Dooced

Apparently I am too much. Too much for a successful career in Canadian politics, anyway. As you may have heard, last night I lost my seat in Parliament in the first elections in the world to be held in the immediate wake of the financial and economic mess enveloping us.

Being Canada’s only blogging MP (my political site played a key role in having my butt kicked out of the Conservative party) was bad enough. But being with a political party which seemed to offer people no better safe harbour in this storm was likely the kiss of death. I’d urged my leader to adopt an immediate policy of guaranteeing all private bank savings, but that commitment was blown.

In any case, my own damn fault. If you want to know more, you can buy my book (the new one). More on that in future days.

This morning I am off to Nashville to give a speech to a few thousand realtors at an industry convention. My topic: What comes next. My thesis is that what’s happening right now bears an uncanny resemblance to what transpired in the months following Nine Eleven. I mean, look – traumatizing major event making people feel helpless. Inappropriate, incompetent government response. Major mistakes in monetary and fiscal policy. Volatile markets scaring the crap out of investors. Sudden perceived value in real estate. And the consuming preoccupation with where money’s safe.

So, are we sowing the seeds of the next housing boom, even as we sink faster into the current rubble?

I think that might be a plausible argument for the American market, while here in Canada we are destined to go through the next phase of decline.

In any case, more later.

In the meantime, send canned goods.

131 comments ↓

#1 Bob Edwards on 10.15.08 at 8:06 am

You lost, because honest people were tired of listening to your vile attacks on the Conservatives. Nobody likes a TURNCOAT and eventually it caught up to you. Your crooked Liberals also lost more than 20% of their seats while the conservatives gained more than 10%. LIEberal support is mainly 3 high immigration cites Toront, Vancouver, Montreal. Canadians don’t want Liberals any longer . Personally I’m glad you are gone LOSER
People do not trust Liberals any longer, and Bob Rae the next leader HA HA HA REA DAYS again?

#2 Trekie2 on 10.15.08 at 8:06 am

Garth you wrote “(my political site played a key role in having my butt kicked out of the Conservative party)” this really bothered me. I have always known and intuitively felt that our governments were scheming little children not wanting to expose themselves for what they are in fear of the public outrage and inevitable correction to there practice. You have always given me a sense of hope that there still were some good and honest people in our government fighting for me….Mr. Joe average. Please don’t loose faith or direction…it will turn around…and when it does your penetration into the hard headed, ignoring the obvious Canadians will gain you much more momentum.

#3 JP on 10.15.08 at 8:28 am

Ah damn, I’m sorry Garth. Not just for you, but for all your constituents and for the rest of Canada.

#4 Rob in Onterrible on 10.15.08 at 8:38 am

Hi Garth, It wasn’t YOU. It was your party. I voted for you and was terribly dissappointed that the Conservative candidate won Halton. Stephen Harper must be happy. WE all lost a great politician. Looks like Harper’s gamble paid off and we have a Conservative majority government. Great Bushism comes to Canada. Just great.

Best of luck with your future endeavors.

Kind Regards, Robert B.

#5 Nicholas P on 10.15.08 at 8:50 am

Good Morning Garth;

Life’s greatest gifts often come disguised as our worst nightmares. So with that I will congratulate you on your good fortune.

Good luck in the private sector where your words will carry the weight of the truth they possess. Now is the time to wash off the yolk of deceit that has become Canadian politics and look deeper into the rabbit hole for the severity of the situation which we face.

As your blogs and book have proven , insight and intuition are your guiding gifts.

Let the blogging begin. I will be reading attentively.

#6 Chris L on 10.15.08 at 9:03 am

I’m speechless, but offering my support. Hopefully you develop a meaningful plan in lieu of the results. Good luck.

#7 POL-CAN on 10.15.08 at 9:05 am

Garth….

Sorry to hear that you lost. Don’t give up as the next election is not that far away!

I doubt that people will re-inflate the housing bubble given current economic state. Joe Public is loosing his job at a too great of a pace and you can’t have a bubble with high unemployment.

I read somewhere yesterday that just in London England 150000 high paying finantial jobs are toast. I would imagine that the job destruction in that sector in New York will be even greater. Will Toronto be any different? I doubt it. Outside of finance, insurence, and government jobs, what does Toronto really have?

With the prices of commodities sinking mostly due to the slowing global economy, the writing is on the wall for the boom in Alberta. The lumber exports have already collapsed. What does that leave Canada with?

There are hard times in our future. I hope everyone is ready but can’t see that being the case as too many greater fools are still in debt too deep. This one is going to hurt…..

#8 Michelle on 10.15.08 at 9:20 am

Garth…I’m sorry for your loss but in a way I am relieved…Milton will be ground zero for the realestate melt down in Ontario and if you won you would have nothing but angry voters banging on your door demanding that you some how save their sorry over-indebted assets from this financial tsunami.

#9 brazer on 10.15.08 at 9:22 am

the liberals under dion were sadly doomed. hopefully, either rae or ignatieff get the green light for the next go.

sorry to hear about your loss…you’ve been a voice for transparency and truth in a sea of smoke since you’ve been in public office.

#10 y3maxx on 10.15.08 at 9:26 am

Send canned goods…lol

…As you enjoy your hefty MP’s retirement fund.

We both know all you need in your new book are the guidelines from Nouriel Roubini’s forecasts…he gives them out for free.

You are a good guy, but please stop with the “I told you so syndrome” ad nauseum.

…If you are ever out this way, Vancouver, you are invited to share a trail walk with me and the pooches here on the North Shore, eg: Lighthouse Park, Capilano Fish Hatchery.

Leave your gun at home please.

Everyday is another day in Paradise out here.

regards

Uncle Max

you already have my email

ps

You interviewed me like 25 years ago in Toronto, Queen and Pape…I was a realtor.

#11 Bruce @mortgagehelp on 10.15.08 at 9:34 am

Garth
Sorry to hear you have lost, but I don’t think you should take it too personally. I usually vote liberal, but did not this election. The Green Tax was just too much for me to swallow when (at the time) I was paying way too much for heating oil. A more focused economic platform would have won me over , and you could have pushed the green platform after you were in.

#12 smwhite on 10.15.08 at 9:53 am

Garth, all the best, unfortunately your were attached to the Dion train.

I believe its the job of government and our elected officials to protect and alert the herd of danger, the majority don’t. In fact, its in the elected officials at the times best interest to create these equity bubbles(Look at me, I’m G.W.Bush and more American’s own homes know then ever before – Pre-election 2004).

Harper almost got his majority by pushing this election up even despite his own policy of fixed dates; he almost beat the recession like his idiot idol south of the border did.

Garth, for the past couple years you’ve been the only Canadian public voice against the actions of government and the banks, allowing those with their heads stuck in the sand to look at the truth if they wished, all the best and look forward to watching the Canadian economy and housing situation into the spring.

Anyone able to dig up some housing statistics recently, finding any is like finding Waldo…

#13 karim kanji on 10.15.08 at 9:55 am

However, myself and millions of others, will continue to look forward to your observations and analysis of all things political and economic.

Best wishes!

#14 Calgary_rip_off on 10.15.08 at 9:56 am

Garth:

You came pretty close in your local area anyway. Part of the problem is nobody really voted. In a city of 1 million(Calgary), what was there about 100,000 votes in total? What’s up with that? It’s nowonder the American wanna be’s(Conservative Party) wound up being elected. The reason they are a minority is most Canadians arent stupid enough to vote for them. Perhaps a better policy is for all the conservatives in Canada to go immigrate to the USA. Im saying this as an American, which I am. If you like free enterprise so much, go south and then have socialist policies bail you out when the going gets tough.

It’s truly disgusting that Harper got in again. There were a lot of NDP and green party votes in Calgary, but not enough.

If there is a job opening on Vancouver Island in my field, Im outta Calgary. It’s amazing how many people here support the oil industry when it doesnt do a damn thing to lower their actual prices at the pump. All it does it jack up housing costs so people struggle to live here.

Cant wait to see what happens in the coming months when credit locks up here and people cant buy the homes that are worth DOUBLE what they cost to build. Talk about a joke and rip off.

And to anyone that is conservative other than Garth wanting to respond to this, save your breath, I dont read any follow ups to my posts.

#15 Dropper on 10.15.08 at 9:59 am

Such a shame. You are the one politician I trust and respect. Mostly because of your integrity and honesty (which your blogs and books have shown us). I sure hope we’ll see you back in the game in the future, Garth. We need people like you in our government.

#16 Tom from Mississauga on 10.15.08 at 10:06 am

Unfortunately I could not convince 2 of my good friends of late to keep them from buying real estate recently. Going for a walking in my neighborhood the for sale signs are many and a foreclosure just outside my condo. The next couple of months in the GTA will be very telling. And what happened to variable rates at the big banks?

