The risk of democracy

Note: I published this yesterday on my political blog, where I am waging war to remain a voice in Parliament. While it may be too partisan for some of the delicate souls who come here, it’s a message worth reflecting upon, whether you agree or not. — Garth
Here’s an instructive tale.

In the world’s greatest economy, bankers screwed up, government policies failed and millions of middle class people ended up suffering as a result. In an attempt to keep the economy from tanking further, the government decided to use taxpayers’ money to bail out the banks.

The administration came to that conclusion in, basically, one day. The law was just three pages long, but would cost $700,000,000,000. It was historic.

The people heard about it, wondered why the bankers would be saved when their own houses were being lost, and complained to their federal politicians. Actually, they buried them in emails and faxes and phone calls. They pointed out the inherent unfairness of the law and the huge gamble it represented. They called into question the wisdom of leaders who were so ready to use other people’s money to solve a problem they had themselves created, which would leave both Washington and Wall Street intact.

Bowled over by their constituents, a majority of the politicians voted against the bill, and it failed. As a result, leaders quickly made it better, tougher, more comprehensive and protective. The three-page law became 440 pages. And then it passed, but still with a vociferous opposition.

Is this an example, however imperfect, of democracy in action? Did the voters of America have a voice? Were they heard? Is this hopeful?

Not if you’re Stephen Harper, it ain’t.

Our current prime minister told voters in New Brunswick today that any Parliament he does not control after the coming election would be “dysfunctional.” That means, he warned, a minority government would be disastrous for the economy.

“Don’t go out and vote just to have an opposition,” he lectured. “Because I think if people start voting just for an opposition, we have the risk you have in the United States.”

Indeed. That risk is called democracy.

Just imagine if there’s an absolute Conservative majority government after October 14th, and if a financial or economic crisis befalls Canada. Imagine if the PMO came up with a fix which was unpalatable to you, but saved special interests. It might mean freezing bank accounts for a few months to prevent a run. Perhaps taxing RRSPs. Maybe suspending trade in stocks for a while. Or an emergency austerity program cutting social program spending. Or maybe a public bailout of CIBC or the Canada Mortgage and Housing Corporation, adding sharply to the deficit and guaranteeing future family tax increases.

If Stephen Harper had a majority, who would stop him? Opposition MPs would be outnumbered. The Conservative caucus would be docile and pliant. The all-powerful prime minister’s office would suddenly wield far more power over this country than the American president does over his – where Congressmen and women sometimes do what their constituents ask.

Before you tell me a scenario like this is far-fetched, that Canada is not America, that we have no crisis here and sweaterman will never be faced with such choices, consider this:

• The Bank of Canada has quietly injected $20 billion into the credit markets to ensure the system does not collapse. If it did, there would be no more car loans, for example. And precious few people building cars.

• The Toronto Stock market lost 11% of its value this week, equivalent to $150 billion. And there’s more to come. The magnitude of this drop is reminiscent of pre-Depression days.

• Oil has collapsed in value from $150 a barrel to $93 in just a few months. Commodity prices are plunging because of a global drop in demand as the USA implodes. In case you forgot, Canada is a commodity-rich country which has just allowed 400,000 manufacturing jobs to be erased and factories full of machines to leave for China. That was smart.

• Real estate values are tumbling everywhere, with Toronto being the latest to see absolute price declines. I sat in a government relations meeting in my riding this week and heard confidential numbers that housing starts across the region – Canada’s most populous – have crashed by half.

• In the past few days two of the leading experts on housing markets – one Canadian, one American – have warned bluntly that there will be a mortgage meltdown in Canada. It will be the direct result of tens of thousands of people buying houses without money – the inevitable residue of the Harper disaster called zero down and 40-year mortgages. This is Canada’s own subprime.

Sadly, we are much further out on the edge of trouble than Canadians appreciate, and certainly more at risk than we’re being told. There’s no protective bubble over this country. Nor do we have a superior system. It’s delusional to believe we will not be living out the drama we’ve all been watching on CNN.

And while we can’t much change the events that may take place, affecting us all, we can do one thing. We can prepare. We can keep democracy alive.

We can elect men and women who have pledged accountability to the people. We can ensure that Parliament does not become the rubber stamp for one man’s clouded and questionable judgment. We can make sure if a storm hits, new laws and strong measures will receive full debate, proper consideration and reflect the will of the voters.

I have worked with Stephen Harper and his crowd long enough to know their game. They speak disparagingly of the voter. They talk about ‘retail politics’ and the gullibility of people – about how they can be manipulated by simple messages. They see public service as marketing and have utter disdain for the democratic process.

When Garth Turner was too noisily independent and questioned the boss, out he went. When Bill Casey stood up for his constituents, he was punted. When Michael Chong opposed nation status for Quebec on principle, he was shunned. And yet when federal minister Gerry Ritz jokes about dead, poisoned Canadians, he’s defended. In this very election, my Conservative opponent was appointed over the wishes of local party members. If elected, she will answer to one person only.

In a few days we get to vote. To send a message. What will yours be?

158 comments ↓

#1 Khumari on 10.04.08 at 2:19 pm

I can’t see any problem about RE Market in Brampton East, Mississauga North,Malton,Burlington,Oakville…
Prices are still going up, and untill you talking about RE Crash ,in Oakville and Burlington avg.prices for detach houses are up about 140K, from last year.
Most of you are idiots. So where is the Crash in Halton and Peel Region?
However in September 2008, in TO-West for
detached houses we’ve seen price increases were excellent:

Oakville- avg.price $509,212/2007—$641,699/2008
Burlington- avg.price $386,513/2007-$504,963/2008
Brampton East- avg.price $386,913/2007—– $428,484/2008
Mississauga North-avg.price $466,095/2007—– $478,476/2008

#2 Barbara Samson on 10.04.08 at 2:25 pm

Garth,

I want everyone here to know about voteforenvironment.ca, a website that promotes and coordinates strategic voting. With 3 major parties now splitting the anti-conservative vote, Canada needs proportional representation. Since we don’t have it, strategic voting will at least give us a parliamentary mix that reflects the will of the people. I hope that the next (minority) government will work towards getting us the Single Transferable Vote so that we can again vote with our hearts.

#3 downsizedanddelighted on 10.04.08 at 2:48 pm

Less Bush and more trees.

#4 dekethegeek on 10.04.08 at 3:05 pm

Sorry Garth but have you just realized that the Prime Minister has more power than the U.S. President ? Remember Trudeau and the ” War Measures Act !” Everyone predicted he was toast at the poles after that politically suicidal move.
While i dont want to vote for “Sweaterman”(good one). And I totally agree with you that this economic meltdown is far from over. The Economist is predicting worse to come and 3-5 years of gloom I still like our parlimentary system as flawed as it is.
The U.S. system of govt. must cater to each and every special interest group out there.
However i would love to see a U.S. Style of the leader only allowed 2 consecutive terms in office at a maximum. That way we would know that if we didnt like a particular leader ( Trudeau, Mulroney, Cretien) they would eventually have to get out.
As Winston Churchhill once said upon reflecting on making very unpopular descisions.
“If I had of voted the way my constituents wanted me to every time I voted in Parliment I would have acheived nothing of consequence.”
While Steve-O aint no Churchill he is certainly a tad more in tune with the economy than the NDP( what exactly does” The New Strong” mean anyway?), the carbontax and spend Liberals, and (God help us all) the Green gardenparty.
And to be honest, do you really think that anything Canada does economically will affect the world markets? With a 30 million population we dont count for much in the grand scheme of world economics. The smart ones will hunker down, pay their bills, and ride this out. The others will continue to buy houses,condos, etc. and be shocked at their RRSP statements.
I will hold my nose and vote like millions of other canadians out there.
Keep up the great website . i love reading your views.

#5 nonplused on 10.04.08 at 3:22 pm

I would think if this scenario unfolded, in order for Harper (or good lord, Dion, who is even worse – how the Liberals came to believe they could represent an alternative to the weaknesses of the Conservatives with this 15 watt bulb at the helm is beyond me) to enact really bad legislation, they would have to be able to depend on their members not to
“cross the floor”. So far the Conservatives do not have a good track record in this area. Even Garth is a former Conservative or at least that’s what I understand. One could describe the whole Party Québecois as Conservatives who crossed the floor. Canada’s own Paris Hilton did it too back before she decided politics wasn’t as cool as she thought it would be and went back to being a billionaire’s spoiled daughter.

And the nice thing about the Canadian system is that if enough members cross the floor to defeat the bill, I would think it probably forces and election so we can throw the whole bunch of the bums out! Whereas with the American system you simply have to spend a week adding “earmarks” to bribe enough senators to vote yes and then push it through. When Nancy Pelosi says they “fixed the bill so that it is good for all Americans” she means that her and her Demopuplican colleges think the bill now contains the appropriate amount of “graft” to enrich themselves and selected supporters. It’s absolutely atrocious and doesn’t look like democracy at all.

This rescue package is a perfect example. Paulson and Co. managed to describe what they wanted in 3 pages. By the time congress was done fixing it, there were over 400 pages of critically important things like tax reductions for toy wooden arrows destined for export. Glad they got that in there because nothing can save an economy like affordable projectiles marketed to foreign children!

In Canada, I believe the process of “earmarking” special funding unrelated to the bill in order to secure votes is much less common due to the way the parliament works, but Garth would know more about that than me.

#6 Geoff on 10.04.08 at 3:40 pm

Garth, this is a potent reminder of what’s at stake for us in this coming election. The libertarian “wet-dream” of the Bush regime, actively preached to the western world by it’s apostles Stephen, Tony, Nicholas and John, is now revealed in it’s full and frightening glory. The world economy has been “shocked” into submission; lest we are vigilant and elect representatives not beholden to the kleptocrats, the transfer of property and political control to the “sovereign” wealth funds will only accelerate. God help us then.

#7 3rdman on 10.04.08 at 3:43 pm

Remains to be seen just how bad things will get. They WILL get bad.

The consensus is this is shaping up to be more a ‘Japanese lost decade’ than a Great Depression that produced the destructive domino of Adolph Hitler. Plus the allure of communism and the counter-reaction to it are not in place.

What we have today is a much more globally integrated economy, where the major players must hunker-down and regulate. And where China is going to pass second place to the U.S..

Back to Canada. Garth, your in an untenable situation with this election. There is no longer a reform party to split Harper’s vote, plus voters in Ontario & Quebec have lost it’s fear factor.

Harper will sink later on his ‘safe’ economy and the extended A mission. The cult of the coming Obama will make Harper ‘wilt’ like Diefenbaker before Camelot.

#8 lgre on 10.04.08 at 3:54 pm

2nd edition of Zeigeist is out, deffinately worth a look..

http://video.google.com/videoplay?docid=7065205277695921912

#9 re-aligned on 10.04.08 at 4:01 pm

Good, strong, accurate conclusion. I fear the methods are not unique to the federal level. Here in BC, Gordon Campbell has done a lot more to centralise control. We’ll know Harper has “arrived” when he cancels a sitting of Parliament a la Campbell.

When you write “I have worked with Stephen Harper and his crowd long enough to know their game. They speak disparagingly of the voter. They talk about ‘retail politics’ and the gullibility of people – about how they can be manipulated by simple messages. They see public service as marketing and have utter disdain for the democratic process.” it rings very true. These guys are hacks and, ironically, are in government to subvert it and its role. They govern as though for revenge. They perceive themselves as persecuted and policy flows from that angry place in their psyche.

#10 The Tallyman on 10.04.08 at 4:41 pm

You are 100% on the mark Garth.
Harper in full control will bury Canada in the same grave as the US.
His laid back everything is “fine here” is outright creepy.
I hope & pray no party gets the majority in this election.
More than any other time in Canadian history we better keep our eyes open and not give a blank check to anyone.

Very suspicious as to why Harper called an election during the crap that is going on world wide.
Let’s not let Harper or anyone else deliver Canada on a silver plater the US.

#11 The Tallyman on 10.04.08 at 4:53 pm

Maybe it’s time we scrapped the Party system in this country and voted for the man/woman on what they stand for.

We need a free vote system for members to do the job they promised they would do, instead of being punished for going against the (clique)Party.

I appreciate the independent thinkers that are not afraid to walk the road less traveled to protect the interests of the real govt. The people.
Thank god for the mavericks like Garth.

#12 Rob in Madrid on 10.04.08 at 4:57 pm

I did something I criticize the Americans for alot. I voted for Harper because he’s a social conservative! I’m tired of PC liberals running our country into the ground.

Unfortunately my (and my wife’s vote ) won’t count for much as ours is a safe liberal riding

#13 Krazy Kacuk on 10.04.08 at 5:00 pm

Were in for hard times!
Time to pray to the Deity of your choice.
Please let this be a normal recession.
Please let this be a normal recession.
Please let this be a normal recession.
Deity, I hope I’m wrong.

In the next yr(start as soon as possible);
1) Pay off as much debt as you can.
2) Keep extra $ in a jar at home(add to it each pay).
3) Buy extra food(canned goods/rice/pasta) each pay.

Financial advice.. see:

http://www.jugglingdynamite.com/

If you don’t need the extra food or $ after 1 yr or so, think about giving it all or part to a charity of your choice.

#14 George Popovic on 10.04.08 at 6:01 pm

I try to pay attention to the many things being discussed about the upcoming election including opinions expressed in the media and in my conversation with friend relatives.
I cannot recall a time where there was so much negative sentiment towards a leader as is now expressed towards Stephen Harper. Yet despite this, the current numbers place the Conservatives at 38%. I cannot understand these numbers as there simply doesn’t seem to be any support this man.

