Schmuckenomics

Days ago I ripped Brad J. Lamb, Rolls-driving roi-des-condos, over questionable marketing for a new condo project. In Calgary of all places. Buy a unit here, it seduced investors, and make 282%. Plus a pony.

In doing so, I erred. Forgive me. My post left the unfortunate impression this was an isolated instance, therefore worthy of coverage. Nothing could be further from the truth. When it comes to flogging those little concrete boxes to investors (because end users are leaving in droves), it’s the industry norm. In fact, murdering truth has been taken to an art form by generously unethical real estate agents who hook buyers on developers’ behalf.

Like this:

This seems typical of the unregulated solicitations invading email boxes lately, from a Re/Max office in Mississauga. It’s this kind of logic that’s led to a never-seen-before event in Canadian real estate – fully 80% of all condo sales in the GTA (running at 2,000 a month) are going not to people planning on living there, but to investors.

What’s the logic, when it’s impossible (given current prices, condo fees, taxes and closing costs) to rent a condo for enough to carry it? One word: speculation. This is dot-com all over again. It’s Nortel. It’s silver. It’s greed. It’s buying high, expecting higher. And we know how that ends.

Look at the pitch: borrow $70,000 to buy a $350,000 condo which won’t be built for five years. Make interest-only payments, so after 60 months you’ve shelled out $11,000. But by then the condo is worth $100,000 more, since “downtown condos historically have been appreciating at approximately $20,000+ annually.” Piece of cake. Spend eleven grand, make a hundred. Guaranteed.

The odds of this happening are zero, or similar to F inviting me to share his hot tub. In five years the condo market, especially in the GTA, will be a smoking hole, leveled by excessive supply, rising interest rates, fat property taxes, shoddy construction and a real estate meltdown. This is the most at-risk segment of the entire housing landscape, and runaway speculation will play a major role in its demise.

Counting on a 6% annual gain in the price of an unbuilt unit while real estate cools, mortgage regs are tightened and the banks spanked by the feds for excessive lending, is fantasy. Like telling a stock investor that because the S&P 500 is up 11% for far in 2012, it will be ahead 33% by Christmas. And 160% in five years. Guaranteed.  BTW, that’s illegal – and for good reason.

But let’s assume some poor schmuck from Mississauga believes this crap. He borrows $70,000 against his $400,000 townhouse near Square One and buys a pre-construction condo in one of the 148 towers now being constructed around Toronto. One of four things may happen. (a) He spends $11,000 on interest and makes a hundred grand, just like Re/Max says, by flipping the unit upon closing in 2017. He sets my house on fire and kidnaps the Amazons in celebration. (b) The market tanks and the condo’s never built. He gets his deposit back after paying a bunch of unrecoverable interest. (c) The building goes up but the market softens. The condo is now worth less than he paid, for an instant loss upon closing. (d) The condo is finished, retains its value, and the investor closes the sale.

The most likely of these? No building goes up. But let’s assume it’s built, and the unit retains its $350,000 value. Then the specker has to close, pay $7,000 in land transfer tax, and take on a $287,000 mortgage. By then a mortgage will be at least 5%, putting the monthly at $1,600. Add average Toronto property tax and condo fees, and the carrying cost will be $2,500. But you also have to factor in the $70,000 borrowed downpayment, for another $200 a month, or a total of $2,700. (I’ll be kind and won’t add the lost $400 a month that could be earned in the downpayment had been invested in liquid assets instead.)

So now schmuck has a $2,700 monthly nut, a one-bedroom condo which rents for about $1,700, and a $12,000 annual loss. That’s a 17% yearly haircut on the $70,000 invested.

So why wouldn’t the vic just bail, sell the condo and get his down back? Because soon there’ll be no market, as condos go illiquid. Happening now, actually. Take a look at how many resales there are on realtor.ca, and how long they sit in agonizing turpitude. The greater fool gene pool is running dry.

So, it might not be interest rates or new mortgage rules. Maybe not the economic mayhem of socialists in France or skinheads in Greece. Or even unsustainable levels of household debt and $1.50 gas. Maybe the real estate market’s final detonator will be the gullible innocent in suburbia pushed into a leveraged and greed-fueled frenzy by his friend, the Re/Max agent.

At least one thing’s certain. We never learn.

155 comments ↓

#1 Narrowgate on 05.06.12 at 8:44 pm

So it was Brad Lamb, I knew it!

#2 thinker on 05.06.12 at 8:49 pm

What a scam – Good for highlighting this stuff Garth. But how do you answer that the fact that if i had done for the last 4 years, it worked every time – why is it different this time?

You are called ‘thinker’? — Garth

#3 Know your enemy on 05.06.12 at 8:50 pm

The most self-righteous, self-important, incredibly arrogant generation of all time. The progeny of the Greatest and Silent Generations, who grew up with the hardship of the Great Depression and won World War 2, the baby boomers had everything handed to them on a silver platter from day 1.

They act as if the world (particularly THEIR progeny, Generations X and Y) owes them a gigantic debt of gratitude for how they perceived they changed society. They romanticize their promiscuous, drug-induced escapades as having been some sort of Earth-shaking cultural movement that changed the course of history. As if they were the first and last generation to get fucked up and have random sex, and as if that somehow changed the world.

By the 80s every hippie had somehow lost touch with his values of altruism, free love, and selflessness, and had transformed into a suit-wearing, cutthroat yuppie. By now he’s a middle-class suburbanite slob. Growing increasingly irrelevant, the baby boomer is trying to insist that his generation was God’s gift to the world when in reality it was a selfish, petty, hedonistic generation that turned its back on everything it once stood for.

With modern medicine and a society that is increasingly health-conscious, the boomers are guaranteed to live on for decades beyond their utility, leeching off their posterity (a younger generation smaller than their predecessors, the first Americans who failed to reproduce at a sustainable rate) to the very end.

As opposed to the cut-and-paste generation? Spare us. — Garth

#4 PoorgEoisie on 05.06.12 at 8:54 pm

Mr. Furst you are no longer my hero… Not even top five

#5 TurnerNation on 05.06.12 at 8:58 pm

A repost for the weekday crowd (many cannot stomach the weekend-drunken-comments-section) on this scotch fueled weblog:

____________________________
Breaking…Toronto realtor admits it: New condos will not rent for positive cash flow!!!

(Worried realtors, realtors in a panic?)

http://www.remaxcondosplus.com/blog/aprilmay-market-report-2012-4/

***”For investors, there is no problem in leasing your unit. The issue is that rental rates do not support current prices and because of this, we would expect to see a drop in new investors because they cannot cover their interest and operating costs”***

#6 mel in victoria on 05.06.12 at 8:59 pm

Can’t put my finger on it but here’s something about her that reminds me of my 2nd wife..

#7 Foggy on 05.06.12 at 9:01 pm

Feist!

#8 zeeman on 05.06.12 at 9:05 pm

hi garth

if the condo market starts to slide, then wont this impact the sfh market….wont the consumer start to doubt what their realtors are telling them….

#9 Mark W on 05.06.12 at 9:05 pm

http://www.realtor.ca/propertyDetails.aspx?propertyId=11295218&PidKey=144858160

You want really nuts.

For almost 600k you can live in a 10/10 neighborhood in central Winnipeg.

10/10 means that in a ten minute walk from a radius of your residence there have been ten murders within the last year or so.

Oh yea, I forgot, it has a view of the river.

#10 Ultraman on 05.06.12 at 9:05 pm

Can’t put my finger on it but there’s something about her that reminds me of my ex 3 wires…together.

#11 Ultraman on 05.06.12 at 9:06 pm

I met wifes, of course.

#12 JM on 05.06.12 at 9:06 pm

As opposed to the cut-and-paste generation? Spare us. — Garth

Pwnd

#13 Kasia on 05.06.12 at 9:06 pm

Went to see an open house today in Markham (NO plans of buying, just being nosey!). Door closed, no one there. Called the office and was told there is a conditional offer so OH was cancelled. How much lazier the agents can get???? Not even a note on the door to inform public about the cancellation? Sure hope they all get what’s coming and start working for their money like the rest of us!

#14 Smoking Man on 05.06.12 at 9:19 pm

Lake Simco Chat on a boat.

Was on the lake today, shooting the breeze with some boomer palls , Many of them lost their shirts in 2008, will not touch a mutual fund or make investments in Bonds Equities, they don’t even know what preferred’s are.

All of them have made their remaining wealth in Real Estate and have no intention of liquidating some of there properties. Made fun of me for un loading all but one. See how much loot you lost smoking man, I said ya I’m an idiot but I had no choice markets wiped me out, poverty sucks, we can’t win all the time I said, as I cruise the lake on the hosts gas, booze and shrimp.

I did such a good job faking poverty one of my pals offered my free car 2007, rag top beamer , as they noticed I was in a rental. I just said thanks but I don’t need a car and the insurance would kill me right now.
Don’t worry boys, not looking for a hand out, I will bounce back, I always do, but thanks I appreciate it.

Prompting guy hugs. I was dying inside. LMFAO

At leased now my kids our out hustilling, learning to sell, they know that stupid dad lost all the loot, They got to make it on there own. The guys on the boat have sons in the 20′s few degrees, but mostly don’t work are banking on Dad to look after them. Funny thing is the daughters are all doing good.

Ah That feminized curriculum.

#15 mel in victoria on 05.06.12 at 9:23 pm

Let’s try that again…

Can’t put my finger on it but THERE’S something about her that reminds me of my 2nd wife…

.. damn gremlins..

#16 Smoking Man on 05.06.12 at 9:25 pm

#3 Know your enemy on 05.06.12 at 8:50 pm

Bahahahah

You just got bitch slapped by a boomer
Nice one Garth

Know your enemy
At lease shuffle the paragraphs and swap out a few words.