#17 Bill on 10.15.08 at 10:16 am

Garth I feel for you. You were the best person for the job but the working man is stupid . Don’t feel bad as you are not a puppet like those in office. You are successful business man who is able to think.

#18 Mountain Girl on 10.15.08 at 10:25 am

Chin up, Garth!
Maybe parliament was starting to cramp your style! :)
I think you need a bigger platform now. Our 59% voter turnout shows you that Canadians are listening to politicians less and less. I think your message about economic and environmental responsibility is too important to have to take a back seat to liberal party politics. Or to be censored by the conservative control freak that we just elected back in.
Use the next term of parliament to help us all start asking the right questions. Most of Canada seems to be under the impression that the Conservatives are “good for business” and that no one could have seen this economic meltdown coming. Most of Canada still seems to think that we have to choose between sound environmental policy and sound economic policy. Most of Canada seems to think voting is not something to bother about.
I think we need a strong voice to shake people up and I don’t think it’s going to come from Parliament Hill.
You know how to get a platform and you know the issues inside-out. I sure hope we hear a whole lot more from you!

#19 Chincy on 10.15.08 at 10:38 am

Garth, you can now concentrate on your real talents, getting your message out to the masses without the crap of government holding you back…not that it did before. You have gained many followers here with your straight punch, I plan on reading yur new book.

cheers!

#20 squidly77 on 10.15.08 at 10:39 am

tough luck Garth..glad to see you take it standing up
i hope that you continue to be a very sharp stubborn stone in the political self assuming rights shoe
cheers

#21 dotava on 10.15.08 at 10:41 am

Sad day in Canadian history. Country that don’t need intelligent and open-minded people as you Garth deserve government that we have. On a day when “Steve” start to bail rich on our expenses (like happening south) those who voted for him will be surprised and try to find somebody else to blame – instead they should take a mirror and closely examine which kind of idiot they just looking to.

#22 Popping Bubbles on 10.15.08 at 10:46 am

Garth… I was sorry to see that you’d lost your riding. Personally I think we need more politicians who tell it like it is and question the status quo. Sadly I have to agree that you were left down by the Liberal leadership. So, what comes next for you?

#23 Ed Sager on 10.15.08 at 11:14 am

I’ll look forward to your insights on the economy and real estate, as well as your next book (I bought Greater Fool and have circulated it to our kids and family). There is life outside of the Ottawa snakepit, BTW.

#24 Carsten on 10.15.08 at 11:16 am

This sucks Garth.

#25 confused and a little crazed on 10.15.08 at 11:42 am

hI,

I don’t think there will be a housing boom soon out of the rubble because it has been proven globally…housing does not always go up and there is alot invloved in the upkeep of a house. Realisticly, people will buy actually bars of gold or silver for perceived retention of value from all those poor econ times of the past unless the the meltdown was caused by Gold which isn’t the case this time.
But I do see the resemblence in 9/11 scenario… low interest rates and stock market crash. Are we really that stupid a society to go thru this song and dance again so soon.
However we know there will be another bubble…what that is , I don’t know…maybe just maybe. we will actually do some research and work to find value in a company and invest there or thru innovation whether it is technology or healthcare instead of just digging into the ground and hauling the stuff away to somewhere else.

Let’s face it. that is really not innovation…we are just finding a bigger more expensive shovel.

good luck to all

#26 arthur on 10.15.08 at 11:45 am

Good luck Garth – it’s just an election – you are still you.
Just keep up your work – it’s better than politics anyway

#27 Dave in Calgary on 10.15.08 at 11:48 am

Sorry Garth,

After paying $300 million for an election that no one wanted, that solved nothing, I am keeping my canned goods.

I am willing to spare a tomato if I see Mr. Fixed Election AKA Fuzzy Sweater around Calgary though…

#28 Republic of Western Canada on 10.15.08 at 11:54 am

My sympathies to you, Garth. There’s lots of good people out there who get caught in tough situations, in just about any profession there is. Best thing you can do is keep doing the right thing, and avoid succumbing to the cheap low-lives which outnumber good men 10 to 1.

On a different note, I believe that the populace doesn’t completely forget what they’ve seen or been through in years past, when they go out to buy something or to vote. If someone gets flooded out, they’ll try not to rebuild on low land. If a country gets screwed over by a tax-and-spend southern-Ontario Lie-beral government which tried to steal everyone’s firearms away in a hugely wasteful social pussification scheme, then that party will wither away.

This election was not just about some recent global financial nonsense, nor individual promises made to vested interests on short notice, nor even to the size of advertising budgets used over the last couple of weeks.

It was what the Lie-berals have been doing to Canada for the last quarter century. Finally, people are ‘getting it’. As Preston Manning said yesterday, the graph is going up.

#29 Wolf In Sheeps Clothing on 10.15.08 at 11:55 am

I thought it was strange that you were running as a Liberal BUT at the same time I liked you.

I guess I didn’t know the full story.

I’m sorry to hear this unfortunate set of circumstances. Our country needs leaders like you, my friend.

PS Could the ‘National News’ please change their name to ‘Eastern Canada News’ or ‘Liberal News’? DAMN – they are supposed to be objective journalists. They can’t contain their bias and disappointment over the Liberal defeat.

#30 Wealthy Renter on 10.15.08 at 12:07 pm

Mr. Turner,

I am sorry that you lost your seat. At least you had four members of my family voting for you.

Many weeks ago I asked the question about whether the various means to shore up the banking system would re-ignite the housing bubble in the United States. I asked whether the hundred of billions injected into the system would be lent again to marginal borrowers, and thus blow up the bubble again. It is a legitimate question.

I have gone back to reading the American housing bubble blogs, and there is a counter argument that virtually everything the feds are doing to stabilize the housing crisis will only exacerbate the problem.

The most recent program designed to help distressed borrowers by lowering their principle owed (below current value) is heavily criticized. Bubble blogs are euphemistically calling these kinds programs, “Cramdowns.”

In the best case scenario, it is argued that if you get a cramdown, the bank eats the loss, and the owner’s credit rating is probably toast. The house is still worth less and the owner can’t sell it for a profit, and the home has little to no equity.

In the worse case scenario, it is argued that these programs will cause defaults to skyrocket. If neighbours A &B bought at the same time, and neighbour B finds out that A just had her principle lowered by 20%, it is argued that neighbour A will demand the same treatment. We live in a world of fairness! J To even my Liberal heart, these housing bubble fixes are disaster.

I know this is a simplistic moral hazard argument. However, given the current state of the American economy and the sting of the housing bubble burst, it is hard to see Americans going house crazy until the memory of this event fades in at least a generation

#31 rob on 10.15.08 at 12:17 pm

Garth I would of voted for you if i could. The bottom line is that you are too good for the Liberal party anyway. I laugh at all the criticism that Harper gets but the reality is that the Liberals are one of the most corrupt parties around. They will say anything to get elected and when they come into power they don’t change anything.

#32 Keith in Calgary on 10.15.08 at 12:22 pm

Sorry to hear that you lost your seat Garth.

#33 dude on 10.15.08 at 12:52 pm

Can we PLEASE stop saying things like “Nine Eleven”? What is “Nine Eleven”? Come on. It was an event that took place on the 11th of September in the year 2001. Why don’t we call everything by the dates they happened on? “The aftermath of Nine One saw the creation of the United Nations.” What the hell am I talking about? Good question.

#34 Crikey on 10.15.08 at 12:56 pm

I had hoped that in the wake of all this financial turmoil, that the general populace would be ready to take the troubled honest truth over mellifluous lies concocted to calm their obviously gentle dispositions. Apparently I have greatly overestimated the average Canadian’s ability to act like an adult.

Please don’t lose heart, and know that there are many people out there who respect your honesty and integrity.

#35 supersocco on 10.15.08 at 12:58 pm

You should have run as an independent. 2 other candidate won that way.

#36 BBC on 10.15.08 at 1:16 pm

You gave a good fight….don’t give up faith! I feel that you have helped the Canadian public greatly with your economic insight, and you can continue to do so. Keep up the good work!

Having said that, I know it sucks to lose :(

#37 The Tallyman on 10.15.08 at 1:30 pm

Garth, you were and still are the best person for the job.
And now your hands are no longer tied to a blind political system.
Getting out is going to be the best thing and you’ll see your effectiveness skyrocket.

This blog is going to explode as more people wake up.

Really respect & admire you for taking the road less traveled.

#38 pjwlk on 10.15.08 at 1:41 pm

Garth, sorry to see you lost your seat in Parliament. I truly had hoped that you would have remained the much needed voice for the people.

