Mr. Market

In a few days our monstrous big banks will report bloated profits. This is no fluke. The S&P index hit a four-year high last week. No fluke there, either. Canadian companies are sitting on $526 billion in cash, and Apple has enough money to buy Greece. See a pattern here?

Meanwhile, here are three hunks of news worth noting.

In Halifax, traditionally one of the most stable, sane and affordable housing markets in the country, a lot of people wondering what the hell they did. Last autumn the feds announced a big ship-building deal directing work to local yards. The housing speckers and gamblers immediately moved in, goosing monthly sales by 30%, igniting bidding wars and spiking prices. Almost a year later, no money’s actually been spent, and none will be for a long time to come. Sales have crashed back by a third, and every day there are 200% more new listings and price reductions across Nova Scotia than there are sales.

Mr. Market, 1. Greater Fools, 0.

In Vancouver, more evidence the real estate market’s growing colder by the hour. Despite price reductions, conversions to rental units, millions in repairs and millions more in marketing, about 200 luxury condos in downtown’s Olympic Village sit unowned, unsold and unloved. This will cost taxpayers about $225 million, critics say, since the idiots who run the city bailed out the incompetent developer before the 2010 winter games.

Already Vancouver has written off $50 million on the project, while another $175 million it should have received as a land payment will never come. Worse, $50 million has disappeared into the pockets of the receiver, the marketing guy (Bob Rennie) plus repairs and operating costs. While this happens, buyers scramble off the beach as the real estate tsunami approaches.

Mr. Market, 2. Greater Fools, 0.

In the US, big lessons for everybody here. Resale prices may have bounced off the bottom, after five tortuous years, but it could take a generation (or more) to repair damage to the middle class. The number of families in negative equity – who owe more on their mortgages than their (unsalable) houses are worth – has declined a little, and now number 15.3 million. This is about 21% of all the people who have mortgages, and caught in that web are the horny young couples who fell for all that granite-and-stainless, no-money-down, you-can-have-it-all stuff that virgins find so appealing.

“Negative equity is trapping young people in their homes, preventing them from selling,” says the chief economist for Zillow. “These homes are likely the very starter homes potential first-time homebuyers are seeking.”

In fact, negative equity has spread faster among the young & the witless than any other group, with nearly half of all recent buyers under 40 also under water. As far as cities go, pray for Las Vegas. Almost 70% of borrowers there are sunk, while it’s 43% in Miami and 52% in Phoenix.

Mr. Market 3, Greater Fools, 0.

I could go on (and on and on), of course. But the point must be clear. There’s nothing but danger in Canadian real estate at this time – no upside in terms of price appreciation, and unlimited downside. Houses perch where stock markets sat in 2007, pushed onto unstable ground by hordes of unsophisticated investors who believed prices would rise forever.  That’s the point of maximum risk, when groupthink and euphoria replace common sense. Contrast that with US housing now, after a 32% drubbing, sitting at a point of minimum risk.

The world’s changing. With deflating real assets, like houses, money grows more valuable. This is a trend you should expect to continue. There will be no hyperinflation, government debt crisis, bank collapses or currency crumbles. Every month for the next 60 or beyond, your dollars will buy more real estate, car or computer. The returns everyone expected from just owning a house will be gone, transferred to financial assets.

Open your eyes. It’s already started. Plumping corporate profits, markets which sawtooth relentlessly higher, bloating banks and rising dividends – here’s all the evidence you need that money’s flowing from the bottom to the top, where it will reward investors while punishing homeowners. The current Canadian real estate market has been built on a pyre of debt, lax lending and cheap money. Not on economic growth, wage gains and spending power.

Meanwhile since the GFC, corporations have had to reinvent themselves, cutting fat, shedding employees, gutting debt, getting efficient and expanding markets. In short, consumers and homeowners have leveraged themselves into massive risk, while companies have deleveraged for survival.

The big shift is here. Who are you betting on?

171 comments ↓

#1 TurnerNation on 08.26.12 at 9:38 pm

Some obvious titles for Garth’s next book:

– Making out like a Bandit: What my dog taught me about life, love, and money,

– Honey I Shunk the Portfolio: A Boomer survival guide.

– The Zen of Portfolio Repair.

– Bikes, Babes, and Balanced Portfolios: What every Canadian should know.

– D.I.Y. DoDos: why today’s retail investor is becoming extinct.

– A Conservative Approach to Liberally Making Money.

– If it’s too loud you’re too old: Sound portfolio strategies.

And here’s a picture of Bandit on the blog, (dis)approving posts:

http://www.quickmeme.com/meme/3qn69k/

You have w-a-y too much time on your paws. — Garth

#2 CY on 08.26.12 at 9:45 pm

Nice pic – where do you get the pics?

#3 LilyFlor on 08.26.12 at 9:48 pm

It’s going to be one hell of a ride

#4 Randy on 08.26.12 at 9:48 pm

Cash will be King…

#5 mel in victoria on 08.26.12 at 9:49 pm

Gonna hafta still bet on gold….for a portion of my portfolio …for at least a couple more years…

Why? — Garth

#6 Paul on 08.26.12 at 9:51 pm

Would you mind commenting on this?

http://leagueinvestmentservices.ca/bluebook?mid=gaw&cid=content&gid=placements&gclid=CMKiuLm9hrICFeaDQgodBUkAXw

Sure. Run. — Garth

#7 Joe in van (livin in it) on 08.26.12 at 9:51 pm

Vancouverites disgust me

#8 Mcexpat on 08.26.12 at 9:58 pm

Garth if corps are sitting on mountains of capital, what is the catalyst for them to release the purse strings? I believe we are in uncharted territory right now. There is a ton of economic uncertainty out there. I can agree with you on the mess that is and will be Canadian real estate but I think what comes next is just one giant guess.

#9 sebastien on 08.26.12 at 9:58 pm

Would your opinion on commodities change if QE3 is launched? The Boston fed director is talking about open-ended QE…

#10 Marco from Van on 08.26.12 at 9:59 pm

Companies 1 sheeple 0.

I hope Bob Rennie has a recourse contract – or maybe the city wasn’t smart enough to put performance clauses in place.

It is funny to see how those who are labeled “king of” make it on easy things. Then all the adjectives they are adorned with are truly tested by challenges, they flop just like everyone else… Bob the condo king… Prove it!

Sell those “Luxury” Olympic stardusted icons to the millions of billionaire HAM “investors” you tell us are buying all the other developments (or is the canadaline the only thing HAM wants). C’mon, for once change “doing so much for so few” into at least “doing so little for so many” and serve your community!.

As for assets, Canada IS (mostly) different… It outlasted every other nation on earth avoiding a huge correction. (Most) People here ARE different, in the face of irrefutable evidence AND digestible information they ignored it as if it just was not real…

P.s. I say “most” as I have met some of the staunchest “contrarians” here and gained a tremendous amount of knowledge – thanks for that…

And yes… This is a fantastic place to live in…

#11 Tremblant on 08.26.12 at 10:00 pm

Your observations and advice are right on. It is unfortunate that many more Canadians are not aware of your blog. Lessons to be learned.

#12 Lost cash on 08.26.12 at 10:06 pm

It wasn’t that long ago you told us that some areas in Toronto would be safe from the crash to come! Garth really what is it? Leslieville is safe or not?

No. — Garth

#13 mel in victoria on 08.26.12 at 10:07 pm

Gonna hafta still bet on gold….for a portion of my portfolio …for at least a couple more years…

Why? — Garth

Well, I bought a hundred Maples early 2002 for $260-$290 and they’re now worth $1670….and for a variety of reasons gold and silver metals will continue to appreciate with respect to fiat currencies…….certain precious metal stocks will likely do very well too…

I see. The past is a guarantee of the future. So glad you cleared that up. — Garth

#14 T.O. Bubble Boy on 08.26.12 at 10:07 pm

What happens to bank profits when Canadians are all HELOC-ed out? If debt levels are peaking, where will new profits come from?

Read a bank annual report and figure it out. Consumer debt is just one piece of the pie. — Garth

#15 Foggy on 08.26.12 at 10:08 pm

Shell is going to spend 1 billion on oil exploration around Nova Scotia starting next year some time. Could attract NS’ers out West, working in the industry.

http://atlantic.ctvnews.ca/shell-hoping-for-big-returns-in-offshore-oil-exploration-1.927461

#16 bruce on 08.26.12 at 10:10 pm

Here is a new saying:

” While it looks like we have it all – actually we have nothing at all”.

#17 Randy on 08.26.12 at 10:13 pm

Thanx to our governments who have been ragging the puck for years now….the inevitable has been delayed only….Political incompetence knows no bounds….

#18 45north on 08.26.12 at 10:13 pm

An Ottawa police officer fired their gun at a dark-coloured Mercedes

Read more: http://www.ottawacitizen.com/Ottawa+police+officer+fires+speeding+overnight+incident/7147048/story.html#ixzz24hz3fAjr

an Ottawa police officer is singular, the possessive is “his gun”

even if the reporter knows that the police officer is a woman

bet it was smoking man in the mercedes

#19 East Van on 08.26.12 at 10:15 pm

I agree that real estate is extremely risky, but so are stock markets. While they are at a 4 year high (which is about where they were 12 years ago), they are only so high because things are so bad that the markets are anticipating government intervention.

Unemployment is high. Consumer demand and confidence are low.

The geniuses at goldman Sachs and the others too big to fail are up to their old tricks.

The next GFC is imminent and inevitable.

There’s a lot more to worry about than a GFC that will nor reoccur. — Garth

#20 Sebee on 08.26.12 at 10:15 pm

Who’s still cheering for that underdog 0 and 3 Fool’s team? They have some weird players, almost as weird as us.

#21 Old Man on 08.26.12 at 10:20 pm

The price of gold is a bit too high; should have bought years ago with a better average cost.

#22 Realtors , Bankers and Mortgage brokers in an all out PANIC! on 08.26.12 at 10:25 pm

It’s going to be a nasty crash realtors a nasty crash.

#23 Tony on 08.26.12 at 10:27 pm

Good article.

Garth, you love to pick on the little guys – halifax, vancouver, brampton, but it seems like Toronto scares the S!%t outta you. Never any predictions. Man up!