#17 Bill Gable on 05.06.12 at 9:31 pm

Checking the speckers in Vancouver’s Yaletown, and there are passel of boxes for nearly two grand a month. These dreamers are going to wake up one day, and realize they don’t have a fig, and they are going to be working to pay that mortgage for a loooooong time. Enjoy the leased Beamer.

#18 45north on 05.06.12 at 9:32 pm

As opposed to the cut-and-paste generation? Spare us. — Garth

pretty funny

Government endorses bill to unmask rioters

Richards’ bill would amend two sections of the Criminal Code that cover the penalties for taking part in a riot or unlawful assembly, criminalizing the use of masks.

Read more: http://www.canada.com/news/Government+endorses+bill+unmask+rioters/6574953/story.html#ixzz1u8wZQ9kA

about time

#19 North o' TO on 05.06.12 at 9:35 pm

#3

:) Most entertaining post and retort I’ve read yet !

#20 tanned34 on 05.06.12 at 9:42 pm

I do believe that although it might not be the best idea to jump in the market right now, it might not exactly be the greatest idea to sell and rent. The rates seem pretty stable right now and it does not seem that the market is going to tank any time soon. My brother in law sold his house 2 years ago for 290000. Today two of them sold for over 365000. He is renting right now for 1600 plus utilities. His mortgage and taxes were almost the same. He cleared $70,000 when his home sold and paid over $38400 in rent for two years.
Had he hung on, he would have made over 140,000 and saved on rent. I’m not saying its a good time to buy a home but no one can time a sale and there is no right answer but to sell your home and move into a rental, uproot and “hope” the market goes down is pretty sad. If you don’t have to sell don’t and if you are thinking of buying, you might want to wait for a bit. If you are renting already why on earth would you want to get into a mortgage and taxes and repair, and buy at what seems to be the top of the market…

#21 T.O. Bubble Boy on 05.06.12 at 9:44 pm

Don’t forget the biggest part of this condo investment scam: the RE board counting these assignment sales as re-sales in their “official” stats.

Many posters have been making note of this recently, and there was even a dispute about this at the YatterMatters blog.

Unless someone can prove differently, evidence points to the RE boards cooking the books with these condo assignment sales.

#22 Gmac on 05.06.12 at 9:59 pm

What’s the downside of preffered shares? They pay great returns and they trade in a narrow margin. There must be something I’m missing …

#23 Mainlander on 05.06.12 at 10:00 pm

I’ve seen a mortgage broker recently convince an older couple into second mortgages. He convinced them to take $300k out of ther house and invest in his MIC, in my opinion these MICs are ticking time bombs that will destroy many like they have before. These things are weapons of mass destruction but no telling the investors I know that are sold on this.
Garth, you should do a story on MIC’s. Im pretty sure what you will use a the picture.

#24 Mr Buyer on 05.06.12 at 10:05 pm

#20 tanned34 on 05.06.12 at 9:42 pm
to sell your home and move into a rental, uproot and “hope” the market goes down is pretty sad
……………………………………………………………………….
I think you have that a little backwards. This is a bubble. To hold out as the top has passed and hope the bubble doesn’t crash is beyond words. BUYER BEWARE. THE BUBBLE HAS TOPPED. NOW IS NOT THE TIME TO BUY A HOUSE. BUBBLES DO NOT GENTLY FLOAT TO THE GROUND. THEY CRASH. GET OUT NOW…IT IS PROBABLY TOO LATE. RATES WILL NOT CHANGE THE OUT COME. GOOD LUCK.

#25 blase on 05.06.12 at 10:12 pm

Garth,

I thought for sure you’d have posted about the Diane Francis piece from last week. Seems likely that this has been going on for several years, along with all kinds of other debauchery related to the moral hazard that is CMHC.

That piece was unworthy of her — Garth

#26 CONDO ZOMBIES are stalking the Land on 05.06.12 at 10:12 pm

A Serious Warning to all Canadians.

Due to the pervasive low interest rate policy of the Bank of Canada, Canada now has a full blown Condo Zombie epidemic. Avoid all contact with these Condo Zombies if you want to spare yourself the effects of this hideous epidemic. Case in point, Mr. X. Mr.X went to try and stop his friend Mr. Y from buying a condo and by the time they reached the front of the line Mr.X bought 2 condos on speculation. This is a serious problem fellow Canadians.

Beware!

#27 Clueless Carl on 05.06.12 at 10:14 pm

#24 Mr. Buyer

Do you think it is a good time to buy real estate in Toronto and Vancouver at his time?

Stop wasting blog real estate with childish posts under various names. — Garth

#28 John G. Young on 05.06.12 at 10:15 pm

That kid’s parents should be arrested.

#29 eddy on 05.06.12 at 10:16 pm

What do you expcet from a company who’s logo is a hot air balloon, and who’s reputation is ‘price it low for a fast sale’ ?

Translation:
‘My commission is based on an average market time of 60-90 days, but I’d rather get the same pay for seven days work, sound fair?’

#30 Country Girl on 05.06.12 at 10:27 pm

Great schmuckenomics post, Garth.
See F tell us there’s no real estate bubble on CTV’s Provincewide:
Provincewide, Sunday, May 6, Part 3, at approx. 2:40,
http://swo.ctv.ca/provincewide/

#31 Not 1st on 05.06.12 at 10:31 pm

#22 Gmac on 05.06.12 at 9:59 pm

What’s the downside of preffered shares? They pay great returns and they trade in a narrow margin. There must be something I’m missing …
____________

They offer no capital gains and they are highly susceptible to interest rate changes. Also, they are not as liquid as their common share counter parts. Yup, you can unload them, but not in mass in a day. It would take more than a few days to unwind a position. Their volume can be less than 10% of their common share counterpart.

You obviously own none. They can certainly provide a capital gain, and are less rate-sensitive than bonds (but since rates are moving at a snail’s pace, hardly an issue). Rates may rise, but the dividend yield remains constant with fixed preferreds, plus you get to claim the dividend tax credit and pay half the tax you would on a GIC. If you buy the preferreds of a major institution (like one of the banks) they are completely liquid, and a position can be unwound in one minute. I’m sure glad you are not investing for anyone but yourself. — Garth

#32 snowboid on 05.06.12 at 10:36 pm

Happily ensconced in our new Okanagan condo (okay it’s four years old). This place may not be as good a rental deal as the old one, but even if we put 50% down the rental costs over 20 years are still less than buying.

Quiet building, pool, spa, steam room, sauna, gym – nice deck with gas BBQ. Granite and S/S, gas range and low utility costs.

The condo has almost 1500 sq ft and the big bonus is they don’t discriminate against renters.

During our rental search we found most of the property management companies are staffed by ex-RE agents. They all know prices continue down, especially with condos.

I would say they see the future for the next few years in the Okanagan – it isn’t selling, but renting.

#33 Saskatoon Housing Bubble on 05.06.12 at 10:37 pm

Don’t these clowns look at previous housing bubbles in Canada?

I might be a clown but I have looked at previous housing bubbles in Canada. Housing bubbles do not end well. Where have I heard that before?

Here is a chart of Vancouver, Calgary, Edmonton, Saskatoon, Toronto, Ottawa and Canadian House Prices, Indexed to 1980 and adjusted for inflation.

http://tinyurl.com/7k4ywlh

#34 Mister Obvious on 05.06.12 at 10:41 pm

#22 Gmac

“What’s the downside of preffered shares? They pay great returns and they trade in a narrow margin. There must be something I’m missing …”
——————–

The downside is you won’t get rich via capital gains. The upside is they help you to remain rich if you already are.

#35 thinker on 05.06.12 at 10:42 pm

In this example, if you have 20% down – why not just by 4 condo’s with 5% down?

Because no insurance. BTW pluralizations do not involve apostrophes. — Garth

#36 Elmer on 05.06.12 at 10:57 pm

What about the fact that there are currently hundreds of apartment buildings in Toronto which were built in the 60s and will need to be demolished soon. Won’t that create a huge supply of tenants who will need places to rent?

Why demolished? — Garth

#37 Canadian Watchdog on 05.06.12 at 11:15 pm

Charts: GTA Condo & Rent Prices + Index

http://i46.tinypic.com/2yxmyvn.png
http://i46.tinypic.com/11kjedv.png

#38 A Fan In Van on 05.06.12 at 11:37 pm

Here’s a fun CBC report, good for a few hearty chuckles.

“Canadian Real Estate Correction?”

http://www.youtube.com/watch?v=iAtuoPql8Is&feature=youtu.be

#39 Dan in Victoria on 05.06.12 at 11:38 pm

Tanned34 @20
Your brother in law is in exactly the same position as he was 2 years ago.
He’s not so dumb.
His timing may have been off, but your advice of sitting and doing nothing……

#40 East Van on 05.06.12 at 11:43 pm

On renting in the good ole USA:

http://online.wsj.com/article/SB10001424052702304746604577382321021920372.html?mod=WSJ_hps_sections_realestate

#41 Devore on 05.06.12 at 11:45 pm

#36 Elmer

What about the fact that there are currently hundreds of apartment buildings in Toronto which were built in the 60s and will need to be demolished soon. Won’t that create a huge supply of tenants who will need places to rent?

Fact? Here’s a fact. Those buildings will still be standing after the cheap glass towers disintegrate. They pay their owners a great income, and they are in no hurry to demolish what is perfectly functional.