Remember what doesn’t kill you will only make you stronger…

#39 David on 10.15.08 at 1:47 pm

Electoral calculus can be a funny game with weird results. The lowest voter turnout in Canadian history and Stephen Harper is opposed by 63% of the Canadians that actually bothered to show up at the polls. There is a deficit all right and to paraphrase Noam Chomsky there is a democratic deficit of a diminished public realm.
My riding elected an empty suit Conservative who did not bother to show up at town hall forums, lest he be guilty of thinking for himself in some off moment.
It is worrisome to read about sowing the seeds of another housing bubble. As if there were not enough rotten commercial paper in the fake economy already in circulation.
None of the pressing environmental or financial issues will magically disappear because the great helmsman in a blue sweater managed to produce yet another minority government.
Lightly rests the crown.

#40 pjwlk on 10.15.08 at 1:47 pm

I read an article in the paper yesterday where the author said that her friend who works at a major bank was getting very tired of answering the large number of calls from people who are concerned about their life savings being covered (or not) by the CDIC insurance program. Seems that the panic is becoming more prominent…

#41 dd on 10.15.08 at 1:51 pm

Garth

Do you really think that “we sowing the seeds of the next housing boom, even as we sink faster into the current rubble?”

In other words cheap debt and government spending is going to go forward in a hurry (if at all?)?

#42 Ilargi on 10.15.08 at 1:53 pm

Garth,

I was sorry to hear the news yesterday. Then again, you didn’t seem to belong in your new party either. Let’s hope you find a place to do more, while being able to fully be yourself.

Meanwhile, the chances of a US housing boom are below zero. Kelvin. Ain’t gonna happen.

Ilargi, The Automatic Earth

#43 Peter on 10.15.08 at 1:55 pm

Sorry to hear Garth, our democracy is the lesser for your loss – whether or not Canadians agree with you.

Any documentary makers out there need an idea? How about: No Country for Bold Men

#44 Andrew toronto on 10.15.08 at 2:31 pm

Garth , Sorry to see the results.. Some people don’t know when they have a good thing .. You’ve done well in preparing us .. And we hope you continue .. there is a real need for the truth to be told and you have not been afraid . As the storm approaches the canadian border most canadians are as ill prepared as our American cousins where… until it to late.. think of all the good you do ,it’s what matters in the End.

#45 zloy on 10.15.08 at 3:12 pm

With a leader like Dion, your personal and party loss was inevitable. Stick to RE work that you seem to know better than politics, you’ll get more respect for that.

#46 Steve on 10.15.08 at 3:17 pm

Sorry to read about losing your seat in Parliament.Our country needs strong voices like you.

Thanks for all you do Garth.
You make a difference

#47 Andrew toronto on 10.15.08 at 3:26 pm

by Mr. Klump. the realestae expert has spoken I guess will see.. if they go down

http://www.financialpost.com/news/story.html?id=882383

Existing home prices in the country’s largest markets fell for the fourth straight month in September but the Canadian Real Estate Association said on Wednesday that the market is beginning to stabilize.

The average price of a home sold in September was $315,461, down from $336,321 a year earlier, for a 6.2% year-over-year decline. In June, home prices fell for the first time in almost a decade and the trend seems to be continuing.

After a 0.4% year-over-year decline in June, prices fell 3.6% in July and then 5.1% August.

Despite that trend, Ottawa-based CREA said the number of properties being listed via the MLS in Canada’s major markets is in decline and causing the numbers of sales to new listings to tighten. There were 146,637 new listings in the third quarter, a 3.3% decline from the all-time high set in the second quarter.

“Informed buyers and informed sellers look at the facts. And the facts right now indicate the real estate market is stabilizing in many markets,” said Calvin Lindberg, president of CREA.

The trend of the decline in new listings is most prevalent in Alberta’s largest cities, said CREA. New listings in Calgary were off 11.7% from a year ago in September and Edmonton new listings were down 19.8% during the same period.

The drop in new supply in both Alberta cities did not stop prices from falling. The average sale price of a home in Calgary last month was $390,599, a 6% decline from a year earlier. Edmonton home prices fell 5.6% from a year earlier.

The Vancouver market, the most expensive in the country, continues to skew the overall Canadian number. Greater Vancouver housing sales were down 43.2% in September from a year earlier, while the average sale price dropped 8% to $535,598 over the last year.

Prices are still rising in 17 of the 25 markets surveyed by CREA. Sales were down from a year earlier in nine of the 25 major markets.

“Price decline in some of Canada’s more expensive housing markets will outweigh further price gains in other markets and continue pulling the national average price lower over the rest of the year and into 2009,” said Greg Klump, chief economist with CREA.

Mr. Klump said as the Canadian market continues to cool, house will stay on the market longer. But he said Canadian sellers are not under financial duress to sell so many will just pull their homes off the market if they don’t get their price and that will result in a continuing decline in listings.

“Canadian homebuyers should not expect to see the kind of price correction that’s underway in the U.S. where overly indebted homeowners are selling into a housing market where foreclosures and the number of newly constructed unoccupied homes are increasing,” said Mr. Klump.

#48 U.B.A.B. on 10.15.08 at 3:30 pm

My whole family was devastated watching the results last night on CBC. We living in Brampton – but rooting for you all the way!

We have come to depend on you for Real Estate Insight and Dan McTeague for Gas Prices – both of you have saved our family thousands and thousands of dollars … an opportunity cost un-imaginable.

We hope you run again – and win! …Perhaps in a re-distributed Halton seat that may change in/by 2011.

#49 Jelly on 10.15.08 at 3:31 pm

What a true shame Garth.
It must be hard to see this right now as you must put a lot of blood, sweat, and tears into your political career but it is a compliment not to be considered part of such a conspiratorial, two-faced, bunch of greedy boneheads. You have integrity, a lot of us believe this.
You are one of those that help people instead of harm people in this world. It is obvious which group Harper and the rest of them belong to.
I hope you make a killing on your books,
I am going to buy a couple more.
I have written excellent reviews of your books on Chapters websites as they are interesting and not the typical dry reads of other real estate books.
Hold your head high Garth, there are not many of us
that are as brave as you.
Stuff them, just do public speaking around the world instead of having to interact with such grey faced, evil losers. Count yourself lucky.

All the best to you and your family…

#50 Rajma on 10.15.08 at 3:31 pm

Really sad that you lost. Loved your Greater Fool book. If it is any consolation, I paid full retail on the book and love your blog. Keep up the good fight. You made the right call on the Economy and Real Estate when the whole world was partying like there is no tomorrow. That takes great courage.

#51 rant in Calgary on 10.15.08 at 4:28 pm

Your loss, Canada gains!

#52 Lawrence on 10.15.08 at 4:36 pm

Garth;

From henceforth, you are free to opine as much as the next person without the burden of political responsibilities. Enjoy expressing your own point of view!!

Canada has faired remarkably well and your pronouncements of doom and gloom were excessive. Correction, sure no problem. Corrections are what allows people to time the market and make money on real estate.

Something akin to the US capitulation?? Not a chance. By comparing Canadians to the US, you tainted us with the greed and corruption that has dissimated the US markets.

While you were an MP you represented Canadians in our Parliament and there was a need to cast at least a respectful glance in the direction of Canadian distinctives and Canadian prudence.

Interesting thoughts regarding the US real estate market, though. It may have bottomed. A flight to safety may mean a flight out of bonds, stocks, and all things that are not “real”. The financial services industry, as we know it, has shot itself in both feet and probably the knees as well – crippled by a lack of credibility and prudence and overcome by greed and self-service.

You can’t trust someone who can’t warn about a train wreck coming head-on. The number of “shocked, stunned, and dismayed” financial advisors is itself insulting. We have been “well conditioned” by the industry to trust them with our life’s savings. May it never happen again.

I sold my Winnipeg property in September and made a tidy profit after five years. Now it is time to wait for a chance for something in Calgary. Dropping oil and gas prices means that we are going to see great distress in the condo market in the next twelve months.

The US market has already turned around for the Canadian investor due to the steep decline of our currency. Early spring 2008 was the best entry point.

Good luck with your future endeavors, Garth. Keep us posted on your latest theories. I hope the transformation is not so radical that I see you on Channel 81 with ads about how to buy a house in the US for a dollar :)

#53 Mark Rainer on 10.15.08 at 4:41 pm

Hey man. Politics sucks anyway. I didn’t even vote because I feel that all leaders are incompetent boobs. I’ll vote when I see a vibrant 30 something come into the leadership role of a political party.

How many MP’s/Politicians use technology to help the people in Canada? How many Canadians use technology to make their lives easier?

Garth. Your new job is web media mogul and property expert! Kick ass! That’s better than MP. Now you are truly going to connect with the people.

Anyway good luck in future endeavors! You’ll do fine. You predicted the housing bust in Canada. It’s still going down… :)

#54 rant in Calgary on 10.15.08 at 4:49 pm

Hopefully you will have more time for the people. The “Greater Fool” has helped more Canadians than you battling the establishment.
I’m sorry you lost, but more Conservatives, Libs, NDPs, Greens… across the Country will gain from your insights.
Book tour?

