollar?

Again…. the BoC’s role in raising rates to slow household credit growth should only be used as a last resort because it impacts Canadian productivity and growth in business at a time when we need it most. CMHC and OSFI are much better suited to slow down credit growth in housing and for the governor of the BoC to publically state this, it has one huge significance.

Our elected MP’s or elected government in power is not listening to the BoC’s warnings on domestic risk caused by household debt and are ignoring its monetary policy recommendations. There is growing evidence that this has been going on for some time (ever since Mark Carney has warned of the dangers of high household debt) and Mark Carney may be left with no choice by our ruling federally elected politicians to raise interest rates to deal with our growing household debt risk and #1 domestic risk to our economy…. and its a shame when it could have been handled so much more easily and less costly through policy changes through CMHC.

Readers need to ask themselves why and the answer isn’t pretty.

One last point. Don’t expect any governor of the BoC to directly challenge the policy decisions made by our elected officials in the house of commons. To do so would undermine not only our democracy but reduce the confidence of bond investors who buy Canadian debt through the bond markets. It would, quite frankly, be uncanadian to do so. It is up to us, the voters, the participants of democracy, us Canadians to decide our majority elected Harper government’s performance for ourselves act/react accordingly and good God, if I need to explain why any more clearly than I have, we’re in trouble. I hope for all our sakes that I’ve made myself clearly understood.

#204 Beach Girl on 04.08.12 at 7:49 am

#148 Westernman on 04.07.12 at 3:05 pm

Beach Girl @ # 143,
As I once informed Form Man and Herbie ( friends of yours, no? ) I don’t have to justify myself to anyone – especially to the likes of you.
As my Father once told me, ” Never argue with idiots son, they’ll just drag you down to thier level and beat you with experience “…
I have always lived by this ( it’s served me well ) and see no reason to break a working protocol …
____

Hi Herbie, I was going to call him a faggot too. Even before I read your response. I have absolutely nothing against gay people. But, this guy is a complete dick. Sounds like even his own Dad didn’t want to converse with him. He just took it wrong.

Anyway, the party was a success. We have all decided to be honorary members of the NCRs (Not Criminally Responsibles), we will design our own patch. With a Jack Russell bearing its teeth. The colours will be different shades of yellow. And we all have to purchase scooters. The Race Car Man will help with our decals and T-shirts. Leather Coats are too expensive at this time. So are the scooters. We might rent for the present time. LOL. It was a competition of cleavages. Most went home happy, I think some are still here. Beach Girl doesn’t provide breakie. Goodbye.

#205 Onemorething on 04.08.12 at 9:14 am

come on guys dont give Sherry such a bruisin’, she just pumps what’s best for herself and those who pay her, just like the rest of the herd!

Step one of dealing with RE addiction is admitting your wrong, step two is listing, step three selling and step four cutting off your signing hand so you dont do it again!

#206 P F Murphy on 04.08.12 at 9:45 am

I really don’t believe that interest rates are going up anytime soon. Inflation and gouging gas prices are enough to crash the houses which should be self-crashing from their own prices. If interest rates go up, the deficit goes up and I don’t believe Mr. Harper will tolerate that. He’ll refer to his drops from 40 yrs and zero to 35 to 30, etc. as his effective efforts on housing. But I believe he will “Kevin Page” Carney if interest rates have any significant rise.

#207 jess on 04.08.12 at 9:58 am

blase

westerman was born an individual and owes no one
;^)

verum esse ipsum factum
“true itself is fact” or “the true itself is made”

http://en.wikipedia.org/wiki/Giambattista_Vico#Major_works_and_their_reception

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

#208 John G. Young on 04.08.12 at 10:33 am

#206 jess on 04.08.12 at 9:58 am

“westerman was born an individual and owes no one”

Where did blase say that westernman owes anyone anything?

As I read his post as simply offering suggestions for having civil discourse online — something that this and every other blog could use a lot more of.

Who knows, there might even be a Wikipedia entry about the subject ;^)

#209 eaglebay - Parksville on 04.08.12 at 10:38 am

#144 The American on 04.07.12 at 2:16 pm

She looks so… American. Poor Sherry.

#210 eaglebay - Parksville on 04.08.12 at 10:55 am

#166 South of 49 on 04.07.12 at 7:58 pm
“Now that Sherry Cooper has sold her house, is she now renting and invested her house profit in a balanced portfolio of income producing investments?”
_____________
She’s probably investing in US real estate.
Not good looking, yuk, but not the dimmest either.
She got a job at BMO didn’t she.

#211 Amarillo on 04.08.12 at 11:00 am

Thanks #197 Blasé. I too am a western person so please cut it out Westernman, you’re making the west look bad.

The real western person is characterized by an entrepreneurial spirit, civility and thoughtfullness -despite the caricatures we are often saddeled with, pardon the pun.

Having said that, in my travels around the world I’ve noticed that people honor & celebrate their own cultures almost everywhere.

However here in Canada, we have those who would deny our western culture a place. A lot of them work for the CBC.

But what to replace our western culture with? Certainly not the ‘culture’ of downtown, iPhone-gazing metrosexuals obsessed with political correctness and the right clothes? Yikes! Give me my open skies, Harley and cowboy boots anytime.

