Not again

pants

‘Why would you want to do that?’ I asked. Henry wasn’t expecting a question. He’d called my cell phone late on an Alberta afternoon to get some advice on an offer. We had never spoken before, but in two minutes I learned he’s in the oil business, wisely sold a condo in Edmonton, has cash burning a hole in his bank account, and just went firm on a vacant chunk of land across the line in BC that a bank repo’d and is selling at 50% of last year’s price. Yes, and he reads this blog.

‘You payin’ cash?” I continued. He is. ‘You building on this land?’ Eventually, maybe, he said. Not sure. ‘Then, why?’ And Henry let it all hang out. “I’m buying for peace of mind, to have something, It’s emotional. For my wife.”

So I explained a few things. A non-producing chunk of mountain dirt, even bargained at $300,000, is a dramatically expensive purchase. That money, now dying a painful death in his 1% bank account could just as easily be chunked into the same bank’s preferred shares and yield 5.25%, with a dividend tax credit cutting the taxes in half. The dividend never changes and preferreds have been as stable as Justin Bieber’s libido. It’s just an example – but in this case he’d have almost $16,000 in tax-efficient income.

‘That’s what this land will cost you,’ I said. ‘Add in a grand for property taxes and it’s $17,000 a year to carry something that’ll never earn you a dime. Besides, BC real estate is doomed. It’s half-price for a reason.’

I’d heard a faint click. She was listening in. ‘What’s more, with that $17,000 a year you could take your wife to Europe for three months every year and treat her with the respect she deserves. Or, go and have a picnic in your field with the bugs.’

Hank has now asked me how to get out of a firm deal. I told him. I think we should cover this a blog topic soon, eh?

Speaking of pathetic blogs, on Friday I shared with you the latest numbers from the Toronto new condo scene, which finally made it into the mainstream media on Monday. They are an unmitigated disaster. Moreover, they come from Urbanation, which is the undisputed industry for accurate builder/developer/sales data. More on that outfit in a moment.

To recap, in the first 90 days of this year, condo sales were crushed by 55% year/year and fell by a third from the last three months of 2012. There has never been as precipitous a decline. Developers are scrambling to cancel projects which have been in the development and design process for years. Unsold inventory in new projects has climbed to almost 19,000 units, which is 21% higher than this time last year. Crane operators, formers, drywall dudes and plumbers are now looking at a lean summer, with little prospect of recovery in the next year or two.

Already the GTA unemployment rate is 8.2%, which now exceeds that of the US, which every doomer on this blog moans about. We’re soon to see the impact of an economy which has allowed itself to become too dependant on a single sector, which in turn depends on horny twentysomethings without any money.

Meanwhile prices start to retreat. For the past decade new condos have added an average of 6.4%, and now that advance has fallen by two-thirds. Soon – for the first time – there will be year/year declines. In fact, at $533 a foot, there’s no longer any premium commanded by new condos over resales (of which there are 9,000 in the GTA). Resale prices, by the way, are falling in absolute numbers.

This is a sick market. Keep your adult children in the basement!

Speaking of sick, it’s time to vote. Yes, again.

I know I recently asked you to vote in the BuzzBuzzHome survey of who the most trusted source is when it comes to Toronto real estate (BuzzBuzz sadly did not include me in the Vancouver version, which a pooch won). And the results had consequences. Not only did I win that with 80% of the ballots cast, but it was a career-killer for the boss of Urbanation (mentioned above) who was also a contestant.

Industry insider Jenn, one of my deep sources, just passed this along:

“How’s this for a chuckle?  Last month I was sending in Q1 numbers to Urbanation and found out Ben Myers had left Urbanation to join Fortress Real Developments.  People come and go so I didn’t really read much into that.  Then I was talking to our VP of high rise that word has it that Ben left as soon as he lost the BuzzBuzz poll to you, saying he wasn’t going to hang around if his opinion wasn’t credible.  I thought that was a little extreme, don’t you?  Haha…”

You bet, Jenn. But not as extreme as the guy who runs a blog called ‘Modest Money.’ Months ago he started a contest to determine the Top Canadian Finance Blog with more than 80 entrants. I asked you to vote. You buried him. But this irritating little Vanna White-wannabe just won’t quit.

“After about 3 months of voting, the first round of voting ended with a total of 4,793 votes from 3,829 voters. Amazingly one blog had 84% of the voters selecting them as one of their 5 favourite Canadian finance blogs. And no it wasn’t the blogger who dominated the 2012 poll.”

Looks like the weasel is having a second round of balloting. Apparently 84% isn’t enough to elect this blog. I smell Conservatives.

“For this poll the 1st round of voting does not carry over though. That way everyone can vote among the most popular blogs instead of just voting for their closest blogging friends. With this format the top 3 blogs should be much more accurate.”

Now, you see what he’s doing? By asking you to vote for three blogs without giving a preference, he’s hoping the ravenous, yelping pack of GreaterFool blog dogs will pump up numbers for the Jar Lady or that limp Potato thingy.

I cannot in conscience tell you how to vote. So let’s set aside morality. Just vote for GreaterFool.

170 comments ↓

#1 CalgaryGuy on 05.06.13 at 7:53 pm

Hi Garth: can you suggest any “Black Swans” or outlier events that would cause housing to crater rather than experience a gradual decline given current economic news?

#2 T.O. and GTA bidding wars debunked -May 6 on 05.06.13 at 7:55 pm

http://recharts.blogspot.ca/2013/05/to-bidding-wars-debunked-may-6.html

http://recharts.blogspot.ca/2013/05/gta-bidding-wars-debunked-may-6.html

I don’t really understand why this is not showing in TREB’s numbers but what is going on outside of Toronto is really depressing.

#3 Mocha on 05.06.13 at 7:56 pm

My dad is in real estate and that’s often the same advice that he gives to people who want only land with no plan for revenue generation.

#4 TurnerNation on 05.06.13 at 7:56 pm

Another poll? 4 more years.

#5 TurnerNation on 05.06.13 at 8:01 pm

This plain-talkin’ weblog could use a 1-900 number, for advice seekers use.

#6 City that smells like it sounds on 05.06.13 at 8:03 pm

Good chance of being 2nd today!

#7 CrowdedElevatorfartz on 05.06.13 at 8:06 pm

Jayzus,

Only a realtor or a BC Liberal sinking in the polls could come up with a voting system like that!

#8 CrowdedElevatorfartz on 05.06.13 at 8:08 pm

Oh, and I was voter #49 for Greater Fool

#9 Nodebt on 05.06.13 at 8:13 pm

Hey Garth , just curious where that guy bought that piece of dirt in BC, I’ve done lots of work on the ski hill in golden and it’s like a ghost town compared to 3-4 years ago. I know a guy that built a place and was offered 1.3 million in 2009 and they said no, it sold last June for under 900 k the guy wouldn’t tell me the exact price. I went up to Sunpeaks just outside of Kamloops and that place is like ghost town as well, one house getting built, was in Vernon and kelowna the last 2 weekends and not much happening there aswell. I’m in the construction business in BC and it’s deffinately shittty out there for work. Lots of companies bidding work for 5% over cost. I know of a contract that just got awarded for 470k, total profit 50k if it all goes smooth, profit should be 188k, hopefully the useless NDP don’t get in!!!

#10 ketch on 05.06.13 at 8:14 pm

you got my vote thanks

#11 prairie person on 05.06.13 at 8:15 pm

Victoria sales last month were better than I expected. Prices have held up reasonably well but there have been some great bargains. Always people who have to sell. However, those who don’t have to sell are learning the prairie trick. Set a price and wait. Sort of like a Venus fly trap plant. However, after six months, my neighbor (I don’t believe he’s had a single offer) has a new sign up saying New Listing. Must have changed realtors. I expect he’s also dropped the price. Good thing he’s in no hurry. The question is how many places will still be unsold by the end of July? August is the month needed for moving so as to be in place by Sept 1.
In Victoria, with the annual influx of retirees, school isn’t a major factor for many but it is for the people buying their house or farm. What seems to be being proved in Victoria and the islands is that a lot of people don’t actually have to sell. Musical houses was fun when house prices went up covering costs, made moving up possible, provide paper profits to make people feel clever. Take away the Musical houses and what you’ve got is retirees moving into Victoria. Not a lot of people coming here for jobs.

#12 prairie person on 05.06.13 at 8:20 pm

Garth is at 77%. Nobody else is close.