#55 dd on 10.15.08 at 5:13 pm

No recession in Canada … can you believe these guys?

http://www.reportonbusiness.com/servlet/story/RTGAM.20081015.wconfboard1015/BNStory/Business/home?cid=al_gam_mostview

#56 David on 10.15.08 at 5:30 pm

Canadians of all political persuasions have stopped giving a shit about this country. The less one cares, the more the criminal classes get a free run. This is exactly what happened south of the border and the contagion is spreading north. When everything is removed from the public realm there is nothing to debate and voting itself becomes a meaningless act. The state should step aside only until the market totally fails and requires recapitalisation. This is what is happening now.

#57 Me on 10.15.08 at 5:32 pm

Wow- the first comment really threw me- “Bob Edwards”. I always knew the Conservatives had a racist following, but I assumed they tried to hide it a little better.

#58 Mike.Slob. on 10.15.08 at 5:36 pm

Garth!
Don’t worry,after 2 years will be another election.
Depression is comming.
However you are the best

#59 anon - GTA on 10.15.08 at 5:56 pm

Sorry to hear you lost Garth. This is not good for our democracy…

http://www.financialpost.com/news/story.html?id=879937

Key message from this article for Canadian banks: “more than 20% of the home loans they have negotiated have become unprofitable”

This is just *AS OF YET* !!!

We are living in intersting times…

#60 unbalanced on 10.15.08 at 6:10 pm

Just remember Garth. When the going gets tuff — the tuff get going. Keep in up. You have many followers here. Thanks again and keep the TRUTH coming.

#61 if you don't like it on 10.15.08 at 6:55 pm

Maybe with someone else leading the Liberals (maybe someone that can speak English), and maybe some commercials with actual info instead of Harper bashings you guys might of had a chance.

Good luck with your next book

#62 Downsized and Delighted on 10.15.08 at 7:13 pm

I’m afraid I voted conservative last night – but I’m not in your riding. I can’t understand a word Dion says, and I’m always suspicious when people try to tell me how “smart” he is….that would usually be self-evident wouldn’t it?

Since the democrats are a shoe-in in the U.S., I don’t have to worry about Harper following them into battle in Iran or Pakistan, or North Korea….. And, with the financial meltdown I was more concerned about fiscal responsibility than paying a new Carbon tax. The conservatives brought in the GST and free trade, and the Liberals gladly benefitted from all that GST money, even though they won on the promise of getting rid of it.

But I am a liberal at heart. It killed me to vote conservative last night. If I didn’t hate BOTH the liberal party leader AND the Liberal candidate for my riding (Miss South), I would have voted liberal again.

Sorry you lost Garth, but P L E A S E get a decent party leader like Bob Rae, or Ignatieff. It sure doesn’t say much about the liberal party that they would pick a leader like Stephan Dion.

#63 3rdman on 10.15.08 at 7:24 pm

Thanks Quebec for blowing Harper’s dozen.

His objective was a majority he didn’t win. He’s back @ square one less several $ million in OUR taxpayers.

Garth the professor was a hard sell. Your books do better…

Toronto Port Authority (Fed woman). Hmm what’s that?
A tad of seasonal yachting, the odd freighter? A week of an air show? Welcome woman to the great unwashed of Halton – bring plenty of Deepwoods Off!

#64 greaterfooled on 10.15.08 at 7:37 pm

tough loss, but you didn’t fit the Dion mold anyway.

about your book, i bought a copy and now i’m the greaterfool. it wasn’t worth the money $ 21.95 plus taxes..ouch!
…too much redundancy, redundancy, repeat, repeat, redundancy, repeat…. wasn’t a good read at all. how many times can you say “houses are illiquid” “heartache” “climate change”….ummm let’s see. maybe every 20+ pages or so.

and what does cliamte change have to do with house prices? you didn’t connect the dots very well. reading too much Chaos Theory perhaps?

adios, amigo a fool, like me, and his money are soon departed :(

#65 $fromA$ia on 10.15.08 at 7:50 pm

#1 commenter is a Mulroney Fascist.

Sorry Garth, looks like the Conservatives prolonged the the financial stupidy before times get really tough here in Canada, then the Conservatives won’t be so popular.

#66 John Burgoyne on 10.15.08 at 7:53 pm

A sad day for Canadian politics. There will always be pathetic morons like “Bob Edwards” among us, but there are also a good number of people who appreciate the unvarnished truth.

#67 Rob on 10.15.08 at 7:56 pm

Garth, sorry you lost that one, but it won’t be the first time a true patriot has been pushed aside in this country. It amazes me how many boobs willingly sold their freedom and their country to fight the phantom carbon tax. Harper now has a green light to bargain away our sovereignty and the future of our children to the libertarian “cabal”. Watch for more creeping de-regulation and disentitlement. It seems a little ironic that the only hope that progressive Canadians have is in Gilles Duceppes hands. Would that he were able to see beyond Quebec’s narrow self interest to the common good of all the people north of the 49th. Unfortunately I’m greatly afraid that the Cons have us trapped in a faustian bargain; Harper is now free to carry out any policy in the rest of Canada as long as Duceppes can manage Quebec. And that is the Jack Layton legacy… What a world. Buckle up folks, we’re in for one heck of a ride.

#68 dotava on 10.15.08 at 7:56 pm

#62 greaterfooled on 10.15.08 at 7:37 pm

Reading the book is not just recognizing the letters and words – point of reading is understand the message.

#69 Peter on 10.15.08 at 8:00 pm

Garth, we know Ontario has hit the FAN closer and closer so thats why many people in Ontario has switch from Conservatives to Liberals..but the west and the prairies people still think their real estate, oil and gas still HOT so they all think all is fine and so the economy DID NOT hit the fan yet so thats why those people vote for conservatives once again !!! I will be happy to see when something hits the fan canada wide in 2009 and 2010 including the people out west and I will be delighted to see how will conservatives saves them by what and what can they do to prop up the economy…I hope they dont follow the footsteps of the fella down south when they think printing more money and bailout does make sense…

#70 OntarioHouse on 10.15.08 at 8:59 pm

Garth. I was so sad when I heard the results last night. I even had trouble falling asleep. You are a smart man and I love reading your blog.
You and your wife should now go on a nice vacation together. You deserve it.
I hope to hear more from you in the future and I wish you all the best!

#71 Kelowna Gal on 10.15.08 at 9:14 pm

To # 60 When describing Dion you made me laugh because I realized that from the beginning I too could not UNDERSTAND a word he said. He was the wrong leader.

Sorry that you did not get re-elected Garth. The Green tax was just too much. That being said I will still read your blogs, etc. and I cannot wait until your new book comes out. I have bought everyone of your books and I have even bought extras to pass on to my family and friends. You have a voice and we need your insight. Keep posting, writing and doing conferences, etc. It would be fabulous if you could come back to Kelowna. We NEED to hear your opinion here. Kelowna is on a slippery slope. I read your last blog and Rene was 100%+++++ correct. There is NOTHING here anymore for families. It’s all wine tours, condos, time shares, etc….. The developers have completely ruined this city. I guess that no one has taken the time to look into what happened to the town of Canmore, Alberta and in the States Aspen, Colorado. Only the wealthy are now able to live in these places. You predicted that the housing market would slow down in Kelowna the last time you were here and they just laughed at you after you left. You were right and some of us knew it and didn’t jump into the buying frenzy. Thank you Garth. We almost bought when the market here was at the top of the bubble. Can’t wait to get your next book. Can you give us a hint????? It would be good if you could come and speak in Kelowna and share some of your insight as to where you think we are headed. Something that is needed because there are still many people here who think that this is only a minor blip in the overall trend. Thanks for speaking the truth Garth.

#72 nonplused on 10.15.08 at 9:22 pm

Hey, on the subject of a financial 9-11…

I think I agree with Garth that the market collapse will have 9-11 like consequences. But not another housing bubble. I’m thinking more like the Patriot Acts 1&2. In the future, new legislation will mean you won’t be able to use a bank machine unless you have a passport and can state what the cash is for, all cash will be RFI encoded, gold will be illegal for private individuals to own, and there will be price controls (followed by shortages) on every major commodity. Not to mention capital controls and “telecom spy program” like monitoring of every financial transaction.

After 9-11 people were scared senseless for their security so new legislation was passed to deprive all American citizens of physical protection from the state (for your own good of course, so the terrorists aren’t protected either). This event (the Paulson massacre) could lead to legislation to deprive all Americans of financial protection from the state as well. One more staged event on the long march to 1984.

#73 Sylvia in Vancouver on 10.15.08 at 11:36 pm

Bloody hell… Hate hearing when the good ones get shot down. No matter what you end up doing, Garth, keep smacking us upside the head with the truth. If you don’t, no one will.

Halton doesn’t deserve ya.