#15 Bobby in Victoria on 10.04.08 at 6:21 pm

C’mon, what a bunch of crap. First, this is a real estate blog so let’s keep with the issue.

However, if you must. I recall when the Liberals were in power all the inaccurate statements they made with no repercussions. Eleanor Caplan called all those who voted for Reform racists and Holocaust deniers. Nothing was ever said. Paul Martin said the Conservatives under Harper would destroy public medicare allowing only private healthcare for the wealthy. Ironically his own private physician is the one of the largest providers of private medical services in Canada. Yet he was never taken to task. Chretian allowed the dollar to sink to peso levels in order to avoid dealing with the productivity issues. And my favourite, the deficit. The Libs passed the costs to the provinces, stating how great they were at managing the economy. I could go on but I think you get the picture.

Fortunately, we now have a choice and many Canadians are warming to the Conservatives. The only hidden agenda out there is really how incompetent are the Liberals under Dion. The Conservatives stand for something and are at least making decisions. One could easily argue that they have accomplished more in a much shorter period of time.

I chuckled at the recent scathing article by a senior CBC writer, Malik, about Sarah Palin, the prospective Republican VP. The reality is that she has got bigger balls than Stephane Dion and the Liberals find that frustrating, hence the repeated references to Bush.

The Canadian real estate market is headed into the toilet, much like the fortunes of the Liberal party. The run up in prices was unfounded much like Liberal hype.

Yes, it’s gonna get ugly!!!!

#16 Transplanted Torontonian on 10.04.08 at 6:28 pm

Great post Garth.

I have never “belonged” to a political party, having voted Reform then PC, then Liberal, and finally Green, in the last election. I thought Chretien was a strong (if ignorant and sometimes embarrassing) leader, but Paul Martin’s pathetic leadership made me move Green. I was planning to vote Green yet again this year as another “protest” vote against somewhat lackluster political leadership, but I think this post has convinced me not to waste my vote on a protest…I will probably vote Liberal, just to try to avoid a Conservative majority.

#17 Noz on 10.04.08 at 6:34 pm

Garth:

The people heard about it, wondered why the bankers would be saved when their own houses were being lost, and complained to their federal politicians.

While I agree with you on what you say, I disagree in thinking the bankers screwed up.

I take a far more, a very unpopular view that there is something far more sinister at work here. Impossible to prove, unlikely to be accepted, but the results are tangible….which is to say that people involved in these large financial activities have always known what their actions will lead to.

People can call it what they wish…conspiracy, tin-foil hat, whatever…it makes no difference because the damage is being done. And frankly there is so much evidence and factual events out there that prove that such activities do occur and are prevalent.

We can argue that perhaps I am giving them too much credit by making them look like they can pull such things off. But they can. When they make the rules, control the flow of money, control the amounts of money, make negotiations and deals amongst each other with absolutely no outside influence….EVER, how can people sit here and say such things don’t exist? When it comes to money and power….everything exists….everything is possible.

Has anyone here or anywhere else for that matter, ever…I MEAN EVER stopped to think that we have absolutely no say so in financial affairs of the government, corporations, etc….of any kind? Do people honestly think being a shareholder of a company means jackshit unless you are Kirk Krekorian or his equivalent?

Let’s get real….they know everything there is to know about us…what we buy, how much we make, how much we can afford, where we spend our money, etc….

By the way, I think your Harper is an absolute idiot….nice job he did plaguerizing his speech….you people are as screwed as we are!

#18 David on 10.04.08 at 6:38 pm

A harper majority and you can kiss Canada goodbye.

“They speak disparagingly of the voter. They talk about ‘retail politics’ and the gullibility of people – about how they can be manipulated by simple messages.”

Their is no doubt in my mind the CONs have this type of thinking. Why Canadians would hate Canada so much as to vote for a mad man who copies other people and lies at will while laughing at the public is crazy. I love Canada and democracy and I am a conservative but I WILL NOT VOTE FOR HARPER THE CRAZY. Harper is not a ture conservative. Vote for anyone other then the CONs.

#19 simple mind on 10.04.08 at 6:46 pm

Garth,

I usually agree with you, but I don’t see how going green is going to help the ecocomy (bad timming).
Minority or majority, I hope the politicians will put differences aside and think about the good of the Country.
It’s like the TSX… where do you go?

As for the housing, a fool and their money is easily separated. People’s biggest investment in their lives made under pressure, that pressure fills bubbles.

#20 y3maxx on 10.04.08 at 7:19 pm

Ok Garth….what is your platform…any solutions?

…It is soooooooo easy to be a critic…isn’t it.

Shhhhhhhh…quietly go to You tube and watch the TV Ontario interview with Nuriel Roubini…it’s less than 30 minutes.

… THE WORLD IS IN TURMOIL NOW… Western Canada’s natural resources are bankable vs Ontario’s dying, manufacturing/financing/overpopulation problem?

STICK WITH YOUR OWN PROVINCE OF ONTARIO’S PROBLEMS…THE WESTERN PROVINCES HAVE BEEN DOMINATED BY YOU ARROGANT “CENTRE OF THE EARTH” ONTARIANS LONG ENOUGH.

imo, without doubt, Canada has become way way way too diverse… the three Western Provinces get nothing but aggravation from back east.

I’ll bet anyone it there were a vote tomorrow for cessation, Sask/Alberta/BC would vote overwhelmingly yes for C.

….and we wouldn’t want present Canadian currency.

#21 islander on 10.04.08 at 7:35 pm

It won’t be for the Lieberals, the Cons, the New Dummiecrats or the Greenbeans.

Because you’re ALL liars.

Oh, as opposed to a real estate agent from Victoria for example? — Garth

#22 Carm on 10.04.08 at 8:02 pm

Why people bash Stephen Harper in regards to our economy is beyond me. The “great” Bill Clinton or any “great” so called world leader, will not be able to stop the inevitablility of our sinking economy. Once middle class U.S. stop buying, the whole world suffers, not just the U.S. Even if our governement where to bail out struggling companies and keep them afloat, who the heck would they be selling their product to? Puppets like Stephane Dion and Jack Layton seem to think they are Gods and could fix our economy, while they’re at it, they should part the seas too. No matter who is in power, our economy will tank. This is not a partisian issue, it’s reality.

Canadians and the rest of the world need this. People have to learn to live within their means and unfortunately a lot of people are going to learn the hard way.

#23 kc on 10.04.08 at 8:21 pm

Garth – Do you happen to know the % of mortgages that are signed/approved by Mortgage brokers versus banks here in Canada? or do you know where there is a website that has this information?

thanks

#24 Gord In Vancouver on 10.04.08 at 9:04 pm

Lots of Conservative party bashing here.

Like them or not, their policies are more likely to revive Bay street than those of the other parties. At the rate things are going, short sellers will soon own North America !!

Looks like the lousy stock markets will soon humble cocky realtors/RE speculators as many potential buyers will now have wait much longer before they can jump into the housing market. Few people nowadays put all of their savings into term deposits or cash accounts.

#25 kc on 10.04.08 at 9:07 pm

In regards to post #17 – I have to also add to your post about “more than meets the eye” post you started. What do you think about 2 new unraveling political things that should wake up many people.

1 – USA agrees to sell Tiawan $6 Billion in arms – Anger in China over this, and congress in the states have been saying no to these types of sales for years. now that the 450 page “buyout” is passed into law. the second night it goes out to this secretive agreement…. strange or just coincideince?

2 – India. USA agrees to “help” them in their nucular situations….. strange also…..

cheers….

#26 Mitchell Cardno on 10.04.08 at 9:52 pm

For all of you wiser folk out there in your middle ages / approaching retirement and think the US situation won’t affect Canada much, here’s a question for you to personally look up, “Have you checked the value left in your pension plan, (G)RRSP’s, mutual funds, and investments lately?”

I’m in my mid-20’s yet I moved all of my money out of mutual funds to the money market (GIC’s and the like) in February. I took a 2% hit on my RRSP’s. Here are the 1 yr gross annualized rates of return for some mutual funds for periods ending in September: (If you don’t recognize the mutual fund, look yours up!)

BALANCED FUNDS (Cdn Balanced)

Income Growth (Trimark) [-10.12%]
Balanced (JF) [-7.11%]

CANADIAN EQUITY FUNDS

Dividend Income (PH&N) [-17.27%]
Cdn Small Cap Equity (Sceptre) [-30.95%]
Canadian Equity (JF) [-10.4%]
Cdn Equity Value (Mclean Budden) [-15.45%]
Canadian Equity (PH&N) [-17.96%]
New Canada (Mawer) [-19.79%]

FOREIGN EQUITY FUNDS

American Equity (Mclean Budden) [-14.64%]
Global Equity (Trimark) [-19.61%]
International Equity (Sprucegrove) [-22.88%]

I see an average loss of 15 – 20% from the above numbers (and they’re averaged over 1 yr!). Let’s say you would like to retire in x years and have built up a nest egg of 500k in retirement savings. The global market just shot 20% from your retirement fund in less than 1 yr. How many more years will you have to work to recover 100k? So much for the global resource crunch – there will probably be a surplus of seniors still in the workplace after they’re 60+ cause they won’t have enough retirement savings.

And you thought losing 10% on your house was bad…

#27 905er on 10.04.08 at 10:15 pm

I have to respond to Khumari

I don’t know where he got his numbers from but The Toronto Star today published the Toronto-area resale house prices September 2008 and they are different

Khumari’s numbers:
Oakville- avg.price $509,212/2007—$641,699/2008
The Star:
Oakville(W21) $376,500/2007-$398,250

Khumari’s numbers:
Burlington- avg.price $386,513/2007-$504,963/2008
The Star:
Burlington(W25) $311,000/2007-$317,000/2008
Khumari’s numbers:
Brampton East-avg.pr $386,913/2007 $428,484/2008
The Star:
Brampton E (W24) $302,500-$326,450/2008
Khumari’s numbers:
Mississauga N-avg.pr $466,095/2007—$478,476/2008
The Star:
Mississauga N hard to determine. There are 4 areas. One is N/A 2 went down and one went up.

He picks some of the few areas where prices actually went up. He conveniently left out:
Mississauga SE (W12)-$381,300/2007-$377,000/2008
Milton (W22) -$347,900/2007-$314,500

All his/her numbers are grossly inflated. My guess is he is an agent trying to pressure people into panic purchases with the “BY NOW the market will only go up.
To summarize the Peel and Halton areas:
Up – 10 areas
Down – 6 areas
Same – 1 area

Hardly overwhelming as is implied.

#28 $fromA$ia on 10.04.08 at 10:21 pm

Garth I dont like the Provincial Liberals here in B.C.

Actually, I cant stand our beady eyed Premier Campbell.

I will vote for the strongest second party though. Alas it will be Federal Liberals.

#29 Keith in Calgary on 10.04.08 at 11:06 pm

Garth…..

The things you state that a Conservative majority government, may or may not do, in the event of a financial crisis would be things contemplated by “ANY” government, regardless political affiliation, in order to stop the house from falling down if it actually came to that.

Looks like you are starting the “big bad conservative bogeyman” fear mongering early, but given the possibility (and in my view it’s an inevitability) of a true conservative majortiy, it’s no surprise.

Lacking logical fact based rebutals to the conservatives positions (popular amongst many of the electorate) and those weak and effeminate, yet barely understandable ramblings of a demented money hungry frenchman (Dion) is atypical of a political party on the short end of a very small splintered stick.

The populace fell for it before, but prior to this time around, the true colors of Canada’s liberals have been fully unfurled for all to see, and we are wiser for it.

I can sum it up in one sentence…….

Liberals are the pallbearers of societies.

#30 nonplused on 10.04.08 at 11:20 pm

It doesn’t matter which of the clowns we elect, the result will be the same! The liberals have had the wheel of this great ship as much or more than the conservatives over the last 20 years, and thus have an equal part in the blame. We didn’t get here overnight, and we won’t be able to get home in a day either. There is over $500 billion in federal debt plus a ton of mortgages and a whack of consumer credit that is all going to be paid back or defaulted before this here economic “event” has passed, no matter which of the bumbling clowns we hand the wheel now. This election will be like handing the wheel of the Titanic to the janitor after the ship has already started to list.

Get to the life boats!

#31 Future Expatriate on 10.04.08 at 11:20 pm

RE: #21

Even worse, Garth… opposed to a CONSERVATIVE realtor from Victoria…

#32 Charles on 10.05.08 at 1:17 am

# 26 Mitchell Cardno. Good post.

I think all asset prices, not just home prices are in bubble territory as a result of the huge credit expansion that has gone on in most of the world’s economies over the past few decades.

Public and private equities make up about 62.0 per cent, or $79.2 billion, of the Canada Pension Plan Fund.

The following is the link to the web page I got this information from:

CPP Investment Board – Equities

#33 POL-CAN on 10.05.08 at 1:40 am

Could this happen to some ‘burbs in Canada in a few months/years???

Garth has speculated that this is a possibility…. I hope not…..

http://uk.youtube.com/watch?v=ss2VLpUAIno

#34 Charles on 10.05.08 at 1:59 am

The following paragraphs are taken from an article on the National Post web site titled “Bailout Marks Karl Marx’s Comeback”. This article was posted by Jeff White on September 29, 2008.