#24 Freedom First on 08.26.12 at 10:27 pm

Mr. Market vs. greater fool……love it Garth!

First thought that comes to mind after reading your blog today Garth, is just how expensive ignorance is.

I was told this when I was 20, by a wise old timer: “I have never seen anyone to dumb to learn the sound financial principles of money management, but I have seen many too smart, but you, you should be okay:)”……..this has helped me a great deal……

#25 [email protected] on 08.26.12 at 10:37 pm

1. Corporations keep cutting employees to pump margins (stockpiling cash instead of taking advantage of low rates to begin growth). 2. The public with no income growth begins reducing debt instead buying (sending money to their loansharks and dollar stores). Doesn’t the deleveraging deliver a nasty negative feedback loop that stalls equity growth?

#26 Not 1st on 08.26.12 at 10:39 pm

Garth, cash can’t increase in value as long as the Fed and soon the ECB are stimulating each other.

Of course it can. And is. — Garth

#27 John in Mtl on 08.26.12 at 10:40 pm

“Canadian companies are sitting on $526 billion in cash.”
.
Was this bailout taxpayer money like in the US?
.
If they aren’t spending, there’s gotta be a good reason for it… World financial instability maybe? Playing casino and expecting something for nothing?
==
==
“There will be no hyperinflation, government debt crisis, bank collapses or currency crumbles. (…)
.
(…)Every month for the next 60 or beyond, your dollars will buy more real estate, car or computer.”
.
Then how come food prices and other life commodities keep going up? Who cares if you can buy more computer, car or real estate if you need to spend more on just living?

I like to think that here in Canada, we were (or are) a little smarter that other countries and will fare better in the coming crunch; ’cause a crunch there will be… all eyes are on what happens after the US presidential election this november.

John

#28 Angel on 08.26.12 at 10:40 pm

“The housing speckers and gamblers immediately moved in, goosing monthly sales by 30%, igniting bidding wars and spiking prices. Almost a year later, no money’s actually been spent, and none will be for a long time to come.”

Sounds like the Cambie corridor!

#29 Can it be? on 08.26.12 at 10:41 pm

To the gold bugs… Invest in gold… Why do you need Garth’s validation? I don’t get it. Are you on the blog or Advice or sparring? Everyone has their opinion on what’s right… But we all know what Garth’s thoughts are so why continually repeat the gold message?

#30 disciple on 08.26.12 at 10:44 pm

Leonard Cohen is Dustin Hoffman!

http://1heckofaguy.com/wp-content/uploads/2009/08/lc-khoffman.jpg

http://www.youtube.com/watch?v=ugh8Xe6hX7U&feature=player_embedded

#31 There will be no...? on 08.26.12 at 10:45 pm

What makes you so confident about this statement?

“There will be no hyperinflation, government debt crisis, bank collapses or currency crumbles.”

Because I’m right. And there’s no evidence to the contrary. — Garth

#32 disciple on 08.26.12 at 10:48 pm

Leslie Cargile = Celine Dion. Now, that’s Titanic. I know who Mulroney is too…

#33 FTP - First Time Poster on 08.26.12 at 10:49 pm

The increased purchasing power with respect to consumer goods (incl RE) along with the rising cost of living (commodities) coupled with little or no income growth is called Stagflation. It’s here, has happened before & will continue for years. Get used to it.

#34 mel in victoria on 08.26.12 at 11:00 pm

Gonna hafta still bet on gold….for a portion of my portfolio …for at least a couple more years…

Why? — Garth

Well, I bought a hundred Maples early 2002 for $260-$290 and they’re now worth $1670….and for a variety of reasons gold and silver metals will continue to appreciate with respect to fiat currencies…….certain precious metal stocks will likely do very well too…

I see. The past is a guarantee of the future. So glad you cleared that up. — Garth

Nope……..just following the trend my friend….

http://stockcharts.com/h-sc/ui?s=$GOLD&p=M&yr=12&mn=0&dy=0&id=p94209870290&a=266312605

Do what you want. It’s your money. — Garth

#35 Smoking Man on 08.26.12 at 11:03 pm

DELETED

#36 There will be no...? on 08.26.12 at 11:04 pm

Re: #31

“Because I’m right”? Do you say that with a dash of humility or earnest seriousness? Difficult to discern humour online?

No. Just right. — Garth

#37 wes coast on 08.26.12 at 11:06 pm

I find timing the market the hardest. If the S&P is at a 4 year high and you are looking to enter the market – is it possible there will be a correction of some sort in the short term?

It seems like a 4 year high can turn into a correction testing old lows in a matter of months. Do you think volatility is gone or here to stay for a while.

It just doesn’t feel like the GFC is over.

If you want to invest for the short term, buy lunch. — Garth

#38 Victor on 08.26.12 at 11:08 pm

http://www.theglobeandmail.com/globe-investor/investors-brace-for-deluge-of-canadian-bank-earnings/article4500167/

As household debt levels rose to record levels in recent years, the federal government took steps to cool the residential real estate market by reducing the maximum allowable amortization on insured mortgages and cutting back the amount that can be borrowed against a home in a refinancing. While those measures are expected to slow the housing market, a steady rise in consumer debt over the past few years is also weighing on household borrowing and consumption. This trend is expected to be a prominent feature in this week’s quarterly numbers.

“We have not had a single investor meeting in the past three months that has not focused significantly, if not exclusively, on the outlook for Canada’s housing market,” Mr. Bilodeau said. “We believe that the evidence is building that the sector is now in the early onset of what will ultimately prove to be a material deceleration in housing activity in this country.”

Didn’t I say that a few years ago? No Canadian bank will fail, or even hiccup. — Garth

#39 Suede on 08.26.12 at 11:13 pm

Agents are getting creative. I admire the cleverness…

“ABSOLUTLEY STUNNING INSIDE AND OUT!! If this home were a movie, it would be a box office hit! A huge Foyer says, “Come in!”

#40 Wofenstein on 08.26.12 at 11:13 pm

I’m betting on cash, mREITs, REITs, soup, tobacco, & corporate bonds. I want to get into guns (too late?), GPS and pharm. Can anyone tell me why banks would be a good investment? Further credit expansion seems limited.

#41 truth hammer on 08.26.12 at 11:13 pm

The shift from real estate to equity happened in exactly the way you described in the early 1980’s. Things on Mainstreet couldn’t have been worse……the years after the late 70’s real estate bubble were brutal for real estate investors…….unemployment was the highest in history ……thousands lined up for crappy jobs as waiters and tire pullers in the wrecking yards…..and didn’t start to mediate until 1986……..that was 6 straight years of losses for real estate investors and holders. But…….in the stock market…particularily in the junior metals and mining issues it was a boom time.

Man…this was a piss off for people with multiple houses and buildings that they couldn’t sell. The real estate pigs couldn’t raise a dime and had to sit by and watch as people got rich rich rich in the stock market. The profits in the market come faster and are much bigger in stocks than real estate has ever been….plus stocks offer 100% liquidity…..real richews are tangible not counted in sq ft.

I see the same thing happening this time around as the greed turns to chase another hare…leaving real estate to suck hind for years to come.

#42 chojo88 on 08.26.12 at 11:14 pm

Please Garth!!! Any further comment about League REIT? Why do you say run? Can’t find anything about this company except that they have pop up ads all over the place and on the website they proudly talk about their coat of arms(?) Sucka bet or legit? Discuss….

Funds like ths exist to finance properties banks won’t touch. Wonder why? — Garth

#43 donald trump on 08.26.12 at 11:16 pm

still no price drops in toronto!

Open your eyes. — Garth

#44 Canadian Watchdog on 08.26.12 at 11:18 pm

“There will be no hyperinflation, government debt crisis, bank collapses or currency crumbles.”

Clarify yourself. Asset, quasi or whatever deflationary twist of words you choose; what you’re saying is GDP will contract… correct?

#45 Don't Believe The Hype on 08.26.12 at 11:21 pm

It’s a bit of an old piece of news and not sure if this was linked here yet, but developers been buying up hotels to convert them to…….condos!
http://business.financialpost.com/2012/08/15/condo-developers-snapping-up-old-hotels/

#46 blase on 08.26.12 at 11:22 pm

A house that sells in Dallas goes for $130,000. It has 4 bedrooms, 2 bathrooms, a nice yard, a nice street. It has a 30-year fixed mortgage. Schools are free, just like in Canada. Health care is provided by your workplace.

A house in London, Ontario sells for $300,000. It has 4 bedrooms, 2 bathrooms, a nice yard, a nice street. It has a 5-year fixed mortgage. Schools are free, just like in the U.S.A. Health care is provided by the government, which means you wait for everything, and you can’t get a family doctor.

Now, I see the benefit of having the healthcare guarantee in Canada. I personally have met dozens of Americans from all economic backgrounds, and I think their education system is great if you want are middle class or above. Their university system creates a much higher base line competitiveness; if you wish to go to a good university, AP level courses are the talk of students from middle school up.

So my long-winded point is, why does it cost 3x as much for housing in an area of high unemployment in Canada, versus an area of low unemployment in the U.S.?

My conclusion is government interference in housing in Canada, and that is the only reason. Therefore, now that the government is getting out of housing in Canada, I fully expect a correction to the fundamentals, and that means a full-scale crash in all cities in Canada, including the “cheap” housing areas like London, Ontario.

#47 earlybird on 08.26.12 at 11:25 pm

Im firmly in the deflationary camp. Homeowners and consumers should slim up as the companies have to survive as well. Companies will only spend when the demand appears(cant blame them)…which does looks like the start of deflation. Demographics and a tapped out consumer will push demand lower…hopefully the cycle wont become reinforcing or else jobs will go, creating even less demand, creating more lost jobs. At that point Canadian RE will go off a cliff. Food/staples and energy will always be inflationary(constant demand in degrees) The US has a couple more shots at holding rates down….but the stimulus effect is clearly not working. If you buy property in canada now, you better want to live there for a very,very long time. Great post once again…love it!

#48 A Horse with No Name on 08.26.12 at 11:40 pm

It’s all elementary you lemmings.

Garth has nailed it. Housing is set to get crushed in Vancouver, and the downslide is now well underway. Only the great unwashed remail oblivious.