#212 eaglebay - Parksville on 04.08.12 at 11:06 am

#180 John G. Young on 04.07.12 at 9:20 pm
“I’m a proud spelling Nazi.
And I’m an American.
And you’re a troll and a waste of space.”
_____________
Tah, tah… Squeak, squeak.
America let you out?

#213 eaglebay - Parksville on 04.08.12 at 11:08 am

#176 Westernman on 04.07.12 at 8:56 pm

“…it’s an amusing way to to pass a day when your all caught up with your chores”

“That’s “you’re”, Dummy.

Keep ‘em coming, loser.”
______________
“you’re” ha, ha, who’s the dummy now.

#214 Abitibi Doug on 04.08.12 at 11:09 am

@Daisy Mae, post #110 who said: I’m beginning to think the average ‘Joe’ on the street has more sense than these well-paid yahoos….

I would have to agree with you there. I would add that every now and then an economist like Jeff Rubin (talking of peak oil) comes along and tries to tell it like it is rather than paint a picture that all is just fine, and they become an outcast. Before believing what any economist says, look at who’s paying their salary and how that might skew their analysis or predictions. Say, isn’t that similar to Garth’s ordeals with the Conservative party? Be informed, and above all think for yourselves.

#215 eaglebay - Parksville on 04.08.12 at 11:14 am

#188 truth hammer on 04.07.12 at 10:59 pm

But, no tsunami. Richmond is protected by Vancouver Island.

#216 eaglebay - Parksville on 04.08.12 at 11:18 am

#191 brainsail on 04.07.12 at 11:25 pm

Enjoy your “leg of lamb” and the smell at $5.99lb.
Here we eat prime rib and seafood with local wine.
The cost is relative.

#217 maxx on 04.08.12 at 11:21 am

#54 Coho on 04.07.12 at 12:37 am

“………some will cheer at higher rates either because they have savings, or have been waiting for house prices to correct.”

Or, because some wish to buy their freedom and decide how they wish to live in their one and only lifetime. Time, not RE, is the ultimate luxury. Let’s face it, many, if not most jobs, even those in the better-paid, professional categories have become nasty, whip-cracker, stress laden slavery posts. Every year, the “organization”, looks for ever more ways to transfer more workload onto fewer shoulders, for fewer and fewer benefits. Happy working souls, for the most part, are those with their own businesses who love what they do and/or those who have become financially independent.

Overpay for tarted up RE and get shackled for life in a stress pit, only to have my health and well-being taken as well? No thank you!

#218 jess on 04.08.12 at 11:22 am

following garth animal theme watch olivia who is 7

http://www.youtube.com/watch?v=e86hSRwkVoA&feature=related

#219 eaglebay - Parksville on 04.08.12 at 11:28 am

#202 daystar on 04.08.12 at 7:41 am

A bit long and boring.
You should post your “literature” on Wikipedia and post a link to it. There.

#220 eaglebay - Parksville on 04.08.12 at 11:33 am

#192 John G. Young on 04.07.12 at 11:46 pm
“At 6’5″ and 235 lbs, I’m definitely not light in the loafers (Rockports actually). If your reference to interior decorating is your coy way of asking me out on a date, sorry, you’re not my type.”
_______________
Huggy, how big is your pinky?
Nothing personal.

#221 Burnt Norton on 04.08.12 at 11:38 am

#202 daystar on 04.08.12 at 7:41 am

Daystar: thanks for your posts. I look for them daily. Very helpful. Your efforts are much appreciated.

#222 TurnerNation on 04.08.12 at 11:40 am

Your kids’ future jobs?

http://www.theglobeandmail.com/report-on-business/indias-whole-new-class-of-call-centre-professionals/article2394550/?

India’s whole new class of call centre professionals
stephanie nolen
GURGAON, INDIA— From Saturday’s Globe and Mail
Published Saturday, Apr. 07, 2012 8:00AM EDT

http://www.theglobeandmail.com/report-on-business/call-centres-are-philippines-new-long-distance-love-affair/article2394538/?

Call centres are Philippines’ new long-distance love affair
andy hoffman — ASIA-PACIFIC REPORTER
MANILA— From Saturday’s Globe and Mail
Published Saturday, Apr. 07, 2012 8:00AM EDT

#223 jess on 04.08.12 at 11:52 am

207 John G. Young

Egads! I need a sarc mark!
western – man excludes east west south north and everyone knows he dislikes the “givernment”

As to the wiki entries I posted in reply to monster cookie, who reframed the question meant for westernman.

# 179 #193

#224 Kris on 04.08.12 at 12:18 pm

#189 disciple.
How about taking your EndofDays stuff to a blog that’s devoted to the subject? Yes, this blog is for conspiracy theorists, but only the financial/economic kind.

#225 deja view? on 04.08.12 at 12:20 pm

Talk about intense. Sherry looks like one of the woman from the series ‘Snapped’.
More fatherly advice from Carney..
Everything’s fine folks! No need to panic..
As long as you don’t trip and whatever you do, don’t look down.