For decades, Austrian School economists have warned against the dire consequences of having a central banking system based on fiat money, money that is not grounded on any commodity like gold and can easily be manipulated. In addition to its obvious disadvantages (price inflation, debasement of the currency, etc.), easy credit and artificially low interest rates send wrong signals to investors and exacerbate business cycles.
Not only is the central bank constantly creating money out of thin air, but the fractional reserve system allows financial institutions to increase credit many times over. When money creation is sustained, a financial bubble begins to feed on itself, higher prices allowing the owners of inflated titles to spend and borrow more, leading to more credit creation and to even higher prices.
As prices get distorted, malinvestments, or investments that should not have been made under normal market conditions, accumulate. Despite this, financial institutions have an incentive to join this frenzy of irresponsible lending, or else they will lose market shares to competitors. With “liquidities” in overabundance, more and more risky decisions are made to increase yields and leveraging reaches dangerous levels.
During that manic phase, everybody seems to believe that the boom will go on. Only the Austrians warn that it cannot last forever, as Friedrich Hayek and Ludwig von Mises did before the 1929 crash, and as their followers have done for the past several years.
Now, what should be done when that pyramidal scheme starts crashing to the floor, because of a series of cascading failures or concern from the central bank that inflation is getting out of control? It’s obvious that credit will shrink, because everyone will want to get out of risky businesses, to call back loans and to put their money in safe places. Malinvestments have to be liquidated; prices have to come down to realistic levels; and resources stuck in unproductive uses have to be freed and moved to sectors that have real demand. Only then will capital again become available for productive investments.
Friedmanites, who have no conception of malinvestments and never raise any issue with the boom, also cannot understand why it inevitably leads to a crash.
They only see the drying up of credit and blame the Fed for not injecting massive enough amounts of liquidities to prevent it.
But central banks and governments cannot transform unprofitable investments into profitable ones. They cannot force institutions to increase lending when they are so exposed. This is why calls for throwing more money at the problem are so totally misguided. Injections of liquidities started more than a year ago and have had no effect in preventing the situation from getting worse. Such measures can only delay the market correction and turn what should be a quick recession into a prolonged one.
Friedman — who, contrary to popular perception, was not a foe of monetary inflation, but simply wanted to keep it under better control in normal circumstances — was wrong about the Fed not intervening during the Depression. It tried repeatedly to inflate but credit still went down for various reasons. This is a key difference in interpretation between the Austrian and Chicago schools.
As Friedrich Hayek wrote in 1932, “Instead of furthering the inevitable liquidation of the maladjustments brought about by the boom during the last three years, all conceivable means have been used to prevent that readjustment from taking place; and one of these means, which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion. … To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about …”

The following is the link to the article”

Bailout Marks Karl Marx’s Comeback

#35 jelly on 10.05.08 at 2:14 am

Noz,

I totally agree with you.
Of course all those in power create market conditions
for their own benefit. All you have to do is research history and see what all the Rockefellers and families like that worked a scam where all the lower and middle class get screwed while the rich take all.
Pretty typical unfortunately.
Everything has been planned and orchestrated since 911. I personally believe (as a lot of others do-in fact over half of New Yorkers believe 911 was an inside job)
911 was simply about money and manipulation of our current situation. This is not rocket science-so obvious.
Before you disagree with me, do your research and listen to the cover ups. What does your gut tell you?
No one can ever convince me that the Twin Towers crashed so hard because of “jet fuel”.
People really are stupid, since there was a show stating this all of a sudden it is true-please.
I am getting a bit off track-election topic and that but I agree it is like it really does not matter what the hell we do, they just do whatever they like anyways.
Stephen Harper is a coward that let’s Bush walk all over him-he sucks for Canada-but he will still get in again! How can we not ever have inspirational, honest, and devoted prime ministers and presidents?
NOT ONE!
WTF? You know what though?
It really would not matter if one person stepped up and did the right thing, the majority in power would get them to step in line or they would be finished.
Oh and by the way, conspiracy theories very often have truth to them, they just are made to look kooky by those that do not want the truth figured out.
Who knows what all this craziness world wide will do to Canada, but it certainly won’t be good.
Garth, I love your guts…

#36 David on 10.05.08 at 2:33 am

Harper’s rhetoric reminds me so very much of the self pitying Conservative rubbish that I had to listen to in Alberta for so many years. The language at election time was always about strong mandates, voters not electing an opposition and leave the details to the experts. Empty non substantive bull feathers to hide behind so they could really go to work after election day.
Harper is an economist who avoids talking about economics and a self styled policy wonk who refuses to discuss policy.
Harper is so devoid of political content, he had to hire soon to be out work US Republican political consultants. Dumb actually, Jesus, hot buttons and fake crisis probably will not cut it north of 49.
Members of the swinish multitudes like myself really are not that important, it is all just a matter of counting stupid duped noses on election day.
The 0/40 mortgage and housing bubble have created an institutional debt culture in Canada. Financial assets grew at a rapid pace and so did unrepayable debts. One man’s debt is another man’s asset. Simple really, there are only two sides to a transaction. No bubble here remember, because the fundamentals are so strong.
The USA bailout of Wall Street yesterday is appalling. Billionaire Chicken Littles from Wall Street issued two ransom notes and got paid $700 billion. The hostage it turns out was dead commercial paper.

#37 Khumari on 10.05.08 at 2:45 am

#27 905er on 10.04.08 at 10:15 pm

I have to respond to 905er,

Now you can look TREB Reports from Sept/2008 and Sept/ 2009, again I’m talking for Detached Houses only,
and just watch avg.prices on W-19, W-21,
W-24 and W-25.

http://www.torontorealestateboard.com/consumer_info/market_news/mw2008/pdf/mw0809.pdf

PAGE -8, Avg.Price-W 19,21,24,25

after that you can open:

http://www.torontorealestateboard.com/consumer_info/market_news/mw2007/pdf/mw0709.pdf

PAGE -8, Avg.Price-W 19,21,24,25

On PAGE -2, you can see District Map of TREB.

Oakville- avg.price $509,212/2007—$641,699/2008
Burlington- avg.price $386,513/2007-$504,963/2008
Brampton East- avg.price $386,913/2007—– $428,484/2008
Mississauga North-avg.price $466,095/2007—– $478,476/2008

So what is the growth in Oakville and Burlington from
2007? Yes, between 120K-140K. And yes, sales are down too,but prices must going up……
Why,I don’t know, ask Garth because he is from Oakville…..
BTW, I’m from East Brampton. And I’m OK, because still with very poor sales,our avg. prices went up 42K.

#38 brazer on 10.05.08 at 3:03 am

well said garth….one of your most thought provoking blog postings yet.

thank you for continuing to have the courage of standing for truth and transparency.

#39 BOB on 10.05.08 at 4:40 am

#1 KHUMARI

My friend you are about to get steamrolled! The whole financial system is crumbling and you think Canada will be the only one to hold up?

#40 BOB on 10.05.08 at 4:48 am

They speak disparagingly of the voter. They talk about ‘retail politics’ and the gullibility of people – about how they can be manipulated by simple messages. They see public service as marketing and have utter disdain for the democratic process.

Oh my God Garth don’t make me laugh! The liberal party used the above ploy for years. Especially the gullibility of people. The liberals manipulated voters for years with amazing lies. They were against free trade and then they backed it and expanded it for 15 years! The best one was when Cretien promised to get rid of the GST! What a lie and he got away with it! LOL my God what has Harper done in the last 4 years that is even half that bad??

#41 bill on 10.05.08 at 9:05 am

“They speak disparagingly of the voter. They talk about ‘retail politics’ and the gullibility of people – about how they can be manipulated by simple messages.”

harper may be a fan of george orwell’s writings….

“As explained in Goldstein’s book, this derives from the social theory which the regime believes in—and which seems to work—that revolutions are always started by the middle class and that the lower classes would never start an effective revolt on their own. Therefore, if the middle classes are so tightly controlled that the regime can penetrate their very thoughts and their most minute daily life, the lower classes can be left to their own devices and pose no threat. Meanwhile, any potentially rebellious or intelligent proletarian indivdiuals who could become the nuclei for resistance are simply eliminated by the Thought Police.”

http://en.wikipedia.org/wiki/Nineteen_Eighty-Four

#42 Andrew Toronto on 10.05.08 at 9:13 am

Looks like credit frezze coming to a canadian neigbourhood near you soon.. credit crunch has arrived in Canada, But how could that be I thought these things don’t happen here lol..have a read ..

http://www.theglobeandmail.com/servlet/story/RTGAM.20081003.wliquidity1003/BNStory/Business

#43 David on 10.05.08 at 9:43 am

Those who say they are consrvatives and support the current CONS are out of their minds. Wake up these people are liars. Look at Finance Minister Jim Flaherty‘s “Halloween massacre‘‘ of income trusts which cost Canadians TENS OF BILLIONS OF DOLLARS and LIED that they wouldn’t touch it. The CONs will DISTORY CANADA. Harper wants to follow the American system which is crashing. Harper broke his own promise and called an election. The CONs are proven LIARS. I could go on and on but what is the point some of you so called conservatives are so closed minded and gullible that logic and reason go out the window. I am a conservative but I know harper is a CON and not a conservative. WAKE UP and stand up for Canada. Vote anyone …..ANYONE other then that madman LIAR Harper.

#44 lgre on 10.05.08 at 9:43 am

Khumari = dumbass

I track brampton prices 3 times per week, there are still houses on mls from 5 months ago, they dont want to reduce prices= no sale..house prices are coming down in brampton and everywhere else..get your facts straight and quit listening to Muareen

I’m sure he is an agent, and is fearing his job..I think walmart is hiring

#45 Nick on 10.05.08 at 10:09 am

to #37 Khumari………………nobody want to live in Brampton.

#46 MBS-Economy on 10.05.08 at 10:10 am

Khumari: Forget about the TREB stats, the numbers are as useless as toilet wipe. It’s skewed by sheer randomness of whether there were more million dollar homes sold or more condos. More condos sold would obviously mean a lower median price etc.

If you really want to know the current situation, you have to talk to the front line guys, who actually see the prices of homes being sold with direct comparisons to prev sales from last year. Prices have fallen 5% in most areas already and most are saying 20% by next summer.

#47 OntarioHouse on 10.05.08 at 10:44 am

#1 Khumari
Your numbers are completely false and exagerated. I checked the numbers from the real estate board and these prices do not exist. Maybe they exist in your mind, in your hopes and dreams. Anyway regardless of the numbers, people in the GTA are waiting for a big discount next year. They will be going around asking for a hundred grand discount. People have seen this movie before. Its called 1989.
Ps: I dont think that your reports from 2009 exist.

#48 brazer on 10.05.08 at 10:51 am

Car vandals aim at Liberal supporters
http://www.thestar.com/federalelection/article/512033

Affected residents live in the riding of St. Paul’s, in a swath of the city around Eglinton Ave. between Bathurst St. and Mount Pleasant Rd., and had Carolyn Bennett signs on their property. Although Meloche confirmed 10 cases of vandalism last night, Liberal riding headquarters said the number was going up, reporting 14 by 9 p.m.

The cars were also damaged in other ways; some were scratched and keyed with L signs. Phone and cable lines of some homes were cut.

“There are two child seats in the back of my car,” said Andrew Lane, chief financial officer for Bennett’s campaign. “To cut the brake line on a car like that is just evil. Awful.”

Added Lane, whose children are 6 months and 22 months: “You have to crawl under someone’s car and cut the brake line, knowing that it could kill someone, or their whole family.”

sad.

#49 brazer on 10.05.08 at 10:57 am

House prices tumble amid freefall in sales
http://www.yourhome.ca/homes/article/511684

“It looks like we’ve finally hit that iceberg and are taking on water,” realtor Mike Donia said. “The slower sales started in January and now it looks like we’re in freefall.”

Donia said he is still getting calls for listed homes, but many potential buyers are holding off. “They’re saying in another year they’re going to get a hundred-grand discount. They’ve seen that movie before and it’s called 1989, the last time we had a bubble,” Donia said.

#50 Gord In Vancouver on 10.05.08 at 11:28 am

#26 Mitchell Cardno

Your move looks like a stroke of genius given current market conditions.

I, personally, do not engage in market timing and believe in investing in a diverse set of companies that have strong fundamentals. Stock market pain is part of the money making process – if investing was easy, we’d all be multimillionaires by 35.

Critics of your strategy will say that you missed a great opportunity to buy in January and make a hefty profit in May.

In defense of those who invested, most GIC/Term deposit products have been underwater all year as their returns are less than Canada’s rate of inflation.

Link to Canada’s 3.5% rate of inflation.

http://www.canada.com/windsorstar/news/story.html?id=b0292eae-44af-4f23-ac87-0438a2b6e11a&k=45635

Link to TD’s GIC rates.

http://www.tdcanadatrust.com/GICs/GICTable.jsp

#51 JMACk on 10.05.08 at 11:59 am

When the common two income family with two solid jobs can’t afford a home, the market must change. My brother is a Journeyman Plumber here in Vancouver, and his crew just got slashed to 4 from 12 because no-one is buying. A major developer ( Let’s call them ONNi) just shut down 6 sites!!!. No problems on the westcoast….haha

#52 My_view on 10.05.08 at 12:15 pm

Garth, you are the first politician that I fell close to. Thanks to this site and your views that I share. I only wish I could vote for you if I was in your riding. However saying that, I wish for once a politician’s promise was kept and something was given back to the people. Something tangible, like more money in my pocket. But its more of the same bickering between parties and nothing being done. I understand its a minority government, but parliament acts like a bunch of grade school bullies than actually working on behalf of their constituents.

#53 prairiegopher on 10.05.08 at 1:04 pm

Well here’s something to ponder for a bit. I saw Paul Martin and Jean Chretien lending their support to the cause. Noticeably absent was Brian Mulroney. I guess Harper didn’t want to sewer his campaign. I think that speaks volumes, because at least Martin and Chretien can show their faces in public. Mulroney would be the last guy Harper would call on. Wasn’t Harper a student of Mulroney’s?? Hmmm, does make me wonder.