#13 blokexistentialist on 05.06.13 at 8:20 pm

Done. You’re the only one, Garth.
However, I’d like to see the three doghead approach to voting in the upcoming B.C. election.
As usual, I want to vote for NONE of them. While I will do my civic duty (holding my nostrils pinched together with one hand while forcing myself to vote for one of these stinkers), I would somewhat prefer being governed by the Three Stooges.

#14 T.O. Bubble Boy on 05.06.13 at 8:29 pm

Canada Mortgage Trends calling the mortgage-broker-who-is-also-my-brother-in-law article in the Star “innocent” (ya, right):
http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2013/05/an-avoidable-potential-conflict.html

#15 J. Roy on 05.06.13 at 8:33 pm

#11 prairie person

“Take away the Musical houses and what you’ve got is retirees moving into Victoria. Not a lot of people coming here for jobs.”

Except for the Navy. A Caporal makes between 56 -60k plus military benefits. Can one afford to rent in Victoria at a cpl. wage?

#16 Rob on 05.06.13 at 8:34 pm

“So let’s set aside morality.”
Duly obeyed and my vote cast accordingly.
Currently poll results still show you at 84%.
Harper and F should be as lucky in the next election! lmao

#17 Trader on 05.06.13 at 8:38 pm

Only vote once, and for greaterfool… That way, your other two votes are unused and don’t fill up the count of other blogs.
Yea, I know it’s obvious…

Strategic voting is never easy. But usually fun. — Garth

#18 Ronaldo on 05.06.13 at 8:41 pm

86% Garth. This must mean you’re a ”worthy” blogger.

#19 Not again — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate – The Affluent Boomer on 05.06.13 at 8:47 pm

[...] via Not again — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate. [...]

#20 jose on 05.06.13 at 8:49 pm

I just went to vote and i thought that GF’s bar on the results was an html line that went accross the whole page. Congrats Garth, you already have over 80% of the votes!

#21 skooby doo on 05.06.13 at 8:50 pm

Garth, any comments on the huge lineups at Scotia plaza week or two ago?

Didn’t see any.– Garth

#22 Nemesis on 05.06.13 at 9:06 pm

Actually, it’s called TacticalVoting… But why be pedantic when there are far more important matters to hand…

KickAss NewBike is a ____ ???

Whatever it is… Put it on the ferry to NewFoundLand and ride to GrosMorne.

#23 HAWK on 05.06.13 at 9:08 pm

Voted…….the greater fool is winning by such a large lead, that there should not be much to worry about.

#24 craig on 05.06.13 at 9:09 pm

Got my vote !

The Greater Fool (91%, 356 Votes)

#25 Bargains everywhere on 05.06.13 at 9:10 pm

The blog contest says you can vote for ‘up to 3′ blogs which means that you can vote for 1 or 2 only if you want. I voted for only one – and you know who it was for.

#26 retired WI Boomer on 05.06.13 at 9:10 pm

…”I smell conservatives”……

My Gawd man, if you smell conservatives, you need to burn your clothes, get de-loused, and stay in a warm dark room for three days until the possible infection disperses.

Better to have darted he skunk

Hope you fully recover

#27 Ronaldo on 05.06.13 at 9:11 pm

Buying vacant land as investment is a crap shoot. In the olden days 1974 when I was still young and naïve I bought an acreage in northern BC thinking that some day I would build and raise my family there.

The price did begin rising a few years later after the recession ended. I watched it triple in price over the next 7 years and kept holding. Then the 80’s recession hit and interest rates skyrocketed. Rural land prices along with all other real estate collapsed and the value of the lot returned to its original buy price.

Held it for another 8 years and sold it in 1989 for the same price I paid for it in 74. Paid taxes on it each year as well. One of the dumbest moves I made in real estate. Good thing it happened early in my working life.

This is probably one of the worst times to buy given that prices are still very high. Henry as a hard lesson ahead of him. The Okanagan in particular is an area with many failed dreams by Albertans in years past.

There are areas that I am very aware of where hundreds of vacant lots lie unwanted and some of these were developed back in the 70’s. Many were sold to Alberta investors where developers targeted the big money in the tar sands.

#28 Terrie Rolph on 05.06.13 at 9:16 pm

The Greater Fool (91%, 379 Votes)
Canadian Couch Potato (13%, 52 Votes)
Canadian Budget Binder (7%, 29 Votes)
Gail Vaz-Oxlade (7%, 27 Votes)
Million Dollar Journey (4%, 15 Votes)
Canadian Capitalist (3%, 13 Votes)
The Blunt Bean Counter (3%, 12 Votes)
Dividend Ninja (3%, 11 Votes)
The Dividend Guy Blog (3%, 11 Votes)
Brighter Life (1%, 4 Votes)
Total Voters: 415

#29 Freedom First on 05.06.13 at 9:17 pm

Voted a few minutes ago Garth. Once, for you, least I could do. Thanks for your blog! Last seen: Garth @ 90%-316 votes.

I was talking to a guy recently about doing business in this world. All he had to say is: “be cautious it is hard to tell the friendlies from the hostiles”. Thanks to Garth, we know who a lot of the “hostiles” are in the RE industry, as well as everyone sucking up to them for their own self-interests.

#30 Notta Sheeple on 05.06.13 at 9:21 pm

“…..Looks like the weasel is having a second round of balloting. Apparently 84% isn’t enough to elect this blog. I smell Conservatives……..”
====================

“Never let a little democracy stand in the way of your own ideology.” – Harpocritical Oath.

In other news, while I continue to wait for my Modest Money robo-call, I decided to dillute the 2nd and 3rd runners up and cast 2 votes for the bottom two underdogs.

Of course, my 1st vote went to further pump up the 91% slaughter.

Once again, truth triumphs over ballot-stuffing.

#31 Smoking Man on 05.06.13 at 9:35 pm

Garth at 93precent.ha I bet if dyslexics smoking man was on the ballot it would finish second, I too have a small be it loyal followers, now that would haven been funny…

#32 Jamaican_Gal on 05.06.13 at 9:36 pm

My three votes in – all for you, Garth.

#33 Larf on 05.06.13 at 9:36 pm

So nice to swing by here for a dose of sanity after reading the idiotic comments from the vancouver redditors on the current state of RE. I truly cannot wait for a hubris to kick in. It may be smug, but it sure is delicious.

A particularly choice comment for your edification here: “How about all the NIMBY Vancouverites just let the “evil” developers build all the housing and condo’s they want. Every time someone wants to increase density, build a new tower, or build where there is currently nearly worthless property (alas looking at all the gentrification stuff) everyone craps their pants and does their best to stop it from happening.

More housing will, hopefully, equal cheaper housing.”

Yep, this guy has got it figured out. As long as ‘it’ isn’t ‘how to use apostrophes’.

(http://www.reddit.com/r/vancouver/comments/1dra2a/hello_rvancouver_with_a_provincial_election_days/)

#34 nic on 05.06.13 at 9:37 pm

93%

#35 Timbo on 05.06.13 at 9:38 pm

not wearing any pants Garth?
– new license plate for BC homeowners.

http://news.xinhuanet.com/english/business/2013-05/07/c_132363498.htm

Meanwhile, the number of jobless people under 25 years old decreased by 1.03 percent, or 4,965, which is positive news taking into account the fact that youth are one of the most affected groups by unemployment in the country with a jobless rate of over 50 percent.

a ray of light….barely…

http://www.guardian.co.uk/uk/2013/apr/04/uk-companies-offshore-directors-figures

“British expats who retain directorships of their business would feature in this data, as do “personal services companies” based in the Isle of Man, which help self-employed people incorporate themselves as a limited company.

However, the figures do reveal the huge scale of company registration relative to some of the islands’ tiny populations: 47,161 companies have listed directors from the Isle of Man – representing one British company for every 1.8 residents of the island.”

Playing the Director role in the play of life has its perks.

#36 Larf on 05.06.13 at 9:38 pm

*Sorry, meant to say “a hubris finale” or something.

#37 Habbit on 05.06.13 at 9:45 pm

Hi Garth. Voted for your blog. Thanks for what you do. I read almost daily. A real breath of fresh air.

#38 not 1st on 05.06.13 at 9:52 pm

Gail Vaz-Oxlade…giving greater fools $15/week food budgets since 2006

#39 Paul on 05.06.13 at 9:55 pm

Victoria.

http://sms.vsip.ca/mailings/84/4eaed3d82a4c8ecaf886d8c55f0de4a7/51883cb30cd8d/

#40 bill on 05.06.13 at 9:56 pm

#22 Nemesis on 05.06.13 at 9:06 pm
”there are far more important matters to hand…”
absolutely.
he IS being a bit coy about the new bike…
cant see him switching from hd tho’

#41 AgAu on 05.06.13 at 9:58 pm

Garth is at 94% as of 9:55 pm Ottawa time. Congratulations, well deserved

#42 Lactose the Intolerant on 05.06.13 at 10:16 pm

#38 not 1st – Hey, I like Gail. The woman has a lot of common sense and she helps people to behave less stupidly with their money. I think she gives good advice. That said, I don’t think of her as a Toronto real estate guru and for that reason I can’t vote for her in here.