#226 Canadian Watchdog on 04.08.12 at 12:38 pm

Condo Stats For Toronto C15 Area (Bayview/Don Mills)

Active Listings http://i39.tinypic.com/2utrtxy.jpg
Sales To Listings Ratio http://i42.tinypic.com/15ytlk.jpg
TREB Benchmark Price http://i43.tinypic.com/2e0jqqr.png

Alas, when even Gregory Klump’s manipulated benchmark formula can’t smooth out volatile prices in decline (as he claimed it would), you know something has gone terribly wrong for C15, all while the media (Urbanation) pumps this area like the next best investment. http://life.nationalpost.com/2012/04/05/street-smarts-the-other-upper-east-side/

Looks like some of developers just may go bust soon, or already did.

PS Garth. This might be worthy of a new post. Check C15 stats TREB monthly reports for Jan-Mar. Benchmark price is on the last pages.

#227 truth hammer on 04.08.12 at 12:38 pm

Foggy # 45….exactly……its all about the payment/rate spread…..nothing to do with value……if rates go up we’re looking at a reversion to the mean…..3% TO 6% is going to create a freaking disaster….everyone knows this. thx for the clearheaded analysis…….Carney….read Foggy….you moron.

#228 Blog Dog Carney on 04.08.12 at 12:40 pm

195 Mr. Buyer – again so many misconceptions on your part. I suggest some further reading on basic economics (any first year economics text should help) and quick references to the BOC website. If we can get past this hurdle I am sure the issues will be much clearer to you, however the solutions will not!

Thank you again Mr Daystar for your continued contributions. I take it you really want that job here at the BOC.

I will however warn everybody, as has Mr Turner, that I may well raise rates before the US fed, for several reasons. LIRP has not had the desired effect in some instances. Many domestic households have continued the debt binge. Rather than taking the opportunity to reduce interesest payments on existing debt, new debt has been added. I have also scolded businesses for holding cash
as opposed to investing in plant/equipment. Thirdly, our dollar has reached parity with the US$, but much of the C$ strength comes from the commodity sector, so a rise in rates may have little effect.

Thank you again Garth for helping get the message out.

#229 Love this Blog on 04.08.12 at 1:33 pm

Anyone know when the next B of C rate review is? I oooked at their site but could not find it.

#230 Rasputin on 04.08.12 at 1:34 pm

I still don’t buy that Carney will raise rates. Who are we kidding? For the past 17 years North American central banks have done everything in their power to create and maintain bubbles! Cool off a bubble?? Please!! Talk about misplaced faith. They are full of talk because talk is all they got. If rates go up 1 lousy percent the debt carry costs go up 25% for many debtors including governments. The world economy would absolutely implode. If rates ever rise it will be because the market forced it, not central banks.

You are so wrong. — Garth

#231 John G. Young on 04.08.12 at 1:39 pm

#222 jess on 04.08.12 at 11:52 am

Sorry, missed the sarcasm and didn’t catch the references. Thanks for clarifying.

Just goes to show how much of communication is inflection, which is of course absent online.

Happy Easter/Passover/long weekend.

#232 Raj on 04.08.12 at 2:17 pm

#25,Canadian Watchdog ,

Thanks for sharing the info.
This spells disaster for sellers.
Listing all time high and Sales/Listing all time low-
a perfect storm.

#233 Dan in Victoria on 04.08.12 at 2:32 pm

Daystar@202
Thanks for the effort to educate us.
I learned quite a bit reading that
Might be awhile till I can get all the links read.
I really appreciate the efforts of the more intelligent posters who take time to try and make a diffrence.
Makes sorting through the crap worth it.

#234 John G. Young on 04.08.12 at 3:04 pm

#212 eaglebay – Parksville on 04.08.12 at 11:08 am

“you’re” ha, ha, who’s the dummy now.”

So let me walk you through this. The word ‘your’ appears twice in your friend Westerman’s sentence:

“…it’s an amusing way to to pass a day when your all caught up with your chores”

Here’s a little test for you: which one of the ‘your’s in the sentence should be ‘you’re’?

And who’s the dummy now, troll?

#235 Cato on 04.08.12 at 3:24 pm

Mr. Carney’s warnings ring hollow. He is unwilling to confront gov’t policy that unleashed the debt gremlin in the first place. Perhaps its healthy for BoC to yield itself so fully to the whims gov’t. I kind of doubt it, the role of the BoC is to ensure the long term health of the Canadian economy and protect us from the myopic vision of politicians whose interests only extend to the next election cycle.

Make no mistake, we have a housing bubble because our gov’t wishes it. Our politicians rightly expect to continue reaping the near term benefits of increased consumer spending, let someone else deal with the aftermath.

Its clear F intends to stand back and continue to redline the economic engine of the country. I suspect we’ll see plenty of political interference in any proposed action of the OFSI or BoC.

#236 The Patient on 04.08.12 at 3:28 pm

#120 Canadian Watchdog to Market Bull:

“More sales, lower price. This is what happens when inventory starts coming back to the market as smart money begins to bail… You better hope this picks up. I’m cheering for you.”
____________________

Irishman to a pair of barside drinkers involved an escalating dispute: “Is this a private fight, or can anyone join in?”

Canadian Watchdog and Market Bull are two sides of the housing coin. CDN Watchdog says the “smart money” will at this time commence renting.

Market Bull — if he’s true to his moniker — says the smart money will buy another house, as inventory starts coming back to market.