#42 Victor on 05.06.12 at 11:55 pm

It seems to be on everyone’s mind these days… Does it make more sense to rent or buy a home (for you)?

http://www.facebook.com/SuperStarSaver/posts/10151543055182588

#43 furst on 05.07.12 at 12:15 am

#4 PoorgEoisie on 05.06.12 at 8:54 pm

FUURRRRRRSTT!!! I don’t need to be actually first to win. win again. FURST!!!!

#44 Kim on 05.07.12 at 12:18 am

Elmer #36

Wow you realtors must be in an all out panic. It’s funny watching mortgage brokers, realtors, and greaterfools posting nonsense to justify a bubble thats seems more like a ponzi scheme which will wipe out 50% of the fake equity. Just like the dot.com bubble were everyone was rich and making money and then the next min you lost everything.

#45 Mark on 05.07.12 at 12:24 am

Right on real estate, wrong on precious metals Garth. Silver and gold are not in bubbles, they will be some day, but they’re aren’t yet.

Yes, silver was $50 an ounce one year ago, it’s going back there. I wouldn’t disregard the advice of Marc Faber, Jim Sinclair, Peter Schiff, Jim Rogers et al.

#46 Nostradamus Le Mad Vlad on 05.07.12 at 12:30 am

-
Do pink Depends really look like that? I understand saggybottomboomer’s moniker now!

“This is dot-com all over again. It’s Nortel. It’s silver. It’s greed. It’s buying high, expecting higher. Plus a pony.” — I’ll take the pony! At the Kentucky Derby today, a 15 to 1 longshot, ridden by a Mexican living in Vancouver came out of nowhere to win. Y’all can share the Nortels, etc., I’ll keep the moneymaker!

“At least one thing’s certain. We never learn. The greater fool gene pool is running dry. Guaranteed. Similar to F inviting me to share his hot tub.” — Refer back to the opening pic to have an idea of where F’s brain is located, and what Garth is talking about.
*
21:44 clip What do economists know? Such as here; EZone and Spain; Game over for the American dream? Yes, and here is the new dream; Avoid Student Loans like taxes; A World Without Money; Greece Does anyone care? Voters are as mad as hell; Homestagers Tricks; US Gold Eagles surge; Too Big To Sink A hundred years on are we about to hit another ‘iceberg’? 6:33 clip Oil should be around US$60-70 a barrel.

End of Merkozy; Supermoon and Cinco de Mayo plus elections lead to turbulence; Growth Engine China? Sony shares drop to lowest level in 25 years; Deutsche Bank France and Greece rejected Germany’s bailout plan; dubya and Obomba Decreasing jobs while increasing wars, and here is the chart to say bye bye to the latter; Work from Home; Banxters Worst Nightmare on Elm Street.
*
Canada will thrive in New World Disorder; Tornado in Tokyo? Political Correctness gone nuts; Google and CISPA Are they for or against it? The Bionic Men a.k.a. Super Soldiers; Michigan town could become China City; Ritalin use grows in UK (economy?); Controlling free speech (what’s left of it); Tinnitus Home remedies; Airports From bad to ugly.
*
disciple – Christian doublespeak, similar to Orwell’s.

#47 mac on 05.07.12 at 12:42 am

Happy to read the word turpitude in the post tonight. Would like to see it used more often, esp. with respect to the CMHC.

#48 Peterfromcalgary on 05.07.12 at 1:08 am

The one thing that has always scared me about condos is the amount they spend to advertise them. If the new condos are advertising so much to sell how is someone who bought a few years ago going to sell their condo which may have bedbugs by now.

Obviously someone selling a single condo can’t afford to take out a full page ad in the Calgary herald. Nor will the herald have an “article” about how hip this old condo is. So they have one way to sell price it a lot lower then the new condos are going for. In a stagnate market that means selling it for less then you paid.

#49 TaxHaven on 05.07.12 at 1:21 am

But I suspect your point of view on this blog is now mainstream. Once a contrarian voice, now establishment thinking.

The only condofans I can see, busy beavers spruiking, flogging and shilling, are real estate agents, the mass media and developers…

I have yet to hear from a real BUYER…

#50 Keith in Calgary on 05.07.12 at 1:30 am

Was at a swank dinner party last night (here in YYC where I live) with 6 couples including my wife and I. At around 900PM when the table had been cleared and the many pre-dinner drinks and about 8 or 9 bottles of utterly intoxicating wine had been consumed, the after dinner whisky, scotch, and cocktails started to flow and the conversation around the table turned to real estate, economics, and politics.

The host couple (close personal friends of ours) and my wife and I were the only bears at a table full of bulls. A little background……the host was a wealthy doctor who acquired his home on a golf course 11 years ago for about 1/3 of what it might be sold for today. He owes about $200K and will have the mortgage paid off in full in 24 more months. If the property dropped back to what he paid for it they would not be materially financially impacted in any way, since they didn’t know that a bubble would occur, nor plan for, any appreciation due to a boom in RE values. They built the house to live in and pay off in a decade. It is one of a portfolio of many international properties that they own, amongst other things. The correct definition of homeowner could be applied here. We are merely renters here, even thought we own a single piece of property in another continent that is paid for. Over the last 11 years we have saved a mid 6 figure sum in cash by renting, staying out of debt, and living within our means. What a concept that is…….

The bulls apparently did not believe that significant international economic or political events cannot impact Canadian RE values. Witness the election of a socialist to the presidency of France for example and the ramifications thereof. The Euro zone will create problems for all of us…..as will the US and China.

It is also their entrenched belief that interest rates will never rise in Canada for a very, very, long time. Even though as other nations react and perhaps have to raise rates to attract capital in order to keep their financial ships afloat, poor little ole’ Canada will have no choice but to follow along or be left behind. Of course, we may just raise rates due to the bubble (that does not exist mind you) because we need to stop the madness and eventually one government will do so of their own accord when they come out of the ether.

Renting is scoffed at, merely because it does not support the last generations ingrained mental foundation of wealth creation, that all of your eggs must be in a piece of property or you are in a class lower than everyone else. When I was explaining that a renter can do just as well as, or IMHO better, than someone who had all of their net worth in a single piece of property, the guffaws could be heard round the table except at our end. Yet they could not, nor would they even try, to rebut our position with logic, facts, and reason, since perhaps they knew we held all the cards. Their arguments were entirely emotional in scope, and easily debunked. Just like any RE agents sales pitch.

At the end of the night I was looking at them, and to me anyways, it seemed that they were all dressed in black pants and shirts while wearing brand new white Nikes…….waiting for the RE comet to take them away. Denial is a powerful belief system.

http://en.wikipedia.org/wiki/Heaven's_Gate_(religious_group)

#51 TRT on 05.07.12 at 1:56 am

Kudos to John? for pointing out an interesting BBC 4 part special called “The Century of Self”

have watched about half and is boring at times but some valuable insight into society….

What i get from this with regards to investing is that high end brands will do very well in the future. The future is in “WANTS”, “NEEDS” were satisfied decades ago.

Hence explains APPL.

#52 TRT on 05.07.12 at 1:56 am

oh…its on youtube

#53 Mr Buyer on 05.07.12 at 2:41 am

#33 Saskatoon Housing Bubble on 05.06.12 at 10:37 pm
Don’t these clowns look at previous housing bubbles in Canada?
………………………………………………………………………..
We weathered previous housing cycles so people may think this is normal but this is a bubble (the others were not) and bubbles are followed by crashes.

#54 daystar on 05.07.12 at 3:07 am

#272 disciple on 05.04.12 at 9:19 am

Thanks. Interesting stuff.

Good piece, Garth!

#55 jay on 05.07.12 at 3:31 am

Dog Walk Index (DWI) in the leafiest of Victoria ‘burbs. 1 sale! First for four months. Three off market as listing agreements lapsed without action. Three on market – hope springs eternal. Three ready to hit market – pressure washers on high.

The DWI does not cover condos but you can rent very nicely in new buildings. $1350-2250. And given supply, I suspect there are deals to be done.

When I puddle jump to Vancouver I am still hearing real estate chatter; in Victoria you talk about golf, the weather….It’s over.

#56 rp1 on 05.07.12 at 5:35 am

#37 Canadian Watchdog – nice twitter feed. Thanks for posting the graphs.

#57 gmc on 05.07.12 at 5:51 am

good article i read on the weekend, 47 million on food stamps, USA economy in the toilet, unemployment figure 8.2%, but incredibly there is 100 million without work.
this isn’t going to happen here, it all to the good, YEEKS

#58 Onemorething on 05.07.12 at 6:49 am

ah, the last scraps of RE pumping torture. The last buyers in the country drive these ads. To squeeze the very last drop of credit out of the unsuspecting lemming.

So predictable, So boring!

So perfect for liquidity players like me, NICE!

#59 Smoking Man on 05.07.12 at 7:00 am

Wow greece votes in neo nazis. In france sarco is broomed. In canada Carneys threat to up rates was just deiverd a knock out punch from across the atlantic

#60 The real Kip on 05.07.12 at 7:00 am

The more the stock markets bleed money the more money seems to pour into Canadian real estate.

We have not built a strictly rental apartment in GTA that I can remember due largely to Ontario rent controls. The new condos simply fill that void. It’s also possible that rents will increase on Toronto as costs rise. With 100,000 people moving into GTA the pressure for housing will continue.

Rents will fall along with average prices. — Garth

#61 House on 05.07.12 at 7:01 am

Aren’t realtors “professionals”? Maybe this is a way of learning. A hard lesson will stay with then for life.

#62 T.O. Bubble Boy on 05.07.12 at 7:12 am

#36 Elmer

What about the fact that there are currently hundreds of apartment buildings in Toronto which were built in the 60s and will need to be demolished soon. Won’t that create a huge supply of tenants who will need places to rent?

Seriously?