#74 The Tallyman on 10.16.08 at 12:02 am

#70 nonplused said:
” I think I agree with Garth that the market collapse will have 9-11 like consequences. But not another housing bubble. I’m thinking more like the Patriot Acts 1&2. In the future, new legislation will mean you won’t be able to use a bank machine unless you have a passport and can state what the cash is for”
————————

This kind of thing is not that far fetched
and is already being used.

Canada’s govt has recently created FINTRAC to ahem.. monitor the sheep, er… I mean, fight terrorism and money laundering.

http://www.fintrac-canafe.gc.ca/intro-eng.asp

To me it looks like big brother is already tracking everyones transactions not just the “supposed criminals”

Any suspicious activity like withdrawing 10k of your own money gets reported. (Only a terrorist would take money from a poor cash strapped banker)

Makes one paranoid to go and withdraw their own money.

Watch out!
FINTRAC is a major step in the destruction of freedom in Canada.

ENJOY the new ankle bracelet citizens.

#75 observer on 10.16.08 at 12:20 am

Garth,
We’ve all heard the old line “be careful what you wish for”. Harper thought he was smart calling an early election by trying to beat the downturn. Problem is he will have absolutley no one to blame. I think had you gotten in somehow you too would have become part of the blame. It will be interesting to see how the elected officials will explain the coming storm. Next time around will give you a clear entry path. Please Garth, don’t stop what you’ve started. You’ve helped many not only here but through your publications as well. You are helping the average joe, and isn’t that what politicians should be doing?
A big heart felt thank you Garth.

#76 charliegosurf on 10.16.08 at 12:29 am

Justin Trudeau is your answer,le nouveau duce

#77 cmh on 10.16.08 at 1:21 am

Garth,
I am sorry for your loss. Keep in mind what Albert Einstein said “Great spirits have always encountered violent opposition from mediocre minds”.

#78 David on 10.16.08 at 1:28 am

Garth, I say hold your head high. You made the mistake of being right at the wrong time. The Federal government is now quietly buying up mortgage assets. Harper decided that Stephan Dion’s ideas about taking a new financial direction for Canada are not so bad after all. The “Alberta Miracle” is fast coming to an end. Fixing a hollowed out manufacturing sector will require significant effort and real dollars. Even worse Canada’s principal trading partner is bankrupting itself bailing out irresponsible Wall Street speculators.
People are scared witless about the housing and financial collapse.

#79 islander on 10.16.08 at 2:32 am

@Me #56 and $fromA$ia: Scoreboard. Losers.

A Calgary ripoff: Any time you want to leave Alberta, you go right ahead. Whiner.

#80 Kash is King on 10.16.08 at 7:23 am

Anybody else notice something REALLY strange?

Did you see how quickly Danny Williams dropped his battle against Harper? Kinda like someone just tapped his shoulder and pointed out the freight train barrelling down on him. I wonder if Harper had to bite his tongue while the election was on, then once PM again, was able to give Williams a heads-up?

What the fark is coming?

Going back to what I mentioned before about “mortgage clerks” and the need for stronger loans underwriting… here’s an interesting page on a Canadian mortgage brokerage website. Looks like they are trying to attract mortgage brokers for western Canada.
It would appear compensation partly is “volume bonus” based, and fees for “mortgage insurance” referrals. Somebody correct me if I’m wrong.

If you read between the lines…. does it look like mortgage brokers are now having difficulty with deals being killed by mortgage insurers? (hmmmm what about AIG ? lol ) Again, my opinion and I could be wrong.

http://homenwork.com/mortgage-broker-careers.html

#81 Missed The Boat on 10.16.08 at 8:29 am

I’m sorry that you didn’t get in Garth, but Dion and the green shift plan were hard for people to understand. Although I had no problem with either.

But, you know, in a year or two we will be back at it and you will have your day then.

Cheers!

#82 Missed The Boat on 10.16.08 at 8:31 am

Excerpt from the Toronto Star

Fall in house prices broadens, deepens

http://www.thestar.com/business/article/518213

“Price declines appear to be broadening as well as deepening nationally,” Merrill Lynch economist David Wolf said in an economic note. “We remain of the view that Canada’s housing market is unlikely to collapse in the same way that we’ve seen in the U.S. and the U.K., but that it is likely to continue to trend weaker than the consensus believes and that the risk of an outright bust cannot be dismissed.”

#83 Kestral on 10.16.08 at 9:00 am

Justin Trudeau, other than being a former PM’s child, has zero qualifications to lead. Nepotism isn’t going to fix this country.

#84 smwhite on 10.16.08 at 10:04 am

#70 nonpulsed

Have you seen Naomi Wolf’s take on the financial crisis?

http://www.youtube.com/watch?v=VFYMHJ5uriQ

#85 U.B.A.B. on 10.16.08 at 11:20 am

Gerard Kennedy is Canada’s Obama !

#86 Housing Bear on 10.16.08 at 11:37 am

Garth:

What made you join the Liberals? In my mind, you would have won if you had gone as an Independent candidate.

As a detached observer, I think the miscalculation you made was joining the Liberal caucus. Why did you need to join another big party? Is more funding available if you are affiliated with a major party? Just curious.

HB

#87 dd on 10.16.08 at 1:04 pm

14 Calgary_rip_off,

It looks like credit is starting to ease not get worse. With the BOC and World Banking system lowering interest rates there is a clear message … spend.

Governments do not want to face 20 – 30% unemployment world wide. They know that if this happens there will be riots in the streets.

If things get worse long-term look for a big public spend policy in the months to come. Governments are not dragging their feet like the 1930’s in response (orf course they were sleeping at the wheel to allow this to happen).

Goverments are looking for way to re-inflate the economy. They might succeed. However, higher taxes, higher inflation, and lower long-term growth will result.

#88 Jelly on 10.16.08 at 1:26 pm

Bob Edwards (Re: #1 Vile Post)

You are a true jackass and loser yourself.

You are most certainly threatened by Garth

because your job depends on him shutting up.

Get a life,

read the posts, Garth is loved by many,

your thoughts mean nothing.

BTW, you sound like your a young kid

teasing someone, dork.

#89 Noz on 10.16.08 at 2:19 pm

BOB EDWARDS:

.You lost, because honest people were tired of listening to your vile attacks on the Conservatives. Nobody likes a TURNCOAT and eventually it caught up to you. Your crooked Liberals also lost more than 20% of their seats while the conservatives gained more than 10%. LIEberal support is mainly 3 high immigration cites Toront, Vancouver, Montreal. Canadians don’t want Liberals any longer . Personally I’m glad you are gone LOSER
People do not trust Liberals any longer, and Bob Rae the next leader HA HA HA REA DAYS again?

Your head is stuck up your ass so far that you can’t even figure out the consequences of a Bushlike government in your country. What a shame.

It’s not that Canadians don’t want liberals anymore, it’s fascists like you who don’t want liberals anymore.

Your country, sadly, like our own down south, is…in one word…screwed. Enjoy the ride.

#90 Noz on 10.16.08 at 2:23 pm

Can we PLEASE stop saying things like “Nine Eleven”? What is “Nine Eleven”? Come on. It was an event that took place on the 11th of September in the year 2001. Why don’t we call everything by the dates they happened on? “The aftermath of Nine One saw the creation of the United Nations.” What the hell am I talking about? Good question.

There’s a reason why they call it 9/11 and it happened that day…it’s no coincidence it happened on that day. And believe me, Al Quada didn’t think that far ahead.

#91 Noz on 10.16.08 at 2:27 pm

Canadians have as much corruption in their government as we do down here…it’s just that no one wants to admit it. Particularly with wackos like Edwards….

Boy you guys have your work cut out for you.

#92 Andrew toronto on 10.16.08 at 3:36 pm

Looking at history ,,the last time we had a banking crisis, it was followed by a bond market crash .. I wonder if this is what could next to come, has many have fled the market to go into bonds thinking there safe..

While All the bailouts and “recapitalization” plans of the Treasury and the FED are highly inflationary and require issuing massive amounts of Treasury debt. The bond vigilantes are waking up. They are going to dump bonds like they have gone out of style. Bond prices could drop like a stone general equities will drop more and the dollar will nose dive.

considering the bond market is the biggest in the world . this could get really ugly

#93 ted on 10.16.08 at 5:25 pm

NOZ I think you are oversimplying the problem here and in your own country. I do not care to go into details, I just want to make a point. The problems with the US are not a result of Bush. The problems are sytemic and will still be there no matter who gets in, Obaman and McCain. The Economy of the last two decades has been based on fraud. Clinton was no better. Remember the dotcom bubble. The real estate bubble was just a continuation. The US and most of the rest of the western countries have been living on debt for too long. We have rewarded crooks in both business and government for too long. And as for war Clinton was no better. Remember the trampling of international law when the US targeted civilians and the chinese embassy in yugoslavia. Or the starving of Iraqis. This problem isn’t a republican one. It is a problem that can only go away if people stop rooting for a side and start being honest about how things work.