#43 CrowdedElevatorfartz on 05.06.13 at 10:17 pm

Sooooooo, wadda ya plan on doin’ with the “C” note Garth?

Blog group RRSP. — Garth

#44 prairie person on 05.06.13 at 10:25 pm

#15 j. roy
Yes, the navy and dockyards. The university. However, I don’t think the navy is expanding and the university, from what I hear, is looking at a ten percent cut in its budget. Sessionals are disappearing and permanent hires are few and far between. The only hope seems to be dockyards and I doubt if it will have any great impact on housing prices. The tourists seem to have faded away. Closed storefronts. So, back to the steady annual migration from the prairies. I’d hate to be a specker with three or four condos bought in hope of a flip. Or someone with a house they never intended to live in. The music hasn’t stopped but it is slowing down.

#45 KG on 05.06.13 at 10:27 pm

There is a problem with just voting for just the GreaterFool. It is hard to spot it on the bar graph, it appears more like a page divider.

#46 Mark on 05.06.13 at 10:33 pm

Anyone reading this, report theaffluentboomer.com to google for generating pagerank spam (see post #19). Garth doesn’t deserve spam on his blog.

#47 The Peg on 05.06.13 at 10:33 pm

Voted ;) No contest as to the winner!

#48 TurnerNation on 05.06.13 at 10:37 pm

#21 skooby doo – the elevator repairman union is on strike and picketing, in downtown Toronto. Some buildings are experiencing longer lines.
And you thought they were lining up for gold @ Scotia Marcatta? (Or whatever it is. Sounds like a coffee shop).

#49 FATHER on 05.06.13 at 10:39 pm

95%/ 924 votes

#50 The Propeht Elijah on 05.06.13 at 10:40 pm

Speaking of doomers, what a great candid video from Columbian Economist Jeff Sachs regarding his meetings at the UN and the general international sentiment towards the US’s corruption of markets, politics and money:

http://www.youtube.com/watch?feature=endscreen&v=hCCr-uiqtAY&NR=1

This is exactly why they are moving away from the USD and seeking alternatives. A must see!

#51 TurnerNation on 05.06.13 at 10:40 pm

Here’s a poll – as this weblog’s comments section is in lo season (Maple Laffs: It’s over. It always was).

Would you rather be living in:

HarperNation
FordNation (Toronto’s dim witted mayoral regime’s)
LeafsNation
TurnerNation

#52 Tom Vu on 05.06.13 at 10:47 pm

Not wearing pants has much classical symbolism.

It regales back to

(i) Garden of Eden….

(ii) Ron Jeremy fan club

(iii) Ontario cabinet meeting

(iv) Something not taxed………..yet !

#53 45north on 05.06.13 at 10:57 pm

I shared with you the latest numbers from the Toronto new condo scene, which finally made it into the mainstream media on Monday. They are an unmitigated disaster.

(Mark Hanson is worried about the US market. I prepared an explanation why we in Canada should be worried. Too much effort. I don’t need that kind of effort to be worried. Good night)

#54 Musty Basement Dweller on 05.06.13 at 10:58 pm

I just saw an article referencing Garth and his “mob” that follows him at greaterfool.com . Thinking about I kinda like being called a mob, it’s gotta a ring to it!

#55 Smoking Man on 05.06.13 at 11:01 pm

So adicative this pathetic blog, I got like maybe 16 fans it only took like 4 years of amazing predictive skills to get them..

Garth the resident alpha, who needs to deepen his voice a bit, perhaps a few smokes between the next interview has thousands pounding this poll.

I’m a bit jealous…….

Which brings me to the topic of jealously.. The number one motivation emotion for success, it is what you need when you start out in businesses grasshoppers.

#56 Kelowna on 05.06.13 at 11:17 pm

Garth what about Kelowna and the million dollar spec house for sale. You haven’t commented on this area in a while.

#57 chichirito on 05.06.13 at 11:20 pm

not every trade is dependent on new construction…

#58 Shawn on 05.06.13 at 11:21 pm

SUCKS TO BE A BUFFETT BASHER

Berkshire closed today at a record price $164,990 for the A shares.

These are the self same shares that Buffett first began buying at under $8.00 and he took control of the company in 1965 having at that point paid an average of $14.76 for his shares..

Any family that tagged along (it’s a generational thing at this point) buying at $15 in 1965 and holding is now up 1,100,000%. 1.1 million % (ponder that) Now this family had to endure four times when the stock fell over 50%. It took a lot of faith but a few of the original Omaha families still hold shares and are of course worth hundreds of millions.

And actually even those who bought in say year 2000 or even January 1, 2013 have done well.

All that return and the man is a paragon of virtue besides.

P.S.

Winners copy from winners…

#59 Gary M on 05.06.13 at 11:32 pm

Garth, asking your readers to vote for you in an inconsequential poll just to augment your ego is a little too much for some of us to handle. Please quit it.

This is Step One in my political rehabilitation. — Garth

#60 West Side Survivor on 05.06.13 at 11:33 pm

Not sure what is going on here on the west side of Vancouver. Houses seem to be selling quickly. Whether they’ve dropped the prices or not there are sold signs everywhere. Kitsilano seems to be taking longer but places that have sat for months are starting to move up here in Dunbar/Point Grey. Could be one last hurrah before the slide? I hope so because things seem to be moving here.

#61 Ryan on 05.06.13 at 11:36 pm

Hey Garth, want the real deal on Fortress Real estate? Check out what their founders did (JAWAD RATHORE,
VINCENZO PETROZZA)…. notice the settlement agreement that they are ONLY allowed to operate a real estate/mortgage entity, so thats why they are operating one.

http://www.osc.gov.on.ca/en/Proceedings_set_20111215_phoenix-credit.htm

http://www.mfda.ca/enforcement/hearings05/Decision200504.pdf

14. Petrozza will not trade in or acquire securities for 15 years, except:

(a) Petrozza may trade in or acquire securities in his personal RRSP accounts and/or TFSA accounts and/or for any RESP accounts for which he is the sponsor; and

(b) Petrozza may trade in or acquire Mortgage Instruments or securities of a Closely Held Private Company;

9. any exemptions in Ontario securities law shall not apply to Rathore for a period of 15 years, except those exemptions used in respect of the trading in or acquisition of Mortgage Instruments or securities of a Closely Held Private Company;

#62 JRH on 05.06.13 at 11:36 pm

You got my vote Garth !

#63 Smoking Man on 05.06.13 at 11:37 pm

Sal Khan, see cbc national, on education, told ya teacher aare toast…

Go Sal knowledge with out obedience control….

Love it,

Smoky always ahead of the curve…..

#64 McLovin on 05.06.13 at 11:39 pm

“bank’s preferred shares and yield 5.25%”

Garth you have to stop exaggerating. No Canadian bank has 5.25% pref’s right now. More like 3.85% for rate resets and maybe 4.5% yield to call for perpetuals. The dividend might be 5.25% but if you are buying it at $26.50 you are not getting 5.25%.

Might sound like I’m nit picking but that is a big difference.

#65 Mark on 05.06.13 at 11:49 pm

Why are people so freakin’ obsessed with bank accounts and land? There *are* other investments out there, including into the firms that actually give this oil guy a job from time to time doing their business.

#66 Joe on 05.06.13 at 11:53 pm

I live in Edgemont Village in North Van it’s a fairly expensive hood, it used to be very white bread.
It’s now being bought up by Chinese, Japanese, Philipino, Persian.
There are loads of foreigners buying this area up, being from West Vancouver and having walked the sea wall for years, no prejudice intended but it is now 70 percent immigrants and growing.
Lots of money out there and lots of millionaires.

#67 robert on 05.07.13 at 12:03 am

What, didn’t anyone mention the quiet beheading of CMHC http://business.financialpost.com/2013/05/06/cmhc-ceo-karen-kinsley-stepping-down-after-25-years/. Having carried out the Con job’s strategy of burdening Canada with the insurance of 800 Billion $ worth of mortgages, she’s obediently trotting out of the way. So now it’s time for OSFI to assume guidance of this train wreck. But wait you say, it’s only 600 Billion. Don’t forget the “private” insurers that slipped in with Harpo’s blessing. We’re covering their assets too. That’s the free market foryou..