Junius, how is your pet monkey treating you these days?

#49 Canadian Watchdog on 08.26.12 at 11:42 pm


Canadian Marketable Bonds Maturity Schedule

Canadian Government Bonds Outstanding
Historic Canadian Crises Timeline
US Crises Timeline

“What one does see, again and again, in the history of financial crises is that when an accident is waiting to happen, it eventually does.”

From This Time Is Different, by Carmen Reinhart and Ken Rogoff

Crises. They happen.

#50 WaterlooResident on 08.26.12 at 11:43 pm

Garth said: (“markets which sawtooth relentlessly higher …. “)

I’ve noticed that in a bear market prices slowly fall and then every once in a while there is a violent ‘SPIKE’ up, then prices again continue their sinking lower.

Lately I’ve noticed that prices are rising higher and every once in a while is a violent ‘DROP’ down, and then prices again continue to rise. To me this represents a BULL market, one in which prices are rising.

The only clouds I see on the horizon is the expiration of the US tax cuts at the end of the year, plus the addition of massive tax increases. That just might cut off 30% from the DOW and the S&P

Read about it here, about how stocks just might get CRUSHED:
“The 2013 Fiscal Cliff Could Crush Stocks”:

http://www.trendmacro.com/a/luskin/20120505luskinWSJ.asp

#51 Aussie Roy on 08.26.12 at 11:46 pm

Aussie Headlines

Vancouver home resales plummeting

Average price down 12.4% to $667,462 over last year in July

The average price of a home in Greater Vancouver in July was $667,462 – down 12.4 per cent from $761,673 in July 2011.

Greater Vancouver’s declines were among the most dramatic and dragged down national statistics. But home prices also continued to decline across the rest of the country in July and the pace of the depreciation is picking up.

http://www.montrealgazette.com/business/Vancouver+home+resales+plummeting/7098423/story.html

Now some Aussie headlines

There is NO BUBBLE just a lack of confidence – lol

Housing is the most affordable it has been in almost a decade but consumers remain negative.

Writing in the Weekend Financial Review, Rismark and Yellow Brick Road director Christopher Joye says negativity in the media distorts a more nuanced view put forward by the Reserve Bank of Australia and leads to an unnecessary level of pessimism among consumers.

Mr Joye argues that housing affordability is at its best in years.

“Much of the responsibility for resisting the vocal spruikers of housing hysteria has again been left to Australia’s central bank,” he writes.

http://www.afr.com/p/national/homes_on_the_cheap_but_buyers_aren_3GVfDIFu2nKB7EhoEKhJ4O

I wonder what ever happened to those who thought “Rents” would never go down?.

Finding a rental property in Sydney can be a daunting task with hundreds of prospective renters flooding to properties on Saturday mornings.

But according to a survey released today, Sydney’s rental vacancy rate has surged to its highest level in six years.

http://smh.domain.com.au/sydneys-rental-squeeze-eases-20120825-24svo.html

#52 Jonno on 08.26.12 at 11:51 pm

People state a four year high in markets but the tsx is well off it’s 2008 may high. The Tsx has failed to recover fully yet…

…and represents value. — Garth

#53 Basil Fawlty on 08.26.12 at 11:52 pm

“Because I’m right. And there’s no evidence to the contrary. — Garth”
Are negative real interest rates not evidence?

#54 earlybird on 08.26.12 at 11:58 pm

#23 Not first…. They can print all they want, but until that velocity of money is moving around in high gear chasing good and services, creating demand and natural inflation, its dead money. They are printing and pimping currency and noone is biting.

#24 John in Mtl….Toilet Paper, food and heat never goes out of fashion! Companies shouldnt/wont spend or expand if they dont see demand…its prudent. Love Canada, but we are not smarter or different, just slower..debt has been a subsitute for non growth in income for a couple decades, alot of that borrowed money is against property and pulled forward a decade of future demand into the profits of now. Once a consumer is debt saturated, the debt has to disappear by consuming way less for payment, or default. The developed economies will be doing this all at the same time, once the C Bankers stop trying to beat a very dead horse! On the bright side….

#55 DD on 08.27.12 at 12:02 am

However people will b worse off because their money will buy well oil, food, and clothing. If money is so dear why are interest rates will near zero? Currencies are being delvalued – watch and wait for the light bulb to go on.

#56 house burden on 08.27.12 at 12:24 am

What happens to bank profits when Canadians are all HELOC-ed out? If debt levels are peaking, where will new profits come from?

Read a bank annual report and figure it out. Consumer debt is just one piece of the pie. — Garth
==================================

Its simple, once the banks can’t sell new mortgages, the milk the crap out of the old one by raising interest rates and there isn’t a freakin thing home owners with debt can do about it.

We have and audience, balled and chained to their mountain of debt

Banks don’t actually set rates. — Garth

#57 Nostradamus Le Mad Vlad on 08.27.12 at 12:35 am


“. . . corporations have had to reinvent themselves, cutting fat, shedding employees, gutting debt, getting efficient and expanding markets. The big shift is here while companies have deleveraged for survival. Who are you betting on?” — Such as here or here?

Granted, the shift is on, with most of the mfg. and industrial base heading east, with little returning, except pre-packaged products and service (min. wage jobs) jobs.

It is reasonable for companies to hold the line on wages and benefits, so if cos. cut fat (good) but shed employees in the process, which side gains the most from a tax base loss (workers in NAmerica who have lost their jobs), or the companies who have shifted production to ChIndia, where labor is a lot cheaper, plus local govts. incentives?

Companies can deleverage for survival and people can reinvent themselves to take advantage of demographic swings, but it appears for those 50+ they’re SOL, which is where McWalmart service jobs are adequate replacements.
*
China Buying US assets quickly; Oz “Home sellers get realistic, mining companies going bust in record numbers.”; NAFTA – TPP See headline; Swell Crime is rampant, cut the police force; Narrow Home or using space wisely; Romney / Ryan This would wipe out US seniors, but apparently TPTB have already anointed them, and Ryan; The US Fed But this is an election year; Gold or Timmie’s? Plus Gold – Inflation (charts); Copper stocks; Big Bad Ben Speaks; GM and Pensions More than one way to go broke; ECB and Merkel Partners in teflon; Contracts Terminated Various police depts. now teachers; Audio clip Lack of demand, lack of interest; VAT blunder for UK Going back to 1973, may cost the govt. billions; DIY Plan to restart the economy; Chinese and Russian economies slowing, but China has a little spare cash.
*
China – US Provocation; Texas Smart meter backlash; Jeb Bush Still rambling and alive (sort of); Windows 8 Should be lumped together with Vista, as they both suck; Copy Cat or any other animal for that matter; UK Intelligence That’s an oxymoron; Assange Being framed and set up.

#58 KL on 08.27.12 at 12:41 am

All signs in Alberta point to full steam ahead.

#59 Tim on 08.27.12 at 12:44 am

Who am I betting on? Sure as hell not the inept boobs at Vancouver City Hall– the clowns that couldn’t run an ice cream stand. Instead of speculating in real estate, they should be trying to run a city. Olympic Village is one cluster-$^$$*. Noisy, crowed suites so close to each other you can hear people fart. Very little light for many of the buildings due to the angles, and shoddy construction. Despite the slowdown, everywhere you turn there are cranes…

#60 League Assets is insolvent on 08.27.12 at 12:53 am

League just stopped distributions and has started offering “equity mortgages” basically second mortgages offered by them to provide “equity” to first time homebuyers to circumvent the new CMHC rules.

To boot their crown jewel project is the brainchild of the same dufus who promoted bear mountain, les bjolas.

Save yourself some time and just send your money to Bernie in the slammer.

By the way, your village phoned, they are looking for you.

#61 Grim Reaper/Crypt Speculator on 08.27.12 at 1:03 am

I don’t get it(aka photo above)…why would cops get involved in a “tie” for a condo pre -sale line up?

PS: Sir Garth do either dudes count as European version of “guy in the orange shorts?”

#62 Grim Reaper/Crypt Speculator on 08.27.12 at 1:06 am

I don’t get it..

Gov’t has been around since Garden of Eden(I am an expert witness)

Why all the cynicism?….if Gov’t did anything wrong…it would be gone tomorrow.

Right?

( Hello…testing 1- 2 -3 … is this mike on?)

#63 vatoDETH on 08.27.12 at 1:11 am

Alberta is different! And surprisingly they lead the country in personal debt:

http://www.statcan.gc.ca/pub/75-001-x/2012002/article/11636-eng.pdf

#64 Not 1st on 08.27.12 at 1:27 am

Canadian banks won’t fail because about 3 years ago they dumped about 400 billion in shaky mortgages onto the gov’ts back. They are effectively nationalized already.

#65 earlybird on 08.27.12 at 1:29 am

The rates are forced down through bond purchases in the US (operation twist) in the hopes that people will borrow their life away to spend, in a consumer driven economy, that is essential and considered as growth. At this moment it devalues…..but if folks/businesses dont use the cheap money, it will contract and become deflationary….too little money chasing too many goods. Companies with global exposure will do well.You would think with rates so amazingly low that the economy would be on fire…

#66 Not 1st on 08.27.12 at 1:33 am

Simple demographics and sovereign debt levels point to the conclusion that no consumer resurgence will take place. Millennial are burdened by over spending of their parents and would rather just text and play games. Boomers getting out with what they can now and their spending will decrease. They will simply NOT put their money back into equities again. Garth will be waiting a long time for DOW 20,000. Stock market sideways just like its been for the past 10 years.

#67 Aaron - Melbourne on 08.27.12 at 1:40 am

Lots of vacant houses in Melbourne….

http://theage.domain.com.au/home-investor-centre/blogs/domain-investor-centre-blog/housing-shortage-nobodys-home-20120824-24qp8.html

#68 Alberta Ed on 08.27.12 at 1:43 am

“…about 200 luxury condos in downtown’s Olympic Village sit unowned, unsold and unloved.” Has anyone told the Gob & Pail, which just published a pump piece on the latest hot Snafouver condo ‘opportunity’?