Using that argument, what about every brick building in the world? Should they all be replaced by stucco McMansions and glass condos where the balconies fall off within the first year?

Also – you should share your theories with Canadian Apartment REIT and Allied Properties REIT, since combined they represent $3.5 Billion in market cap – 100% tied to buildings like the ones you think all need to be torn down immediately.

#63 Sebee on 05.07.12 at 7:17 am

Can’t wait for the media to start acting surprised about these real estate practices once the thing pops. I can see hour long investigative specials already.

But for now, consumer alert sections of news is all about expensive cell phone bills. It’s more important advice after all.

#64 bigrider on 05.07.12 at 7:17 am

#23 Mainlander- What is a MIC ?

Mortgage investment corporation. Basically a pool of funds used for residential or construction mortgages, given to people the banks reject. — Garth

#65 bigrider on 05.07.12 at 7:22 am

Garth ,lots of talk from you with regard to preferred’s. Preferred’s being on the income side of a 40/60 portfolio as you have always espoused, together with bonds.

Perception here might be that they make up a larger percentage of you porfolios than they actually do.

I would be curious to know what the other 60% equity/growth side looks like in terms of holdings.

Preferreds at one-fifth of a balanced portfolio seems about right. I will address your question is a subsequent post. — Garth

#66 Aussie Roy on 05.07.12 at 7:23 am

Aussie Headline

That’s not a bubble, this is, maaate.

http://www.theburningplatform.com/?p=34055

Now we don’t have a bubble BUT, just in case.

How to beat the deflating property bubble

http://www.heraldsun.com.au/money/beat-deflating-property-bubble/story-fn7kiw2r-1226348121027?sv=f8d9569c30d025517571f54d6f7b393

North Stradbroke Island much-hyped $30 million auction sells only one property

http://www.couriermail.com.au/life/homesproperty/stradbroke-to-stradboom/story-e6frequ6-1226347138800

Top end caught flat-footed as property slump worsens

http://theage.domain.com.au/top-end-caught-flatfooted-as-property-slump-worsens-20120505-1y618.html

We can’t give away mortgages no matter what the interest rate.

CBA cuts 100 jobs on weak mortgage demand

http://www.theage.com.au/business/cba-cuts-100-jobs-on-weak-mortgage-demand-20120507-1y8hi.html#ixzz1uBKrm1u4

Melbourne’s auction market posted another mediocre performance today despite the sharp cut in the interest rate.

http://theage.domain.com.au/auction-market-slow-to-respond-to-rate-cut-20120505-1y5tg.html

Hear that hiss? It’s house prices deflating

http://www.smh.com.au/opinion/politics/hear-that-hiss-its-house-prices-deflating-20120504-1y42s.html

#67 richard on 05.07.12 at 8:16 am

Devil’s advocate,

In regards to your repeated postings, a couple days ago, about your wife being mistaken for the model in the photos, as well as your previous numerous references to how your hot wife would make the posters here cry….

…nobody but nobody is confusing Pammy for the model in the photo.

Your desperate attempt to overcompensate for your wife, is even worse than your acting-out motivated by your own inadequacies.

#68 Rob now in Nova Scotia on 05.07.12 at 8:21 am

Silver a bubble? Sure the price dropped from a high of $50 and is now around $30 but that doesn’t make it a bubble. It is a market correction (some say a take down). The fundamentals have never been stronger and silver will climb again in the second half of 2012. Precious metals are the safest bet right now and that’s why I’m buying more at these bargain prices.

I did not say it was a bubble now, but anyone who bought at $50 – and has lost 40% of their money – knows how silly it is to chase rising values. PMs define volatility and most investors should eschew them. — Garth

#69 mark on 05.07.12 at 8:37 am

Garth,

What do you think the impact of a nation-wide real-estate correction would be on REITS?

Essentially none. — Garth

#70 disciple on 05.07.12 at 8:47 am

#45 Mark… Talk about Schmuckenomics…If you take advice from Peter Schiff, then you are taking advice from Paul Reubens (pee wee Herman). They are, in fact, the same person…

http://wirenetology.blogspot.ca/2012/05/peewee-herman-exposed-peter-schiff-is.html

hey Boomer… did you read this, or was it too long-winded and non-finance-related for you? Jerk.

#71 Canadian Watchdog on 05.07.12 at 8:55 am

—Canada residential building permits down 1.7% y/y/ (-4.4% unadjusted)
—Ontario residential building permits down 20.2% y/y.
—Toronto residential building permits down 22.8% y/y.

#72 Flash on 05.07.12 at 9:08 am

Great article, your a good teacher.
I see a bit of a selling panic here in Milton Ontario now, these sellers must be reading your recommendations and are getting out since I suspect that many can’t make ends meet. I believe I missed the selling boat by about 6 weeks. At that time there where about 100 houses for sale, now there are 500. Unfortunately I’m now one of them, just retired and want to relocate to the Niagara Region. I have a perfect house that I nurtured for 31 years at $450 and only 2 viewers through since listed a week ago. Until now, a house listed on my street sold in 2 days. Timing is everything.

#73 NCYer on 05.07.12 at 9:11 am

Garth, with respect to preferred shares. Is there any preference for fixed or floating rate ones in times like these?

#74 The real Kip on 05.07.12 at 9:29 am

Get ready for more stock market turmoil as confidence in them erodes.

We can’t control what happens around the world but I can control what happens in my own back yard. I think I’ll keep the house!

Let it bleed!

#75 Party On Garth on 05.07.12 at 9:29 am

We can now soon add France to the PIIGS.

F ‘n PIIGS ?

#76 Steve Thompson on 05.07.12 at 9:46 am

Interestingly, one of the Maritime’s leading realtors admitted to a friend of mine, off the record of course, that there is a real estate bubble and that we’d best be careful. Odd candor coming from an occupation that is generally anything but pessimistic about their own business interests. Even more interesting when you consider that real estate in the Maritimes has been anything but “bubblicious” when compared to most of the rest of Canada. At least here, we can still buy a decent house for under a quarter of a million dollars.

#77 Joe Q on 05.07.12 at 9:48 am

Garth,

I think you’re in a unique position with a big enough audience to call out the RE boards on what is clearly statistical manipulation on a grand scale. Enter the HPI.

Look at the Fraser Valley Real Estate board statistics for April on MLS Summary page 1 of 3.

http://www.fvreb.bc.ca/statistics/Package%20201204.pdf

Median detatched price April ’11: $558K
Median detatched price April ’12: $537K (-3.7%)

Average detatched price April ’11: $641K
Average detatched price April ’12: $589K (-8.1%!)

Benchmark HPI Index price April ’11: $547K
Benchmark HPI Index price April ’12: $576K (+5.3%?)

Of course, good luck finding any reference to the bloodbath Average and Median price shocks in the “official” press release. Instead, you get told about the rosy HPI which is calculated with so many assumptions they can make up whatever number they want.

I have a friend who works at the CBC and aparently, marketplace is already investigating.

#78 Do Do Bird on 05.07.12 at 10:06 am

Currently renting in “Etobicoke” and am shocked at Garth’s scenario about the investor condo renting for $1,700…..imagine seeing the arrogant snout of a condo owner “informing” you that the rent was $1,700. they should make a reality tv show with that. After living in such a tight restricted environment one would believe folks would be unhinged and dying to get out to Oshawa where for less than half that they could find a huge rental.

#79 Daisy Mae on 05.07.12 at 10:15 am

Why is there a need to bash ‘boomers’?

Is it because we need to blame someone other than ourselves, so the ‘boomers’ serve well as our scapegoat?

#80 jimsum on 05.07.12 at 10:30 am

Can we finally stop blaming everything on CMHC and first-time home buyers?

Does CMHC have anything to do with these condo speculators? Speculators don’t have mortgages yet. They just sign a contract and pay a deposit, and I’d like to know what role, if any, the government plays in that.

Just like the States, we are ignoring the speculators and the borrowing they do, and blaming the bubble entirely on government programs and sub-prime borrowers. I expect the same end-game in Canada: the Government will bail out the banks and speculators who made stupid real estate investments; then the government will cut programs to pay for the bailout, which is only fair because poor people caused the bubble.

Government policy is not the cause of bubbles; effective government regulation is the only thing that might stop bubbles. As we can see, Bankers get rich and keep their money, even when they make decisions that are so bad they nearly sink the world economy.

At least house-horny kids with no money down want to live in the condos they are buying. Speculators buy multiple condos, and will walk away as soon as they discover there aren’t enough people willing to live in their condos.

#81 Mr. Anderson on 05.07.12 at 10:34 am

#15 mel in victoria

Was this an upgrade?

#82 HDJ on 05.07.12 at 10:39 am

Is Diane Francis correct?

http://www.huffingtonpost.ca/2012/05/07/tax-fraud-canada-housing-bubble_n_1495286.html?ref=topbar

#83 truth hammer on 05.07.12 at 10:42 am

Liberal socialism a disaster for Ontario. More draconian tax policies will force high wage earners ( like these doctors) to abandon ship

http://news.nationalpost.com/2012/05/06/ontario-doctors-face-wage-cuts-clawbacks-in-government-proposal/

When do the dreary Libs ever sit down and talk about cutting the giveaways to special interest groups?

Answer…..never.

#84 bguy1 on 05.07.12 at 10:45 am

better to have perpetual preferreds or not?

#85 bigrider on 05.07.12 at 10:52 am

Garth, have you seen the article by Julie Cazzin and Phil Froats in Money sense page 47 this months issue.?

Basically they have done an analysis of real estate markets across Canada applying some type of grading system (not explained) which indicates which areas are good investments.

Bottom line is they practically assessed a strong rating to all areas.

Pumping I think.

What are your thoughts?