#68 Cici on 05.07.13 at 12:04 am

#33 – Larf

NIMBY – That was a great Chalk Circle song!

#69 Canuck Abroad on 05.07.13 at 1:01 am

LOL Garth you have 96%.

Also you can vote for up to three, so one vote is good – no need for anyone to vote for those other guys…

#70 Winner on 05.07.13 at 1:06 am

#46 Mark on 05.06.13 at 10:33 pm
Anyone reading this, report theaffluentboomer.com to google for generating pagerank spam (see post #19). Garth doesn’t deserve spam on his blog.

Hey Mark
Don’t jump to irrational conclusions.
It’s a trackback from someone reblogging Garth’s content.
Thankfully Garth is savvy enough to allow it as it gives him even more coverage.

#71 Jordy on 05.07.13 at 1:08 am

This is an addictive blog Garth, my girlfriend is starting to think I have a girlfriend. I think you are going to get disqualified for having a cult and being too popular.

#72 The Affluent Boomer on 05.07.13 at 1:17 am

#46 Mark

I am just reblogging content for my readers benefit. Since when is reblogging spam? Where does it say that reblogging is not permitted by Google? I am merely giving Garth credit for posting some of his content on my blog, which is what Google requires.

#73 Tony on 05.07.13 at 1:44 am

Henry doesn’t state how much he lost on his Edmonton condo that he sold. Likely would have been better walking away from it and giving it to the bank. Now he wants to lose even more with land in B.C.? We all know how long Henry will be working, yes until the day he dies likely penniless.

#74 Freebird on 05.07.13 at 1:57 am

# 54
I just saw an article referencing Garth and his “mob” that follows him at greaterfool.com . Thinking about I kinda like being called a mob, it’s gotta a ring to it!
———————-
Mob? OK. My partner and I are educated business owners. Such a definition makes me laugh. Sounds like an attempt at discrediting to me. But then I guess I simply operate on ‘mob’ mentality. LOL

#75 Freebird on 05.07.13 at 2:01 am

#43

Sooooooo, wadda ya plan on doin’ with the “C” note Garth?

Blog group RRSP. — Garth
——————-

Finally, part of a group benefit plan! Woohoo! Wait ’till I tell the husband!

#76 Humpty Dumpty on 05.07.13 at 2:12 am

Speaking of sick, it’s time to pretended….. Again!

Looks like this weasel is having a reviewed and profound friendship with commie china…

He’s hoping the ravenous, yelping pack of the Quartet dogs will pump up media

http://news.xinhuanet.com/english/china/2013-05/06/c_132363313.htm

Li said..

“China will continue its own way and make use of its influence to boost Palestine-Israel peace negotiations, which will work for regional and world peace and stability,”

Hmmm…

1 Thessalonians 5

For yourselves know perfectly that the day of the Lord so cometh as a thief in the night.

When they are saying, Peace and safety, then sudden destruction cometh upon them, as travail upon a woman with child; and they shall in no wise escape.

For the record…

China on Tuesday revealed the military strength of the People’s Liberation Army (PLA) for the first time, saying it had 1.483 million personnel

http://www.hindustantimes.com/world-news/China/China-officially-reveals-the-size-of-its-mammoth-Army/Article1-1045643.aspx

Revelation 9

16The number of the armies of the horsemen was two hundred million (1).

#77 Ray on 05.07.13 at 2:16 am

Give them a chance, Garth. Let them add the votes for all the other blogs together, then triple it. You still win! Voted.

#78 Freebird on 05.07.13 at 2:23 am

#42
—————-
#38 not 1st – Hey, I like Gail. The woman has a lot of common sense and she helps people to behave less stupidly with their money. I think she gives good advice. That said, I don’t think of her as a Toronto real estate guru and for that reason I can’t vote for her in here.
—————-
For the most part I like her as well – jar idea has merits but needs to be updated to meet the needs of living in a digital world. Also, considering her track record in marriage she really shouldn’t be dispensing marital advice. But she gets in people’s faces and tells them what they don’t want to, but need to hear and calls out their BS to help them, and genuinely wants to. I do wish she’d get a better show format because I don’t think she’s marketed/branded as effectively as she could be. In an interview on Marilyn Denis where she started a sentence with “mitigate, big word…” and came across very condescending. I would love to see Garth be on that show with the wealth through real estate purveyors and sponsor CIBC and new salesman/ mascot Scott McGillivray.

#79 Buy? Curious? on 05.07.13 at 2:36 am

Holy Cow! (no disrespect to my Hindu friends) Garth, you’ve not 97% of the gawdamn votes! Even without looking and the bar graph, you’re huge! Those other boobies are sucking your dust! It’s like you’re penetrating the market and giving it a pounding!

I give today’s post a 7.5 out of 10.

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

#80 mx420 on 05.07.13 at 2:40 am

vote number 1412.. 97% LOL

I like how it says vote for your top three, i just clicked one and submitted.

On a related note…

Garth, a few months back you recommended a book on learning personal finance (I cant remember if it was in an article or in a reply to someone’s comment) but I can’t seem to find it. Would you help me out? thanks

I catch this blog every night, thanks for your time!

#81 betamax on 05.07.13 at 2:48 am

97% / 1,438 votes – PWNED!

#82 Corban on 05.07.13 at 2:56 am

Hey Garth, what blogs do you have on your daily read?

#83 Ballingsford on 05.07.13 at 5:10 am

97 percent now.

Posting early tonight Garth?

Go SENS Go!!!!!

#84 The real Kip on 05.07.13 at 6:57 am

“Crane operators, formers, drywall dudes and plumbers are now looking at a lean summer”

Don’t worry about the crane operators Garth, we are running flat out, full employment and will continue for all of 2013. There is too much on the go now and even if condo sales drop to zero tomorrow morning, 2013 would still be a good year.

I’m riding this gravy train until the wheels fly off it and it has gone on longer than anyone including you expected.

#85 maxx on 05.07.13 at 7:20 am

#77 Freebird on 05.07.13 at 2:23 am

“For the most part I like her as well – jar idea has merits but needs to be updated to meet the needs of living in a digital world. ”

Fixed expenses are necessarily part of the equation, but the focus is on the discretionary problem. Many pay fixed expenses via digital mechanisms.

Discretionary spending resides in the jars for a very good reason. People need to re-learn to feel the pain of this money actually leaving their hands. That way, they have time to reconsider the stupid, wealth-annihilating purchases they got into the habit of making.

The reasons many throw their hands up in the air and exclaim that their debt is out of control is evident on a daily basis: ignoring bills as they come in; shredding bills; incessant borrowing for discretionary spending; disorganized documentation and tracking; atm slips left on bank floors; and one of my favorites: “touchless” payment- way to separate people from the finite nature of money…. the list goes on.

Gail is spot on. A majority of people need to relearn the “meat and potatoes” of money management, saving and wealth building.

#86 Carpicker on 05.07.13 at 7:29 am

@69 Garth’s blog can get penalized from google serps for duplicate content allowing trackbacks.

#87 Craig on 05.07.13 at 7:34 am

Having a bad day…not happy with your rate of returns….A little perspective;

Three women who were missing in separate cases have been found together in Cleveland, police said. A 52-year-old man was arrested.

One of the women called 911 after breaking out of the house where she had been living.

“Help me; I am Amanda Berry,” she said, her voice distraught in an audio recording of the call. “I’ve been kidnapped and I’ve been missing for 10 years. And I’m here and I’m free now.”

Berry and Gina DeJesus were in their teens when they disappeared in 2003 and 2004, CNN affiliate WEWS reported. Michele Knight vanished in 2002, according to the Cleveland Plain Dealer.

Follow complete coverage of breaking news on CNN TV, http://cnn.com and CNN Mobile.

#88 Herb on 05.07.13 at 7:35 am

#75 Humpty Dumpty,

into propaganda much?

#89 Victor V on 05.07.13 at 8:06 am

http://themashcanada.blogspot.ca/2013/05/and-it-went-for_6.html?showComment=1367713708137

This 3 bedroom, 2 bathroom house on a 15.67 x 129 foot lot at 251 Manning Avenue in Little Italy was first listed in December.

It was priced at $768,900.

It is well taken care of but because of the updating it could use, I thought it was about $80,000 overpriced.

It didn’t sell and they dropped the price in February to $749,000.

Again it didn’t sell and the price was dropped at the beginning of April to $714,900.

It sold last week…

For $689,000.