#69 Over in Australia on 08.27.12 at 1:49 am

Going with the Gold and Silver commentators too.
Gold and Silver have any where from 3 to 5 years of their current bull run to go so I am happy to have more portfolio weighting to them. Silver Bullion, Gold Miners are my preference at the moment.
I’m in Melbourne and our realestate market is turning down so no hurry to buy in at this point.
I enjoy reading your blog very much Garth, agree with most of it. You have stated in the past Gold should be no more than 5% to 10% of ones portfolio, I think in these uncertain economic times that ratio can and should be a little higher.

#70 Scott (GVRD) on 08.27.12 at 2:06 am

I need help understanding something. When I look at the houses on MLS for Vancouver (and area) the assessments are still incredibly high. Are these numbers to be believed or are they a fraud like the asking prices?

#71 L Pearson on 08.27.12 at 3:18 am

#1845north on 08.26.12 at 10:13 pm

…the possessive is “his gun”

even if the reporter knows that the police officer is a woman

Nonsense! The correct usage in that case would be, “the police officer fired HER gun…” Whatever style guide you’re using is wrong and outdated. You should get another one.

#72 Piccaso on 08.27.12 at 3:32 am

#46 blase on 08.26.12 at 11:22 pm

Don’t forget in the U.S. you can also write off your interest and taxes on your personal residence.

You will pay capital gains on the profits though unless you buy another house which most people do when they sell the house there living in.

#73 Buy? Curious? on 08.27.12 at 3:49 am

Garth and blog puppies, let me let you in on a secret. Canadian Justice is the most lenient, passive, forgiving, offering the benefit of the doubt system on the planet. Trust me, I know. Offer a sob story, promise whatever to the judge and the next thing you know, you’ll be smiling while you strut pass all the legal aid losers offering poor people plea bargain advice. If you go into negative equity hope it’s for a lot. And the moment it does, stop paying the mortgage. The bank can try and sue you, creditors can too but as by the time it gets to court (at least 3 years, minimum. Think about what you’ll be saving) tell the judge a sob story, shed a few tears and I guarantee any judgement will be reduced by 2 thirds.

You’re welcome.

http://www.youtube.com/watch?v=4-nv0-EhLCQ

#74 Buy? Curious? on 08.27.12 at 5:52 am

See? What did I tell you?

http://www.thestar.com/news/gta/article/1247362–bad-tenant-nina-willis-fails-to-pay-rent-again-violating-court-order

#75 Lost Soul on 08.27.12 at 6:45 am

Garth…so there is nothing to the rumors of Hank Paulson and his hedge fund going 50% to gold? And that silver will not spike. Not that i do not concur with your real estate theories. I have no position in the metals…just asking?

Cheers

#76 John on 08.27.12 at 6:53 am

“Open your eyes. It’s already started. Plumping corporate profits, markets which sawtooth relentlessly higher, bloating banks and rising dividends – here’s all the evidence you need that money’s flowing from the bottom to the top, where it will reward investors while punishing homeowners”

Economic growth, wage gains and spending power are needed in a pluralistic, democratic society for your “strategy” to have more weight.

The current situation can’t be a long-term have and have-not society. It’s time to spell out the real social problems that would develop on this “60 month” timeline.

Go one better. Let’s talk grade 10 students. Think they’ll play in 10 years? You can’t play without game. And all this is assuming the current system is allowed to freely victimize vast sectors of the population without kickback along the way.

Corporate profits and sawtoothing markets sawing upwards? That’s right. Casino wins using derivatives, central banking and a non-representative political class…joined at the hip to speculative corporate interests. Wow.

Yes, people will take it because they are confused, frightened and willing to take on credit to consume…and wait to see if “things will change”.

Things will change…yes. But not in the way you may be suggesting. That things “correct” to allow muppets to keep fake world casino “equity” is as likely as corporate “profits” flowing “upward” in a cross-society sustainable way.

Have and have not built in the context of repression-ignorance has a traditional name: The Third World.

Hey…maybe that term won’t mean so much if meaningfull action isn’t taken in “first world” societies

#77 House Horny Housewife on 08.27.12 at 7:36 am

Garth,

The biggest mistake people make these days is thinking that a house is an investment that can be unloaded for a profit at the drop of a hat and just a year or two after they’ve moved in. If people did not think like that, they would not be freaking out right now.

A property is a property. You want it, you buy it with loaned money, you own it and you also own the debt. If it goes down in value, this should not matter. When you made the decision to buy it you took a risk and you own the debt no matter what happens. Own your mistake, pay off the damned loan and stop complaining already.

I am getting rather sick and tired of people blaming banks, rich companies, rich people, global warming or whatever for their financial decisions. Remember when you first visited that house and you thought you would do anything to have it ? Remember when you moved too quickly in order to outbid other buyers for the property ? Remember when you chose the more expensive HGTV house as opposed to the other one that was more within your price range ? Remember when you ignored the bank’s evaluation of the home and offered to come up with the difference because you absolutely HAD to have it ? Remember when you didn’t have the downpayment but still agreed to own the place with just $100.00 down ? Well for heaven’s sake you can’t say you didn’t have any warnings about what you were doing so now you have to live with it. Either take the hit and still owe the bank a bit of money after selling the house, stay in the home and pay off your mortgage and shut your eyes to the real estate market or find a way to make balloon payments to pay it off sooner.

Learn from your mistakes in order not to make others in the future and start living within your means for heaven’s sake.

Do you think all of those rich bastards that everyone loves to hate didn’t make any financial mistakes along the way ? Of course they did and so did many successful businesses. The difference between them and others who didn’t survive is that they learned from their mistakes and became good at making sound business decisions. Learning to balance risk is a part of life. If you cannot afford to gamble then be wise enough to know not to. If something looks too good to be true, then it most definitely is.

People in Vancouver and Toronto have been making housing transactions faster than you can buy a big mac at MacDonald’s. Didn’t this seems idiotic to people at the time ?

The world doesn’t owe anybody anything and it’s about time people starting owning their mistakes and moving on with their lives. Goodness knows I have made a few errors in my life that I have had to pay for and I blame no one else but myself.

HHHW

#78 Government debt crisis? on 08.27.12 at 7:36 am

Are you talking about Canadian government debt, or US, or EU?

#79 Monkey see - Monkey do on 08.27.12 at 7:59 am

I believe there is a telling sign why corporations are hoarding tons of cash – they too see dark day’s ahead. They will need the cash to survivie a economic chill that will cover our landscape.

Corporations aren’t stupid – Carney may say one thing but he knows why they keep it – and what bargains they will have when things get ugly.Why buy your competitor now when within 2 years they can be bought for pennies on a dollar in a liquidation sale.

I believe everything is done for a reason, this was planned years ago. I don’t think all this cash is a sign of health – I believe hoarding cash is a sign of dangerous times ahead. Like myself, times were good I spent, today I pile cash to the sidelines – knowing that cash is king.

Hardly. Healthy companies throw off cash from operations. The 2008 financial crisis turned into an employment disaster precisely because corporations were cash-strapped and indebted. They are not about to repeat. Sometimes this blog terrifies me. — Garth

#80 In GARTH Almighty not God we Trust on 08.27.12 at 8:08 am

#31 There will be no…?

“What makes you so confident about this statement?
There will be no hyperinflation, government debt crisis, bank collapses or currency crumbles.”

You must be a newbie to this blog so I shall explain. What makes Garth so confident with this statement is easy. He is the bearded mystic oracle, all knowing, all wise, financial prognosticator without equal, former minister of national revenues, intrepid denouncer of parliamentarian peckerheads and peckerettes, gifted sagacious financial tea leaf reader, Harley riding, New York Times bestselling author, Amazon surrounded, lone voice of financial reason in the HELOC infested wasteland of Canada. Now do you see how he can make this statement and be so confident?

#81 Gypsy Kid on 08.27.12 at 8:18 am

HHHW,
I agree. Stop blaming “others” for your stupid mistakes….if you made mistakes, take care of them and move on! Live without granite and stainless steel and expensive trips and lessons for your kids until you get back in shape.
Garth, let’s move on for now and talk stock market. REal estate is tempting and maybe in the far future we might buy a decent rental property, but for now, it’s yawn…..

#82 Ret on 08.27.12 at 8:27 am

Your Canadian tax dollars at work for sure.

The Canadian consulate in Buffalo across the river from, on its knees Fort Erie, is closing. I didn’t know that we had a consulate in Buffalo. Seventy five Americans(?) out of work, all the luxury mansions for sale and 36,000 sf of office space now vacant. Who will now represent Canadian interests in Buffalo?

For years day tripping Canadians and travellers along with commercial truck traffic, have endured waits of 45 min. on a good day to over 2 hours on other days to get back into Canada. Those tireless efforts of our consulate workers have really helped trade across the Peace Bridge into Ontario, haven’t they?

How many more of these sweet little consulate gigs are there? A few elections ago, our MP who had been defeated was fortunately the candidate of the winning Liberal party in that election. He was posted to take over the consulate in Boston of all places. A demanding job for sure, entertaining all those visiting MP’s and Senators, arranging lavish parties and managing a plethora of servants and underlings. Nice consul-ation prize! (Get it!)

http://www.thespec.com/news/world/article/787787–closing-of-buffalo-consulate-means-sale-of-queen-s-homes

#83 syfon on 08.27.12 at 8:39 am

Gold will do very well but investment of choice is silver.
Metal will reach it’s historic ratio 16:1.
There is not much metals left in a ground and what is left is expensive to dig.
It costs 10-15% more a year to operate mines.
Garth it is just economics not metal mania that will guarantie price moving higher or metal stays in a ground.

Tell that to the suckers who took your advice and bought silver at 43. — Garth

#84 Rex_b99 on 08.27.12 at 8:39 am

So the homeowners will be poorer, the wages are stagnating, weak economic activity, cheaper prices of goods but the corporate and bank profits will continue to soar? Great lesson, we will have a society where the economic conditions of the people will be poor but the corporations and banks will be rich. That may last for a short while but eventually the bank and corporate profits must reflect the general health of the finances of average people.