If the “smart money” is selling-then-rebuying, keeping the market hot and bothered, then total sales for April and May 2012 could yet make laggards of last April and May.

Is the bubble topping or is this bull snorting with contempt at most blogdogs, including our dear host?

Who’s right? What *is* the smart money doing? Betting on the Yanks and Western civilization, with a portfolio of blue chip preferreds, REITs, ETFs, bonds, a few bars of gold and a bunker hedge? Or, is the smart money just buying another house because there’s no damn bubble?

What *if* it’s not a bubble? What’s the definition of a bubble?

Wikipedia:

“Because it is often difficult to observe intrinsic values in real-life markets, bubbles are often conclusively identified only in retrospect, when a sudden drop in prices appears. Such a drop is known as a crash or a bubble burst. Both the boom and the burst phases of the bubble are examples of a positive feedback mechanism, in contrast to the negative feedback mechanism that determines the equilibrium price under normal market circumstances. Prices in an economic bubble can fluctuate erratically, and become impossible to predict from supply and demand alone.”

When Canadian house prices “suddenly” drop by more than…uh, 10%? 20%? 40%…?

Garth, what’s the average drop you need to be absolutely vindicated? And need it contain an element of suddenness, as Wiki suggests?

Thank you. Never a dull moment on this blog.

#237 TurnerNation on 04.08.12 at 3:31 pm

Hi Garth, still flying on Westjet? Did you tire of Air Canada’s allegedly surly (and billingual) services? But not of their lounges and executive class seating?

FYI: Air Canada’s seats are wider than Westjet’s on all medium and large sized planes; Westjet 737s’ seats feel like a cheap vacation charter run (crammed in).

Westjet is slowly eliminating Seatback TV – on all newly delivered planes – in favour of (paid) internet access (TBA). Because Owners Care?? Well, the common now pays a dividend.

#238 TurnerNation on 04.08.12 at 3:33 pm

This pathetic weblog is garnering 200+ daily comments! Blog dogs enthralled by Shirley Cooter’s and Brad Sheep’s antics make for sticky weblogs.

#239 ozy - i don't belive Meaty (Carney) a second on 04.08.12 at 3:52 pm

Meaty does not have the BALLS to raise rates, an soft-spoken kanatian style guy, with energy, materials stocks down 20% last month, will he? He know sthere was/is zero recovery, just money printing and injection in economy via banks bonds guaranteed by peoples mortgages. He fulled the rally in housing on purpose.

http://www.theglobeandmail.com/report-on-business/carney-ready-to-step-in-if-household-debt-levels-get-out-of-hand/article2394048/

#240 Blue Monster Lover of Meats and Vegetables on 04.08.12 at 4:10 pm

Enough childish banter.

Here’s something of substance regarding the true history and motivations of the Euro by Philipp Bagus

See all encompasing link at Tom Woods dot com.
http://www.tomwoods.com/blog/get-up-to-speed-on-the-euro-painlessly/

or

The full book is free below:
http://library.mises.org/books/Philipp%20Bagus/The%20Tragedy%20of%20the%20Euro.pdf

or

A summary by Andy Duncan here:
http://www.cobdencentre.org/2011/02/book-review-the-tragedy-of-the-euro-by-philip-bagus/

Very interesting and relevant to everything that’s happening in the battle between freedom and tyranny. Mark Carney and the BoC is of course on the side of tyranny just like the ECB and Federal Reserve. Things we all know but nice to be refreshed to maintain the correct BIG picture that affects daily decisions.

I rather buy gold too early than too late.

#241 daystar on 04.08.12 at 4:11 pm

#218 eaglebay – Parksville on 04.08.12 at 11:28 am

A bit long and boring.
You should post your “literature” on Wikipedia and post a link to it. There. – eaglebay

Long, yes. Boring… only for those who don’t understand the message and wikipedia isn’t the place to go with information and drawn conclusions such as my own. I would tend to think that a real estate blog such as Garth’s or an economics forum is far more practically suited. If you find comments such as mine too challenging for you because of its length (which I find amusing, chuckles, we do come here to read), you can always excercise your free will on this free blog and skip it.

#220 Burnt Norton on 04.08.12 at 11:38 am

Thanks and y’know, I get the feeling that you aren’t alone but thanks again for the motivating credit given.

#227 Blog Dog Carney on 04.08.12 at 12:40 pm

Employment as a prime reason to write this piece isn’t the case (I can’t say it isn’t a factor but its far from being the only one. You have made headlines lately, lol). I’m a Canadian sovreigntist. I’ve generally always had a deep appreciation for the systems Canada has within government including its history, how these systems have evolved to serve us and I have a strong desire to keep our systems intact (this appreciation has got to be within me, 3 decades old and I’m 46). The not so imaginary line on the 49th parellel is defined by differences to our systems of which I speak. Stand on guard for thee, thats me and in this last decade, I’ve felt a major threat towards our institutions from within.

Competition for our economic domestic market share within Canada is fierce. In every sector, international interests push hard to increase market share within Canada including and especially so what our governments in the past have previously protected so the moment I see our elected representatives move away from preserving and growing our market share domestically and abroad, I get defensive at times to the best of my abilities and I’ve reflected it on this blog.