$79,900 less that the original ask.

#90 Victor V on 05.07.13 at 8:09 am

PRICE DROP – 603 Carlaw Avenue – RIVERDALE

http://themashcanada.blogspot.ca/2013/05/price-drop-603-carlaw-avenue-riverdale.html

I first posted this 2 bedroom, 2 bathroom house on a 34 x 69.5 foot lot in November.

It was listed at $1,499,000…..and that is not a typo.

It has a nice view of Withrow Park and of the city if you stand in the right spot….but $1.5 million!?!

It needs updating, there is no yard….

So, of course it didn’t sell. The price was dropped in February to $1,249,000. I still thought it was too high but it was better than the $1.5 initial asking!!!

It still hasn’t sold and the price was dropped again a month ago to $1,124,900.

#91 Centre-ville on 05.07.13 at 8:15 am

Voted. For you, obviously.

#82: That’s an excellent question!

#92 LP on 05.07.13 at 8:18 am

#85maxx on 05.07.13 at 7:20 am

I agree completely. There’s a very old expression that says, “Look after the pennies and the dollars will look after themselves.”

We rely on our financial advisor to look after the dollars and, by following Gail’s old fashioned down-to-earth advice, we look after the pennies.

So far, it seems to be working very well in tandem.

#93 Morgan on 05.07.13 at 8:31 am

I rather like the canadian potato, although I’m skeptical of his views sometimes, just as I am of yours. But I respect both of you more than any of the personal advice types that focus on my coffee habits to save money.
The biggest factors in my financial life are how much I earn, where I live, how many kids I have and (down the list) what I drive and how much education I buy. Keeping the micro-focus on my spare change distracts people from the major problems. In many ways, I’m critical of a lot of investment advice because it doesn’t address a deeper question – why isn’t working and saving enough anymore? Why is the basic government pensions so far below poverty and so politically unstable? Why do we accept future cuts to our pensions as fact, and not try to change anything? Why have wages stagnated for decades while productivity has gone up and up? Where did the money go? And now, we can invest our life savings to try to win some of those earnings back from the 1% by being the marks at the table in a game of casino capitalism?
Yeah, I’m suspicious…

#94 Not 1st on 05.07.13 at 8:32 am

In 2 years time Garth will be asking you all to vote for Mr Harper and then he will be appointed to the Upper chamber and can claim housing expenses from NS.

Correction: From the south of France. — Garth

#95 souvereigninternational on 05.07.13 at 8:37 am

From Gains, Pains and Capitol

“May 6, 2013

Are We Heading Into a 2008 Style Economic Implosion?

The media is jumping for joy over last week’s US jobs numbers. But beneath the veneer of headline numbers lies a truly horrible economic reality.

Let’s have a look at the two key economies for the world: China and the US.

For starters, China’s recent economic data, as massaged as it is to the upside, is downright awful. China’s PMI numbers were the worst in two years. Staffing levels in the Chinese service sector decreased for the first time since January 2009 (remember that year).

China’s LEI also shows no sign of recovery. If anything, it indicates China is heading towards an economic slowdown on par with that of 2008. And if you account for the rampant debt fueling China’s economy you could easily argue that China is posting 0% GDP growth today.

In the US, last week’s jobs report didn’t look too bad until you dug deeper into the report and found that the average workweek declined by 0.2 hours from March- April.
So what you may ask… 0.2 hours? Just under a 15 minutes per week?

The issue here is that if you apply this drop to the total number of people employed in the private sector, this is the equivalent of over 21 million work hours being lost in one month.

That is the single biggest drop since April of 2009 when the US economy was absolutely imploding. It’s the numerical equivalent of firing 718,000+ people.

This is how companies deal with economic contractions. They don’t start laying people off en masse… they start cutting work hours bit by bit. The mass layoffs don’t come until the official numbers announce that we’re in a full-blown recession.

The first stage of this is already happening. 99% of investors fail to see it, but the clear signs are there.

Investors take note, the market may be hitting new highs thanks to traders’ games, but the real economy is contracting sharply. This is precisely what happened during the market peaks before the Tech Crash and the 2008 Collapse. ”

Blah, blah, blah. Heard this every week for four years. In the meantime wise investors have done well. — Garth

#96 CrowdedElevatorfartz on 05.07.13 at 8:43 am

@#44 Prairie Person
geez, for a second there I coulda swore you were talking about Halifax……….

#97 thiscountryisgoing down the toilet on 05.07.13 at 8:52 am

Let them eat pizza…..is the civil service channeling Marie Antoinette?

Dairy marketing boards control of cheese prices equal a tax grab on pizza? Recently the high price of mozzarella has working Canadians dreaming about the pizza they can no longer afford.

Meanwhile in the US pizza and cheese is plentiful and cheap cheap cheap…..because dairy isn’t a revenue grab for retired civil servants pensions.

Why do Canadians allow this assault on their wallets to continue. Have you heard of the cheese smuggling rings? How long can this insanity go on?

Look at union pay and ask yourself why you can’t afford a pizza for your kids anymore.

#98 CrowdedElevatorfartz on 05.07.13 at 8:56 am

@88 Herb
“Into propaganda much?”

Nah…. Humpty just loves to link everything to a biblical quote.
It makes getting out of bed so much easier every day.

I have gas Humpty, and I live in an apartment building. Which mean I ride the elevator at least twice a day spreading my form of the “gospel” .
Is there a quote for “evil doers” such as myself?

#99 CrowdedElevatorfartz on 05.07.13 at 9:03 am

@#91 sovereign
Couldnt agree more.
A friend who purchased a house in Pheonix several years ago just returned to Canada after spending the winter in Arizona.
He said the work situation there is not good and the mood on the street is ugly.
Unemployent, low wages = an unhappy population.

Interesting times.

#100 AK on 05.07.13 at 9:03 am

Global shares near 5-year high as central bank rally rolls on

Not looking good for the “Sell in May” pumpers.

Rally Rolls On

#101 Shawn on 05.07.13 at 9:15 am

Real Economy?

(Doomer) souvereigninternational at 85 says:

Investors take note, the market may be hitting new highs thanks to traders’ games, but the real economy is contracting sharply.

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

Meanwhile Warren Buffett who actually employs 288,462 real people in over 70 major real subsidiaries with many more subsidiaries below that says business has been improving slowly but surely for four years now.

Who ya gonna believe?

#102 souvereigninternational on 05.07.13 at 9:24 am

Blah, blah, blah. Heard this every week for four years. In the meantime wise investors have done well. — Garth

all I’m saying is that “wise investors” should periodically review their positions and consider taking profit or reducing positions. It’s like hearing your real estate detractors. Yeah, blah, blah, blah houses were suppose to go down since 2009 according to Garth, meanwhile I made 100 grand on my condo in the last four years.

#103 gladiator on 05.07.13 at 9:48 am

This is Step One in my political rehabilitation. — Garth

OMG! It looks like there IS a hope for Canada, after all. A common sense guy up there will be a boon to everyone!
I never voted before (yeah-yeah, I’m an irresponsible bastard and stuff), but if you run, I will finally vote, and will canvass all my friends to do so too.

on a side note, I just hope the cute teacher boy doesn’t get the PM job, because he just runs on his dad’s great name and keeps spewing slogans, showing he has no clue what to do with this country if he gets there.

#104 Grantmi on 05.07.13 at 10:24 am

Australia lowers THEIR rates again!

WHEN WILL IT EVER END!!! http://bloom.bg/12P9LiT

#105 Kreditanstalt on 05.07.13 at 10:43 am

Curious…I’ve always wondered how banks can profit on money borrowed at 5.25% and yet issue more and more and more of it all the time?

Wow…good rate. Is there enough for everyone? Why couldn’t all 30 million Canadians do that instead of buying gold, pieces of mountainside, cans of baked beans or small town RE?

But ask yourself what kind of entity can pay 5.25% for money when fake, artificial “interest rates” are at @0.50%. When bonds pay next-to-nothing?

Who?

Someone who is taking BIG but hidden risks with your money, betting on a “self-sustaining recovery”. Someone who is playing the markets with your money. Someone who is betting on the efficacy of central banking…on the “Bernanke put”.

Someone who is is quite willing to take risks with the money lent by you – a future “unsecured creditor”…

Hahahahaha.

#106 Humpty Dumpty on 05.07.13 at 11:07 am

CrowdedElevatorfartz

Yo stinky, head over to Ugo and Joe’s and ask them for some breoshikie.. that should help you with your ongoing problem..
Get the lemon flavour… taste better…

Is it evil to be asking your little cousins to pull your finger every time you see them?