#94 jose on 10.16.08 at 5:33 pm

I am sorry to hear that people can be so blind. Anyone with an opinion of their own however different from ours deserves listenning to. I agree with you about the signs of the times. Oh well I guess we only learn the hard way. Good luck.

#95 Jmack on 10.16.08 at 7:09 pm

Oil at $74 per barrel. No problems for the oilsands. 2 large tower projects stopped on the Westcoast. No problems in Vancouver- “the recession will not affect us”

#96 dd on 10.16.08 at 7:13 pm

90 Andrew toronto,

How is the best way to view the bond market? IE TSX for stocks. Is there something for bonds?

#97 eddy on 10.16.08 at 8:55 pm

garth, i offer condolences and congratulations. why not move to 416? liberals are big winners all over TO . this is a good city to mount your comeback

#98 Derrin on 10.16.08 at 9:48 pm

Hello
The bubble is gone. With the amount of cash being injected watch inflation sky rocket. On with the new bigger bubble. Enjoy the ride. It’s being going on for awhile. Garth’s new book will be sell your house and put all your money into the market. Oh…..sorry I think he has already played that tune!

#99 dd on 10.16.08 at 9:56 pm

Sprott … a good read

http://www.sprott.com/pdf/marketsataglance/04-2008.pdf

#100 anonymous on 10.17.08 at 12:05 am

Derrin,

I was thinking about the next bubble.

1. Bubbles don’t repeat themselves for about 15-20 years.

2. Nobody seems to suspect them.

So here’s my list:

a. Video Game Companies, as I think people purchase video games regardless of the economy and we are in a bull market in the industry. (Disclosure: I’m long ATVI).

b. Treasuries. There’s a record amount of people moving into cash, that has to have concequences when they all panic out again. We don’t know what to expect.

c. High yield / recession-proof stocks. Heinz, Kraft, P&G, JNJ, etc. Kind of obvious, though…

d. Some ‘new’ so-called safe product… ala ABCP or some form of insured-return stock or bond. Maybe it will be a stock with a put-option as part of the product… I really don’t know. But it will be bullshit anyway.

Safety and recession-proofing will be the next place people put their money.

But it needs a good story.
Remember these golden oldies?

Tech Bubble – It’s the “new” economy.
Housing Bubble – It’s a hard asset that you can live in.
Oil Bubble – Peak Oil. Bullshit “research”.
Commodity Bubble – We are teaching China and India how to eat food. Again all bullshit.

Add your own!

#101 Jelly on 10.17.08 at 12:07 am

Noz,

I am beginning to like you more and more…

#102 charliegosurf on 10.17.08 at 3:05 am

@ kestral, ref; Canadien royalty

maybe the first qualification to get the job would be a deputy for Papineau the riding name after his great great grand father, the patriot LOUIS-JOSEPH.

common, it’s a feat now, its like the Kennedy in the usa, he is a pure bread politic horse, nobody can argue this, watch Mckenna come in and salvage the mess, somedy else maybe, in 4yr he can become minister, (the blog dpt lol)

whats wrong with inexperience anyway, when yur great yu are no matter what, anyhow yure probably a leafs fan or asens, yu guys always have that hope of better things but cant commit to it in desire. Go Habs Go 1 0 0

#103 charliegosurf on 10.17.08 at 3:37 am

oh yeah, if yud choose people for theit stats always,NONDEPOTISM to use yur terms, yud be listening to yur brain so much, end up like all these people in the world concerned about the economics, it’that reasoning that cause allthis speculation evrwer, lol

to win yu need GUTS, GUTFEELING is the answer to lots of things, cant explain yu why…yu need Honor, Honesty, abit like Garth that sticks to his gun, gets thrown out of the saloon, but guess what, “if it works, if i succeed, at least it will be what i believe,”

lots of times yu need Luck, and the liberals spoiled their luck, in a lavishing way, they desrve wat they get now, anybody could admit that too, with time the pc will do the same, the book is alreadyprint…gottagocatchthenextsethangten

#104 dd on 10.17.08 at 8:17 am

#93 Jmack,

Recent q2 data from Suncor = breakeven @ $50 a barrel operating costs
Year to date = breakeven @ $35 a barrel operating costs

#105 dd on 10.17.08 at 8:20 am

Venezuela’s oil output slumps under Hugo Chavez

http://www.telegraph.co.uk/news/worldnews/southamerica/venezuela/3183417/Venezuelas-oil-output-slumps-under-Hugo-Chavez.html

#106 Just another Joe on 10.17.08 at 10:05 am

dd:
Sprott is a good reading. And it also shows how fast the information could be outdated. It was quite relevant few months ago. These theories are good for a period of time. Now the oil is below 75$/barrel. Who knows what future brings?

#107 smwhite on 10.17.08 at 10:21 am

The conservatives and bankers are telling us one thing and their actions another.

http://www.financialpost.com/story.html?id=886453

If Canadian financial institutions are so safe, why all the tinkering and rule changing?

By keeping the gambling by the banks off the books it will make their “numbers” appear prettier, so when do we get to hear about the losses, or do we, just sweep it all under the rug.

How scary is it that these institutions have no idea what they bought to the point the either (A) can’t report properly or (B) are scared too.

If the Canadian financial institution is so safe and secure the leave them be and let the markets work; or let a couple of them flail around in the wind for a while, instead we have Flaherty running with the toilet paper to collect the last “hanger” off the banks respective dirty asses.

Heard Don Drummond on Ottawa CFRA radio today, he basically stated that yes, the Canadian banks have better capitalization and that because of the financial status of Canada and no deficit, that Canada is in better position then most countries.

HOWEVER, he also said that (Canadian Banks) lining up for a 100m race against a bunch of tortoises(World Banks) isn’t a fair comparison, expect a recession… Even BMO is finally fessing up…

http://ca.news.finance.yahoo.com/s/16102008/6/finance-canada-economy-headed-recession-bmo-forecasts.html

Whats CIBC predicting, not even predicting a global recession…

http://network.nationalpost.com/np/blogs/tradingdesk/archive/2008/10/09/tsx-to-hit-12-000-by-end-of-2009-cibc-quot-s-rubin-says.aspx

Looks like Rubin figures for a 2003 type recovery next year, wishful thinking as CIBC has the largest exposure to liar loans in the USA? I guess when the tax payers around the world are picking up the tab for the banks things are always looking up.

#108 gold is money on 10.17.08 at 11:39 am

Good evening Ladies and Gentlemen;
The cartel are getting extremely desperate as they whacked gold and silver pretty good today.
Gold fell by 34 dollars to 801.60 and silver fell badly by 54 cents to 9.64.
In economic news the following are very newsworthy:
Industrial production fell a whopping 2.8% last month. It is the biggest fall in over 34 years.
2. The Philadelphia Fed. Factory Index fell big time down to a negative 37.5 from a positive 3.8 in Sept. Remember yesterday, the Empire index for the NY area was disastrous. You can safely say that manufacturing in the Philly area is dead.
3, Libor dropped slightly to 4.5% as banks did not want to lend. It is ironic that Government leaders around the world are forcing banks to take money for equity. Banks are still going to the Fed and other central banks for cash. However they refuse to lend. Maybe it is because there is nobody to lend to.
4. The Dow zoomed up 400 points today on rumours of another ½ point cut in the Fed Funds rate. I thought we would get it today with the Dow plummeting. It was rescued so the ½ point was temporarily shelved until the next Dow bombing.
5. The Fed announced its TAF auction on cash needed. A record 101 billion dollars was forked over. Here is the passage:
Just watching breaking news on Bloomberg that FED discount window lending today Oct 15 was a RECORD 101 B$. The AIG loan drawdown had gone to 84B$ from 70B$. end.
Take a look at the AIG drawdown: it has now surpassed the 84 billion dollar mark and we haven’t got to any payments on the Collaterized Debt Swaps yet. You can bet that AIG is going to cost the Fed in excess of 1 Trillion dollars.
6. The biggest news was the release of the TIC. This data gets no fanfare yet it is the most important data. I will highlight the passage to you and then explain:
09:00 Aug net overall capital outflow ($0.4B) vs. revised Jul outflow of $33.6B
Net long-term TIC flows $14.0B vs. revised $8.6B inflow in Jul.
* * * * *
US net capital outflows ease to $400 million in August

NEW YORK, Oct 16 (Reuters) – Net overall flows of capital out of the United States eased to $400 million in August from a revised outflow of $33.6 billion in July, the Treasury Department said on Thursday.

The department originally reported outflows of $74.8 billion.