#86 bigrider on 05.07.12 at 11:06 am

Page 68, TorontoLife special issue, reason #19 “Reasons to Love Toronto”.

Garth ,you have been quoted and subsequently dismissed as an alarmist.

“Toronto is stable and prosperous” according to the fine purveyors of this rag.

#87 Arshes on 05.07.12 at 11:12 am

#72 Flash on 05.07.12 at 9:08 am Great article, your a good teacher.
I see a bit of a selling panic here in Milton Ontario now, these sellers must be reading your recommendations and are getting out since I suspect that many can’t make ends meet. I believe I missed the selling boat by about 6 weeks. At that time there where about 100 houses for sale, now there are 500. Unfortunately I’m now one of them, just retired and want to relocate to the Niagara Region. I have a perfect house that I nurtured for 31 years at $450 and only 2 viewers through since listed a week ago. Until now, a house listed on my street sold in 2 days. Timing is everything.
——————————————————–
Yes timing can be everything, Spring is usally the strong season for RE sales, and thats when most people list. Everyone is coming and listing at the same time, probably they wanted to wait for the strong season or because they are currently re-lisitng because the didnt get the price they wanted. I predict the bubble will pop in Fall of this year. People have a tendency to behave in predictable ways. They all list in spring because thats when demand is traditionally high, but no one will buy becuase the supply has now exceeded demand and the changes to mortgages rules etc.. People will pull and re-list in the summer but still no bites and when fall comes everyone will realize its really over, fall is slow for sales because the summer is over people are returning to work and school. Panic ensues.

#88 };-) aka DA on 05.07.12 at 11:54 am

#67richard on 05.07.12 at 8:16 am
Devil’s advocate,

In regards to your repeated postings, a couple days ago, about your wife being mistaken for the model in the photos, as well as your previous numerous references to how your hot wife would make the posters here cry….

…nobody but nobody is confusing Pammy for the model in the photo.

Your desperate attempt to overcompensate for your wife, is even worse than your acting-out motivated by your own inadequacies.

Sorry, but you are quite wrong.

Some guys are lucky and some not so. I am one of the lucky ones. Not only is my wife a good looking lady with a well maintained body that she looks after she is also one of the smartest people I know. Again, why she agreed to spend the rest of her life with me more than 30 years ago when she had so many other options I have no clue…

Too bad you cannot seem to be able to say the same of yours (Pammy) – even if it were a desperate attempt to overcompensate. Fact is though, that would be a most repugnant thing to try to do if it were not true – if you did not feel toward your wife the way I do mine. It would be lying to yourself about your being trapped in a hideous relationship. I can imagine nothing so sad.

I could not do it, I am just that selfish and shallow. I sought out better than that for myself and was fortunate enough to have found it.

21 Suggestions for Success by H. Jackson Brown Jr.

Suggestion #1. Marry the right person. This one decision will determine 90% of your happiness or misery.

Believe me Richard when I tell you… 90% of the time my wife makes me a most happy man. The other 10% is because I have not been able to make her as happy as she makes me.

Now let us return the topic of this blog to matters of real estate.

#89 Saskatoon Housing Bubble on 05.07.12 at 11:56 am

Garth,
here are a few more graphs with Vancouver, Calgary, Edmonton, Saskatoon, Toronto, Ottawa and National average house prices from 1980 to 2011.

Here is the average house price in nominal dollars.
http://tinyurl.com/c5z5dhx

Here is the average house price indexed from 1980 in nominal dollars.
http://tinyurl.com/d8zrquc

I believe one of the best ways to look at returns of any asset class is to account for inflation.
Here is the average house price adjusted for inflation in 1980 dollars.
http://tinyurl.com/c5z5dhx

This next graph clearly shows the housing bubbles in western Canada in the early 80′s and Toronto’s bubble in the early 90′s.
Here is the average house price adjusted for inflation in 1980 dollars and indexed to 1980.
http://tinyurl.com/82n5aac

I also have Winnipeg, Kitchener, Hamilton, Oshawa, Montreal and Halifax average house prices from 1990 onward. I will graph them later this week. Toronto was not the only city in Ontario to suffer from a housing bubble in the 90′s.

#90 Gotthardbahn on 05.07.12 at 11:58 am

Hi Garth – I stopped reading your pathetic blog a while back when it appeared your negativity was a trifle overdone. Then I noticed a couple of huge building-mounted billboards in my area of Toronto – Roehampton Avenue near Yonge & Eglinton – touting a couple of enormous new condo developments. As well, a couple of pile drivers are hard at work nearby driving piles for, presumably, new condos in the area. It’s certainly not for office towers and new houses don’t need piles driven, so it looks like this Toronto condo.com madness really is accelerating. I’ll continue renting for now, thank you very much, and I’ll continue reading this pathetic blog.

#91 Snowboid on 05.07.12 at 12:03 pm

#55 jay on 05.07.12 at 3:31 am…

“…pressure washers on high.”

Hilarious – reminded me of my spring routine fully dressed in my rain gear, heading out to attack the moss that covered our decks, concrete driveway, stairs, patio and walkways.

At the end I appeared to be something from a HAZMAT horror movie, but blasting the crap out of everything was sure fun!

#92 disciple on 05.07.12 at 12:19 pm

The Coolidge-Effect
In experiments with rats it has been observed that after vigorous copulation with a new partner, male rats soon completely ignore this partner, but when a new female is introduced, they immediately are revitalized – at least sufficiently to become sexually active once more. This can be repeated again and again until the male rat is completely exhausted.
This phenomenon has been called the “Coolidge Effect” after an American president. On a visit to a farm his wife had been shown a rooster who could copulate with his hens all day-long day after day. She liked that idea and asked the farmer to let the president know about this. After hearing it, President Coolidge thought for a moment and asked: ”Does he do that with the same hen?” “No, sir” answered the farmer. “Please tell that to Mrs. Coolidge” said the president.
http://www.reuniting.info/science/coolidge_effect

Not only has the Coolidge effect been observed in all tested male animals, but also in females. Female rodents for instance flirt more and present themselves more attractively when observed by new males than in the presence of males with whom they had already sex.
Another experiment indicates that the cause of this effect may be a rush of dopamine. When rats were taught to pull a lever to stimulate their own reward center, they would forgo eating and copulating, and just continue to stimulate themselves until they were totally exhausted.

#93 truth hammer on 05.07.12 at 12:19 pm

a little levity please

http://www.bbc.co.uk/nature/17953792

#94 Market Bull on 05.07.12 at 12:22 pm

Watchdog wrote:

—Canada residential building permits down 1.7% y/y/ (-4.4% unadjusted)
—Ontario residential building permits down 20.2% y/y.
—Toronto residential building permits down 22.8% y/y.
_____________________________________________

You failed to mention that non-residential permits were way up again or that total building permits were up subsatantially beyond economists expectations. This suggests that the economy is picking up steam. Businesses are expanding and it is the absolute best news for our economy – jobs, jobs, jobs.

As for residential permits, this is excellent news as well as it clearly indicate that builders are mitigating against the construction of excess housing inventory.

The main developers and builders in the GTA are all the same groups / families that were here in the last crash, except this time they took what they learned about over-building in the late 80′s, and passed it down to the next generation.

Outside of perhaps a few high-rise condo projects that are too deep into production, most other projects can be halted on a dime.

You will not see excess inventory in the new home segment; and SFH – both new and re-sale, are poised to go higher.

#95 };-) aka DA on 05.07.12 at 12:27 pm

#67richard on 05.07.12 at 8:16 am

That must have been weighing heavy on your mind that you would bring it up so many hours later.

You need to do something about your discontent my friend. No one will do it for you. You have to do it for yourself. I didn’t marry my wife for her I married her for me and every day that I set about pleasing her is as much for me as it is for her – more. Selfish? Duh. But the more you give the more you get – believe it. And trust me Dude I am getting more than my fair share };-)

Look, if your wife is a fat assed lazy waste of space, like that shown sitting atop the “todd-l-chair” in the picture at the top of this blog, (Is that maybe what incensed you so in the first place? Too close to home?) you have to do something about it. Maybe get up off that Lazyboy recliner of yours and do some exercise yourself that you give her incentive to please you as you are then trying to her.

It’s always a 50/50 deal Richard – always. The best you can do is pick up the slack in your 50% before blaming her for neglecting her 50%.

This advice holds true for so many other things in life outside marriage.

21 Suggestions for Success
Suggestion #18. Stop blaming others. Take responsibility for every area of your life.

#96 Makavelli on 05.07.12 at 12:30 pm

With the markets declining in the last week, is it a good time to jump into REITs?

#97 lawboy on 05.07.12 at 12:42 pm

#60

Yes, there are new all-rental buildings in Toronto. There is one on Mt. Pleasant, just north of Eglinton. Another is being constructed on Lisgar Street near Queen & Dovercourt. There may be more. My understanding is that rent controls came off for new buildings in the late 1990s.

#98 VINNY on 05.07.12 at 12:46 pm

HI GARTH ! DO YOU THINK ONE DAY YOU MIGHT GET BACK INTO POLITIC ???
YOU WILL SURELY GET MY VOTE….

#99 Pops Ol' Limey on 05.07.12 at 12:52 pm

#36 Elmer

Toronto 60′s apartment buildings better built overall. Just repair balconies and garage floors, renovate/redecorate the units. Plumbing & HVAC can be the challenge.

#100 Oceanside on 05.07.12 at 1:19 pm

Qualicum Beach BC.

255 active residential listings

Last 7 days there have been 6 sales, 5 under $420,000 and one for $625,000 on an asking of $699,000.