#54 kc on 10.05.08 at 1:11 pm

USA – Sub-Prime

Canada – Sucker-Prime

exerpt from globe & mail

full article >> http://www.reportonbusiness.com/servlet/story/RTGAM.20081004.weconomy04/BNStory/Business/home?cid=al_gam_mostview <<< straight to the point

It’s already too late for Mr. Lafleur, in Windsor, where auto-sector job losses pushed the unemployment rate to the highest of any Canadian city at 9.6 per cent in August. Although he and his wife have both found new jobs after losing their last ones at a Chrysler car dealership and General Motors plant, respectively, their house is now worth less than the mortgage on it.

Mr. Lafleur’s lender, Xceed Mortgage Corp., has tightened its credit conditions and recently told Mr. Lafleur it would not renew the $155,000 mortgage on his modest 50-year-old bungalow because the property is now worth about 25 per cent less than that amount.

Harper states Canada’s job market is sound and well diverisified…. I say Bull-sh$t

“Times aren’t just getting tougher for homeowners. Home builders face bleaker prospects, too. Across Canada, jobs in the construction sector have accounted for virtually all – 99.4 per cent – of total employment growth so far this year, according to Statistics Canada data. One in 12 Canadians is now directly employed in the sector, the largest share on record.

Residential activity, which constitutes about half of the total construction market, is already cooling after a decade of growth. Now, limited access to credit is threatening to curb the start of big new infrastructure and commercial projects.”

#55 Calgary rip off on 10.05.08 at 1:37 pm

Nice post Garth.

The Calgary Herald compared countries today where voting is mandatory. It should be here as well.

Your party(liberal) is better than the conservatives, but still too conservative. I will vote for NDP. As a new citizen of Canada, I take this seriously. Unfortunately in the USA, where I will vote for Obama, only has two parties that really can take office. Otherwise, I would vote socialist. I really like the idea of my taxes going to other people to support housing and health programs. If I knew that my taxes were really benefiting people who really need it, that’s great. The person’s with the most wealth and power have the responsibility of using their skills and wealth to benefit others. You dont see that happening in the USA, and in Alberta.

What we dont need is the current idiot party in Alberta. The conservatives are pompous and all about business. Living in Alberta really is just like living in Houston, Texas, where I used to live. Priorities are backwards. Its all about greed. I really dont like what I see in Calgary. Fortunately, I can go to work, do my work to the best of my ability, and after work, stay in my house and not have to deal with the delusion until the next working day.

I hope your party or preferentially Jack Layton throws the conservatives out on their asses. Harper might as well be George Bush.

#56 Ed Sager on 10.05.08 at 2:15 pm

Three condo projects in Canmore have shut down recently (“just temporarily”, you understand, according to the local realty spokesperson), and they’re trying to flog condos in Lethbridge by giving students $3,200 in tuition. The cracks are starting to spread, and the credit squeeze has just begun. It’s going to be an interesting fall.

#57 Bobby in Victoria on 10.05.08 at 2:37 pm

My colleague, an investment manager, says he will never take on a realtor as a client. He says they believe their own hype!

Yes, it’s going to get ugly.

#58 nonplused on 10.05.08 at 3:11 pm

Mandatory voting? Preposterous. There has to be a “none of the above” option, which is what the majority of Canadians are now voting.

There is no way to ensure there is a viable party or at least a good candidate in your riding, so one must be allowed to vote “none of the above”. Otherwise people of good moral fiber would have to spoil their ballot.

If the business of politics wasn’t held in such low esteem by the public maybe we would have a decent alternative and the other 51% of the voters would return to the ballot box. But right now when a politician gets caught with an escort it’s the escort who is embarrassed and looses clientele. Heck, it can ruin her.

#59 Alan on 10.05.08 at 3:51 pm

Came across an interesting article about why the bailouts and cash injections will not fix the problems.

“Low interest rates, easy money and malleable accounting rules are what plunged Wall Street into crisis.”

http://www.washingtonpost.com/wp-dyn/content/article/2008/10/03/AR2008100303309_pf.html

#60 APCM on 10.05.08 at 4:44 pm

#49 – Thanks for posting this. The agent quoted in this article has had a townhouse condo listed across the street from me since July. It’s close to Bay/Bloor in downtown Toronto. Last time I checked the price hadn’t reduced. This agent is telling it exactly how it is.

#61 John on 10.05.08 at 5:03 pm

I live in Saskatchewan, and we just started recovering from the last Great Depression and now we are headed for another one? Damn! ! !

I think Sask will be best positioned to deal with this upcoming economic turmoil.

The truth is, we have had horrible economic growth for the last 20 years and this is actually going to help us in the end.

Our “boom” has been limited and mostly in the Housing Sector, which doubled in two years, but the speed of that doubling has also lowered the amount of people at risk, and when all is said done, people here are still buying homes that are cheaper than what people with the same incomes were forced to buy in other cities.

The end result is that while home prices will come down, it wont “destroy us” in Saskatchewan because the utterly vast vast majority of people owned their homes for longer than 3 years, and about 70% of the price increases can be attributed to the last 2 years.

Still, we are going to take a hit regardless.

Saskatoon will get hit much harder, and I expect its Real Estate market will decline into the $160-$180k average home price, which is significant (down from $300k average).

Regina will take a hit as well, but some mega-projects that are starting soon will ultimately damper the effects and make it more gradual, which means that we could see the “upside” hit us on the way down, still, I think that homes in Regina will average out in the $180k range, down from $250k. The government sector in Regina also helps keep it more level.

As for the rest of Canada? The places that boomed the LONGEST will be hit the hardest. The short boom areas wont be as bad off, since they have not had as much time to do stupid things with their debt, thus less people will be affected.

Still, I think at the end of the day, we wont be hit as hard as the rest of the world, but we will be hit.

#62 Charles on 10.05.08 at 5:21 pm

Anyone who wants to clearly see why we have a historic credit crunch on our hands, should check out the following web page on the St. Louis Fed web site.

It lists the actual dollar values of the m3 money stock in the United States from 1959 up until 2006 (when the release of the m3 money stock numbers was discontinued).

On Jan. 1, 1959 the m3 money stock was 288.8 Billion $
On Jan. 1, 2006 the m3 money stock was 10.242 Trillion $

This is an increase of approximately 3500%. It’s no wonder we have a big time problem with too much debt in our economy. These numbers are mind boggling.

The following is the link to this site.

United States Money Supply Numbers

I am sure the percentage increase in Canada’s m3 money supply during the same time period is approximately the same. I have tried finding out our long term m3 money supply numbers, but so far have been unable to do so.

According to Statistics Canada, our m3 money supply has increased by approximately 61% over the last 5 years. In 2003 our m3 money supply was 788.5 Billion$, and our present (2008) m3 money supply is 1.27 Trillion$

I got these numbers by going to the following two Statistic Canada web pages:

2003 M3 Money Supply

2008 M3 Money Supply

It looks like the (debt-fueled) party is finally over, and that the painful hangover (deleveraging process) is about to begin.

I would like to encourage everyone to check out theautomaticearth.blogspot.com web site to get absolutely outstanding coverage of our unfolding unprecedented economic crisis. I think this website is so good that I have sent them money twice.

Thanks Garth for having the link to this site on your blog roll. I have a feeling you know a little more about the seriousness of this current crisis than you are letting on.

The following is the link to the site:

The Automatic Earth

#63 wealthy renter on 10.05.08 at 5:32 pm

Khumari,

It is pretty typical of a used house salesperson or a specu-flipper to cherry pick numbers, but some of your examples are about as extreme as it gets. When you cite SFH for Oakville, you are talking about the top of level of housing for some of the richest demographic in North America.

There is nobody on this board that will dispute that prices in Oakville are high. It has been discussed here many times and certainly a year over year jump of 137K in average price won’t shock anybody. Oddly enough, my wife interviewed for a job in San Diego the summer that fine city had a YOY increase of 150K. We were pretty set to move. Of course, we know that story did not have a happy ending.

Only a greater fool would not question your numbers and cheerleading of the housing market.

The data links you cite actually speak volumes of the state of SFH in Oakville.

Between September 2007 & 2008, the median price for SFH went from 462K to 496K. This is a little more than a 7% gain in the best tier of housing, in one of the richest areas in Canada. The average numbers were obviously skewed high by some very expensive housing at the top end of the market. Otherwise, please explain the small change in median SFH price?

Active listing for SFH in Oakville totaled 394 in 2008 and 250 in 2007. If I am using my fingers and toes correctly, that would be about a 58% increase in inventory. Once would think that all the extra inventory would get all those rich people excited and motivated to buy a sparkling new home. However, only 4 more homes sold in September 2008 in comparison to the prior year when 72 homes sold.

So where does the specu-flipper stand in SFH in Oakville?

58% yoy increase in September inventory and a 6% yoy increase in September sales.
In September, 18% of the SFH homes for sale in Oakville actually sold. Of course, inventory will level off! RIGHT!

OUCH! I wonder also what the current October inventory is?
Would suck lemons to be a SFH realtor in Oakville right now!

Anecdotally, the Oakville market is done. My sister lives in the Northwest corner of the Bronte Village. The new homes are actually quite nice. The larger family went for a walk last weekend, and I counted 30 homes for sale within about 8 blocks of her home. There are all types of housing for sale.

Lets see the YOY numbers for Oakville next year.

#64 Rasputin on 10.05.08 at 5:42 pm

The PC’s are elitists???? PLEASE!!! The Liberals are the elitists. Trudeau??? Martin??? Multimillionaires both. Martin had his businesses offshore to avoid Canadian taxes while he was Prime Minister for crying out loud!!! Steven Harper has a mortgage and was pure middle class until he became Prime Minister. One other thing. Within 6 month of getting elected he fulfilled EVERY campaign promise. When was the last time THAT ever happened?

#65 $fromA$ia on 10.05.08 at 5:43 pm

#1 Kumari is about to find out what its like to be a Canadian.

Real Canadians have seen booms and busts.

#66 brazer on 10.05.08 at 5:44 pm

Check out sprott’s latest newsletter…interesting analysis:
http://www.sprott.com/pdf/marketsataglance/09_2008.pdf

“This is why we are quite skeptical of claims that a global recession will be deflationary. Ceterus
paribus that may be true, but all bets are off when massive bailouts are in the works. We’ve
believed, and continue to believe, that as long as central banks continue to do what they do
best, print money, then the logical economic result will be stagflation. History shows that
exchanging cash for paper is always inflationary. It means the money-dropping helicopters are
in full flight. We continue to believe that the ultimate outcome, at least for the United States, will
be much higher interest rates (and much lower bond prices) for US government debt. How can
it be otherwise? It’s the inevitable outcome when a central bank loses credibility.”

#67 Rick on 10.05.08 at 5:59 pm

#51 JMACk on 10.05.08 at 11:59 am When the common two income family with two solid jobs can’t afford a home, the market must change. My brother is a Journeyman Plumber here in Vancouver, and his crew just got slashed to 4 from 12 because no-one is buying. A major developer ( Let’s call them ONNi) just shut down 6 sites!!!. No problems on the westcoast….haha
————-
and the feds and the provincial Liberals keep spewing the “shortage of trades” garbage. Beyond haha, simply criminal.

#68 brazer on 10.05.08 at 6:00 pm

http://www.reportonbusiness.com/servlet/story/RTGAM.20081004.weconomy04/BNStory/Business/home

Mr. Lafleur’s lender, Xceed Mortgage Corp., has tightened its credit conditions and recently told Mr. Lafleur it would not renew the $155,000 mortgage on his modest 50-year-old bungalow because the property is now worth about 25 per cent less than that amount.

It’s a big switch from a few years ago when lenders were falling over themselves to offer a mortgage to almost any homeowner or buyer who asked for one. Indeed, Mr. Lafleur was not required to retain any equity in his property when he remortgaged it five years ago.

“I was getting married and I needed 100-per-cent financing. They said fine, no problem. Got the mortgage,” Mr. Lafleur said.

#69 Noz on 10.05.08 at 6:58 pm

KC

In regards to post #17 – I have to also add to your post about “more than meets the eye” post you started. What do you think about 2 new unraveling political things that should wake up many people.

1 – USA agrees to sell Tiawan $6 Billion in arms – Anger in China over this, and congress in the states have been saying no to these types of sales for years. now that the 450 page “buyout” is passed into law. the second night it goes out to this secretive agreement…. strange or just coincideince?

2 – India. USA agrees to “help” them in their nucular situations….. strange also…..

cheers….

Exactly….US policy is so incredibly two-faced and hypocritical it’s astonishing. Can anyone see how the US is egging on Pakistan and pitching it against it’s cousin India? Just like they did with Iran/Iraq in the 1979?

Where does this stop? WHY do these countries allow themselves to be had like this? Are people really this stupid???

It appears to be so…..I can’t imagine what the US has on these people. Perhaps Garth can shine some light on exactly why countries like India, Iran, Iraq, etc are constantly being suckered into such deals when they know better. I’ve never understood what US diplomats could possibly be saying to each other to make others kneel down to them so much…is it a threat to their lives? To their families lives?

Why can’t these people be exposed once and for all?

KC:

As far as 9/11 goes….you are indeed on the same page with me. As a mechanical engineer specializing in structural design, I can tell you with 100% certainty that those buildings were brought down by demolition. The naysayers can turn blue in the face but defying physics isn’t their strongpoint.

What astounds me is this was probably the biggest false flag operation in the history of mankind and look at the reaction of people in this country of the US…….everyone is walking around with blank faces on them. Boy are people in the US becoming dumber and dumber.

I argued these points with friends many times…some agree…but the ones that don’t are so closed minded, so totally in fear of the truth, that they retaliate with hatred and a mode of visciousness that you’d not see in your enemy.