As an investor, I want healthy companies. Without those there is no general economic wellbeing, comrade. — Garth

#85 T.O. Bubble Boy on 08.27.12 at 8:41 am

@ #42 chojo88

Please Garth!!! Any further comment about League REIT? Why do you say run? Can’t find anything about this company except that they have pop up ads all over the place and on the website they proudly talk about their coat of arms(?) Sucka bet or legit? Discuss….

Funds like ths exist to finance properties banks won’t touch. Wonder why? — Garth

Try Googling something before investing in it.

League REIT recently suspended distibutions!

http://canadianmoneyforum.com/showthread.php/12289-League-REIT-suspends-distributions-in-June

REITs that aren’t publicly traded should require more research/due diligence than listed ones… League should require about 10x more (being the king of the REITs when it comes to google spam ads).

If your REIT ad pops up when my daughter watches kids’ songs on YouTube, your advertising/marketing dept needs some help.

#86 Francis on 08.27.12 at 9:05 am

During the period 2005 to 2012 as house prices went wild , did municipal taxes increase prorata. In which case, should we expect a decrease as house prices slide ?

#87 Steven Rowlandson on 08.27.12 at 9:12 am

The current Canadian real estate market has been built on a pyre of debt, lax lending and cheap money. Not on economic growth, wage gains and spending power.

This is absolutely true and it is also true that real estate prices must for the good of the species absolutely crash and burn all the way down to next to nothing.
For the real estate cultists I say there is a price to pay for following the crowd and breaking the rules and if you do not clean up your act you will likely pay the price. Financial death. Young people and property virgins don’t owe you profits and should not get involved in a deal that amounts to financial gross indecency.

#88 Tom from Mississauga on 08.27.12 at 9:13 am

So Rob Carrick at the Globe and Mail is a blog dog…

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/rob-carricks-reader-the-housing-correction-starts-here/article4500585/

#89 Please clarify your position on 08.27.12 at 9:15 am

What makes you so confident about this statement?

“There will be no hyperinflation, government debt crisis, bank collapses or currency crumbles.”

Because I’m right. And there’s no evidence to the contrary. — Garth

I can only assume you’re referring to Canada (in not having to confront these challenges) because anyone with a heartbeat realizes there are government debt crises, bank collapses, and currency wars already in full swing among many other participants in the global economy.

#90 Linda on 08.27.12 at 9:17 am

Gold will do very well but investment of choice is silver.
Metal will reach it’s historic ratio 16:1.
There is not much metals left in a ground and what is left is expensive to dig.
It costs 10-15% more a year to operate mines.
Garth it is just economics not metal mania that will guarantie price moving higher or metal stays in a ground.

Tell that to the suckers who took your advice and bought silver at 43. — Garth

2012 was a bad year for precious metal…election are coming in US, so economy have to look doing really well!
If the guy who bought silver at $43. did not sell and has been patient, he will be reward because soon silver will go to $150.
No hyperinflation? I would not bet on that…No currency crisies…I would not bet on that either!

#91 John on 08.27.12 at 9:17 am

Not 1st wrote:

“Canadian banks won’t fail because about 3 years ago they dumped about 400 billion in shaky mortgages onto the gov’ts back. They are effectively nationalized already.”
—–

Isn’t that unreal? So simple. So obvious…with consequences that are evident. To all. Except those in some way plugged into the system with some kind of role. An identity. A survival strategy with a “self-destruct” button. A protection delusion of “them”
(whoever responsibility for meeting personal needs has been given away to).

Know what that sounds like? Addiction. A system. Just like the alcoholic family system.

Of course it’s just human and power imbalance based…where the individual does not see himself as an actor ( on his own behalf..and, in turn, on behalf of others). Spontaneous community based on values.

The question becomes…when is the famous “moment of clarity”?

Right now? It sounds like…”I only drink on weekends” or “I switched to beer”.

Just this little “Canadian AIG shuffle” alone, brokered by the Goldman Sachs et al network, with Canadian “government” as partners is more than enough writing on the wall.

It’s not complicated or sophisticated. The denial and cover-up yes…but not the problem.

The solution? That only starts being considered with acceptance of what is actually happening, and the consequences associated with that.

Not one single person is better than anyone else, but solution does arise from a collective of responsible ( and imperfect) individuals.

#92 Old Man on 08.27.12 at 9:20 am

Gold / Silver: when the crowds rush in to buy at high levels it is time to sell, and move the cash into quality preferred share holdings for greater safety of capital.
The crowds get horny about getting rich, and 90% of the time are wrong, so go into the opposite direction; the same works for Real Estate.

#93 Toronto_CA on 08.27.12 at 9:21 am

“#43 donald trump on 08.26.12 at 11:16 pm
still no price drops in toronto!”

Hah. This is gold, coming from a “donald trump” alias considering the Trump Tower condos.

I remember damning articles about those condos from early this year, I wonder what the current state of them is? Still sitting, unsold?

http://www.thestar.com/business/article/1108666–star-exclusive-angry-trump-condo-buyer-wants-out

http://business.financialpost.com/2012/05/14/luxury-condo-glut-about-to-flood-toronto-housing-market/

http://www.torontolife.com/daily/informer/to-market-to-market/2012/04/24/trump-tower-weak-start/

#94 eaglebay - Parksville on 08.27.12 at 9:51 am

Corporations are sitting on $526 billion in cash.
Interesting, where do they keep the cash?
Do they use boxes and store it in their warehouses?

#95 grantmi on 08.27.12 at 9:55 am

Nope.. Different here in the BPOE!!!!

Canadian housing became less afforable in Q2: RBC

A large part of that, however, can be blamed on a single market: Vancouver. The RBC report said that the Vancouver-area market continues to be the least affordable in Canada, by far.

“RBC’s affordability measures further deteriorated for all housing types in [Vancouver] to levels that stood very close to the worst on record,” the report said.

http://natpo.st/OENGz2

#96 Junius on 08.27.12 at 9:55 am

#70 Scott (GVRD),

Assessments are only assessments by the government. They don’t mean that is the value of the home – especially in Vancouver where they have become an incredible tax vehicle to soak homeowners.

An anecdote. I was at a function on the weekend and spoke with a woman who just listed her West side home. She had just met with one of the super star Realtor to the stars (which is another sign of how nuts this place it).

The woman had suggested to the realtor they list at the assessment value to start. No way said the realtor. They told her 200K below assessment was much closer to market.

What is fascinating in Vancouver is that the common belief is that the assessment is lower than the actual value. This, of course, helps us all stomach the high taxes. Except in many cases it is obviously not true or at least not true anymore.

#97 syfon on 08.27.12 at 10:20 am

#83
Those suckers are happy investors that hold silver from much lower level that it is today.
If someone bought metal on parabolic move last year , can only blame themselfs, but theirs patients not overreactions will be awarded in time.
We met many years ago in Rouge Community Center in West Hill before a boom but I bought your book that said after a boom.
If you look at financial history of the world there is no rights and wrongs just perception ones gets at the time.
Investing is all timing.
Silver is before a boom and underowned.

My daughter was 10 when I took her to your seminar.
To this day she remembers one of your lines.

“What you got after owning a Lexus for a five years- an old car”

That just proves that you do influent some young people.
She saving money for down payment and boyfriend just sold his condo in Toronto both waiting for better prices.
Both are happy metal investors.
Garth market is 0 gain game for every winner there is a looser.
only service companies making money. with metals there is not counterparty risk, price will never goes to 0 like many GREAT investments of the past and present ( nortel, enron, some banks ect)
Will continue

#98 live within your means on 08.27.12 at 10:20 am

Agree HHHW. Several in my family are in debt. BIL invested heavily in Nortel & lost big time – now refuses to invest. He & a friend had to replace a Bay window in dining room open to kitchen. Then he put up phony brick on the wall like the lowest pic (http://www.fauxpanels.com/fireplaces.php). Yuck. Can’t imagine trying to remove the dust and grease next to a kitchen. Both DH & I made no comment when my BIL was raving about how great it looked. I know he was looking for our confirmation.

DH & I spoke to my PIL’s in France Sat. who said BIL finally asked them to move money they had put into his Savings acct to his Chequing acct. so he could access it from Mtl. They finally agreed to do so. He hasn’t visited his parents in 3 yrs. (Both are older & have health problems.) They continue to spend like they did when both were working & earning big bucks. I love all of my extended family, but unless it’s an extreme emergency, we won’t lend/give them any more money.

#99 The American on 08.27.12 at 10:24 am

At #72: Picasso, you do not pay critical gains on profits in the sale of your PRIMARY residence in the U.S., even if you do not purchase another home. You will only pay taxes in the U.S. on profits realized in excess of $250,000 as a single person, or $500,000 as a married couple. It makes no difference if you purchase another home or not.

You may be referring to investment properties, at which time 1031 Exchange laws will come into play. In that case, if you do not IDENTIFY another property to place net proceeds from a prior sale of a property, then those proceeds are subject to taxation. You have 6 months to identify the next investment property you will purchase once you have sold a similar/like investment property.

#100 joe_blown_away_by_high_housing_costs on 08.27.12 at 10:57 am

Globe and Mail article links to Garth Turner’s blog:

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/rob-carricks-reader-the-housing-correction-starts-here/article4500585/

#101 Fort Mac Flatlander on 08.27.12 at 10:58 am

#15 Foggy

Shell is going to spend 1 billion on oil exploration around Nova Scotia starting next year some time. Could attract NS’ers out West, working in the industry.

Unfortunately, the money that would return east is already going there. We have seen in NS and NB that house prices actually increase when the mills close their doors because the money returns from the west. Completely opposite to what one would think, but its what’s happening.

#102 disciple on 08.27.12 at 10:59 am

Joe Trippi of Green Party Canada is Ray Romano. Time for these fraudsters to pack up and leave this country.

#103 Old Man on 08.27.12 at 11:03 am

BCE was sitting on $billions of cash when the stock went to $24.25 more or less, paying no dividend at the time, so the crowds sold it down the drain. I bought this opportunity of a lifetime, as went the opposite way, and with the dividend tax credit am yielding about 10% with a huge capital gain if I ever want to sell. The company took cash to reward shareholders several times over.