#107 Canadian Watchdog on 05.07.13 at 11:09 am

Canadian banks: Safe as houses?

Ahhh, finally someone is starting to ask the question: Just how do Canadian banks make double digit returns when the economy is growing at a snail pace?

It's called fraud. All explained in this video starting at 11min.

You can bet your ass that OSFI avoids on-site inspections because at this point, they're scared shitless of what they may find. So, they do what they're told, and continue to look the other way.

Did a bank steal your lemonade money when you were six? — Garth

#108 Piccaso on 05.07.13 at 11:16 am

GOLD CRASHING AGAIN

#109 VIVE LA FRANCE on 05.07.13 at 11:19 am

“Correction: From the south of France. — Garth”

Ehm, shall I start looking? Neighbor just sold. 50K all in for 130m2, plus a small retail space….

http://theceliachusband.blogspot.fr/2012/09/for-sale.html

Absolutely. Tell us what $250,000 Cdn buys in your hood. — Garth

#110 VIVE LA FRANCE on 05.07.13 at 11:33 am

“Absolutely. Tell us what $250,000 Cdn buys in your hood. — Garth”

Though we bought a year ago at what we perceived bottom, well, the slide keeps going. No doubt.

Let me see if this link works. It is a local “Craig’s list” type of site. If one enjoys country life, is handy with small repairs and drywall, SW France is bargain valley.
Wine is less expensive than a bottle of San Pellegrino at Earl’s, food is fine.

Not all is gold that shines though, do not move here if you don’t have any sort of residual income back home….tough to land a job worth talking about. If onthe other hand you are good with tools, it’s gold mine territory here.

http://www.leboncoin.fr/ventes_immobilieres/offres/poitou_charentes/?f=a&th=1&ps=6&pe=8&ret=1

#111 Smoking Man on 05.07.13 at 11:45 am

National Post has an article today.

CANADA HOUSING

It makes all the points I have been making, (copy cats) especially reference to the herd.. As Shiller recently discovered there is a psychological prospective factors…… At play. Wants to hire a sociologist
To study The herd……

SMOKING MAN ALWAYS AHEAD OF THE CURVE…

I believe these people come here and steal my shtick. But then again I encourage that…

:)

#112 cramar on 05.07.13 at 11:46 am

A family I know was renting a house in Mississauga and the owner drastically increased the rent. The husband told the owner that is more than we can afford so we will have to move. The owner said that’s fine, I’ll then sell the house. Houses in that area are selling quickly and the owner like will get twice what he paid a few years ago. Guess it really is different in Mississauga. The family recently moved out of the GTA to where there is more affordable rentals.

#113 Canadian Watchdog on 05.07.13 at 12:07 pm

Did a bank steal your lemonade money when you were six? — Garth

Banks are not the problem, rather our incestuous regulators who continue to put on a circus show regarding guidelines (not rules) being imposed. CMHC high ratio IFF just hit a record $290B, up 1.5% y/y in 2012 compared to 2011; while low ratio IFF declined 5.4% from $243B to $230B. Moreover, CMHC plans to reduce low ratio loans to $234B and (ready?) increase high ratio loans to $302B in 2013! Wasn't B20 suppose to reduce high ratio loans?

The reason they won't reduce high ratio loans is because like all ponzi schemes, more entries are needed from the bottom in order to expand profits to the top — so they keep going — looking the other way until they eventually lose control.

Sidenote: Why is nobody reporting that our government just installed a crooked banker to head CMHC?

#114 Ogopogo on 05.07.13 at 12:13 pm

#56 Kelowna on 05.06.13 at 11:17 pm
Garth what about Kelowna and the million dollar spec house for sale. You haven’t commented on this area in a while.

Do you mean million $ atrocities like this that have sat unsold for 3 years and counting?

Kelowna is where overpriced houses go to die.

#115 Shawn on 05.07.13 at 12:18 pm

YOU GOT QUESTIONS, I GOT ANSWERS…

Kreditanstalt at 105 asks:

Curious…I’ve always wondered how banks can profit on money borrowed at 5.25% and yet issue more and more and more of it all the time?

***************************************’

Leverage is the answer. The 5.25% borrowed on pref shares is equity capital. For every dollar of equity capital they can take in $10 of deposits at an average of say 1% and lend it out at an average of say 3.5%.

2.5% profit on your own money sucks. Leverage it up 10 times and its 25% gross margin on equity and works out to 10 to 15% ROE after all expenses and taxes.

That is how banks work.

There is indeed risk in leverage but banks usually manage the risk well. But if not careful they blow up and that is why depositors are insured by the government, otherwise who would deposit money into such highly leveraged banks?

#116 Ogopogo on 05.07.13 at 12:20 pm

I neglected to post the link to the million $ money pit that’s sat for 3 years and counting in the best area bar none in Kelowna. A bellwether of the real estataggeddon here?

http://www.realtor.ca/propertyDetails.aspx?propertyId=12872694&PidKey=-52591134

#117 Rural Rick on 05.07.13 at 12:34 pm

Just throwing this out to the blog dogs. TNLB called today all excited about some locked in pension money arriving in my account. Wanted to know if I wanted to set up an appointment to discuss investments I said no thanks. She asked why and I said I would prefer to get my investment advice from someone more independent. What do you mean independent she asked? Well you work for the bank don’t you? She seemed truly puzzled and rang off.
The funds are only about 10 grand and I was wondering if any of the gang would care to offer up some practical ideas for it. Thanks in advance.

#118 Bottoms_Up on 05.07.13 at 12:58 pm

#107 Canadian Watchdog on 05.07.13 at 11:09 am
—————————————————-
its called investment banking. ever hear of the rates they charge for loans to businesses?

#119 Holy Crap Wheres the Tylenol on 05.07.13 at 1:06 pm

Holy Crap here we go again with BBRY, I am not one for vulgar vernacular but WTF? Burned again, thank god this is not a key investment fund for me. I pity others that don’t have the tenacity to ride this hog out!
I miss the good old days of the Nifty Fifty, Oh yes I forgot that was 1969!

http://finance.yahoo.com/q?s=BBRY

#120 Jimmy on 05.07.13 at 1:48 pm

The folks with homes and lives have little motivation to vote in these silly polls. Its the desperate basement-dwellers who follow their pied piper around the internet to do his bidding. They want to make the housing market collapse through effort so that they too can have a piece of the pie. The truly pathetic thing is, these people would have gladly joined the ranks of the “house horny” if they had only got on board earlier. Its their bitterness that drives them to this blog and the hopes that they’ll finally get their chance to have a nice house in a desirable neighbourhood.

And what brought you here? — Garth

#121 Roial1 on 05.07.13 at 1:52 pm

Garth,
I have some bad news for you if you want to re-enter politics in your new province, you will have to have a name change.
It would have to be MacTurner. The entire province is held by the party of the Mac some-things.
This is an unwritten but well known law in N.S.

#122 Dr. Hoof - Hearted on 05.07.13 at 1:55 pm

So I explained a few things. A non-producing chunk of mountain dirt, even bargained at $300,000, is a dramatically expensive purchase.

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

Its a huge demographic swing.

Our family has had a lakefront recreational property since 1970’s. About 6 hour drive each way.

Collectively, we used it perhaps 6 weeks of the year.

Its now worth about $350,000.

I am in my 50’s….and the novelty has worn off. You hit the wall like WTF am I doing….it takes a day to get ready and load up….waste a day driving….lots of maintenance upon arrival…..then a day to clean up….then a day to get home and unload.

Problem is one other sibling and her lazy family who doesn’t want to sell, even though they do F#@K all of any of the work

IMHO prices have peaked and the younger generations(ie our children) have little interest in this. In others fewer buyers that will drive prices down…as many will have too much debt to afford it anyway.

Get out of the deal….invest the $$$ and go on trips…don’t be anchored to the short term novelty of one spot.

Been there …done that…. had enough.

#123 FATHER on 05.07.13 at 2:01 pm

120 IS A LOOOSER i could of bought but i will only buy when i get his house at 50% off. the key to realestate is to buy low sell high

#124 aprilNewwest on 05.07.13 at 2:04 pm

#120 – you must be realtor or worried homeowner. Don’t you know all booms end in busts.

#125 Dr. Hoof - Hearted on 05.07.13 at 2:07 pm

Meanwhile prices start to retreat. For the past decade new condos have added an average of 6.4%, and now that advance has fallen by two-thirds. Soon – for the first time – there will be year/year declines. In fact, at $533 a foot, there’s no longer any premium commanded by new condos over resales (of which there are 9,000 in the GTA). Resale prices, by the way, are falling in absolute numbers.