#101 };-) aka DA on 05.07.12 at 1:22 pm

#77Joe Q on 05.07.12 at 9:48 am

I think it safe to say “You can’t handle the truth”.

It is practically impossible to lead someone to believe that which they do not want to believe

#102 Tony on 05.07.12 at 1:24 pm

Re: #22 Gmac on 05.06.12 at 9:59 pm

They can go to zero just like the common shares.

Of course not. Like bonds, preferreds have a par value. No bank preferred has ever not been redeemed for full value. You are the poster boy for financial illiteracy. — Garth

#103 };-) aka DA on 05.07.12 at 1:38 pm

#100Oceanside on 05.07.12 at 1:19 pm
Qualicum Beach BC.

255 active residential listings

Last 7 days there have been 6 sales, 5 under $420,000 and one for $625,000 on an asking of $699,000.

For a small hamlet of approximately 8,500 with a demographic boasting a median age of 61 years that’s pretty good I’d say. You want that we should return to the wildly exuberant times of 2007/08?

Might be time I move to the Island. };-)

#104 new_era on 05.07.12 at 1:52 pm

LOL – Peter Schiff on the Life of Julia

http://www.youtube.com/watch?feature=player_embedded&v=UxKE5–iB4U#t=1029s

#105 Oceanside on 05.07.12 at 2:35 pm

#103 };-) aka DA on 05.07.12 at 1:38

For a small hamlet of approximately 8,500 with a demographic boasting a median age of 61 years that’s pretty good I’d say. You want that we should return to the wildly exuberant times of 2007/08?

Good point. Same week in May last few years. maybe is just slow and steady. 2008 wasn’t too wild here.

2012 6 sales
2011 8 sales
2010 2 sales
2009 9 sales
2008 3 sales

#106 Canadian Watchdog on 05.07.12 at 2:39 pm

Red Pin MLS listings up 7.9% w/w, 33.7% m/m. http://www.theredpin.com/blog/canada/toronto-real-estate-may07-2012

https://p.twimg.com/AsTVCKICMAEalqL.png:large

28,430 listings on Red Pin meanwhile TREB reported 18,379 last week. Everybody see what’s going on now?

#107 Tony on 05.07.12 at 2:45 pm

DELETED

#108 Canadian Watchdog on 05.07.12 at 2:50 pm

#94 Market Bull

“You failed to mention that non-residential permits were way up again or that total building permits were up subsatantially beyond economists expectations.”

Yes, largely due to commercial and government buildings which have no relevance to residential.

“You will not see excess inventory in the new home segment; and SFH – both new and re-sale, are poised to go higher.”

There doesn’t have to be excess SFH inventory for the market to crash. Once the condo market plunges it will take down everything with it because ALL LIABILITIES FALL ON THE BANKS’ AND CMHC’S BALANCE SHEET, and no lender loan high LTV’s when asset prices are falling. They don’t want it on their balance sheets.

#109 jjpetes on 05.07.12 at 2:56 pm

@#3 Know your enemy

As opposed to the cut-and-paste generation? Spare us. — Garth

Owned!

Now to own you some pwnage Garth,

It was not cut-and-paste it was COPY-and-paste

OWNED!

jj

#110 John on 05.07.12 at 3:02 pm

Disciple writes:

“stimulate their own reward center, they would forgo eating and copulating, and just continue to stimulate themselves until they were totally exhausted.”

This is absolutely relevant for the consumption-driven GDP and the derivatives-backed, Goldman Sachs et al, international Canadian real estate bubble.

Dopamine. ( The money junkies driving the “Canadian” “economy” are no different…novelty sexually is just another dopamine spike).

In fact, there is now a really good documentary out from the site “pleasure unwoven” which talks about what all that modern dopamine rush is doing to the frontal cortex ( dopamine from fast carbs, smokes, sodas, internet, porn, alcohol, other drugs, gambling, risk-taking etc.)

Turns out the frontal cortex ( judgment center) shrinks with the modern rush of dopamine, day at night. It’s called “hypofrontality”. To see it in play, even suggest the idea…people would laugh at it the same way they’d laugh at the concept of a weak economy in Canada, on the brink of serious problems.

Check out what’s happening to young people with internet porn. It’s a mess and it’s REAL. Denial anyone? ( the core of addiction). I’ve never even HEARD of this reality coming from a Canadian source. It’s a denial culture.

Check the six part series done by a high school science teacher. This is our society right now.

Think of the CONTEXT for Canadian society. Consider the dervatives-built casino sinking Canada…visible in real estate. With no judgment whatsoever, and a deluded public on “social” networking day and night.

Connect the dots. This link is just one ASPECT of the hyper-stimulated public. And the link starts with the Calvin C. Effect, just as you posted.

http://www.yourbrainonporn.com

#111 Soylent Green is People on 05.07.12 at 3:03 pm

If you Google “ICELAND FORGIVES ENTIRE POPULATION OF MORTGAGE DEBT” you will get ‘About 359,000 Results’. Not one of them is a Media Outlet in the US. Not one single Major or Minor news outlet in America has mentioned a single word about this story.

This is TOTAL MEDIA CENSORSHIP and a TOTAL MEDIA BLACKOUT, and it should tell you who owns and runs the Media in America.

BANKERS. Foreign Bankers.

We are allowed to see a tortured, bleeding, dying Gaddafi anywhere, but we are not allowed to know about Debt Forgiveness.

http://www.liberationfrequency.info/2012/05/07/iceland-forces-debt-forgiveness-total-us-media-blackout/

.

#112 McLovin on 05.07.12 at 3:05 pm

Ok Garth enough is enough. DA HAS TO GO!

He is abusing this blog and acting like a child. Please ban him for good.

#113 Canadian Watchdog on 05.07.12 at 3:17 pm

New condos are getting listed in lots now—the same way they were purchased. http://i49.tinypic.com/35hn6li.png

#114 };-) aka DA on 05.07.12 at 3:22 pm

#112McLovin on 05.07.12 at 3:05 pm
Ok Garth enough is enough. DA HAS TO GO!

He is abusing this blog and acting like a child. Please ban him for good.

WTF! What’d I do now? Acting like a child?

If Garth wants me to leave I will gladly leave.

That you want to muzzle me says more about you than it does me.

#115 pop on 05.07.12 at 3:25 pm

from http://www.moneyville.ca/article/1174391–gta-condo-market-starts-out-2012-hitting-new-records

The number of active projects in the first quarter hit 338, up from last year’s 284.

But the number of “active” units — those in pre-construction sales, under construction or in newly constructed condo towers yet to be completely sold out — stood at almost 85,000 units in the first quarter, up from 73,643 during Q1 of 2011

#116 robert james on 05.07.12 at 3:43 pm

It may not be a good idea to buy drug capsules produced in China… http://www.cbc.ca/news/world/story/2012/05/07/human-flesh-capsules-south-korea-china.html

#117 Timing is Everything on 05.07.12 at 3:58 pm

#111 Soylent Green is People – Your Iceland mortgage debt story…

(editors note: 05/07/2012: It has come to our attention that this article is somewhat inaccurate, please see here for the full story.)

‘So I am afraid I must shatter the hopes of anti-debt activists and their ideas of Iceland. Unfortunately, the debt of Icelandic households is still around and it probably amounts to roughly as much, as a share of GDP, as it did before the collapse of October 2008.’

http://tinyurl.com/7f2qerb

#118 Devore on 05.07.12 at 4:22 pm

Proof of income?! We don’t need no stinkin proof of income, this is Canada! (best said while “THIS IS SPARTA!” from 300 is playing in the background).

Oh yeah, so credit is getting snipped, prices are expected to decline. The media bubble has definitely arrived to the bubble pop party.

#119 GTA bubble H on 05.07.12 at 4:31 pm

Interesting article from:

http://www.moneyville.ca/article/1174391–gta-condo-market-starts-out-2012-hitting-new-records

The number of active projects in the first quarter hit 338, up from last year’s 284.

But the number of “active” units — those in pre-construction sales, under construction or in newly constructed condo towers yet to be completely sold out — stood at almost 85,000 units in the first quarter, up from 73,643 during Q1 of 2011, says Myers,

#120 Makavelli on 05.07.12 at 4:36 pm

Bank preferred shares have many different series. How does one know which one to buy?

Ask. — Garth

#121 naga on 05.07.12 at 4:41 pm

Garth based on http://tinyurl.com/7k4ywlh – provided by #33 today RE over the period 1980 – 2011 inflation adjusted growth:

1. National avg – up 1.75;
2. GTA avg – up 2.25;
3. Van avg – up 2.75.

Do you have a similar “INFLATION ADJUSTED” avg growth for TSE, Dow or S&P?

Going off my memory I think that in 1980 TSE was around 1800! so if I assume a 4-5% avg inflation then the inflation adjusted TSE is up about 2.

30 years from now will GTA or Van RE prices prove to be a better investment option to TSE? I would bet on SFH but not condos. But with Swizterland multigenerational Mortgage rules.

#122 live within your means on 05.07.12 at 5:03 pm

Re the French elections. My French DH chose this year not to participate as he has lived in Canada for 30+ yrs. & feels he should have no say what happens there. His Mom wanted a centrist govt. (as did DH). His Dad voted left. Not sure why as he retired with an 80+% pension about 25 yrs ago (unique situation). DH’s B&SIL (in PQ) asked my FIL to vote Right for them. They suspected he would not.

B&SIL are hypocrits in our humble opinion. He has a great job at Hydro Quebec w/all kinds of benefits/pension plan. She’s a Chemist & had earned $60K+ plus perks a year, but has pissed off several co’s. Took stress leave & then didn’t like the territory the co. proposed. Now she’s upset that the only jobs she can find are at $10./hr. and refuses to demean herself. She obviously has a reputation within that small pharma community. During that time they gladly took advantage of $7.00/day care while they were spending way beyond their means.