#104 “The woman suggested to the realtor they list her Westside home at assessment value to start. No way said the realtor, they told her 200K below assessment was much closer to market.” | Vancouver Real Estate Anecdote Archive on 08.27.12 at 11:06 am

[…] high taxes. Except in many cases it is obviously not true or at least not true anymore.” – Junius at greaterfool.ca 27 Aug 2012 9:55am Share: This entry was posted in 16. Missed The Boat? and tagged Anecdotes, British Columbia, […]

#105 Junius on 08.27.12 at 11:32 am

Another good reminder of what works and does not in the real world from Barry Ritholz. Iceland essentially nationalized their banks, made their creditors take the losses and prosecuted the banksters. Now they have rolled the banks back out and their economy is healthy.

Note that this is a left wing or “socialist” government in the eyes of our local neandercons like Blue Monster, Hammerhead and Westernman.

Compare this to Ireland and the approaches of austerity taken by the right wing in Europe and North America. Again, the so called “free market” crowd doesn’t see what is real and what is just an excuse to socialize all loses for the crony capitalists.

See below:

http://www.ritholtz.com/blog/2012/08/iceland-did-it-right-and-everyone-else-is-doing-it-wrong/

#106 Old Man on 08.27.12 at 11:34 am

#104 – In selling a property will never trust a Real Estate agent for a listing; trust, but verify, as too many will do or say anything to make a commission. A home is a huge asset, and it is tantamount for the homeowner to do their own market research to ascertain a fair market value for a sale before a listing.

#107 Gold Finger on 08.27.12 at 11:35 am

The total fiat money experiment that we’re all living in at this time is going to end badly. Being off the gold standard has given the government of this world a green light to borrow and spend “money” at will, that should be repaid by future generation. This will just not happened… There is a 100% probability that this system will crash, and everyday that passes brings us closer to the end… It won’t be the “end of the world” , but a new “system” will emerge from the ashes of the old one, and there is little doubts that gold will play a major role in it… Don’t be fool, your best bet (and only one as a matter of facts) is in precious metal . I’ve been invested in precious metal 100% since 2003, and I sleep like a baby every night since then… My 2 cents…

#108 Hoof - Hearted on 08.27.12 at 11:41 am

“Cynically” From Yesterday

#263 cynically on 08.26.12 at 10:43 pm

#240 Hoof-Hearted – Why do you disbelieve one story which has had more validity over the years and yet believe the other far less known one when both are probably untrue historical tales used to support a position at one time? As to your question “Is the US a republic,” most people would think so and we know for sure that it is not a monarchy like a certain country to its north where its “subjects” know for sure what they are and I’m sure always be.

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

There is a lot of myths and legends in history and historical figures. One has to weed out fact from P.R.

The US had an opportunity to create a system of governance that was unique, as they had seen the good bad and ugly of other ruling systems prior to independence.

A “Democracy” can be best analogized as (2) wolves and a sheep voting on what to have for dinner.

A “Republic” would not allow that type of “democracy” the sheep’s rights would be entrenched.

I recall the Founding Fathers of the US estimated it ..the Republic model…. wouldn’t last for 100 years. It didn’t.

If you are suggesting the US Constitution etc still protects the citizens , one is sadly mistaken, as they have overrriden many rights with the Patriot Act, Homeland Security, etc..

Re Politicians, they also anticipated scoundrels in office, that’s a given but the scoundrels needed to be handcuffed first..ie their individual -agenda powers would be very limited, as they would have no choice but to follow the rules etc.

#109 Gold Finger on 08.27.12 at 11:45 am

I forgot to comment on the whole concept of “diversifying” your portfolio… What a loser concept… You win on some front, and loose on the others, so you remain a sitting duck, not going anywhere… You will never get rich applying this concept, that is a certainty… Just think for yourself … You don’t need no GURU… Precious metals are on the verge of an imminent upright on the horizon… The train is about to leave the station, get onboard :-)

#110 spaceman on 08.27.12 at 12:04 pm

“Gonna hafta still bet on gold”

oops sorry, the get rich by gambling blog is a few doors down…

but something to remember, buy low, sell high… sell high… sell high… are you getting this?

#111 live within your means on 08.27.12 at 12:15 pm

“In Halifax, traditionally one of the most stable, sane and affordable housing markets in the country, a lot of people wondering what the hell they did. Last autumn the feds announced a big ship-building deal directing work to local yards. The housing speckers and gamblers immediately moved in, goosing monthly sales by 30%, igniting bidding wars and spiking prices. Almost a year later, no money’s actually been spent, and none will be for a long time to come. Sales have crashed back by a third, and every day there are 200% more new listings and price reductions across Nova Scotia than there are sales.”

I wish I could find an article that I read when the shipbuilding contract was announced. IIRC, only the hulls would be built in NS as no Canadian company can provide the sophisticated equipment within these ships so I don’t understand how this contract could provide 25 to 30 years (what I read) of work for Nova Scotians. Please correct me if I’m wrong.

#112 luke8929 on 08.27.12 at 12:21 pm

Glad to hear the banks are doing so well I assume they will be paying the $114 billion back lent to them by Canadian taxpayers during the 2008 financial crisis shortly.

#113 Seriously? on 08.27.12 at 12:21 pm

Wake the hell up.

The middle class is dead, the sixties are over.

The politicoes have sacrificed the middle class in favor of wealth transfer.

Your power is gone.

They own you.

Better luck next time, thanks for coming out.

#114 CP on 08.27.12 at 12:42 pm

“What about Bob?”

http://www.huffingtonpost.ca/2012/08/16/bob-rennie-vancouver-housing-bubble_n_1777122.html

#115 Can it be? on 08.27.12 at 12:48 pm

Got an email from a lovely real estate agent today. Houses that I looked at have been pulled from mls and are now exclusive listings. No official price drop but people are flexible with offers. I suspect lots of
Listings will go back on mls in the fall. I guess a lot
Of homeowners didn’t get the memo that the good times are over. Time to price drop and get out.

#116 dd on 08.27.12 at 1:16 pm

Money is becoming more valuable.

That is why interest rates are at historic record lows. LOL!

That is correct. — Garth

#117 TRT on 08.27.12 at 1:21 pm

The bubble will pop sooner or later. No area will be spared…not even the ‘416’!

Why? Because demographics predict it and there will be an immigration backlash when numbers have to increase further..

The longer prices are sustained, the more abrupt the drop. Only then will the smug sheep homeowners realize what they lost….their wages have been stagnant in real terms over the last decade, eroding pension benefits will come to fruition, and their house will be losing money by the day.

What will be the point of protesting after the fact??

#118 TRT on 08.27.12 at 1:24 pm

Oh, then the ‘Corporate Coup’ will be complete. Sitting on $528 Billion and counting..

#119 Toronto S on 08.27.12 at 1:46 pm

$43 donald trump, I have to agree with Garth – open your eyes. I don’t believe you’re actually actively following the Toronto market based on that statement. Of course there have been price drops in TO. My favourite is a 890 sq foot 1+1 bdrm, 1 bathroom condo, with parking and locker, downtown Toronto that started at $475K, and I watched the price drop to $455K, $425K, $415K, and then lastly $399K. That’s what it sold for in the end. Great building, great location. But price drops were necessary to move it.

#120 Iwillfixit on 08.27.12 at 2:09 pm

“Garth and blog puppies, let me let you in on a secret. And the moment it does, stop paying the mortgage. The bank can try and sue you, creditors can too but as by the time it gets to court (at least 3 years, minimum. Think about what you’ll be saving) tell the judge a sob story, shed a few tears and I guarantee any judgement will be reduced by 2 thirds.”

The above poster has an attitude that is a Cancer to our economy and it’s people who think like that that will destroy our financial system. Judges need to able to spot this kind of thinking make sure that its not rewarded.
In fact guys like this need to be made an example of. This attitude about personal responsibility needs to be irradicated from Canada

#121 Ronaldo on 08.27.12 at 2:11 pm

#21 Old Man –

”The price of gold is a bit too high; should have bought years ago with a better average cost.”

Compared to what?

#122 Ronaldo on 08.27.12 at 2:30 pm

#52 Jonno

”People state a four year high in markets but the tsx is well off it’s 2008 may high. The Tsx has failed to recover fully yet…

…and represents value. — Garth”

And don’t forget that its off more recently from its high of 14,270 of April 5, 2011……how quickly we forget but we will see that again and not that long from now…stay tuned Good value indeed Garth…

#123 DonDWest on 08.27.12 at 2:34 pm

#101 Fort Mac Flatlander

Good point.

When the oil boom in Alberta was fresh, I remember housing prices in Nova Scotia skyrocketing in the most bizarre of places, such as Lunenburg and Cape Breton.

In Lunenburg, it wasn’t uncommon to see some houses going for 700k in the early 2000’s, now such houses sell for 300K at best. This money was coming from men working out West, making tons of cash in Fort Mac, and then subsequently sending the money to their wives and families who still live in those communities.

Modern day Nova Scotians have long lived like immigrants. . .

Now that Alberta is cooling a bit and there’s job growth in HRM; housing prices are starting to chill big time in rural Nova Scotia and HRM is spiking/dipping out of control. It isn’t uncommon to see house prices spike 30% in one season; and then drop 30% the next. It’s enough to make you want to pull your hair out.

Yes, the jobs in HRM pay crap, but at least there are jobs now, and the drive to come home is always there. . .

This is what I believed happened in HRM, the jobs were coming back and unemployment is low, but the jobs pay crap. So many people out West came back and took a huge pay cut. They brought some of that rich Alberta money with them, but it quickly ran out once people realized how little a $12 an hour job carries them even with substantial savings/investments. As a consequence, they bought a 300K dwelling (which seemed cheap compared to Alberta and the money they used to make) then only realized wtf they were doing once it was too late. That same house will soon be worth 200K next year.

This is what contributed to the spikes in HRM, the ships were just foreplay. Now that the Alberta money has dried up the people came here will need to decide whether to move back to Alberta or lower their expectations working low service jobs the rest of their lives in Nova Scotia. Either way, prices are going down.

#124 condopoor on 08.27.12 at 2:48 pm

I am 30 with money in the bank, no debt, and no house. It’s amazing how many of my peers and even older friends show give me a hard time for lack of the latter. I don’t get it.