Amazing..truly amazing.

#70 Noz on 10.05.08 at 6:59 pm

Sorry that second part was for JELLY!

#71 Noz on 10.05.08 at 7:02 pm

QUESTION FOR GARTH:

Over at the Rob Chipman site, the new MLS site went up for Realtor.ca…..I checked it out and looked for homes in the BC area.

I have to say I was rather disappointed with the STILL outrageously priced homes in and around Vancouver. Am I being impatient? Your prices out there are still very high and not worth it IMO…….still a ways to go in your opinion?

I’m asking because if we plan to move there in the next 6-12 months, I’d like to be able to buy something and not rent.

#72 wealthy renter on 10.05.08 at 7:10 pm

I live in Saskatchewan, and we just started recovering from the last Great Depression and now we are headed for another one? Damn! ! !

John, this is such a damn serious place. Thanks for the laugh.

#73 dd on 10.05.08 at 10:01 pm

Garth,

I just can’t vote for a wet noodle like Dion. What kind of leadership has he shown? He keeps talking about carbon tax going into a recession.

Honestly, would anything be different under the Liberal Party? Are you saying that the Liberal Party could avoid a recession or save jobs in the Ontario auto plants?

Come on … you are starting to sound like a politician.

#74 Rasputin on 10.05.08 at 10:46 pm

I wonder if CNBS still has some “Dow 10000” party hats kicking around from 1998? They are going to need them. This is shaping up to be the wildest stock market week in decades. We could blow right through 10k and into 9k, 8k, 7k…

#75 JohnnyK on 10.05.08 at 11:08 pm

Harper, Dion, Mcguinty, Layton and other significants in Canada should take a sebatocal and live in the U.S for a few years and observe democracy America. You have to live it and not just read and observe it. This would be a huge wake-up call for them and they would learn a lot.
As professional Canadians, my wife and I moved to the U.S. in 1998, because America called and Canada’s tax rates were overbearing and the tax pro-formas confirmed that we would be 18% better off each year which came true. Although democracy exists in Canada it is rather one of following the leader, the U.S.A. Canadians live in Lalaland, Canada as I have discovered over the last 10 years, still a great country compared to most but apart from its oil, forests and car related industries plus a few unique companies, for the most part it is a small unproductive country, highly overgoverned and too much time is taken in making business decisions. It is also a commodity production reliant country and has relied heavily on U.S. exports to fund the trade. Canada and Canadians have been lucky to be living next door to the most productive, ingenious, creative and democratic nation in the world and yet Canadians are smug, unpatriotic, compared to what I have seen here and have become a mosaic of self interested cultures, and have become a bunch of winers, compared to Americans. Americans just do it. Canadians have become self endulging complainers and yet Americans protect thier interests all over the world. Wake up Canada, you are small country, waving a big flag, big mouth and show very little on the world scheme of things. You will bow to the American economy eventully because most Canadians do not realize how Great American is, self reliant, creative and above all a protectorate of freedom around the world…. and that costs billions which Canada as its ally does not have to pay, albeit in a small token way. I think most politicians, including Harper acknowleded the resiliency of America because he really believes America will rise above its current problems. America is and always will be the beacon of freedom, democracy, and free enterprise. It regroups, corrects and moves on to the next while Canadian just keep talking. No country in the world will replace them , not even China, until they perhaps recoginize personal freedoms. So those who think China will be the next U.S.A., think again, why is every country talking about the bailout bill? . Why is the U.S. dollar rising? vis a vis all currencies including the loonie…………cause people believe in the U.S. dollar still, it was underpriced given the debt, but currencies seek democracy at its best as well, something, Russian, China, India and other large economies cannot offer.

#76 Carsten on 10.05.08 at 11:21 pm

There will be riots.

#77 The Other David on 10.05.08 at 11:28 pm

After being on the market for over a month, this is the next move

http://www.toyfactorylofts.ca/flash/auction.html

well if greater fools dont jump in and buy, then the next move is a fire sale. people that bought and are living in toy factory are probably crapping bricks, this project is parkdale’s pride and joy and no one seems to want in.

#78 dd on 10.06.08 at 12:06 am

#62 Charles

Is the money supply the real problem here? M1 … M3 … cheap debt, credit cards .. loan sharks … whatever.

Too much debt is caused by people spending more than the make. Period.

D

#79 dd on 10.06.08 at 12:14 am

#59 Alan,

Do you know when this mess will end? When North Amercians start to consume less and save more. Lets blame the cheap rates and accounting rules … ha.

This train wreck could been seen back in 2005.

#80 dd on 10.06.08 at 12:25 am

#55 Calgary rip off,

If you haven’t noticed the US is going to be one big socialist state. The US government will be the biggest shareholder in the banks, mortgages, and car companies. If you don’t like Alberta move back to Victoria or the States where socialism will be alive and well.

Why do you even live in Calgary?

Stop bitching or go home.

#81 dd on 10.06.08 at 12:32 am

#50 Gord In Vancouver,

My parents paid off the mortgage, bought goods with cash, and built up a sizable cash / GIC retirement fund over 55 years together.

I could never understand why they stayed away from the markets. They would say ” we don’t understand stocks.”

Now they are growing richer by the day as assets decrease in price. Wow … one of the best money managers I know.

#82 dd on 10.06.08 at 12:35 am

#64 Rasputin,

Ya … good old Paul Martin … taxes where to high for CSL company he owned so he reg the business off shore to pay less taxes.

Great example of a Liberal.

#83 David on 10.06.08 at 3:04 am

Judging by last week’s market meltdown Canadian banks are just as reprehensible for their practise of financial alchemy as banker’s everywhere else. And like everywhere else that had a real estate bubble, Canadian taxpayers will inevitably be asked to give generously to help save life as we know it.
People were borrowing vast sums of money for mortgages supported by a low savings rate. House price increases vastly outstripped family income growth, savings, GDP and just about every fundamental metric anyone who passed economics 101 and finance 101 can possibly think about.
Last week CIBC had to turn to Cerebrus Capital Management a US based vulture fund for a capital injection of $1.05 billion due to overexposure in fetid US mortgages. This vulture fund is only asking for a 20% return, worse than major credit cards and slightly better than pay day loans. CIBC is exposed to $22 billion US in mortgages supposedly of a prime nature, but at this point who knows, since asset valuations have become so nebulous. This should leave no doubt in anyone’s mind why taxpayers are such a compelling target.

#84 Mike.Slob. on 10.06.08 at 5:19 am

Oil drops almost three dollars on demand worries!

Email Story SINGAPORE (AFP) – World oil prices fell almost three dollars in Asian trade Monday on demand worries as Wall Street’s financial meltdown extended to Europe, triggering fears of a global slowdown, dealers said.

In afternoon trade New York’s main contract, light sweet crude for November delivery, sank 2.99 dollars to 90.89 dollars a barrel.

Brent North Sea crude for November fell 2.71 dollars to 87.54 from 90.25 on Friday in London.

Sydney-Australia-Market hours (local time)
9:00 AM – 3:00 PM.
Current Gold price $ 825/oz.
Current Silver price $ 10.95/oz.

This morning from Asia Market again very bad news for Canadian Market.

#85 brazer on 10.06.08 at 8:13 am

Bank of Nova Scotia predicts Canadian recession
http://ca.news.finance.yahoo.com/s/06102008/6/finance-bank-nova-scotia-predicts-canadian-recession-report.html

“A Canadian recession would not be as bad as one in the United States, but would be marked by a continued slowdown in the Canadian housing market, a decline in exports and an increase in unemployment as companies cut spending, CTV said, citing a report it said it obtained from Scotiabank.”

#86 pbrasseur on 10.06.08 at 9:14 am

Unfortunately the new government will be probably minority anyway.

That’s because in the past few weeks Québec’s left has mobilized and is on a crusade to demonize and beat Heaper. As a result the Bloc is getting stronger and stronger.

Québec is the Cuba of the north (I know, I live there), don’t ever forget it, in the past it carried Trudeau’s liberals to create an unsustainable welfare state, now it is blocking any attempt to repair the damages.

#87 APCM on 10.06.08 at 9:29 am

#64 – Harper broke several promises. He taxed income trusts after promising not to thereby causing those stocks to plummet. He promised transparency but now chooses which reporters can ask questions during press conferences. He also appointed a senator after promising senate reform and then appointed that unelected senator to cabinet. And then of course he broke his own fixed election law.

#88 Signal Loss on 10.06.08 at 10:16 am

The attitude displayed by y3maxx and other folks in the west of our great federation (and i’m not being sarcastic when i say that) is perplexing. Their regional economy is largely based on commodities, so how is it that they expect to be buffered from the downturn? Canada was the worst hit “industrial” nation in the 30’s precisely because we were so commodity-dependent. You’d think they’d be looking to the rest of the federation to spread the risk somehow. I’m not trying to be smart here, i really don’t understand what they think their “upside” is. Ok, they’ve stashed some cash away in their respective heritage funds (and good on them), but presumably those funds are invested in the international economy – which is suffering. They’re rich only because the price happened to be right for a time for the stuff they can dig up. That sounds like the sort of thing you build a temporary worker village on, not a sustainable society. I’m open to hearing why “the west” (and i cringe as i say that) is so bullet proof.

I think it would be useful for Ontario and Quebec to create, through interprovincial agreements, some sort of central canadian economic zone. We’ve lost a ton of manufacturing jobs, true, but we aren’t a one-trick pony: we have all of the infrastructure (finance, academic, telecom, transport, high-tech manufacturing) needed to do well.

And as for the US “bailout” issue, I recall a time when the US government bailed out Mexico by buying Mexican instruments. The US gov did very well out of the deal when Mexico recovered. Similarly here, isn’t the US gov actually buying assets – toxic instruments, to be sure – some of which might actually turn out to have some worth? Aside from all of the stupid riders, the concept of purchasing assets isn’t that bad.

#89 Andrew toronto on 10.06.08 at 10:51 am

market’s really tanking today , this is not good all major support broken .. dow down over 500 points

#90 anonymous on 10.06.08 at 11:15 am

No bailouts for the fat cats on main street; you know, the ones who bought/sold overpriced real estate. The ones who refused to pay their mortgages. And the ones who borrowed against their homes to buy toys that they couldn’t afford.

That’s what put us in this mess. The voters.

People are stupid and they didn’t suffer, enough. That was the largest problem with getting the bill passed. Nobody knew how a financial meltdown would affect them.

I do take pleasure in seeing the TSE meltdown. All the jack-ass armchair investors who claimed victory by being long agriculture/energy stocks. I hope your family is wiped out, financially. It was a bubble all along. And that “global growth” bullshit story won’t comfort you. Alberta really bought into that garbage.

Alberta is already melting down. I’m hearing stories from people who were layed off from PetroCan. And projects are being “delayed” or cancelled. Housing is a joke… It’s so over.

DOW below 10,000 really makes me grumpy. But I’m convinced that the US markets will turn positive long before the other markets.

I’m still in sell-the-rips, buy-the-dips, but my patience is getting thin.

#91 prairiegopher on 10.06.08 at 11:24 am

#61 John,
Still feel certain about Saskatchewan?? Hmmm, oil slipping fast, potash in the tank, grains falling…what else has Saskatchewan got? Oh right I almost forgot, Brad Wall could take his comedy act of sounding like a Ukarainian on the road and raise money to stave off high taxes….too funny!

#92 PO'd BUYER on 10.06.08 at 11:39 am

Well, my friends, the time is drawing near for payback time. That’s right, real estate finally at prices the average family can afford! Refuse to listen to slick RE agents saying buy now as prices will be 10-15% higher in the Spring (I was actually told this last month).

Instead, let’s all collectively decide to make low-ball offers. Yes, if the market is overvalued by 15-50% by most estimates, let’s make offers 50% below asking price. We have the power! Don’t be a greater fool, don’t pay 500K for a dumpy two bedroom home in Mississauga or another way over-priced area. Find a new agent if you need to. Enough is enough!

#93 dotava on 10.06.08 at 12:39 pm

#64 Rasputin on 10.05.08 at 5:42 pm

Same happened in former Yugoslavia – Milosevic was ordinary guy living with his family in 2 bedroom apartment – but when he become president/ prime minister – things changed. Get the picture.

#94 Mark on 10.06.08 at 12:58 pm

This is just fear-inducing crap! I guess having a minority Conservative government opposed by various liberal left wing parties is any different than having a liberal majority? The fact is that no matter what, except a Conservative majority, left wingers will always have their say as they have many more voices in parliament, such as the Greens and NDP. And really, trusting a majority Conservative government is no different than the previous years of Liberal rule.
Democracy is indeed people voting for various parties. It is also the people voting for a majority Conservative government!
As far as the economy goes, everyone is to blame…citizens, banks, governments, etc. We have lived for too long in extravagent manners. But I guess the current government is to blame and the past MP’s of past governments are let off the hook as they had no forsight into any of this mess, right? hmmm… passing of the buck, perhaps?

#95 Edmontoonian on 10.06.08 at 1:18 pm

Party discipline is nothing new in Canadian politics. Both Liberals and conservatives crack their whips on the backbenchers. Not very democratic, but then again our founding fathers didn’t think democracy was a very good idea. They intended and designed our federalism to concentrate power at the center.
Personally, I would prefer if my MP was directly accountable to the local constituency, but whats the alternative? Free vote system? Pure representation by population? Canada is a huge country, with huge disparities in local and regional interests. A pure free vote system would tear this country apart. The way I see it, party discipline is an evil we endure so that we can have a unified country coast to coast. BTW I am a born and raised in Alberta, but I’m Canadian first and Albertan second.