Net long-term capital inflows excluding swaps were $14 billion in August, up from a revised $8.6 billion inflow the previous month. The department initially reported outflows of $8.2 billion. End
You will note that instead of the necessary 60 billion dollar inflow there was an outflow of 400 million. This is deadly to the usa.
The usa is now projected to have a deficit of 2 trillion dollars this year. If you divide by 365 days, one gets 6 billion dollars per day or 180 billion dollars per month of foreign money is needed to fund the deficit. If they do not get it, then they print it. This is the inflationary part and is very deadly to the usa.
We now have the banks, refusing to lend which is the debt deflationary spiral coming head long against the printing of dollars to fund the deficit.
This hyperinflationary depression will be worse than the Weimar of 1923 and the Credit Squeeze Depression of 1931.
7. Home building sentiment fell to record lows last month. The Wells Fargo index fell another 3 points to 14. Last month it was 17. Any reading below 50 means more builders view the building scene as unfavourable to favourable.
8. This is not good at all:
20:55 Hedge fund withdrawals surge to $43B in September – FT
The FT cites data from TrimTabs Investment Research. The paper notes that the $2T hedge fund industry has experienced outflows during only a handful of months previously. Of interest, JPMorgan has estimated that hedge fund outflows could total up to $150B over the coming year, a dynamic that would lead to sales of about $400B when considering the industry’s use of leverage.
Reference Link (subscription required end
9. This is very serious. The Baltic dry goods index fell again last month.
Here is the passage:
Shipping Lines Say Tight Credit Cutting World Trade
Oct. 15 (Bloomberg) — Pacific Basin Shipping Ltd., Hong Kong’s biggest dry-bulk carrier, and Precious Shipping Pcl. said demand for moving coal, iron ore and other commodities will fall because banks are guaranteeing fewer loads.
“Letters of credit and the credit lines for trade currently are frozen,’ Khalid Hashim, managing director of Precious Shipping, Thailand’s second-largest shipping company, said in Singapore yesterday. “Nothing is moving because the trader doesn’t want to take the risk of putting cargo on the boat and finding that nobody can pay.’
Ships are not carrying any goods across the ocean.
10. Iceland`s default is playing havoc to the Collaterized Debt Swaps. Here is the passage:
CDOs Imperiled by Collapse of Iceland Banks, S&P Says

Oct. 16 (Bloomberg) — Iceland’s collapsed banks pose a “substantial’ risk to collateralized debt obligations that made bets on corporate debt, according to Standard & Poor’s.

Kaupthing Bank hf, Landsbanki Islands hf and Glitnir Bank hf were included in 376 CDOs worldwide, S&P said. Another 297 made bets on two of the three banks. The CDOs packaged credit-default swaps that pay investors if there is a default, and the government’s placement of the banks into receivership triggered a settlement of the contracts.

Because the so-called synthetic CDOs also bet on Lehman Brothers Holdings Inc., which filed for bankruptcy on Sept. 15, and Washington Mutual Inc., the bankrupt holding company of the largest U.S. lender to fail, the “impact of these exposures is likely to be significant,’ S&P said in the statement yesterday.

KBC Group NV, Belgium’s biggest financial-services company by market value, yesterday wrote down 1.6 billion euros ($2.15 billion) on its CDOs. Moody’s Investors Service said Oct. 14 that it’s reviewing 2.88 billion euros of the Brussels-based lenders’ five CDOs linked to Icelandic banks.

Iceland’s bank regulator took control of the country’s three biggest lenders last week when they couldn’t secure short-term funding on their about $61 billion of debt. The nation’s benchmark stock index plunged 77 percent on Oct. 14, the biggest decline on record, after trading resumed following a three-day suspension.

Iceland Default Swaps

The cost of hedging against default by the Icelandic government has soared to 948 basis points, according to CMA Datavision prices for credit-default swaps. That means it costs 948,000 euros a year to insure 10 million euros of debt for five years. It compares with 118 basis points for the Czech Republic and 238 basis points for Morocco.

Sellers of credit-default swap protection must pay the buyer face value in exchange for the underlying securities or the cash equivalent after a bankruptcy filing…
-END-
10. The treasury was busy today. They auctioned off 194 billion in treasuries.
If this continues they will need 10 trillion dollars per year.

#109 kabloona on 10.17.08 at 12:04 pm

Anybody watch the CBC last night? It was like a visit to la-la land as they examined “what to do in Hard Times”. Patti Croft and some bald Guy from one of the banks was saying how we *might* tip into a mild recession next year…but it will all be over by the 4th quarter of 2009…..A-HA-HA-HA-HA!!

I’m fairly optimistic about the future, but gimme a break….this will be the harshest US consumer-led recession in two decades, but somehow we will only suffer a mild economic pullback? geez….

#110 nonplused on 10.17.08 at 12:27 pm

#82 smwhite

Yes, she paints a pretty scary picture! It sounds far fetched on the one hand, but seems eerily realistic on the other.

#111 Interesting Times on 10.17.08 at 1:19 pm

http://www.contraryinvestorscafe.com/broadcast.php?media=141

#112 CinToronto on 10.17.08 at 1:40 pm

smwhite: Thanks for the link to the FP article. I know that they have been talking about this for a few weeks (particularly when the CIBC got that great loan at 20%). We keep bragging about how Canadian banks are better because our rules are stricter. It’s really bothering me that people, including analysts, keep repeating this mantra without ever giving any specific, verifiable details.

#113 No Fool.... on 10.17.08 at 2:36 pm

DD, those Suncor stats are actually for operations already in existence.

Every single bbl of new growth adds incremental costs to operational costs….it doesn’t decrease it. Do the math and economics.

Nobody cares if Suncor keeps running what they have. If they and others STOP growing however, Suncor keeps printing money and AB job growth goes into the crapper…..negative numbers. Not good.

#114 y3maxx on 10.17.08 at 2:41 pm

Washington Post…

Worldwide Financial Crisis Largely Bypasses Canada
Tight Regulations, Strict Lending Practices Encourage Optimism

Fears about the global crisis helped Prime Minister Stephen Harper’s Conservative Party gain seats in Tuesday’s vote.

By Keith B. Richburg
Washington Post Staff Writer
Thursday, October 16, 2008; Page A11

TORONTO, Oct. 15 — While the United States reels from the global financial crisis, with credit markets still frozen and stock prices careening from highs to lows, Canada has remained relatively insulated.

Canadian banks have not gone shaky like their American counterparts, economists and other experts said. There is no subprime mortgage or home foreclosure mess. And while the United States fears a prolonged recession, Canadians have remained relatively sanguine, convinced that they are in a good position to weather the economic tsunami from the south.

“We will be pulled down,” said Michael Gregory, chief economist at BMO Nesbitt Burns, an investment firm. “Not as deep, not as long.”

The main reason for optimism here is the banking system. Experts here note that Canadian banks are more tightly regulated, more liquid and less highly leveraged. Instead of being highflying investment banks, they tend to operate in a more traditional manner, with large numbers of loyal depositors and a more solid base of capital.

“I think the regulatory framework in Canada is a little more stringent,” Gregory said, “and Canadian banks are a little more conservative in terms of lending.” The World Economic Forum this month rated Canada’s banks as the world’s soundest, ahead of banks in Sweden and Luxembourg.

According to the Canadian Banking Association, one reason for the system’s solidity is that banks are national in scope. Each of the largest five institutions has branches in all 10 Canadian provinces, meaning they are less susceptible to regional downturns and they can move capital from region to region, as needed. “As far as I am aware, no American bank has branches in all 50 states,” banking association spokesman Andrew Addison wrote in an e-mail.

Strict rules also govern mortgage lending. By Canadian law, any mortgage that will finance more than 80 percent of the price of a home must be insured. Two-thirds of all Canadian mortgages are insured by the quasi-governmental Canadian Mortgage and Housing Corp. As a result of the tough standards for insurance, “people tend not to get mortgages they cannot afford,” Gregory said.

Defaulting on a loan is also more difficult in Canada than the United States, Gregory said. “You can’t just drop off the keys and walk away.”

For Canada’s seven biggest banks, the percentage of mortgages at least three months in arrears was 0.27 percent in July, close to historic lows, according to the banking association. Also, few Canadian banks got caught holding large numbers of toxic American mortgages.

Another difference is that in Canada, mortgage interest is not tax-deductible, making it harder to buy a house. As a result, Canada did not have as strong a construction surge as the United States did during the boom years, and thus does not now have a big oversupply.

People do not take out mortgages just for the tax break. In Canada, “a mortgage is seen as something you want to get rid of as fast as possible,” said Peter Dungan, an economist with the Rotman School of Management at the University of Toronto.

Amid this relative health, there have been reports that American companies, needing cash and credit, have been turning to their Canadian subsidiaries for short-term loans.

But Canada’s economy has not been entirely trouble-free. The Toronto Stock Exchange is down. The appreciation of the Canadian dollar has harmed exports. The slowdown in the United States — which takes 80 percent of Canada’s exports — has a direct impact here. In particular, the American housing troubles have hurt because much of the wood in new U.S. houses comes from Canada.