#125 Ronaldo on 08.27.12 at 2:55 pm

#92 Old Man – ”Gold / Silver: when the crowds rush in to buy at high levels it is time to sell, and move the cash into quality preferred share holdings for greater safety of capital.”

When people start lining up in -40 degrees to buy 1 oz of gold at $840/oz as they did in Feb. 1980 and everyone is setting up shop to buy gold and silver, and gas stations are offering gas for $1.00/gal if you pay in silver coins, and all the talk in the media is about gold and silver, then, I would have some concern. We’re a long ways from that yet. In fact, very few people are even buying the stuff let alone interested in it. Hardly something that average people are rushing to buy.

#126 prairieperson on 08.27.12 at 3:06 pm

I saw on “Whispers” that a mega expensive house in TO just got foreclosed. Unfinished. I assume that the builder couldn’t pay the bills, couldn’t find a buyer. I also assume that the trades who worked on the property are going to take a hit. Carpenters, plumbers, roofers, etc. plus the suppliers of materials. A lot of small trades companies could go under, even larger suppliers. The contagion spreads.

#127 [email protected] on 08.27.12 at 3:09 pm

#77House Horny Housewife

Amen sister.

#128 Buy? Curious? on 08.27.12 at 3:17 pm

@120 Iwillfixit, I love people like you. You’re so adorable.

Walking away from debt is like a guaranteed 2nd place 649 lottery win. Can you think of an easier way to wipe away $60k, $75k or even $100k from your personal balance sheet? Do you really think a couple of phone calls from collection company is going to scare someone into coughing up that kind of dough? If they call just do a Rick Flair impression.

http://www.youtube.com/watch?v=yjW9UXoKU2s

#129 Old Man on 08.27.12 at 3:32 pm

Lunenburg is a gem in the rough, as a longterm investment, as it has a quality of lifestyle that will surpass it all in the end, and prices might go up or down, but so what. There is a price to be paid for paradise, and wish I had bought there. It is all about the mix of all that matters, so why not buy a condo in Toronto, and see who wins the race?

#130 joe_blown_away_by_high_housing_costs on 08.27.12 at 3:41 pm

“My job, I’ve always felt, is to dumb down a room” –Bob Rennie

http://www.huffingtonpost.ca/2012/08/16/bob-rennie-vancouver-housing-bubble_n_1777122.html

#131 Hoof - Hearted on 08.27.12 at 3:49 pm

Was in the BC Interior for a family re-union.

Spouses cousin from Alberta was there with her spouse.
She’s a realtor and he is recently retired , no kids, live in rural area near Edmonton.

We didn’t talk about market aka RE shop talk..but they had bought in Arizona and built a new house. They had also mentioned a property they owned near Salmon Arm.

They said their original retirement plan was to build a home on this lot in BC…but when they crunched the numbers they saw how much just the HST etc would be.They will likely sell the BC lot.

They decided to buy in Arizona…outside Phoenix…. I asked what the cost was…lot and new house..and they said TOTAL of $140,000….(they added a pool for another $30,000).

Interesting….

#132 Linda on 08.27.12 at 3:55 pm

Gold / Silver: when the crowds rush in to buy at high levels it is time to sell, and move the cash into quality preferred share holdings for greater safety of capital.
The crowds get horny about getting rich, and 90% of the time are wrong, so go into the opposite direction; the same works for Real Estate.

Completely agree with you, but taxi drivers are not buying yet!

#133 Humpty Dumpty on 08.27.12 at 4:01 pm

“Let the Blind Guides or Guru’s lead the blind right into the ditch”..

Remember G, Eyes WIDE open…

It is a deal with the devil: Governments churn out more and more cash for the promise of continued prosperity. But the day of reckoning is near, according to Doug Casey,

http://www.theaureport.com/pub/na/14199?utm_source=delivra&utm_medium=email&utm_campaign=Gold%20Finalstreetwise-reports%2008/24/2012%2015:05:57

#134 Linda on 08.27.12 at 4:11 pm

I forgot to comment on the whole concept of “diversifying” your portfolio… What a loser concept… You win on some front, and loose on the others, so you remain a sitting duck, not going anywhere… You will never get rich applying this concept, that is a certainty… Just think for yourself … You don’t need no GURU… Precious metals are on the verge of an imminent upright on the horizon… The train is about to leave the station, get onboard :-)

Well said! I had diversified my portefolio before..a little bit there, another little bit there. One goes down, the other goes up…At the end, I was just even and the brooker was making the money!
Anyway, gold doesn’t goes up, it is the US dollar going down. Baltic Dry Index is also going down, prices are going up, and so on.
Marc Faber, Casey, Peter Shiff are completely in precious metal and Faber advice is: buy gold and a farm! Good advice!

#135 IM in C on 08.27.12 at 4:25 pm

Garth
I think a lot of people on this blog need a refresher course on what happens to mortgage holders here in Canada when they default on their mortgage.

#136 Devore on 08.27.12 at 4:25 pm

#10 Marco from Van

(Most) People here ARE different, in the face of irrefutable evidence AND digestible information they ignored it as if it just was not real…

Really? Can you tell me where people did not ignore it? US? Australia? Spain? Dubai? Ireland? Greece? UK?

#137 Blue Monster Lover of Meats and Vegetables on 08.27.12 at 4:29 pm

#120 Iwillfixit on 08.27.12 at 2:09 pm

“Garth and blog puppies, let me let you in on a secret. And the moment it does, stop paying the mortgage. The bank can try and sue you, creditors can too but as by the time it gets to court (at least 3 years, minimum. Think about what you’ll be saving) tell the judge a sob story, shed a few tears and I guarantee any judgement will be reduced by 2 thirds.”

The above poster has an attitude that is a Cancer to our economy and it’s people who think like that that will destroy our financial system. Judges need to able to spot this kind of thinking make sure that its not rewarded.
In fact guys like this need to be made an example of. This attitude about personal responsibility needs to be irradicated from Canada
——-
The problem is only half his fault so half default is fair. The system is broken already if deadbeats can access huge amounts of debt. Let the collapse begin and it’s every man, woman and child for themselves, and look out for the cannibals that are coming, they’re nasty.

#138 Hoof - Hearted on 08.27.12 at 4:38 pm

Bank /Mortgage Boycott…

Seeem to recall in the 1970’s and 1980’s farmers were sucked in by banks to take on big debt when comodity prices had a bubble.

However, this did not end well (same stry, different pile)and a lot of farms were foreclosed on.

However….the buyers of farms are what….a limited pool called farmers. The farmers would form a united “buyers” group…and made sure that the foreclosure bids were very looooow for land and/or equipment…and got back at the banks…and often returned the farm and equipment to the owners.

#139 jess on 08.27.12 at 4:48 pm

headwinds?…” Still pending are a series of LBOs from the 2005-07 period, which have huge debt loads, much of which PE has been able to refinance. But slow economic growth persists, and the future of investments made at the height of the real estate boom is uncertain. ”

http://www.cepr.net/documents/publications/financial-intermediaries-2012-08.pdf

#140 Devore on 08.27.12 at 4:51 pm

#42 chojo88

Please Garth!!! Any further comment about League REIT? Why do you say run?

It’s a private REIT. How do you get your money in and out? How do you find out how it’s managed? How do you know what the finances are and how it’s performing?

#141 Old Man on 08.27.12 at 5:02 pm

#136 there are two default remedies with a default on a mortgage, and one is power of sale which is fast, but to meet the sheriff and the locksmith for possession on an appointed date can have a few life threatening type of surprises, as both sheriffs have no weapons. The other is foreclosure with equity that goes through the court system, but will take a year or more, and is not used much.

#142 jess on 08.27.12 at 5:07 pm

deadbeats ?

Small and mid-sized companies, unable to compete in bond markets for credit, have turned to HFs (hedge funds) to borrow billions for needs ranging from on-going operations to new strategies and innovations. While filling a needed role in the post-crisis period, HFs charge high interest rates – of 12.5 percent or more Moreover, they are known for their short time horizons, raising questions about whether they will quickly foreclose on loans which fall in arrears – a strategy referred to as ‘loan to own’.57
An important example of a distressed investment is Yellow Roadway Worldwide,

#143 tkid on 08.27.12 at 5:08 pm

#109 #135, yours are the best arguments I’ve heard yet for diversifying. Gold is not a sure thing.

#144 John in Mtl on 08.27.12 at 5:09 pm

@ #125 Ronaldo on 08.27.12 at 2:55 pm said:

“When people start lining up in -40 degrees to buy 1 oz of gold at $840/oz as they did in Feb. 1980 and everyone is setting up shop to buy gold and silver, and gas stations are offering gas for $1.00/gal if you pay in silver coins, and all the talk in the media is about gold and silver, then, I would have some concern. We’re a long ways from that yet. In fact, very few people are even buying the stuff let alone interested in it. Hardly something that average people are rushing to buy.”
.
.
Yeah, but the Chinese are buying it BY THE TON and I suspect its not to put in iPhones and big screen TV’s circuit boards :)

Something’s going on…

#145 John on 08.27.12 at 5:16 pm

Eaglebay Parkesvlle wrote:

“Corporations are sitting on $526 billion in cash.
Interesting, where do they keep the cash?
Do they use boxes and store it in their warehouses?”

The widely known quote: “It’s digital money not worth the paper it’s not printed on.”

To keep this simple, you require the ponzi scheme more or less in it’s current form ( imagine what that includes) to project forward the funny money.

The “money” came from and could go to thin air. A lot of juggling to keep the perception going.

#146 jess on 08.27.12 at 5:19 pm

125 condopoor

you could always throw an emerson quote back at em

“What lies behind us and what lies before us are small matters compared to what lies within us.”

#147 jess on 08.27.12 at 6:15 pm

#82 ret

.. sovereign wealth fund avoid withholding tax , reduces costs using an online tech innovation . is the russian ,kaspersky, the new cyberprotector?

The Buffalo News reports that the homes are owned in the name of “Her Majesty the Queen in right of Canada.”
Canadian officials said work done at the consulate will now be done online or at the New York City consulate.