#96 smwhite on 10.06.08 at 1:22 pm

“Let’s be clear: the prime minister of Canada isn’t going to go around the country predicting a recession when we’re not in a recession now,” – Steven Harper

You don’t predict the present Mr. Harper…

I think the citizens of Canada deserve the right to hear he truth from their PM, being open and honest about whats happening and whats about to happen, its not just a recession in Ontario anymore, its spread to the west and with the price of oil dropping the way it has, and the state of housing speculation in that side of the country, it should be very clear Canada is in a very volatile situation with mining and oil/gas in risk, juniors are getting creamed this AM! They are going to have a hard time getting investment capital and credit!

Mr. Harper is either (A) ignorant to the situation or (B) lying. Him being a economist by trade, I’ll take the later, I didn’t think he was a fool but apparently he thinks the country is filled with them.

Its his 40 year mortgage that put Canada at risk, not just the American economy, this all would have fizzled out and we would have moved sideways in 2006 versus the blast of hot air into housing nation wide.

It prolonged his “false” economy about 2 months short of the election.

#97 jelly on 10.06.08 at 1:56 pm

JohnnyK,

There is some truth in your post, as much as I had to say it. However, I disagree with you when you stated China will not replace US as super power. The US is in shambles and their time is up. Americans love to say ” The US is the best country in the world” They do not even know what that means-really! They have no idea about what most countries are like in comparison!
Historically all imperial powers eventually fall.
The US is no different.
America is not as democratic as they think, they have different forms of slavery and their politicians certainly run the show. You think Bush legally won his second term? There is a lot of evidence which I frankly believe since the computer voting system is privately run and not policed. You can see on Bush’s face prior to him being elected president, he had a cocky, knowing look that was obviously telling many people he already knew he won even though the news said he had lost. You call that democracy? Not to mention the mess he has made over the years due to this. As far as freedom goes-it is NOT as free as you may believe. Besides the fact that the government wants the American people to be in debt and ignorant about world events (thus the terrible school system-check out test scores if you do not believe me) so that the citizens do not cause trouble and try and keep the government accountable.
Are you aware that in the name of “anti-terrorism” laws, named “Patriot Acts”, they have stripped away civil rights and liberties similar to how communist China rules their people? You can be jailed for up to 3 YEARS
with NO proof if they suspect you of terrorism. I do not have to say how dangerous this is because obviously
innocent people are being jailed because of political reasons or revenge. These poor individuals eventually go insane-you call that freedom? How about how many innocent prisoners are tortured and we are supposed to believe the US is a moral authority and would never sucumb to such atrocities? Please!
Most of us know the truth just like we know that politician’s just tell us what we want to hear.
America just spews lies on the media and occupies countries while killing its citizens and then wonders why so many people hate them around the world. How many enemies do you think they have now around the world? MUCH more than previous to 9/11 you can be sure of that.
I think Canadians as imperfect as we are, are proud that we are not viewed as hypocritical, war mongering bullies around the world which I think is very valid.
We are not as greedy as many US corporations, I may not have loads of evidence on that one but I believe it to be true nonethless. We are definitely bureaucratized to death and over taxed obviously but there are important positive attributes to being Canadian.
I think we have more reasons to be patriotic than the US at the moment because of their awful current administration. We do not go over board on patriotism in your opinion because you are probably used to seeing the ethnocentrism of the US. In comparison to them we may not seem as patriotic but we still are proud for the most part I think.
Regarding the freedoms I mentioned above, there is an excellent book that notes all of the crazy, non-democratic, fascist laws that have recently come into effect that most Americans do not even know about. It is called “The End of America” by Naomi Wolf, a very intelligent and inspirational writer and speaker.

“In The End of America Wolf takes a historical look at the rise of fascism, outlining the 10 steps necessary for a state to take control of individuals’ lives:

Invoke a terrifying internal and external enemy.
Create secret prisons where torture takes place.
Develop a thug caste or paramilitary force not answerable to citizens.
Set up an internal surveillance system.
Harass citizens’ groups.
Engage in arbitrary detention and release.
Target key individuals.
Control the press.
Treat all political dissidents as traitors.
Suspend the rule of law.
The book explains how this pattern was followed in Nazi Germany and Mussolini’s Italy as well as elsewhere, and compares it to the current state of affairs in American Political power since September 11, 2001”
VERY scary…
Anyone who thinks that America is democratic and free is highly mistaken, they are just terms used for political reasons, not true at all…

#98 Dave in Calgary on 10.06.08 at 2:10 pm

I hope there is another minority government. I’d hate to see either the Conservatives or Liberals with a blank cheque in this time of uncertainty.

Let the shit hit the fan over the next year or so and see how the parties deal with it (in coalitions), then give one of them a mandate to take us out of this mess.

For God’s sakes, do not give George W Harper a blank cheque to do what he wants over what will be a very interesting coulpe years (economically).

#99 Shifty on 10.06.08 at 3:41 pm

#75 JohnnyK
Check your research, it’s flawed, the USA peaked in the mid 1950’s been down hill ever since. Otherwise – bulla bulla.

#100 y3maxx on 10.06.08 at 4:08 pm

World Markets Crash…All Is Lost.

…Garth invitates all Canadians to move in with him and his family.

#101 brazer on 10.06.08 at 5:58 pm

$75 billion wiped out in day
http://www.thestar.com/article/512375

“People are scared and the only thing they’re doing is selling,” said Ryan Detrick, senior technical strategist at U.S.-based analyst firm Schaeffer’s Investment Research.

#102 brazer on 10.06.08 at 6:00 pm

Fed to pump up to $900B to banks
http://www.thestar.com/Business/article/512606

To better open the lending spigots, the Fed said today that 28-day and 84-day cash loans being made available to banks will be boosted to $150 billion apiece, effective today. Those increases will eventually bring the amounts outstanding under the program to $600 billion.

Loans that will be made available in November to banks also will be increased to $150 billion each. That makes a total of $900 billion in credit potentially outstanding over year end, the Fed said.

#103 brazer on 10.06.08 at 6:02 pm

Banks warn of ‘worse than recession’
http://www.thestar.com/Business/article/512491

Economists from Canada’s Big Five banks say they expect little or no growth in the near future and they warned today that the domestic economy’s current gloom will likely deepen into something worse than a recession.

#104 brazer on 10.06.08 at 6:05 pm

Housing market shows more signs of weakness
http://www.theglobeandmail.com/servlet/story/RTGAM.20081006.wpermits1006/BNStory/Business

Housing activity in Canada is showing further signs of weakening, with building permits plunging 13.5 per cent in August from a month earlier.

The drop was nowhere near analysts’ expectations of a 0.6 per cent decline on the month.

“Canadian building permits absolutely cratered in August,” said economists at TD Securities.

#105 brazer on 10.06.08 at 6:06 pm

Loonie slides to 18-month low
http://www.reportonbusiness.com/servlet/story/RTGAM.20081006.wloonie1006/BNStory/Business/home

“The C$ is now down more than 9 per cent from year-ago levels, which marks the steepest year-on-year drop since the height of the emerging market crisis in 1998,” Mr. Porter said in a note to clients Monday.

#106 brazer on 10.06.08 at 6:08 pm

Harper to address market worries later today
http://www.theglobeandmail.com/servlet/story/RTGAM.20081006.welxnharper1006/BNStory/Business

“Canada’s financial system has handled the persistent global market turmoil very well. Canada’s banks and other financial institutions are sound and well-capitalized, and are less leveraged than their international peers,” Mr. Flaherty said.

“Canada’s mortgage system is sound. The Canadian housing finance market does not have a large sub-prime component and has not witnessed the proliferation of products and marketing practices that have led to the serious problems being experienced in the United States. Canadian households have smaller mortgages relative to both the value of their homes and to their disposable incomes than U.S. households,” he said.

is the finance minister talking truthfully…hmmm?

#107 brazer on 10.06.08 at 6:11 pm

Scotiabank projects recession in Canada, U.S.
http://www.reportonbusiness.com/servlet/story/RTGAM.20081006.weconomy1006/BNStory/Business/home

“This is not just made-in-the-USA weakness as Canada faces its own homegrown recession signals.”

#108 dd on 10.06.08 at 6:13 pm

#76 Carsten,

Riots for what?

#109 brazer on 10.06.08 at 6:13 pm

Stocks recoup some losses after markets hit by panic selling
http://www.reportonbusiness.com/servlet/story/RTGAM.20081006.wmarkets1006/BNStory/SpecialEvents2/home

“Everyone is finally coming to the realization that the U.S. is in recession, and passing a bailout law will not change that,” said Louis Gagnon, a finance professor at Queen’s University in Kingston, Ont. “The consumers must go back to spending, but they will not do this when they are losing their jobs and their houses.”

#110 dd on 10.06.08 at 6:14 pm

#61 John,

Western Canada has what the world needs. Timber, oil, gas, wheat, potash etc.

Guess what people … the world will survive.

#111 brazer on 10.06.08 at 6:19 pm

Bush says rescue plan will take some time to work
http://news.yahoo.com/s/ap/20081006/ap_on_go_pr_wh/meltdown_bush

President Bush on Monday said the U.S. economy is going to be “just fine” in the long run.

nice to to see gwb keeping his chin up, while millions are losing their life savings.

#112 charliegosurf on 10.06.08 at 6:27 pm

y3max, yur such a cheese cutter, is it fun to be a one man team? garth hunting season is now close, go hunt your tarsands cockroaches, yu migth catch one and name it stephen…

#113 dd on 10.06.08 at 6:33 pm

#85 brazer,

We all hope for a recession … and not a depression.

#114 Rasputin on 10.06.08 at 6:55 pm

Wow! Just wow! Today in the stock market was amazing. Tomorrow however…Today was the foreplay, tomorrow will be the money shot. In my entire life I have never seen a setup like this. The perfect storm. I will eat my golf clubs without catsup if the TSX isn’t down 2000 by noon and the exchanges are not closed. Be it for “technical difficulties” or an admission of no buyers. Tomorrow is looking to me like the day we will all remember for the rest of our lives. I sure hope I’m wrong about this…

#115 brazer on 10.06.08 at 6:56 pm

#112 dd

hope is a good thing, maybe the best of things…and good things never die.

i hope.

#116 dd on 10.06.08 at 7:04 pm

Kevin O’Leary’s take on todays market:

94% of mortgage in the US are still proforming.
6% are in default.

http://watch.bnn.ca/clip100158#clip100158

#117 JO on 10.06.08 at 7:10 pm

JohnnyK
America may be more innovative and aggressive at business than others, and I am sure she will survive what will be a near death experience in the next 4-5 years, but have to say that your perception of the USA is a tad optimistic. You cannot be truly free when your money is controlled by a private bank (The FED), a bill called the Patriot Act that allows blatant disregard for democratic rights is in place, an estimated 35K lobbyists (AKA paid liars) influence and dare i use harsher words ..corr?…politicians, and your country is broke. What’s worse, the most intense phase is still ahead. California and Mass are on the brink and the debt based economy is in complete collapse.
Canada will suffer, but we are in better shape to get through it. We also do have stronger buy in to help each other via social services and more conservative institutions. I would rather get through a depression in Canada then the US. Most of my extended family is US (for several generations) so I wish you the best, but think twice about any percieved superiority…that type of mentality is the driver of ill fated empirical quests. Only citizens of empires believe in the illusion of strength they think their country has, yet it is clear to all on the outside the apparent strength is nothing but a hoax. America is there now and with each passing day, the illusion of debt and empire superiority becomes a reality of being broke and brought to its knees.
JO

#118 dd on 10.06.08 at 7:35 pm

Steven Harper today on BNN:

http://watch.bnn.ca/clip100158#clip100160

#119 brazer on 10.06.08 at 8:01 pm

http://www.antiwar.com/orig/berga.php?articleid=13554

So here we are: a phony monetary system, $3 trillion wasted on wars, and a citizenry mired in debt. And what does Congress do? It adds more debt – a trillion dollars, just for starters, since once starting down this slippery slope, it won’t be able to stop. It then gives the Treasury the green light to buy securities that are trading as low as 20 cents on the dollar at the hold-to-maturity value, i.e., par! Not surprisingly it has engaged in a media blitz to “sell” this boondoggle, convincing the taxpayer that this bucket of dross will one day turn to platinum. Sensing that working stiffs are a little perturbed about the fleecing, it has leapt to the offense: “No, this is not a bailout of Wall Street. This is a rescue plan for Main Street.” By embracing the mortgage waste dump, U.S. citizens are supposedly saving jobs and retirement dreams. They are told that interest-free car loans will stream from dealerships and refi windows will again beckon, even to those with homes worth half the value of mortgage paper.

#120 prairiegopher on 10.06.08 at 9:14 pm

I agree with smwhite. Harper wanted an election, but wanted one of the opposition parties to crater the government so he could blame it on them. Since that didn’t happen he blames the election on the unwillingness of the opposition parties to work with him. Would he tell people the truth that we are heading into a recession? NO! History has proven that the Govt in power at the time of poor economic showing is usually hated by the people. So his best case scenario was to have a quick election, get his majority, and when all hell broke lose he would have 4 years for it to pass. Well, Stevie, you don’t always get what you want. I don’t even think you will get one of those Mr. Roger sweaters for Christmas either, Sorry!

#121 Rasputin on 10.06.08 at 11:12 pm

Whomever wins the elections, here and in the US, should demand a recount.

#122 kc on 10.06.08 at 11:15 pm

NOZ 69 & jelly 96

2 good posts.

I have felt since day 1, (9/11) as I watched the destruction that it was an inside job.