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

Here in HAMVILLE…its weird.

A few Hi Rise projects are commencing as we speak….lots of product around the Olympic Oval coming on stream.

Doing a bit of digging, one finds many of the frontline local Companies are Joint Venture with offshore companies

Still think its all money laundering.

#126 Canadian Watchdog on 05.07.13 at 2:08 pm

#118 Bottoms_Up

its called investment banking. ever hear of the rates they charge for loans to businesses?

Business loans backed by what capital and regulated by who? OSFI rarely visits banks and only hopes financial statements are true. Nobody actually verifies what's submitted. 

You should read more. You'd be surprised how unregulated our banking system is.

#127 Steve on 05.07.13 at 2:10 pm

#121 Roial1 on 05.07.13 at 1:52 pm Garth,
I have some bad news for you if you want to re-enter politics in your new province, you will have to have a name change.
It would have to be MacTurner. The entire province is held by the party of the Mac some-things.
This is an unwritten but well known law in N.S.
______________________________________

I do not remember ever hearing of the Mac Irvings…

#128 cramar on 05.07.13 at 2:12 pm

In the U.S. housing market, greed is back! There’s money to be made in flipping houses. Best 25 cities for flipping…

http://247wallst.com/2013/05/02/is-house-flipping-still-a-good-idea-realtytrac-shows-10-to-60-percent-gains/

#129 craig on 05.07.13 at 2:13 pm

“They want to make the housing market collapse through effort so….”

LOL

This is a great blog but impact the housing market in Canada??

Please keep it real. I know there are a lot of renters here cheering every drop in a certain house price but it’s all in good fun and just folks sharing their opinion of the future.

Reality is no one knows the future no matter how well they spin their yarn :)

My opinion is as long as rates remain the same or drop, as witnessed in Europe last week and Australia this week, then I’m not worried about my house price.

The other indicator is the US economy which may have stalled out. We’ll see…

Till then we speculate….

#130 Victor V on 05.07.13 at 2:15 pm

http://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/boomers-taking-on-added-financial-burden-by-helping-boomerang-kids-poll-finds/article11745808/

Along with reduced pensions, low returns on their savings and high debt, Canada’s boomer generation is facing an additional burden as they ease into their retirement years – their “boomerang kids.”

A report from TD Canada Trust suggests boomers are taking on more of the responsibility for their adult children struggling to attain financial self-sufficiency in the post-recession years of high youth unemployment and low wage gains.

#131 Devore on 05.07.13 at 2:18 pm

#57 chichirito

not every trade is dependent on new construction…

What’s with you people and absolutes? No one said EVERY trade is dependent on new construction and will lose their jobs. No one said everything everywhere will crash immediately. No one said sales will go to zero and all realtors will be flipping burgers. No one said everyone has to sell. No one said all home owners will be in trouble.

But enough will that there will be serious economic consequences for them and the entire economy.

#132 boba on 05.07.13 at 3:01 pm

Take a look at this live chat today, very interesting. I participated and asked a few of the questions:

http://www.theglobeandmail.com/globe-investor/investor-community/live-chat-with-vijai-mohan-the-man-whos-shorting-canadas-banks/article11731134/#dashboard/follows/

#133 EIT on 05.07.13 at 3:03 pm

I voted three times, the American way.

#134 Mc Cheese on 05.07.13 at 3:06 pm

Without the stats, you know the housing market is getting pounded by the commericals from Leon’s – now they are resorting to comparing your daily coffee as the same monthly fee for a leather couch – (somehow the quality of the leather may be in question).

84 month with 0% financing for vehicles tells me that the economy is still very sick but is showing a brave face –

How much longer before I will awake one morning and read the world has just financially imploded …. I know Garth – won’t happen – my gut says otherwise! There is way to much debt to sweep this baby under the rug -

#135 Albert on 05.07.13 at 3:17 pm

The Biggest Price-Fixing Scandal Ever:

http://www.rollingstone.com/politics/news/everything-is-rigged-the-biggest-financial-scandal-yet-20130425

…”Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right.
The players may be a little different, but your basic premise is correct: The world is a rigged game.
We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world’s largest banks may be fixing the prices of, well, just about everything.”

#136 Canadian Watchdog on 05.07.13 at 3:18 pm

The Federal Reserve's Retail-To-Reality Gap

Alas, now the biggest of institutions are taking notice and asking the same question everybody is asking: How long can central banks keep puppeteering stocks? We'll find out one day soon 

#137 Shawn on 05.07.13 at 3:18 pm

Canadian Watchdog at 107 asks:

Just how do Canadian banks make double digit returns when the economy is growing at a snail pace?

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

Actually, growth is neither a necesscary nor a sufficient condition to make a double digit return. Double difit return on equity that is.

Your question contains an incorrect assumption.

#138 espressobob on 05.07.13 at 3:28 pm

#117 Rural Rick

Be wary of bank employees! It seems their trained at sales as well as their regular duties. When confronted with a simple question like ‘whats an ETF’? the answer rings with the intelligence of a door knob!

Better to sit down with a ‘fee based’ advisor and have a chat. Good luck.

#139 rosie "moving forward" on 05.07.13 at 3:38 pm

#113

I have not found any indication that Kelly is a crook. Rich and ruthless like a good little banker should be, but a crook? http://money.cnn.com/2011/11/18/news/companies/robert_kelly_bank_new_york.fortune/index.htm

#140 Spiltbongwater on 05.07.13 at 3:44 pm

Garth you always say buy America, sell Canada. I am going to take you up on that, but have a question. Detroit or Cleveland?

Buffalo. — Garth

#141 frank jimney on 05.07.13 at 4:07 pm

&A with Vijai Mohan, the man who’s shorting Canada’s banks

“Canadian banks appear to be the most simple and one-sided way to take a position here. Yes, roughly 60% of the Canadian mortgage system is currently insured by CMHC. However, the way a downturn might play out is anything but simple. My research suggests that the underwriting process for insured mortgages has been anything but robust, and that there could be potential “put back” risks where CMHC nullifies its insurance on individual mortgage loans.”

He seems to be betting 95% of his investors assests that “CMHC nullifies its insurance on individual mortgage loans.”
Whats the chance of that???

http://www.theglobeandmail.com/globe-investor/investor-community/qa-with-vijai-mohan-the-man-whos-shorting-canadas-banks/article11731134/

#142 Tom Vu on 05.07.13 at 4:14 pm

This is a sick market. Keep your adult children in the basement!

Garth

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

You must not focus on lost opportunity, but unexploited potential.

Move into attic and tell friends you have a penthouse !

Image…. baby…… image !

#143 franke le skank on 05.07.13 at 4:17 pm

#120 Jimmy on 05.07.13 at 1:48 pm
I’m starting to realize that a lot of these pro-realestate characters actually believe what they say, its called brainwashing.

#144 Herb on 05.07.13 at 4:20 pm

#127 Steve,

that’s because the Irvings only own NB, not NS.

#145 Herb on 05.07.13 at 4:22 pm

Smoking Man,

just think, if bullshit were music you’d be a brass band and wouldn’t have to blow your own horn.

#146 jess on 05.07.13 at 4:29 pm

interesting

Most data isn’t “big,” and businesses are wasting money pretending it is
By Christopher Mims — May 6, 2013

http://qz.com/81661/most-data-isnt-big-and-businesses-are-wasting-money-pretending-it-is/

… may be getting drawn into particular kinds of algorithmic illusions,”

#147 Roial1 on 05.07.13 at 4:55 pm

127Steve on 05.07.13 at 2:10 pm

I do not remember ever hearing of the Mac Irvings…

Ah, But they are NOT politicians.
They just own a few.

#148 Tom Vu on 05.07.13 at 4:59 pm

Hey “Apple” heads

Where’s your stock today…

ahahahahaha

#149 jess on 05.07.13 at 5:11 pm

Triffin paradox

Robert Triffin (5 October 1911, Flobecq, Belgium – 23 February 1993, Ostend, Belgium) was a Belgian economist best known for his critique of the Bretton Woods system of fixed currency exchange rates. His critique became known later as Triffin’s dilemma.

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

=

China announced this week
to permit more capital to flow in and out of the country, a key element of yuan convertibility, and liberalize its interest rates (link in Chinese), by the end of the year.
http://qz.com/82048/chinas-promise-to-open-up-capital-flows-is-a-big-deal-but-there-is-a-very-long-list-of-problems-to-be-solved/

#150 dv8 on 05.07.13 at 5:17 pm

China, which has lead the S&P 500 in general since the 2009 bottom peaked months ago:

Copper, which serves as an excellent proxy for the global economy, is collapsing, showing that this rally in stocks is occurring while the global economy gets weaker and weaker.