I also get… upset with people who wrongfully attack sound policy, especially when such attacks are void of evidence or truth to support it and become personal and I think a large part of me wants to see a balance restored against such attacks. Not so long ago, not so many years ago, I considered this balance to be restored by giving such misplaced behavior a taste of its own medicine. Unfortunately, the more one participates in such a way, the more the same behaviors rub off on one’s self.

In political debate it seems logical to meet the low road with the low road, communicating with a language that is the same so as to be undeniably understood. There are times where it is actually necessary. However, some of us can’t take what we dish out. Psychological factors come into play here especially when one wills the best outcome for us all. Anonymity isn’t enough of a defence against negativity returned (or given, the point I made earlier) when one isn’t prepared for it. With this in mind, the strongest argument that refutes any argument without evidence or base and/or incomplete truths is precisely the argument that reveals the entire truth communicated in such a way that it becomes irrefutable. (this may make for long comments but it is highly effective) Hence, as it always has been, the plan is as equally important as the motive and goal.

I’ve thought about your suggestion to check out “careers” and what I could offer an institution such as the BoC over the last 36 hours and I do feel as though I could make some positive meaningful contributions for the BoC specifically in the area of economic risk assessment domestically and abroad but I as yet remain convinced that I would be the best choice for the position (assistant director) advertized in the career link. I base this assessment on not knowing the talents and experience of the rest of the applicants who would apply for the same position. (if I knew what I was competing with, I would have a much more definitive answer)

I would also say in the breath however, that my own successes as an investor and track record concerning risk assessment and communicating these assessments are hard for me to ignore. I might go so far as to say that my background which doesn’t come from academics may in fact help me to see certain risks while those who are educated and trained through our universities and financial institutions may miss certain causal effects precisely because I view risks from an investors point of view (a forest for the trees thing, product of our own environment) but its a two way street. What helps my vision can also blind me and with this too, I am also well aware (some training would be essential).

At the end of the day, what makes or breaks a good economist/researcher is the ability to see the forest from the trees (see the interconnectivity and functionality of the combined systems and their participants combined with the changing variables and causal effects thereof, eg. supply and demand), and a sheer natural ability and desire to research and dig for the truth beyond the point of mere thinking they’ve found it towards the point of knowing. My point is, too many of us end up giving up on our searches for the truth when we think we’ve found it and as a result leave the work only half done. (I know this too, by experience)

Final assessment concerning what I believe I can do for the BoC? Within 3 months I’ll be pushing consistently past the paygrade which is hard for me to ignore and its not about the money. Its ideological. Like yourself, its a call to serve Canada and yes, Mark. I really want it but… I would need a referral. :) Give me that much and I’ll start working on a resume. Garth has my contact information if you wish to be discrete.

#242 gladiator on 04.08.12 at 4:23 pm

@daystar: one question to ask the so-called Bank of Canada is: why one of your objectives is to keep robbing the value of Canadians’ hard-earned money by keeping a positive inflation number throughout the years?

The existence of inflation is enough for me to see that BoC does not act in Canadians’ interests. The financial oligarchy needs “growth” in nominal terms and that’s why it wants inflation.

Your thoughts will be highly appreciated.

#243 Billy Fisher on 04.08.12 at 5:12 pm

The American – LOL I have to agree with you. Although Sherry Cooper lives in Canada and was born in the U.S. she really does look more Canadian than American by way of her awful plastic surgery. I’m not saying all Americans have great plastic surgery but there is mostly a big difference between American plastic surgery and Canadian plastic surgery. American plastic surgery is SO MUCH better than what I see around here on Canadian women. I can tell when a woman has had work done, whether Canadian or American, but here in Vancouver the American women take top billing for best plastic surgery – bar none. Sherry Cooper looks plain creepy to me and no self respecting American plastic surgeon would put their name on that face. My wife went to L.A. to get her nose done after seeing two of her friends come out of a hack operation here in town. Best decision of her life.

This is not a nose blog. — Garth

#244 City Slicker on 04.08.12 at 5:21 pm

#21Oil Patch Factor on 04.06.12 at 10:36 pm
Does anyone have the stats for income growth in Alberta? Hard to see the party coming to an end in Calgary when the industry is so hot at the moment. Salaries are getting out of hand in the oil patch – the competition is fierce between companies for help.

From everything I have heard in the industry – there is a massive labor shortage. With such demand and high salaries, I do not see the party ending.

My employer for instance, has ~1600 people working at site and within two years this will be doubled. Same goes for our competition.
—————————————————————–
Keep in mind this labor shortage is due to many tired of working in the boonies and the life sacrifices you have to make. So it is hard to fill jobs in the patch.

#245 John on 04.08.12 at 5:46 pm

Daystar’s posts are a great example of the Canadian “authority sickness”.

Delving in, studying, fleshing out and creating importance regarding current societal institutions is as simplistic as it gets. That level of simplicity could only come from a belief system built on denial.

It’s not important what the Bank of Canada says it does, or has done, or whether or not the people within, around and connected to it are “competent”, ignorant or corrupt.

What’s important is the damage it has and is doing, recognizing it, and moving on.

Daystar probably believes that Canada is a democracy…built on those principles. That we have “representation” in “Ottawa”. Perhaps that the GOP party is having a leadership process to “go up against Obama”.