Noz, I am on your side, I have used a cutting torch enough to know the heat needed to CUT steel. It doesn’t just crumble ……. cheers

#123 Republic of Western Canada on 10.06.08 at 11:17 pm

Garth,

I will be voting Conservative, because the Lie-beral criminals attempted to steal my rifles through legislative chicanery. Everyone knows that given the chance, they will do so again, and replace the means I have to feed myself with taxpayer-based red tape which can feed no one.

If stupid people go broke anywhere because they voluntarily ‘bought’ massively overpriced houses, good. That’s their problem. No sympathy.

If the hot air goes out of global markets because people finally saw through the scam it has become, good. Eventually it will reset to the mechanism it is supposed to be – distribution of saved capital to enable innovation and growth, not a ripoff mechanism to enable the Geckos of the world to build empires on the backs of the working man.

But to make the lame jump from a U.S.-based attempt to uselessly placate their markets to a Canadian Conservative effort to maintain tight rein on party members is ridiculous. Too much crap, starting from the Avro Arrow debacle through to Trudeau/LaLonde’s NEP all the way through to ‘tax this’ Mulroney and his mafia buddies ( On The Take: Crime, Corruption and Greed in the Mulroney Years ) exists in the eastern Canadian (Ontario) federal system to allow free rein in federal politics.

Godspeed to you Garth in your own personal riding, but heaven help us all if the same lousy little dictator Jean-Chretien Lie-beral types get any toe hold in the future Parliament.

Harper is the first viable rep from Central Canada (Alberta) in this lifetime to properly run the country. Thank god we finally have a chance to get it right and do it right. Damn straight he’s going to keep an iron hand on the politics down there.

And if not, you’ll just shoot them, right? — Garth

#124 Peter on 10.07.08 at 12:16 am

Kevin O’Leary is a LIAR..He is a BANK PUMPER that is well supported by CI$C..He is always promoting his “GET PAID WHILE YOU WAIT” strategy and I have heard him enough on this by telling every single of us to LOAD up on BANK & INSURANCE companies STOCKS and keep saying “THOSE HAS NICE YIELDS and WE GET PAID WHILE WE WAIT”…Ok, Lets say I load up on every single bank and insurance company stock, now, I know B.O.A is cutting 50 % off from their dividend and in need of raising capital now…Other banks are hiding bad debts behind the scene and Our PC party has keep saying our economy is still safe and sound…Hmm…I heard this since Mr. Bush down south 2 years ago…and look at now !! Last time on TV, Mr. Bush said, there is a painful recession going on..Secondly, do you all agree that SECRETLY or SLIENTLY injection of liquidity in the financial system will be alright with all of you ?? Remember, the more cash in the system, the HORROR the equity market is… That means you got these big sharks eating every single fish (investors) out there and in the end, we all got eaten and sharks got hungry of themselves too, they will bite each other to death and for me, a trusted vote lies with the economic words that a PM should say, if he and his team are keep painting our version of Goldilock economy, we will seriously HIT the FAN next or 2 years later… So, with the experience down south, How can you all trust P.C copycats = US Republican party ???

#125 Republic of Western Canada on 10.07.08 at 12:51 am

‘And if not, you’ll just shoot them, right? — Garth’

No. And that’s the difference between disciplined people like myself, and fictitious demons whom the Lie-berals wished to invent. That sort of reaction is indicative of the sad, fallacious ‘social re-engineering’ which permeated Lie-beral policy throughout the ’90’s.

A policy which is the reason for the miserable polarization of the country, both north and south, and east and west, which Harper now has to heal. That is something which can now only be done with an absolute and responsible majority government.

#126 David on 10.07.08 at 1:20 am

Republic of Western Canada, that sounds like an undirected populist rant against the perceived evils still extant in Canada. Blessed and virginal Alberta defiled by the NEP, which incidentally precipitated the international price collapse of oil world wide in 1985.
The scam you speak about is financial capitalism, assuming of course that I am reading your arguments correctly. Maybe you are a right wing Bolshevik and Alberta has a long tradition of right wing authoritarian Bolshevism.
The Geckos of the world read Milton Friedman and his utopian visions of a perfect wonderful friction less free market. There should be no institutional restraints on human greed and the market is the ultimate arbiter of all that is good and wonderful in human life. If it cannot be measured it cannot be treasured.
My definition of a neo conservative is a person who really can’t enjoy a nice meal unless he knows someone else is going hungry.
People like you have thoroughly convinced me that strategic voting is the only sane path.

#127 Noz on 10.07.08 at 1:36 am

JOHNNYK:

YOU MUST BE JOKING…on ALL ACCOUNTS!!

Where shall I start?

Canada and Canadians have been lucky to be living next door to the most productive, ingenious, creative and democratic nation in the world and yet Canadians are smug, unpatriotic, compared to what I have seen here and have become a mosaic of self interested cultures, and have become a bunch of winers, compared to Americans.

Have you EVER been to America? The whiney little bitch capital of the world? Where people NEED SUV’s as soon as they think of having kids? Where people complain about the real price of fuel? Where people don’t want to hear any problems or feel any pain? Get real man….

Americans just do it. Canadians have become self endulging complainers and yet Americans protect thier interests all over the world. Wake up Canada, you are small country, waving a big flag, big mouth and show very little on the world scheme of things.

Americans do WHAT? Create wars? Bomb countries? While their population goes without healthcare? While their children are part of one of the worst school systems in the world? Americans protect THEIR interests? By who’s right do they have to go around the world ‘protect” their interest? Most of the shit they protect isn’t even theirs. Is that the sort of Canada you want to be living in and be proud of? A country that goes around the world raping and pillaging everything it wants?

You will bow to the American economy eventully because most Canadians do not realize how Great American is, self reliant, creative and above all a protectorate of freedom around the world…. and that costs billions which Canada as its ally does not have to pay, albeit in a small token way.

No one will bow down to anything. America is as self-reliant as Britain was when it was going around the world screwing everyone over. American doesn’t protect shit around the world unless it has an interest in it….and freedom is probably the lowest item on the list….please save us the patriotic crap.

Rest assured that the US doesn’t give a crap about Canada other than perhaps to get your resources and bring in cheap goods. Otherwise..your freedom??? Good laugh.

I think most politicians, including Harper acknowleded the resiliency of America because he really believes America will rise above its current problems. America is and always will be the beacon of freedom, democracy, and free enterprise. It regroups, corrects and moves on to the next while Canadian just keep talking.

No country in the world will replace them , not even China, until they perhaps recoginize personal freedoms. So those who think China will be the next U.S.A., think again, why is every country talking about the bailout bill?

My God…where do I start? Either you’re joking or you’re smoking. Which is it?

America’s resiliency has come from decades of debt that it is perpetually repaying. Since the US doesn’t have any fiscal responsibility in mind for its citizens, it can do that and gullibles like yourself view it as an achievement. Dear God….please stop.

The US is being replaced as we speak. No country has ever lasted forever and neither will the US. This country is BANKRUPT. It has no money. By the grace of the Chinese, Japanese, and Koreans, we have borrowed hundreds of billions if not trillions to do what we are doing.

If Canadians are truly that stupid to go that route, then they also deserve a meltdown like we are having here today in the US.

And what personal freedoms are you talking about? Please tell me what you can do in the US that you can’t do in Canada? Or Britain? Or France? Or Belgium? Or in most places around the world? What? Go to Denny’s and have a grand-slam breakfast at 4AM? Is that the freedom you keep talking about?

Stop propogandizing that crap..it’s getting old.

Why is the U.S. dollar rising? vis a vis all currencies including the loonie…………cause people believe in the U.S. dollar still, it was underpriced given the debt, but currencies seek democracy at its best as well, something, Russian, China, India and other large economies cannot offer.

Really? Is that why crude producing countries are switching to the Euro to trade? Is that why China is trading Euros for crude as well? What rubbish…rubbish.

This country is not a democracy..it’s a plutocracy.

The best form of slavery is the kind where you are not aware that you are enslaved.

Be lucky that you live in Canada friend…where at least there is more respect for people than there is for a paper bill with some president’s face on it. Because here in the good old US of A, they’d rather see you die on the side of the street than spend a penny saving your Great Northern ass.

#128 Gord In Vancouver on 10.07.08 at 2:34 am

#81 dd

I’m happy for your parents and wish them a great retirement.

My mom also did well with GICs and term deposits but, again, with inflation at 3.5%, you have to understand why I avoid them during “normal” market conditions.

#129 Gord In Vancouver on 10.07.08 at 2:35 am

Vancouver’s condo king is still drinking the Kool Aid.

http://www.youtube.com/watch?v=Bc7GFRn3ggk

#130 Greg on V. Island on 10.07.08 at 5:19 am

Lotsa blame to go around, it seems…

Independent.co.uk
20 reasons for the crunch
The finger of blame points widely, encompassing greedy bankers, the Iraq war and even Margaret Thatcher

By Sean Farrell and Sean O’Grady
Tuesday, 7 October 2008

China

The source of the greatest of the “global imbalances” still troubling the world economy. The Chinese government has kept the exchange rate of the yuan low to stimulate exports and build up foreign currency reserves – principally in dollars. These were then lent back to the West, driving down interest rates and fuelling a real estate bubble.

The liquidity bubble

The unprecedented flow of cheap money looking for a home flooded the West’s economies. Trade surpluses were recycled in the early part of the decade. This stimulated the “search for yield” and, in turn, the mispricing of risk as investor s imagined the high returns they were offered were safer than they proved.

Search for yield

With interest rates low and money sloshing around the system, investors sought out increasingly risky assets for a higher return. Demand squeezed prices so little premium was paid for extra risk. When sub-prime mortgage borrowers started defaulting, the market rediscovered risk with devastating consequences.

Sub-prime lending

With interest rates low and liquidity in plentiful supply, lenders threw caution to the wind, lending billions for high margins to people who found they could not afford repayments when rates rose. Often seen as the cause of the crisis, but in fact the most visible symptom of a 10-year debt binge.

Leverage

Cheap money caused the world to go on a leverage spree. Individuals borrowed to invest in property or buy goods; investors used cheap debt to invest in higher-yielding assets, or borrowed against existing investments; bank lending outstripped customer deposits and activities were kept off balance sheet. The shortage of credit as the debt is unwound threatens to bring the economy to a halt.

Originate and distribute

The craze for higher yielding investments allowed banks to parcel up loans through mortgage securitisation, packaging of corporate debt and other means for sale to investors. This was meant to disperse risk, but when confidence collapsed banks were left with billions of pounds of loans they had not offloaded. No one knew where the debt was, causing further market seizure.

Alan Greenspan

One of Mr Greenspan’s predecessors, William McChesney Martin, said his job was to “to take away the punch bowl just as the party gets going”. Alan’s legacy was less happy; the Greenspan put, the idea that whenever the markets took a tumble the Fed would be along with an interest rate cut to get the party going again. Now only the most dramatic cuts in rates can restore market confidence.

The Democrats

A Democrat president, Bill Clinton, oversaw the repeal of the Glass-Steagall Act in 2000, which had separated commercial and investment banking since the last banking crash in the early 1930s. Although sponsored by Republicans and the banking industry, the administration let the move get off the ground. Later the Democrats also blocked reform of Fannie Mae and Freddie Mac.

The Republicans

Nobel economics prize winner Joseph Stiglitz famously called President Bush’s adventure in Iraq “the three trillion-dollar war”, a third more than the Vietnam war. Like ‘Nam, its effects have been economically devastating, fuelling America’s long boom and her appetite for imports and credit.

Regulators

The watchdogs argue it is not their job to run banks, but from London to New York and Reykjavik regulators failed to rein in the excesses of the financial industry. Competition between financial centres for business added to the belief that the market would operate efficiently, producing laissez-faire policies that were exposed in summer 2007.

Credit rating agencies

Regulators left judgements on the quality of debt sold to “sophisticated” investors to Standard & Poor’s, Moody’s and the like. But the agencies got too close to the issuers of debt, slapping top-notch ratings on batches of structured credit containing risky loans. Investors chose to believe them until things were too late.

Financial Services Authority

Britain’s main financial regulator is sticking its nose in to all aspects of banks’ affairs now, but only after a humiliating admission that it failed to keep a check on Northern Rock in the months before the bank’s near-implosion.

Greedy bankers

Many in the City losing their jobs will have made millions from short-term bonuses for market speculation. Traders’ bosses in the boardroom let the casino continue because their pay was also linked to short-term results. The authorities’ price for bailouts will be attempted curbs on bankers’ pay.

Consumers/housebuyers

It’s easy to blame traders, bank bosses and watchdogs, but no one was forcing us to take 125 per cent mortgages or to rack up debts to pay for Caribbean holidays and Jimmy Choo shoes..

Margaret Thatcher

The high priestess of market economics has much to answer for; the deregulation of the mortgage market; encouraging the demutualisation of the building societies; selling off council housing; and encouraging the national obsession with home ownership.

Moral hazard

An idea that proved all too powerful in the minds of men such as Mervyn King. Fear of the consequences made him, arguably, unwilling to help stricken banks. Erring on the side of caution, he misjudged the greater hazard of systemic risk.

Gordon Brown

Oversaw the biggest real estate boom in British history and gave the impression he had abolished the economic cycle. “No return to boom and bust” was the mantra, but the budget deficits he ran up only made matters worse. Tony Blair watched him do it.

Mark-to-market accounting

“Fair-value” accounting was meant to bring greater openness to company accounts, forcing banks to admit the market price of securities on their balance sheets. But with no market for many of these assets, banks have hadto take massive writedowns, creating a spiralling loss of confidence. Pressure is building for the rules to be suspended or changed.