#123 Doug in London on 05.07.12 at 5:28 pm

@Know your enemy, post #3:
Your criticisms are directed at the wrong generation. I am a boomer, 51 years old who was raised by parents who were a product of the depression and war rationing. I DID NOT have everything handed to me on a silver platter. I actually wore old hand me down clothes (not the latest style), had an older bicycle (my parents couldn’t afford a new one) and actually rode it a lot rather than whining and begging my parents to drive me everywhere, and didn’t always get everything I wanted for birthdays or Christmas. I actually got used stuff from yard sales, or even fished some stuff out of someone elses garbage, and actually fixed it myself. It shows, as I have no debt and live well within my means to this day.

By contrast I have met younger 20 somethings (Generation Y?) who wouldn’t do the things I do, as they see it as below their dignity. For example, I was at a work location with a 27 year old coworker where there was an old woman’s bicycle lying around. I said : hey, a used bike, if I didn’t have a bike already (which I fished out of the garbage, in good working order) I wonder if it’s up for grabs? He went on a rant about how he would NEVER be caught dead on a woman’s bike. By contrast, with my background I was happy to have any kind of bike. Similarly I would show to others my age how I fixed many things, such as fixing a car heater by using the old air conditioning evaporator as a heater core rather than the horrendous ordeal of replacing the original leaking heater core, and they seemed impressed. by contrast, younger 20 somethings say; why don’t you just throw money at it like I would?

In summary we Baby Boomers are not as spoiled as younger generations are. So do you have a reply to cut and paste?

#124 Makavelli on 05.07.12 at 5:39 pm

#121 Makavelli on 05.07.12 at 4:36 pm
Bank preferred shares have many different series. How does one know which one to buy?

Ask. — Garth
———————-
Garth,

Which series from TD and RBC should I buy?

Ask your advisor. — Garth

#125 Mingeford on 05.07.12 at 5:55 pm

One of the main non bank lenders – Merix Financial – who still offered 40 year amortisations for conventional mortgages has today announced they will no longer be available after midnight.

The landscape for Mortgage Brokers, ergo investors/specers is changing fast.

#126 John G. Young on 05.07.12 at 6:00 pm

#92 disciple on 05.07.12 at 12:19 pm

“When rats were taught to pull a lever to stimulate their own reward center, they would forgo eating and copulating, and just continue to stimulate themselves until they were totally exhausted.”

True, but I believe that the design of that study (i.e. rats kept in isolation in cages with no other stimulation) was believed to contribute to the lever-pushing behaviour. If you haven’t already, you might want to check out information on “Rat Park”.

I believe that addiction is a complex, multifactorial problem — especially in humans.

Cheers,

John

#127 Q on 05.07.12 at 6:03 pm

Who would have believed that there are so many single digit lemmings out there, allowed access to money? Think maybe I’ll get back into the Toronto real estate developement game, my first project could be BRE-X I. Maybe I could gain some initial momentum by getting Donald Hump involved…..free autographed hairpiece and K tel combover tool to all buyers….

#128 Smoking Man on 05.07.12 at 6:09 pm

#111 Soylent Green is People on 05.07.12 at 3:03 pm

You swallowed that story, last week Iceland raised a Billion in a bond action. That would not have happened if it where true.

MSM did not report it cause it did not happen.

Apr fools was last month

#129 MarcFromOttawa on 05.07.12 at 6:29 pm

US prices back to 1895 levels after inflation

http://www.smartmoney.com/spend/real-estate/why-us-house-prices-wont-recover-1335877657114/?link=sm_newsticker

#130 gmc on 05.07.12 at 6:30 pm

TAXPAYERS ALSO VICTIMS OF ‘HOT MONEY’ BEHIND CANADA’S CONDO BUBBLES
Written by Diane Francis at Financial Post
Saturday, 05 May 2012 09:49
There are three times more condo high-rises being built in Toronto than in New York City and seven times’ more than in Chicago.
The condo bubbles in Toronto and Vancouver are caused by foreign speculation and are making housing unaffordable and creating financial risk for the country in terms of government-insured mortgages. But there’s another issue of vital concern to taxpayers.
There are three times more condo high-rises being built in Toronto than in New York City and seven times’ more than in Chicago. This boom is not the market at work, but is manipulation by “hot money” from abroad.
“I have come across something that I find astonishing, and which amounts to systemic tax fraud by investors, mostly foreign, on a massive scale,” wrote an investor involved in the industry.
He explained how it works:
1. Foreigners sign an agreement of purchase for a condo unit, or for 50 at a time, and put down a 5% deposit. This buys a right to buy the unit in future at a fixed price. In financial markets, this is known as a derivative.
2. Many developers include in the agreement of purchase the right to “assign” this right to buy at a fixed price. In financial markets, this is called creating a futures market. This assignment of a right to buy at a fixed price turns buyers into speculators (unless they want to move in or rent out the unit) who are set up to flip the units for a profit as prices are pushed upwards.
The Australians were victims of the same shenanigans and shut it down and now Canada must too
3. Some developers, and intermediaries, are in the business of helping speculators flip their rights and pocket a fee for doing so. For instance, Mr. X from Asia pays $15,000 for the right to buy a $300,000 condo, then, when the price of similar units rise to $400,000, he can assign the right, get his deposit back and make the $100,000 difference. There is a frenzy of this speculation going on which makes prices escalate so rights can be bought and resold over and over again before a building is completed.
4. The paperwork for these agreements is kept in-house and my source said one intermediary told him that there are no T-5s issued to the speculator or to the Canada Revenue Agency, something that stock and futures market intermediaries must do so that taxes can be paid on the $100,000 trading profits. Instead, the profits vanish, possibly along with the paperwork, and taxes paid will be by the end user if they buy, rent out the unit and make a capital gain down the road.
“[Condo] brokers tell me I can flip my assignment and pay no tax and there is no paper trail. They say we do it all day long,” said the investor who asked to remain anonymous.
Under CRA rules, foreigners making Canadian-sourced income are fully taxable by the federal and provincial governments. In Ontario or BC, the total tax bill would be 46% or $46,000 in tax for $100,000 profit.
The unpaid taxes could be staggering, said a real estate agent. In Toronto, 20,000 condo units have been sold each year for the past five years. Let’s assume one-quarter were sold to foreign speculators who flipped the assignment and made $100,000 profit without paying taxes. Their Canadian-sourced income would total $500 million a year, and they would owe 46% of that in taxes or $230 million.
Most condo developers may not be involved in this game, but a few – notably developers with Asian and Middle East owners or backers and buildings located in downtown areas – certainly are.
So this is what must happen. As I argued last week, Ottawa must forbid the purchase by foreigners of any residences in Canada as Australia did in 2010 after foreign speculation and tax evasion damaged its housing market.
The Canada Revenue Agency should send in auditors to the lawyers and intermediaries and developers who have the lists of those who signed agreements of purchase. If they did not close on those deals, and the deals sold for more money than the agreements, then auditors must work backwards and assess income taxes.

Not some of her best work. There is zero evidence a condo bubble stems from foreign investment. The vast majority of speckers and flippers are Canadian idiots. The foreign idiots are just extra. — Garth

#131 Tony on 05.07.12 at 6:42 pm

Re: #122 naga on 05.07.12 at 4:41 pm

Things usually balance out over time. As more people move into the thing that has done well usually the bottom falls out of it. Right now that’s Canadian real estate in the late 1990′s it was stocks.

#132 J.I.M. on 05.07.12 at 6:56 pm

I opened the Edmonton Sun and there was full page ad featuring an exuberient elderly couple on a motor scooter with mountains and sea shore in the back ground. The head line reads :

YOu can’t spend the weekend in a GIC!
Own a 5 Star Waterfront Condo!
Earn Monthly revenue
Make money if you sell

You know, part of me wants to believe.

Now they live on a scooter. — Garth

#133 Mister Obvious on 05.07.12 at 7:04 pm

#124 Doug in London

You’re wasting your time Doug. Young knobs like ‘Know Your Enemy’ (how silly) aren’t interested in how things used to be as recounted by fossils like us.

Eventually those lazy grudge puppies will have to come up by the same process most of us did: maturity through a thousand mistakes. It’s best to leave the boy alone with that process.

#134 mel in victoria on 05.07.12 at 7:08 pm

# 81…Mr Anderson…..

You wrote. “Was this an upgrade?”…

…You tell me…I understand she’s your current ‘squeeze’…

#135 Not 1st on 05.07.12 at 7:08 pm

I’m sure glad you are not investing for anyone but yourself. — Garth

Unlike you, I don’t live in a world where stocks are infallible, but if you want some proof here you go.

TransCanda pipelines, Common stock TRP yielding about 4%, daily average volume near 1 million shares.

TransCanada pipelines, Preferred shares TCA.PR.X, yielding 5.34%, daily average volume, approx 1000 shares.

Result = illiquid trade. You could be the entire market. Going to take more than a “couple minutes” to unwind in that low volume. Lots of other preferred are the same low daily volume compared to the common stock. Look at some of BMO’s preferred sometimes trading only a few thousand shares a day.

Where did I say to buy pipelines preferreds? But if you’re so worried about liquidity with stable assets that pay 5% and give you a tax credit, then don’t buy them. That was easy. — Garth

#136 Westernman on 05.07.12 at 7:28 pm

DELETED

#137 Westernman on 05.07.12 at 7:35 pm

McLovin @ # 112,
Don’t be a Fascist boy, if you don’t like DA then just scroll on by…

#138 Nostradamus Le Mad Vlad on 05.07.12 at 7:43 pm

-
Question for Form Man, Dan in Victoria and other builders: We bought and moved into our home in July 1992, when it was brand spanking new.