Investors take note, the market may be hitting new highs thanks to traders’ games, but the real economy is contracting sharply. This is precisely what happened during the market peaks before the Tech Crash and the 2008 Collapse.

#151 cramar on 05.07.13 at 5:38 pm

Roberto Luongo selling his Vancouver condo for $4.2 mil.

Times are tough!

http://www.huffingtonpost.ca/2013/05/06/roberto-luongo-vancouver-condo-for-sale_n_3226966.html#slide=2416296

#152 dv8 on 05.07.13 at 5:47 pm

the fed has pumped the corporations (mainly banks )that is why they can pay dividends while things still appear normal .the money they receive is out of thin air your invested money represents your labour if stocks crash the they lose nothing but thin air but you lose your money which was your labour ….ponder on that for a bit

No government stimulus money goes to corporations or is paid as dividends. An absurd statement. — Garth

#153 JimmyAAA on 05.07.13 at 5:50 pm

#125 Dr. Hoof – Hearted on 05.07.13 at 2:07 pm

Here in HAMVILLE…its weird.

A few Hi Rise projects are commencing as we speak….lots of product around the Olympic Oval coming on stream.

Doing a bit of digging, one finds many of the frontline local Companies are Joint Venture with offshore companies

Still think its all money laundering.

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

I think this actually worth an post by Garth, if he can any sort of data on it. What is the impact of the illegal drug trade revenues on the value of homes in Vancouver / BC. While not the main factor, it is significant.

In my local mall, we notice several short term tenants a year that sell wooden toys, crummy makeup, etc. They rent a storefront in a lonely section for 4 -8 months, you see no customers in them ever. And then they shut down. And a new store pops up 2 months later. Both of us think it is just money laundering.

#154 John on 05.07.13 at 7:09 pm

“Ahhh, finally someone is starting to ask the question: Just how do Canadian banks make double digit returns when the economy is growing at a snail pace?”Cdn Watchdog

I’m no expert on banks. If I had to guess, obscene leverage. Like LTC, all looks great until a bump in the road and then everyone says they had way too much leverage what were they thinking. Banks are the economy in Canada. Iceland II.

#155 dv8 on 05.07.13 at 7:16 pm

No government stimulus money goes to corporations or is paid as dividends. An absurd statement. — Garth

so the fed prints money gives it to banks then what does the bank do with it ?buys bonds and pays dividends
tell me i dont know how this works

The Fed expands its balance sheet through the issuance of bonds which is absorbs. It does not print actual money which is gifted to any bank. By the way, bonds don’t pay dividends. — Garth

#156 Bill Gable on 05.07.13 at 7:27 pm

Gold Bugs must be having a fit:
“Hedge fund billionaire John Paulson is emerging as one of the biggest losers in this year’s gold rout, further tarnishing his once legendary status in the $2-trillion hedge fund industry.

Paulson’s $700-million gold fund lost a whopping 27 per cent in April, when the price of the metal plunged 17 per cent over a two-week stretch, according to performance figures provided by a person familiar with the fund.”

Link: http://tinyurl.com/bpr43n2

#157 dv8 on 05.07.13 at 7:27 pm

No government stimulus money goes to corporations or is paid as dividends. An absurd statement. — Garth

oh and i forgot to mention Stephen Harpers gift to GM i think it was to the tune of 250 million
oh and 50 billion from the us government
you might have missed that news

#158 Smoking Man on 05.07.13 at 7:34 pm

Have fun with this one hetb

ALL SO-CALLED MENTAL DISORDERS ARE CONCOCTED, NAMED, LABELED, DESCRIBED, AND CATEGORIZED by a committee of psychiatrists, from menus of human behaviors.Their findings are published in periodically updated editions of The Diagnostic and Statistical Manual of Mental Disorders (DSM), printed by the American Psychiatric Association.

DMS

Dyslexic Smoking Man

#159 TurnerNation on 05.07.13 at 7:52 pm

Ha I see this weblog is displaying its ‘crackerjack’ award! Now about those Magic Sea Monkeys I ordered up…

#160 TurnerNation on 05.07.13 at 8:03 pm

This award winning pathetic weblog!
Eat your heart out, Couch Potatoes.

(Oh yeah, baby!!!!)

#161 AK on 05.07.13 at 8:03 pm

S&P 500 could hit 1800 this Summer. Jeffrey Saut.

Jeffrey Saut

#162 Tom Vu on 05.07.13 at 8:19 pm

#151 cramar on 05.07.13 at 5:38 pm

Roberto Luongo selling his Vancouver condo for $4.2 mil.

Times are tough!

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

I was thinking of putting in offer…but place has oily hair gel on floor….smells like a pizza/pasta factory…and “I hate Toronto” chiselled into Granite counter.

Also someone buried in cement yelling “Godfather..forgive me”

#163 CrowdedElevatorfartz on 05.07.13 at 8:21 pm

@#106 Humpty Dumpty

hahahahaahaha
Good one. I’ll definitely check out the “cure” at Ugo and Joe’s.
As for “pulling my finger” I ask total strangers in every elevator i ride in to help me……..
Why let my cousins have all the fun?
God Bless ya for not resorting to biblical passages….( yeah , I know, the irony of my last comment doesnt escape me)

#164 Canadian Watchdog on 05.07.13 at 8:22 pm

#161 AK

Jeffrey Saut, Mar 4 2008

We agree with Warren Buffett, “It’s an enormously rich country, and we can continue trading it away for a very long time. It’s a powerful machine, and it can take a lot of abuse.”

He said that when the S&P was right about here.

#165 Ballingsford on 05.07.13 at 8:27 pm

Post quick Garth, the Sens are in trouble!!! :'(

#166 Smoking Man on 05.07.13 at 8:41 pm

Turner nation only reason couch potato came in second cause my shit blog was not listed.

#167 Shawn on 05.07.13 at 8:58 pm

FED MONEY PRINTING

Garth said: The Fed expands its balance sheet through the issuance of bonds which is absorbs. It does not print actual money which is gifted to any bank.

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

With all due respect I would not put it that way.

True the Fed bond buying expands the Fed’s balance sheet. The Fed buys bonds owned by banks. The bonds the Fed buys from the banks are typically treasury bonds issued by the U.S. treasury which the bank earlier bought for cash. To pay the banks for the bonds the Fed simply credits the federal reserve bank account of the bank. This crediting creates money from thin air. This action enlarges the Fed’s balance sheets.

The banks don’t get any real gain out of this except to the extent that the Fed may pay a fraction more for the bond than the bank originally paid.

The bank which formerly had bonds but now has cash on deposit at the Fed can leave the cash with the Fed or it can use that cash to make loans to bank customers. The Fed hopes the bank will make these loans and that this will stimulate the economy. However in most cases the bank already had enough money to make all the loans it wanted to and so it often leaves the cash sitting with the Fed.

Garth is correct of course that no physical dollar bills are printed up it’s all electronic money here.

Now, don’t you feel stimulated by all this talk of money from this air?

#168 Freebird on 05.07.13 at 10:15 pm

#85
——
I agreed the jar idea has good points and we agree on the general premise of what’s lacking in so many who need to learn the basics of money management skills. I stand by the rest of my comment and that different things work for different people. We agree on the goal, the rest we’ll agree to disagree as life is short.

#169 Small Town Steve on 05.07.13 at 10:35 pm

The Royal Canadian mint should create a new gold coin that says:
“In Garth We Trust” and along the bottom
“Stay Liquid”

That would turn the metalheads upside down!

In my eyes you are a rare and truly caring individual that has educated so many on how to avert disaster.

Signed:
An ex-metalhead who liquidated his silver well before taking a beating.
Thanks Garth

#170 Ron on 05.08.13 at 8:27 pm

Why the hate on couch potatoe?

Will it get as good of returns as say someone who can pay the high costs of an ad visor to pick out especially good mix of assets? Maybe not.

But is it free advice that allows you to put together an balanced ETF portfolio much like you talk about all the time but never specifically spell out or at least get someone thinking the right way to making their own? Very much so.

As well, the actual articles that are regularly published that discuss the various issues around ETFS and what not and the commentary on it certainly beats the hell out of the dash to say “Furst” and the concert of “A**hole” than tends to populate much of this blog.

Not that I don’t like this one more but I would hardly call them “limp”

Pure indexing doesn’t work. But you’ll learn that. — Garth