Basel 2

The Basel 2 bank capital rules did not ensure banks had enough liquidity. Northern Rock and Bradford & Bingley met the capital rules, but that didn’t stop depositors getting scared. The rules are said to encourage banks to run with less capital in the good times, leaving them exposed when the market turns.

Estate agents

They were just doing their jobs, but they sold the houses and no one likes them. Going out of business at a rate of knots.

#131 jelly on 10.07.08 at 7:41 am

kc,

Ever since Sept 11 when I watched the news I can’t help but remember the news broadcaster say that it looked just like a demolition and that bombs were going off. Funny how we never heard anything more about that.(on mainstream TV) Even more, strangely enough over 100 million dollars went missing and was never found just hours before the planes hit. (this was found on World Trade computers but was never investigated fully) In fact more money was spent on the whole Clinton sex scandal than on 9/11! WTH!
Once I heard those experienced in engineering say it is impossible for a building to implode like that without explosives, it was pretty obvious what the deal was.
When discussing this with a co-worker one day she actually said to me,” No, I saw a program on that, I guess because the jet fuel was so hot, it melted the building” Ha! I just saw red for a moment, this is a supposedly highly intelligent woman, believing such garbage from a program no doubt pumped from those who want to lie and fool us. All I could say to this silly woman and this ridiculous “fact” was, “You believe that? I certainly don’t. Talk to any engineer!” I was so disgusted, I could not believe it. I buy the unbiased experts’ opinions, thanks very much. The proof is unbelievable as I am sure you have seen kc.
For those who have not seen it, check out “Loose Change” on youtube, it will blow your mind, make up your own mind then. Why is it so difficult for the average person to believe their own government is responsible for evil and manipulating events for their own gain? It is so obvious to those of us who are thoughtful and sceptical of “truths”.

#132 charliegosurf on 10.07.08 at 8:11 am

republic of west canada, in central canada, with the bad east(only ontario) balls of confusion…. affraid to take yur gun away, poooor boy, chretien had a bus full of guts, way more than most big pick-up truck redneck looser.

the avro was another genius canadian achievement killed by our greedy neighbours. the economy will always, have up and down, so the weather, so the price of evrthing. so whats in yur pants…this modern world is filled with cry baby that take everthing for granted.

who cares who represent this country, or any country, they are all just puppets, controlled by the greeed gang. what a joke this world is, really, and what is even funnier is that it will never change or will it?

who will i vote for? about being honest and admitting that this election is not just a waste of time and stupid$, its aslap in the face at the system, it doesnt work at all, and nobody cares in fixing it, i do a least.

about all of us become mp, we all get to take office a few second a day, on the web, we propose our idea and people vote for it our against dayly, the tally of it decides if it is voted, the one with the most approved idea gets to spend some time at rideau hall and play prime minister, until smdy else gets bettter approval rates.

anyhow, enjoy yourself, all members of the great canadian/earth $$heep herd, the wolf pack are laughing their teeth away!

#133 dd on 10.07.08 at 9:20 am

#123 Peter,

Kevin O’Leary must be doing something right. And he didn’t say load up on every bank and insurance company. If that is what you heard him say … you better say away from info commerials because you would buy everything.

#134 Signal Loss on 10.07.08 at 11:35 am

omg i think cats and dogs are living together…

#135 Noz on 10.07.08 at 12:07 pm

Consumers/housebuyers

It’s easy to blame traders, bank bosses and watchdogs, but no one was forcing us to take 125 per cent mortgages or to rack up debts to pay for Caribbean holidays and Jimmy Choo shoes..

GREG ON V. ISLAND:

EXACTLTY!!!

Everyone wants to bail out MAIN STREET…why? Why should I? I was responsible….I don’t drive around in a freaking $50K Beemer even though I could….to freaking bad that they are losing everything.

As I have said before, if I can take the time to read a 20 page contract when I’m signing my life away, so can the rest of these whining little bitches.

#136 brazer on 10.07.08 at 1:07 pm

http://www.nationalpost.com/news/canada/story.html?id=865524&p=2

Garth Turner – There are undoubtedly Liberals hoping this renegade from their caucus loses his Halton seat courtesy of an eager takedown effort by the Conservatives. Consumer advocate Turner can talk, blog or video himself into trouble, seemingly without effort, but he’s never boring and refuses to blend in with the mass of nobodies in the Commons. His name alone should carry the riding, but the Conservatives have targeted him for a takedown so the seat’s very much at play.

put up a good fight garth!

#137 brazer on 10.07.08 at 1:11 pm

Brace for 2-4% tax hike, Mayor says
http://www.thestar.com/news/gta/article/513139

more bad news for Toronto home owners…

#138 brazer on 10.07.08 at 1:14 pm

Tillsonburg auto parts supplier to lay off 430
http://www.thestar.com/Business/article/513142

” A union official says the ongoing slump in the auto industry is forcing a southern Ontario company to lay off 430 workers.

The layoffs at DDM Plastics will take effect Jan. 1, according to an official with the International Association of Machinists.”

won’t be a happy new year for these manufacturing workers, sadly.

#139 brazer on 10.07.08 at 1:16 pm

Financial crisis begins seeping into all corners of Canada’s economy
http://www.thestar.com/Business/article/512886

Homebuyers have also been spooked. “I had one purchaser who basically said he didn’t have the down payment for the home he wanted to buy anymore because he lost so much money in the stock market,” said realtor Jim Common.

He said he held a weekend open house for a North Toronto home on a choice ravine lot and noticed would-be purchasers were reluctant to take the plunge in an uncertain market. In last year’s market, “this home would likely have sold in multiple offers in a week. But buyers are definitely nervous,” he said.

#140 brazer on 10.07.08 at 1:20 pm

Worse Than ’87 Crash: Current Crisis Hitting Main Street Hard
http://finance.yahoo.com/tech-ticker/article/90611/Worse-Than-87-Crash%3A-Current-Crisis-Hitting-Main-Street-Hard

The current turmoil in the financial markets is “far worse” than the 1987 crash, the 1998 Long-Term Capital Management crisis, or the bursting of the tech bubble, says Jeff Matthews of Ram Partners.

Those past episodes, while painful, were mainly Wall Street events, says the veteran hedge fund manager, blogger, and author. But the current cycle is very much a Main Street phenomenon that is hitting “real economy” companies and employees alike, as Matthews recounts with a variety of anecdotes.

#141 brazer on 10.07.08 at 1:22 pm

Job growth losing momentum, TD Bank warns
http://www.financialpost.com/story.html?id=866024

The report, written by economist Beata Caranci, said nearly all of the 87,000 new jobs created in the first eight months of 2008 were in the construction sector. Take away the construction industry and “Canada is left with a mere 500 new jobs,” the report said.

#142 brazer on 10.07.08 at 1:24 pm

Oil sands stocks hit 52-week lows on financing fears
http://www.financialpost.com/most_popular/story.html?id=863968

CALGARY — A slew of Canada’s most respected oil and gas outfits slammed into 52-week lows during Monday’s tumultuous trading session, highlighting fears that companies in the oil patch face a struggle to rustle up the cash necessary to plow ahead with expensive projects.

#143 POL-CAN on 10.07.08 at 2:12 pm

# 134 Noz

You are right as far as the guilty overconsuming consumer…. However the derivative problem was not created by the average Joe/Jane that is overleveraged in a house they can not affort driving a BMW :)

And the derivative and CDS issue is what will ultimately spell the end for life as we know it…..

For my part… Got out of the stock market in August… My RRSPs are taking a beating but are beyond my control as I have them via my work (green bank) so hopefully they will recover by the time I am ready to start drawing on them in 20 plus years :)

My biggest worry right now is the rumors I have been reading about since this weekend. People are saying that a “bank holiday” might hit us within the next 2 weeks. That would be a global bank shutdown. No access to accounts, no debit, no credit. To that end I went and got a few k of cash out today, filled up my tank with gas, and will be going to buy some food stuff tonight. Just in case as one never knows anymore.

As for who is elected…. It really does not matter at this point… This is a global slide that can not be prevented. Buckle in and get ready for a wild ride.

#144 Calgary Rocks on 10.07.08 at 2:34 pm

Consumers/housebuyers

It’s easy to blame traders, bank bosses and watchdogs, but no one was forcing us to take 125 per cent mortgages or to rack up debts to pay for Caribbean holidays and Jimmy Choo shoes..
====================================

The issue is the 10x leverage based on those loans not the loans themselves.

Foreclosures are not a new thing. Packaging a subrime loan, leveraging it and selling it as a ‘safe’ investment is what is new and why we are in this situation.

#145 y3maxx on 10.07.08 at 2:41 pm

New Western Canada Financial System…

….Barter System for Services Instead of Currency….

eg:

I sleep with your wife and you sleep with my Mother in Law.

#146 POL-CAN on 10.07.08 at 2:43 pm

Mike Shedlock makes yet another strong case for DEFLATION. Please read:

http://globaleconomicanalysis.blogspot.com/2008/10/real-price-of-gold-soars.html

#147 jelly on 10.07.08 at 3:04 pm

Noz, regarding your response to Johnnyk:
LOVED your post,
I agree with everything you said.
All Americans should have a read of that and then
think about it for a bit before spouting off that brainwashed, boring drivel a lot of them believe…

#148 dd on 10.07.08 at 3:17 pm

At least S Harper has a plan:

http://watch.bnn.ca/#clip100338

#149 The Tallyman on 10.07.08 at 4:43 pm

Bad News –
TSX down 400 points today.

Good News –
Harper’s JFK haircut held up well during his True North Strong and Free for the taking speech.

#150 George Popovic on 10.07.08 at 4:55 pm

Garth,

I know the election is just around the corner and you must be vey busy, but the last few days on the financial markets calls for a comment even if it’s just a short commentary on the current state of affairs.

#151 Peter on 10.07.08 at 5:53 pm

dd, It is evident before the first wave of US credit and the ABCP crisis, he strongly recommended to load up the banks and insurance companies as a safe haven play….but I truly think he was wrong !!! What I think he was right was we still need something for our bread and butter (to make something out of the market with some dividend paid out) …

#152 dd on 10.07.08 at 6:01 pm

#134 Noz,

Give your head a shake. I don’t want to bail out Wall St or Main St either. However the alternative doesn’t look good. 30% unemployment and food lines for 10 years doesn’t appeal to me. Could you imagine another war? People living on nothing will cause more unrest and a possible war than anything else.

People, Governments, and Companies have lived / consumed beyond their means. This is and will be a painfull process … de-leveraging.

#153 brazer on 10.07.08 at 6:06 pm

Dow dips more than 500 on worries about financials
http://news.yahoo.com/s/ap/20081007/ap_on_bi_st_ma_re/wall_street

“The calls I’m getting — every money manager I deal with, and every client I talk to — are just very emotional. This is a very, very emotional time, and most of them are taking steps to shore up their defenses, reducing exposure to stocks just to defend their portfolios,” said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors.

#154 brazer on 10.07.08 at 6:07 pm

Retirement accounts have lost $2 trillion — so far
http://news.yahoo.com/s/ap/20081007/ap_on_bi_ge/meltdown_retirement

Falling home values and now the decimation of much of their savings could plunge older Americans into period of austerity not seen in decades, Miller said: “The fear factor is huge, and they don’t see the availability of resources to them to get well.”

Orszag said the situation has little precedent in American history.

“The period that we’re experiencing is arguably the greatest collapse in confidence that we’ve experienced since the Great Depression,” he said.

#155 Noz on 10.08.08 at 3:13 am

DD #151:

It’s hard to say if the alternative is better or worse. It’s not coincidental IMO that the bailout is about the same amount spent on the Iraq war for the last 5 years.

McCain tonight called for a sweeping take over of all homeowner’s debts who are in distress and re-negotiating down their mortgages…IS HE CRAZY?

So basically give a bunch of people homes they don’t deserve to be in and screw the rest? What does that promote for the long term in this country?

Meanwhile, I watched a special on CNN regarding the truly wealthy….the types who are in Wall Street hedge fund firms, etc…who make hundreds of millions of dollars. Doing WHAT? Stealing people’s money and skimming off the top is what.

Hope is what gives the US such a great reputation…otherwise it’s been fluff covering crap for the last 250 years.

#156 dotava on 10.08.08 at 6:56 am

#13 Winston Smith on 10.07.08 at 8:34 pm

They don’t have an option. Immigrants coming to the country mostly are well educated (what we are missing in our system) but we are not missing without reason – much easier to manipulate less educated people. More over if we care about our future – why we do not organize election on a day that our future well educated young people can express there vision (can be done – with minimal disturbance in there curriculum). If we like to deal with any problem in our lives – we have to find the root and start digging there.

http://video.google.com/videoplay?docid=7065205277695921912

TNX Igre.

#157 gold is money on 10.09.08 at 12:15 pm

Gold closed up by 22.30 to 903.40 and silver rose by 37 cents to 11.71.

The open interest on silver continues to collapse falling below 100,000 to 99883. Gold’s OI rose by 4700 contracts to 329000 as many sovereign nations are ready to take on the comex.

The big news came from the ECB who have decided not to renew any leases on gold. The lease rate on gold continues to climb above 3%. The ECB does not like the quality of the loan as all the banks in the usa are suspect. Expect all the leases not to be renewed and thus all the gold will have to be called back.

This no doubt will cause the default in gold and silver and end this game. It will also end the Euro. In all probability, the French will revert to French francs, the Germans to Marks etc.

The dollar will tank and Ben will start his helicopter engine.

Your comment is awaiting moderation.

#158 Noz on 10.09.08 at 1:10 pm

DOTAVA:

Because no one gives a shit anymore. If what is happening now happened 200 years ago, people responsible would have been hung and executed on the spot.