Now, parts of the stucco are dirtying, graying and falling off, so should we pressure wash or spray paint with liquid stucco spray paint (or both)?

It would be nice to clean it up a little. Thanks!
*
#79 Daisy Mae – “Is it because we need to blame someone other than ourselves, so the ‘boomers’ serve well as our scapegoat?” — It is inbuilt into most societies that ‘it is always someone else’s fault, not mine’.

The simple fact that one is fully, totally and completely responsible for their own mistakes seems to have bypassed a lot of them. However, this is why rebirth is a part of the process, as each will proe to themselves.

I made my own bed, now I lie in what I created for myself.
*
Europe Rejects Austerity The day after the elections; Speeding Up “Wrong! The ultimate goal of the elites is to create a one world fascist government.” wrh.com. Or, privatizing the profits while socializing the losses; Malware demands payment or freezes PC’s; 4:31 clip Geithner facing criminal charges? States’ alarm This is Reagan’s trickle-down theory in action, except nothing is trickling anymore; California Bankruptcies shot up between ’06-11; Bunch of Losers a.k.a. America’s Idiot Rich; UK On the dole? It’s being cut; Build A Burger The real 1%; Treasury Bubble in one graph; Greece “The future’s uncertain and the end is always near” (The Doors).
*
Five min. clip Yesterday (May 6) marked the 75th anniversary of the Hindenburg going down; It Will Be The UN, not the US who confiscates guns and ammo; Ron Paul “Which is why GOP lawyers are getting ready to repeat the 2000 Florida debacle.” wrh.com; Which is worse – This or Monsanto? 3:23 clip While the US declares war on anything that moves, it is also clothed in Political Correctness; Climate Cooling says new study, and Most Polar Ice ever recorded plus Panetta This guy is a denglebit; Mobile Scanner We are nothing more than a scanned bag of groceries.

#139 John G. Young on 05.07.12 at 7:50 pm

#137 Westernman on 05.07.12 at 7:28 pm

DELETED

But it’s not hate, just “the truth”…

Seems like our host doesn’t agree with your assessment.

#140 bigrider on 05.07.12 at 7:57 pm

Somebody, or better yet some entity with substantial resources and capability needs to do a definitive study on the true number of foreign buyers in our RE markets ,as opposed to the hype and BS being spewed by both sides of the camp.

I really have no idea what influence foreigners have had on our RE markets here in Canada. Based on the back and forth on this blog and the lack of fact or supporting evidence for either position, neither does anyone else.

#141 Form Man on 05.07.12 at 8:12 pm

#139 Nostra

Impossible to know what is going on with your stucco without observing it. I would suggest having a reputable stucco contractor look at it. Loose material should be removed, then a bonding agent applied before patching. Any good quality exterior acrylic paint works fine on stucco. ( I always buy the best quality paint available, it is well worth it considering the biggest cost by far with painting is labour )

#142 Form Man on 05.07.12 at 8:24 pm

Nostradamus

If your stucco is 20 years old, you have done well. Some prep and patching, then re-paint the entire house. It will look brand new again, and you are good for another 20 years. ( better than stripping vinyl siding off and hauling it to the landfill like one of my acquaintances just did……..)

#143 jen on 05.07.12 at 8:39 pm

Apparently this music video is based on Lamb – no I am not joking. Final Fantasy (Owen Pallett) is the Canadian band. Listen to the lyrics its almost funny. Just think – it was done in 2006.

http://www.youtube.com/watch?v=U1kL568eg1w

#144 jen on 05.07.12 at 8:47 pm

Further to my previous post see this article.

http://torontoist.com/2006/05/this_lamb_poos_1/

#145 disciple on 05.07.12 at 8:55 pm

Nostra LMV… thanks for the link(s). BTW, Panetta (denglebit) is Madoff, they are the same person. Also, Michael Rivero of WRH is a suspect next on my chopping block… still looking into it but will keep you posted… cheers…

#146 Mr. Anderson on 05.07.12 at 9:09 pm

# 135 mel in victoria

Not even close, could never go over to that dark side. Regardless, we’ve strayed from the intent of this blog.

#147 mousey on 05.07.12 at 9:13 pm

I need some boots on the ground reporting from Kerrisdale. I’m away on vacation and would like to know how Van West is doing. Thanks to all responding.

#148 Linda Pearson on 05.07.12 at 9:15 pm

#124Doug in London on 05.07.12 at 5:28 pm

Your post reminds me of an occasion a couple of years ago when I asked my Mom to write out some of her memories from earlier times. I promised to print them out for her.

Mom related a time during the depths of the Depression, when her father was laid off from the CPR. In order to qualify for the pittance of relief money, Grandpa had to work several hours daily for the city. Since it was winter, he was given the job of snow shovelling though not where they lived in West Toronto. His ‘area’ was the downtown core. He couldn’t afford TTC fares so he walked – both ways, every day.

One day he saw a bunch of steel pipe placed curbside for the trash. He carried the pipe home and with some bicycle parts he already had, built himself a working bike. It weighed almost 75 pounds (you do the metric please; it’s late and I’m tired) but it sufficed.

Before that winter was out he came upon an old rolled up piece of carpeting. Just the thing to keep his wife and two little girls warm in bed. So, all the while pushing that heavy bike with one hand, he shouldered the carpet and proceeded to walk the rest of the way home.

It was during the typing of that piece for my Mom that I came to a fuller realization of how extraordinarily fortunate I and my husband are. We will never likely be rich in the eyes of many but we are richer by far than our families ever were. For the way each of us was raised by hard-working parents and grandparents, we are truly grateful.

#149 John G. Young on 05.07.12 at 9:33 pm

#149 Linda Pearson on 05.07.12 at 9:15 pm

Thank you for sharing that.

#150 Ogopogo on 05.07.12 at 11:37 pm

#32 snowboid on 05.06.12 at 10:36 pm
Happily ensconced in our new Okanagan condo (okay it’s four years old). This place may not be as good a rental deal as the old one, but even if we put 50% down the rental costs over 20 years are still less than buying.

Quiet building, pool, spa, steam room, sauna, gym – nice deck with gas BBQ. Granite and S/S, gas range and low utility costs.

The condo has almost 1500 sq ft and the big bonus is they don’t discriminate against renters.

During our rental search we found most of the property management companies are staffed by ex-RE agents. They all know prices continue down, especially with condos.

I would say they see the future for the next few years in the Okanagan – it isn’t selling, but renting.

Congrats, snowboid, and amen to that!

#151 Do Do Bird on 05.08.12 at 10:12 am

Things to know about Kelowna: there is a cattle waystation on one side of town which smells like WELL COWS AND THEIR FEED LIKE PURINA OR SOMETHING and on the other side of town next to the fancy hotel casino and theatre is a SAWMILL which still cuts up wood and people notice the sawmill when you open the window.

#152 Industrial Guy on 05.08.12 at 3:18 pm

This is so amazing … The Toronto Star is so deep in the pocket of the real estate cartel … they actually market their comments section to the banks ….. Check out the link:
http://www.moneyville.ca/blog/post/1174158–why-we-ve-locked-in-to-a-10-year-mortgage?bn=1#comments

Farhaneh’s comments are just ad copy …

#153 Daisy Mae on 05.08.12 at 7:19 pm

KELOWNA, B.C. – “A flock of problems has come home to roost in an abandoned condominium project in Kelowna, B.C.

Councillors in the Okanagan city are at the mercy of mother nature as they try to clean up the construction site, which has been untouched since 2008 when the original developer ran out of cash after setting up a crane and pouring the foundations…..”

#154 jess on 05.08.12 at 7:42 pm

Allow scientists to speak

If fracking is good then why ?
“As communities struggle to contend with these impacts and risks in their daily lives, citizens are forced or sometimes unknowingly sign a nondisclosure agreements, [and] they have lost their freedom to speak and share their knowledge and experience with their neighbors,” Perry said. “As a result, whole communities have been silenced and repressed.”
http://truth-out.org/news/item/9004-silencing-communities-how-the-fracking-industry-keeps-its-secrets

Why should something true be a reason for losing one’s job?

EPA scientist who warned of caustic dust from Ground Zero wins job backCate Jenkins was fired from job as chemist after accusing EPA of deliberately covering up dangers of 9/11 wreckage dust.

Jenkins, who has spent more than 30 years at the EPA, was the first agency official to warn of the dangers of the caustic dust rising from the ruins of the World Trade Center.

“The dust, which had dangerously high pH levels, was so corrosive it caused chemical burns to the lungs of firefighters and other rescue teams. Hundreds of workers spent weeks at the scene without protective gear such as respirators…Subsequent research has shown as many as two-thirds suffered permanent lung damage…In the 1990s, she was transferred out of her job after accusing Monsanto of falsifying a study on the cancer risk from exposure to Agent Orange. An administrative judge later ruled she had been wrongly transferred…”

http://www.guardian.co.uk/world/2012/may/07/cate-jenkins-epa-ground-zero-dust?INTCMP=SRCH

#155 Skip Breakfast on 05.08.12 at 8:22 pm

Both fascinating and disturbing how xenophobia an dracism emerge so quickly when a country gets itself in serious economic trouble. Asian investment is NOT the cause of Canada’s ridiculous real estate bubble. Let’s be careful about who we blame for our troubles, or we’ll end up bringing the next New Dawn Party (Greece’s latest neo-Nazi addition to their parliament) to government. Foolish speculation from abroad is only following the lead of our foolish speculation at home. If foreign money wasn’t bidding, a local white guy would be there to do it for them. ‘Nuf said.