The info in your post might be a good rah-rah training text for an administrative assistant to a crooked technocrat.

The whole reason our fantasy bubble economy exists is due to a child-like belief in authority. And that this authority is benevolent.

Mark Carney is CYNICAL. Consider what this word means. He’s not much better than Alan Greenspan. What do you think of him?

The information you have posted is simply not relevant. The fact that you can’t imagine why is the most relevant point of all.

#246 Westernman on 04.08.12 at 6:01 pm

Re: General comments about me from various flotsam and jetsam:
You are plainly jealous of my unassailable logic and common sense as well as my elevated level of intelligence and moral uprightness… not to mention my financial success ( if not my spelling ability, which hasn’t hindered my money earning endeavors at all by the way ).
Not to mention my rugged good looks and charming personality…
Try not to let the envy eat you up inside…

#247 Debtfree on 04.08.12 at 7:04 pm

@ 214
But, no tsunami. Richmond is protected by Vancouver Island.
You albertans are so funny . Water could never find it’s way around an island . And you tell us you have a boat . I guess you must wonder how all that water at high tide gets there and where the heck does it all go when the tide goes out again . I guess vanisle will be okay as well because swiftsure will stop the the wave .
Thanks again eagle bay . Please keep the hydrodynamics comedy coming . Best laugh today.

#248 Burnt Norton on 04.08.12 at 7:16 pm

#244 John on 04.08.12 at 5:46 pm

Jeez man, talk about a cynical post, not to mention arrogant.

The way I see it, we each make a little decision every morning when we look in the mirror: Am I going to try to make the world a better place today, or not?

Between daystar and yourself, I gotta pretty good idea how the answer goes.

#249 coastal on 04.08.12 at 7:59 pm

“But, no tsunami. Richmond is protected by Vancouver Island.
You albertans are so funny . Water could never find it’s way around an island .”

Man there are some uneducated people on here. Why do you think Richmond has dikes ? If the center of the big one is anywhere near the tip of either end of island the tsunami will find Richmond with ease.

#250 Re-diculous on 04.08.12 at 8:09 pm

@202 Daystar….yes, thanks for that, very informative. I wonder if Carney’s warning of last week was more for the Dept of Finance, OFSI and CMHC than it was for the average citizen.

#251 Mr Buyer on 04.08.12 at 8:17 pm

#227 Blog Dog Carney on 04.08.12 at 12:40 pm
195 Mr. Buyer – again so many misconceptions on your part. I suggest some further reading on basic economics
……………………………………………………………………..
Mr. Carney if I have understood the implications of your response correctly then I am to assume that my assertion that over inflated house prices are horrendous for the country and the families laboring under their burden and with a more evolved understanding of the black art of economics (forgive the slight it is a backhand return of yours as I have likely read 4kg of hardcore textbook material to your 1 and 2kg of hardcore journal articles to your 100 grams ) I would better appreciate the great job you have done for our children and Canada’s future. I am afraid that you and you political cohorts are leading us into disaster.

#252 The Thing in the Basement on 04.08.12 at 8:19 pm

Debtfree/Eaglebay FYI re tsunami map SW BC

http://atlas.nrcan.gc.ca/site/english/maps/environment/naturalhazards/tsunami/fig19_tsunami_hazard_zones.jpg/image_view

#253 Trebeck on 04.08.12 at 8:36 pm

So… Long time follower, first time poster…. I do hope house prices go down, but one of my pet peeves is that I have been following Smokingman since his Globe posts, and he`s been 98% right, 2% wrong… so all you nay-sayers, don`t bash him.. he does have a track record!
He`s not a realtor, he`s not a psycho, he`s just one of those dyslectic people out there who know more than us common folk.

Thank you, SM. — Garth

#254 eaglebay - Parksville on 04.08.12 at 8:39 pm

#233 John G. Young on 04.08.12 at 3:04 pm

Testing, testing.
You said that you would ignore me from your post awhile ago, “from now on”.
Big “man” with little pinky.

#255 Daisy Mae on 04.08.12 at 8:42 pm

#243 CITY SLICKER: “Keep in mind this labor shortage is due to many tired of working in the boonies and the life sacrifices you have to make. So it is hard to fill jobs in the patch.”

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

My son worked in Fort McMurray for awhile as a Civil Tech, but didn’t want to become a ‘lifer’. Good money, yes. But people get so deeply in debt they can’t afford to leave…trapped!

#256 eaglebay - Parksville on 04.08.12 at 8:45 pm

#240 daystar on 04.08.12 at 4:11 pm

I do understand but, I appreciate new knowledge.
Been to kindergarten already.
I’m sure that most people that read this blog, not necessarily posting, know more than you think.
Give us credit.

#257 Daisy Mae on 04.08.12 at 8:48 pm

#246 DEBTFREE: “Water could never find it’s way around an island…”

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

Now, THAT’S funny! LOL

#258 Mr Buyer on 04.08.12 at 8:50 pm

PS. Just to clarify, I am extremely dense and it takes me 4kgs of textbook material to gain a similar understand most can achieve in 1kg, but do not tell Mr blog dog carney that because he will make fun of me again. Also I think we can all assume the blog dog carney is in fact a literary device being employed by an anonymous commentor as it would be highly unlikely Mr Carney with his dedication to his post would be offering it up to half wits such as myself and others like me on this blog.