#148 Junius on 08.27.12 at 7:14 pm

A look at Romney’s economists shows the usual list of those responsible for the failed policies of the past decades. More of the same nonsense if he is elected:

http://www.nakedcapitalism.com/2012/08/pavlina-tcherneva-economists-for-romney-a-closer-look.html

#149 TRT on 08.27.12 at 7:22 pm

Fraser Valley…

friend just bought in N Delta…sister just bought in Surrey…both to rent out..

Delta guy thinks Asians are gonna start moving there as richmond fills up..

Sis thinks immigration is key..

who knows where this is going…Guess put your money where your mouth is.

who knows where this is going..

#150 Devore on 08.27.12 at 7:25 pm

#105 Junius

Note that this is a left wing or “socialist” government in the eyes of our local neandercons like Blue Monster, Hammerhead and Westernman.

You mean investors who took a risk lost money, banks failed, white-collar criminals went to jail? Sounds like a free market solution to me.

#151 45north on 08.27.12 at 7:31 pm

L. Pearson: Nonsense! The correct usage in that case would be, “the police officer fired HER gun…

well you’re right of course, I was thinking that if Alicja knew the police officer was a woman but did not want to reveal that in her article.

#152 DonDWest on 08.27.12 at 7:44 pm

Gold dropped back down. Predictable that people would profit take on a Monday after a recent upsurge on a Friday. Seen this a million times with logs, grains, stocks, oil, etc. 90% of the time upsurges on a Friday are failed moves – doesn’t matter the product.

Gold may have yet another large uptick to go where it goes back to $1900 and silver $40. I do believe gold/silver will double-head (long term), but not this week.

Based on what? — Garth

#153 Nostradamus Le Mad Vlad on 08.27.12 at 7:53 pm


Thought For The Day! — “There is only one basic human right, the right to do as you damn well please. And with it comes the only basic human duty, the duty to take the consequences.” — P.J. O’Rourke (1993) wrh.com. Generally referred to as self responsibility.
*
Wage Cuts “This loss of decently-paying middle-class jobs is not accidental: it is deliberate.” wrh.com, and China “When the globalists decided to have all the manufacturing in Asia and all the customers in the United States, the system was going to eventually break down. The manufacturers have no customers and the customers have no jobs.” wrh.com; Germany Business confidence slumps; Forced Resignation Some of you may get a chuckle out of the first couple of sentences; Jamie Dimon Say it ain’t so; Morgan Stanley In the process of doing a Bear Stearns / Lehman? Citigroup Takes milliseconds, that’s all, but Protect the banks (obviously); Believe It Or Not Letting the crooks fix the problems they created; GM bans ORomnbamaey from plants. Why? Denmark “Banks pay you to borrow their money. Actually, not YOU, just other bankers.” wrh.com; Incomes still lagging; Banxters’ Profits Proof.
*
Syria – France “The invasion has started!” wrh.com. Russia’s and China’s response (if any) should be interesting. BTW, when is regime change happening in DC? Russia Propaganda bots. The west has plenty of them; TSA and DHS What is the need for 1,400 lbs. of high-powered explosive? Gadaafi error “We talked about the shoot-down of the Itavia flight in the context of TWA 800, but viewed it as an accident, like TWA 800 itself. According to this report, there was an attempt to kill Qaddafi by shooting down his plane, but the attackers mistook the Itavia flight for Qaddafi’s plane and destroyed it.” wrh.com; FCC New ‘net tax; Nukemap “Find out if you will survive and by how much.” wrh.com. It’s better to move on into the next worlds. They are far more vibrant and beautiful than here; Police State becomes ever more brutal, and US Vets in mental hospitals; Kidney disease from agrochemicals; DC needs war because they’re broke; Af’stan, Russia and the US It’s complicated; Synthetic Vitamin K Deadly effects; Coffee, slugs and the EU A dictatorship gone wild.

#154 jess on 08.27.12 at 8:16 pm

irish history
http://neweconomicperspectives.org/2012/08/why-is-paul-ryan-an-irish-catholic-praising-the-dogmas-that-drove-the-great-hunger.html#more-3031

#155 DonDWest on 08.27.12 at 8:21 pm

Based on what? — Garth

Fear.

Why does that not surprise me? — Garth

#156 TurnerNation on 08.27.12 at 8:28 pm

It’s going to be the winter of our discontent. Windsor’s CAW union workers going on strike; Ontario’s PCs and Liberals both holding the line on Teacher Union salaries amid much throwing of toys.

And, here’s how I imagine SM’s son to be:

http://www.quickmeme.com/meme/3qnt04/

#157 Canadian Watchdog on 08.27.12 at 8:45 pm

Based on what? — Garth

Based on the fact that central and bullion banks are going net long.

#158 kam on 08.27.12 at 8:53 pm

Stocks on firmer footing as gold rises

http://www.ft.com/cms/s/0/2f2b42d4-f074-11e1-93fa-00144feabdc0.html#ixzz24oFR2qlL

Gold prices extended gains on Monday with investors boosting their bets that the precious metal would provide a hedge against future inflation if global central banks provide additional stimulus measures.

Gold rose as high as $1,676 an ounce, the highest level since April, before ­paring some of the gains.

#159 Silver on 08.27.12 at 8:54 pm

well now I know why my business property taxes have gone from $5,000.00 a year to $20,000.00 a year.

I wonder what Blair Choo the City of Vancouver’s Manager of Collections had to say about the Olympic Village out standing bills and receipts as well as tax’s.
and will he threaten to collect under the Vancouver City Charter section 406 by November of this year.

The City of Vancouver has told me they do not verify a single assessment document for accuracy from B.C. Assessment.

I suppose that is how the paperwork estimates at Olympic Village were done as well…

lets see $225,000,000.00 divided by 200 units is $1.125
million per unit left?????

Best of luck taxpayers in vancouver… good deal Mr Blair Choo. nice work

Welcome to hell Vancouver

Silver

#160 Can it be? on 08.27.12 at 9:11 pm

People pulling listings off mls and going exclusive… Thoughts?

#161 Mark W on 08.27.12 at 9:25 pm

http://www.news1130.com/business/article/395591–vancouver-has-worst-housing-affordability-in-country

#162 Devore on 08.27.12 at 9:28 pm

#126 Ronaldo

When people start lining up in -40 degrees to buy 1 oz of gold at $840/oz as they did in Feb. 1980 and everyone is setting up shop to buy gold and silver, and gas stations are offering gas for $1.00/gal if you pay in silver coins, and all the talk in the media is about gold and silver, then, I would have some concern.

You have heard of the Internet, yes? No one needs to line up to buy anything.

#163 truth hammer on 08.27.12 at 9:30 pm

hedge your bets bug eyes……theres no safety net……it’s a market classic run off between fear and greed……gold set to advance for the 12th year in a row……..but can this continue…????? Does a 12 year streak mean anything? Isn’t gold ‘a barbarous relic’? Shouldn’t we believe the greatest liberal minds and seel our national holdings as did our beloved trudeau and the impressive G Brown?

believe your betters….damn you……isn’t that why they are in office….because they’re smarter than the smartest?

http://www.bloomberg.com/news/2012-08-27/gold-set-for-best-year-since-2010-as-stimulus-bets-stoke-demand.html

#164 Mel on 08.27.12 at 9:35 pm

I agree that there is a ‘shift’ happening in the economy. Practically all debt related assets will be facing a long decline.

However, in my opinion you are too optimistic on the economy. I personally would not touch any company stock. It is overvalued at the moment. The world economy is in recession. Stocks have not priced that in as of yet. I expect it to do so in the coming 6-12 months. I will be buying then.

Perhaps Banks are doing well so far, I do expect them to have lower revenues going forward. I would not buy them at these prices.

Markets price economic factors in before you even hear about them. — Garth

#165 Junius on 08.27.12 at 9:37 pm

#151 Devore,

You said,”You mean investors who took a risk lost money, banks failed, white-collar criminals went to jail? Sounds like a free market solution to me.”

Then why did it only happen in Iceland and Sweden in the 90s and not in the US or UK where they are more free of banking regulation? You missed the part about who the free market is free for.

#166 Devore on 08.27.12 at 9:57 pm

#166 Junius

Then why did it only happen in Iceland and Sweden in the 90s and not in the US or UK where they are more free of banking regulation?

Clearly they’re only paying lip service to free markets. When the rubber hit the road, Iceland decided to have Mr Market pick winners and losers, instead of going the corporate welfare route.

You should know better Junius than to say UK or US have more free market in banking than any other country.

#167 The American on 08.27.12 at 10:08 pm

At #115: timing is Everything, yes, in my opinion people are losing it more often more recently than even a decade ago. Media coverage hasn’t increased, but the crazies have. Per capita, the U.S. has a propensity to use guns, whereas in Canada the preferred method is dismemberment and mutilation (greater in Canada than in the U.S., believe it or not). This is often a point overlooked between the two countries.

#168 Linda on 08.27.12 at 11:00 pm

#109 #135, yours are the best arguments I’ve heard yet for diversifying. Gold is not a sure thing.

Fiat money (out of thin air) is not a sure thing too!

#169 Gunboat Denier on 08.27.12 at 11:42 pm

Junius re: Iceland – read the first comment in the link you provided. Iceland has a population and economy about the size of Victoria BC. Their banks took in money from all over esp UK to the tune of an order of magnitude larger than their GDP. They couldnt have bailed them out
if they wanted to.

#170 wes coast on 08.28.12 at 12:47 am

Garth said:
If you want to invest for the short term, buy lunch. — Garth

——

LOL. Point well taken. That’s just the kick in the arse I needed. Thank you :-)

#171 Jared on 08.28.12 at 1:44 pm

Housing affordability is unlikely to be helped by income growth. From the teachers to gov’t ministries, the unions are all facing proposed wage freezes, and in some cases, the elimination of cost-of-living adjustments from their compensation plans – at least in Ontario this is the case. That would mean a gov’t worker would never make more money, regardless of inflation (therefor would make less money over time). With unemployment still structurally high (and likely to remain so for the foreseeable future), the private sector is unlikely to raise the standard of living for the average Canadian out of sheer generosity (unless you are a senior exec in the banking industry who managed to survive 2008).

Thus, if housing affordability will continue to erode, even if rates don’t increase for years (and they won’t). The writing’s on the wall. For a country with so much oil, Canada’s ironically out of gas.