#259 eaglebay - Parksville on 04.08.12 at 8:55 pm

#243 City Slicker on 04.08.12 at 5:21 pm
————————
“Keep in mind this labor shortage is due to many tired of working in the boonies and the life sacrifices you have to make. So it is hard to fill jobs in the patch.”
_________________
Most of the gas wells, 80% of the wells in Alberta are gas wells except for the oil sands, and are located much closer to a city or town than you think.
Go check it out, you may like it.
Been there, done that, and still own many gas and oil well partnerships. Check it out.

#260 Mr Buyer on 04.08.12 at 8:56 pm

PS.PS. However he and his political cohorts are still leading us into disaster and I think they all know it. BUYER BEWARE, NOW IS NOT THE TIME TO BUY A HOUSE. THE BUBBLE HAS TOPPED. SALES ARE FALLING ACROSS CANADA. BUYER BEWARE.

#261 eaglebay - Parksville on 04.08.12 at 9:11 pm

Re: tsunami
Ever heard of mountains?
The speed of a tsunami would not allow it to penetrate the small channels between mountains.
If you know anything about Vancouver Island you would know. The Island is much bigger than the Maritimes and much, much higher.
V.I. is bigger than most countries in the world.

#262 Mr Buyer on 04.08.12 at 9:26 pm

#252 Trebeck on 04.08.12 at 8:36 pm
he`s been 98% right, 2% wrong
……………………………………………………………………..
It is hard to argue with a 98% correct batting average (did you do hard research on that or is it an unsupported assertion? Are you in fact Smoking man himself posting under another name? I thought of doing that but an ip address localizing to Japan is a bit of a dead give away). I guess he is the guy to be listening to. So it is not the end of the bubble after all and there will be tons more money made in TO because of tons of buyers on the sidelines just waiting to jump in. Sounds all to good to be true but hey 98% right. Time to run out and get a massive mortgage on a hugely overpriced house and sell it for a cool 50k profit in a couple a months. Tell you what, I will just sit this one out because I do not have the stones (actually rocks, in my head, not my pants) to run with that little insight, and the BUBBLE HAS TOPPED. A dyslexic programmer, that would be a riot except for the fact that I am slightly dyslexic myself, but do not tell anyone, and I have spent many an hour pouring over code looking for compile time, run time and logic errors only to magically SEE the friggin opposite operator in place after looking at it like 5 million times (okay 50 times, but it feels like 5 million).

#263 John G. Young on 04.08.12 at 9:36 pm

#253 eaglebay – Parksville on 04.08.12 at 8:39 pm

Hey troll, I see you didn’t answer the skill-testing question. Too difficult?
Perhaps if you stopped fixating on the size of other men’s members and cracked a book…
Typical straight man.

#264 Westernman on 04.08.12 at 9:47 pm

John G. Young,
So you consider your perversion a source of pride, do you?

#265 John G. Young on 04.08.12 at 10:01 pm

#263 Westernman on 04.08.12 at 9:47 pm

“So you consider your perversion a source of pride, do you?”

What perversion?

#266 daystar on 04.08.12 at 10:06 pm

#241 gladiator on 04.08.12 at 4:23 pm @daystar:

“one question to ask the so-called Bank of Canada is: why one of your objectives is to keep robbing the value of Canadians’ hard-earned money by keeping a positive inflation number throughout the years?” – gladiator

Lets look at the answer provided by the BoC in the link below as to why Canada has set its inflation target at 2%:

http://www.bankofcanada.ca/wp-content/uploads/2010/11/inflation_control_target.pdf

http://www.investopedia.com/articles/06/gdpinflation.asp#axzz1rUqLwTAJ

Macro economics is not a light subject. Demographics, unemployment, productivity, money supply, current and projected supply and demand of imports/exports and the changing technologies that give birth to new growth and changes to supply and demand, currency valuations domestic and abroad, access to trade and liquidity with other nations not to mention fiscal policy determined by elected officials playing an intimate role on disposable income and public/private/household debt to GDP ratio’s which also impact currency valuations (inflation) and monetary policy in the form of interest rates all come into play here in determining the relevancy of nominal GDP, GNP, real GDP, inflation and employment numbers and you put it all on a timeline and you have complexity layered on complexity. Its deep!!

In short, everything is interconnected and to put just one of these areas in the spotlight without looking at influencing factors can and will distort what one observes. High inflation could mean for example, exploding productivity which drives inflation that may not be a bad thing depending on the circumstances or it could mean years of poor fiscal policy (undertaxation/overspending leading to deficits, unsustainable intergovernmental debt to GDP ratios and a currency crisis producing hyperinflation).

High interest rates will have an obvious correlation with currency valuations, monetary supply and inflation but what is the cause? This is why fiscal policy needs to be balanced/harmonized with monetary policy and my major argument of the day in case it was missed is that there has been a perceived divergence between fiscal and monetary policy in the area of housing which has been going on since late 2009, early 2010… and as a consequence, household debt to GDP has risen to become, according to the BoC, the #1 domestic threat to Canada much to the BoC’s disliking. (but the BoC can’t come right out and say it and if readers are paying attention, thats not the only area of concern at least, with me concerning fiscal policy)

Take a quick look on this map below (which is an excellent way of comparing our numbers to the rest of the world. If you think our inflation rate target is high, Norway, arguably one of the best run nations in the world has an inflation rate higher than our own.

http://www.indexmundi.com/map/?t=0&v=71&r=xx&l=en

In summary, I don’t think modest inflation targets are a bad thing. One of the links I refer to suggests that labor doesn’t want 0 growth or inflation with incomes (and I don’t blame them because the fluxuating supply/demand of basic goods i.e. food and energy forces earners to want earnings inflation to offset shocks to basic goods pricing and earnings inflation has to be priced into overall inflation to accompany this) so its easier to target modest inflation with monetary policy than it is to change the paradigm expectations of income earners and policy makers can get around this as long as there is earnings growth in line with demographics, productivity and sound fiscal policy to offset inflation (i.e. keep public and household debt under control through balanced taxation/spending and if possible, budget surplus).

I just want to say again, monetary policy is not the problem in this nation as I see it. Its fiscal policy that is creating undue domestic risk to our economy and its evidenced by the runaway credit expansion we’ve experienced in Canada (outside of private/corporate credit growth, thats another matter all together) that is the true risk towards high inflation. As public debt to GDP ratios climb, currency valuations evenutally fall and it leads to, wait for it, less bang for our import buck (inflation) and way cheaper commodity exports (i.e.oil) for the U.S.A… (i.e., we work harder for less) a highly plausible reason for the fiscal policy we see coming from our Harper government.

#267 daystar on 04.08.12 at 10:08 pm

#255 eaglebay – Parksville on 04.08.12 at 8:45 pm

Credit… when you can tell me something I don’t know, I will.

#268 daystar on 04.08.12 at 10:09 pm

#249 Re-diculous on 04.08.12 at 8:09 pm

I think the warnings have been for us all.

#269 daystar on 04.08.12 at 10:23 pm

#244 John on 04.08.12 at 5:46 pm Daystar’s posts are a great example of the Canadian “authority sickness”.

Recreating reality to reflect on it… nice self projection. Authority issues, systemic issues, no information or evidence to support your ignorant rundowns, just slander and slur. I’ll let the readers make their own conclusions but I’ve made mine. Get help.

#270 disciple on 04.09.12 at 12:05 am

daystar… you used a lot of big words (I read them all I assure you) and directed us to the BofC website but have offered nothing substantial to support the alleged importance of the central banking system in Canada. This little girl explains it better and she’s not reading from a website.

http://www.youtube.com/watch?feature=player_embedded&v=axS-QdUkMqk#!

#271 daystar on 04.09.12 at 12:53 am

269 disciple on 04.09.12 at 12:05 am

If its too much of a challenge for you to figure out maybe you should get a friend to help you? Its ok if you can’t get it, some of us just haven’t got the potential but you can always keep trying. Maybe it’ll come to you in bits and pieces over time.

#272 Bilbo Bloggins on 04.09.12 at 3:13 am

Condo emperor Brad Lamb?
Well here in Hongcouver, we have our own Condo King Bob Rennie as well as the Court Jester himself, Cam Good.
We got the Owe-lympic Village, helicopters droping yuan from the sky, and now we sell condos ala Groupon.
Take that BLamb!

#273 disciple on 04.09.12 at 8:48 am

daystar… I crave challenges. The problem here is that you don’t offer any. The Bank of Canada has in the last decade been a complete and utter failure to the Canadian people. It started out as being owned by us, but that is no longer true. It is only laughable for anyone to assert such a ridiculous notion.

Your sycophantic and false syllogistic tirade that our banks are hopelessly intertwined with the global banking cabal is foolish at best and nefarious at worst. It’s not difficult to see whose hand feeds you. Please, offer more of your “challenges”. I welcome it.
Waiting patiently,
disciple

#274 disciple on 04.09.12 at 9:11 am

daystar…. Here is a challenge for you:

Yes or no, is there any reserve requirement for Canada’s commercial banks?

Prior to the deeds of that traitorous Mulroney, did the commercial banks have the right to create new money?

Does the current Bank Act make mention of any reserve requirement?

#275 Allison Aal on 04.09.12 at 9:14 am

Hi,
I really don’t think your correct not everything is going bad stop thinking on the bad side…………….pls email me why you keep doinging this:(
God Bless your family abundantly!!
Pls. Remember god loves you and he was the one who died on the cross for your sins!
-Allison Aal

#276 The Thing in the Basement on 04.09.12 at 12:00 pm

273 Disciple – there is no set reserve requirement in the Bank Act – removed about 1995? Other mechanisms are employed. Recent financial statements from RBC, BMO and CIBC show about a 3-5% reserve being held.

#277 disciple on 04.09.12 at 3:35 pm

Thingy… Correct! Meaning that effectively there is no law that would compel any of the commercial banks to hold any reserve fraction. Those “other mechanisms” you mention are maintaining “adequate” reserve supply. The Canadian banking system is more secretive than the Swiss! In what form does that 3-5% take? Gold?

#278 Northvan50guy on 04.10.12 at 1:03 am

As far as the Princess Sherri… good reverse indicator is all I have to say. She is more consistently wrong that even remotely right.