“What Americans are not buying is directly what we export,” Dungan said.

Fears about the global crisis helped Prime Minister Stephen Harper increase his Conservative Party’s presence in Parliament in Tuesday’s elections, many analysts here believe, though the party still fell short of an absolute majority.

Harper called the election in September, just before the crisis hit. After some initial verbal stumbles — he at first seemed to play down the fall of the Toronto exchange — he campaigned as the steady hand to see Canada through hard economic times ahead.

Polls showed that the economy was the main issue in the election.

#115 dd on 10.17.08 at 3:01 pm

104 Just another Joe,

True. However the long – term supply picture has not changed. This theory has played true in North America, North Sea, Mexico, and in Russia. Traders are concerned with demand at the moment and it seems that is what is driving the price lower. When demand picks up the story will shift back to supply.

Again I just don’t see were the world is going to get it energy needs in the future.

#116 Cave Spot on 10.17.08 at 3:31 pm

Toronto Resale House Prices Collapse!!

House prices declined throughout the GTA during the first half of the month. The average price of a GTA home is currently $353,772, down 11 per cent from $399,013 recorded the comparable period in 2007.

In the City of Toronto the current average price $375,804, a 15 per cent decrease from the $441,878 average recorded at mid-October 2007.

In the 905 Region the average price of a home is currently $337,671. This represents an eight per cent decline from the $365,527 average recorded during the first half of October 2007.

http://www.torontorealestateboard.com/consumer_info/market_news/news2008/pdf/nr_101708.pdf

#117 dd on 10.17.08 at 5:06 pm

#98 anonymous,

Yes … could be all BS. I guess the thing is to ride the wave up and sell well before things start to crack.

Many did that in the Calgary housing. Like today with stocks … at a low … looking very temping to start to invest in the market.

http://www.globeinvestor.com/servlet/story/RTGAM.20081017.wbuffettmarkets1017/GIStory/

#118 aloha on 10.17.08 at 5:56 pm

Garth, your prediction of a 15% price drop in Toronto has now come to pass. For the first half of Oct, City of Toronto sale volumes are down 18%, listings are up 30%, and prices are down 15%.

http://www.torontorealestateboard.com/consumer_info/market_news/news2008/pdf/nr_101708.pdf

#119 justin on 10.17.08 at 7:50 pm

You look like such a grumpy guy in all your pictures, maybe thats why!

That’s a picture of me in my happy place. Now come over here and say that. — Garth

#120 charles on 10.17.08 at 10:04 pm

Garth, the following is an update to your post last week that was titled “Crashing in Kelowna”

The following is from an article on the Vancouver Sun web site (Oct. 15, 2008) titled
“Falling house sales, prices in B.C. drag down national average”

“In the Kelowna region, the $392,179 MLS average price represented a 10-per-cent decline from the same month a year ago.”

“VANCOUVER – Falling sales and declining prices in British Columbia’s high-priced Vancouver, Kelown and Fraser Valley markets weighed on the national average home price, which declined 6.2 per cent in September compared with the same month a year ago, the Canadian Real Estate Association reported Wednesday.

The average Canadian Multiple-Listing-Service-recorded home price in September hit $315,461, compared with $336,321 in September, 2007.”

“Across B.C., the average MLS home price in September was down 7.4 per cent to $412,149 compared with the same month a year ago, the B.C. Real Estate Association also reported Wednesday.

Province-wide sales of 5,107 in September, the B.C. association said, were one-third lower than September 2007.

“Weaker consumer demand and a large number of homes for sale are having an impact on home prices in the province,” Cameron Muir, B.C. Real Estate Association chief economist said in a news release. ”

The following is the link to the article”

Vancouver Sun Article

#121 kc on 10.17.08 at 10:59 pm

sorry to hear about the loss. On a different note, (same topic) From what I have read about you in here and your tell it straight persona, Canada may have lost one of the few truthful politicians, ( I know that is an oxymoron – truthful politician ). Why is it that when the election is on the candidates pander to the knowledge that maybe us voters can read and might, just might have some knowledge and know when we are getting smoke blown up our butts? It didn’t surprise me one bit that 2 days!!!! after he is in office he all of a sudden changes his words to… canada is heading for trouble and calls for emergency meetings…. SOB, steady hand on the tiller and keep the course…. At least we only made a parchal mistake and give them a minority govt.

I had the oppurtunity to personally question one of the CON’s running in my riding…. had him on the ropes as to why his party did a couple things, he was running away trying to avoid the questions and giving me that “how in hell do you know that” look. (i know how to read you idiot) Then last thing he says is… many people think harper is joined to the hip with Bush…. ummm ya no kidding we think that….

Give people the truth everytime and give them the pill that maybe they don’t want to hear, however, they are smart enough to make an EDUCATED decision every time… half truths will KILL this country….

cheers garth, and I hope you don’t give up on your dreams, nor this blogg.

#122 Jeff Riverdale on 10.17.08 at 11:03 pm

Here is an email I got from a local developer.

They want to pay for new owners mortgage payments, strata fees & property taxes for 2 years. Sounds very desperate to me. Almost like California, Florida & Nevada.

Dear Buyer,

INVESTOR ALERT!

Earn up to a 15% annual return on your Investment!

INVEST IN REAL ESTATE THAT PAYS YOU TO OWN FOR TWO YEARS:
Mortgage payment – covered!
Strata fees – covered!
Property tax – covered!

Centrally located on Elmbridge Way and Alderbridge Way in Richmond, FLO keeps you at the heart of city living. Nearby, you’ll find a plethora of restaurants, schools, shopping malls and the upcoming RAV line station. The luxurious FLO high rise boasts sublime interiors encased in a sleek glass and concrete exterior. Revel in the comfort of heated tile floors, the beauty of natural hardwood, and the splendor of the distant horizon framed by your vast, floor to ceiling windows. For the gourmet in you, enjoy a premium stainless steel kitchen appliance package complete with gas range, granite countertops and plenty of cabinet space.

These well appointed floorplans range in size from 665 condominiums to 1,455 SqFt townhomes! Visit us at the FLO sales centre at #101 – 7362 Elmbridge Way in Richmond, or call us for more details at 604.276.8832. We look forward to seeing you!

Sincerely,

Christopher Lau, Vermont Lee-Kerfoot, Christine Kann
The FLO Sales Team
Presentation Centre:
#101 – 7362 Elmbridge Way, Richmond
Open Daily 12 – 6pm, Except Fridays

604.276.8832
[email protected]
http://www.onni.com

About this email: Our records indicate that you would like to receive updates from The Onni Group.
If you would no longer like to receive these updates, please use this link.

#123 anonymous on 10.17.08 at 11:04 pm

dd,

I got long some oil / gas services today (DIG). I don’t know if oil is done going down… but I think natgas has and if oil does drop, I don’t think it will be a lot.

Anyway, I guess you could say that I’m officially bullish on oil. Who knew? When the hedgies liquidated their oil/gas/ag stocks they left a giant hole that you could drive a truck through.

I’m not an advisor, so I can’t make recommendations, but as a young(er) guy with balls of steel… I’m taking advantage of the low prices in the US market.

TSX makes me a little nervous still (with the housing problems in Canada, and higher costs of natural resource production), but even the Canadian markets are due for a resurgence!

So long doom and gloom! Hello affordable gas prices! Long live peak oil!

#124 kc on 10.17.08 at 11:24 pm

CinToronto pm smwhite: Thanks for the link to the FP article. I know that they have been talking about this for a few weeks (particularly when the CIBC got that great loan at 20%). We keep bragging about how Canadian banks are better because our rules are stricter. It’s really bothering me that people, including analysts, keep repeating this mantra without ever giving any specific, verifiable details.

heads up…. canadian banks are also in to the eyeballs…. over 800 billion in CDS, or put another way, the volitile derivatives market.

http://www.financialpost.com/news/story.html?id=794968

Canadian banks have more than $800-billion in exposure to one of the most closely watched segments of this market — credit default swaps. It is estimated that Royal Bank of Canada has the biggest position — with about $300-billion of notional exposures to this market, an amount many times greater than the entire value of Canada’s largest bank

#125 Kash is King on 10.18.08 at 6:30 am

Wonder why this story isn’t getting much play in the MSM…other than the FP?

Canadian banks and insurance companies can now delay declaring all the garbage on their books.

Guess there won’t be the transparency required to attract Warren Buffet’s $$ to buy shares. Hell anybody would be crazy at this point to buy their shares due to this lack of transparency….how can you trust them???

http://www.financialpost.com/news/story.html?id=886453

Methinks one of them was on the brink…?

People need to realize that our economy is now based on a sham.

#126 BOB on 10.18.08 at 6:43 am

Toronto prices drop 15% and now cottage prices fall

http://www.yourhome.ca/homes/article/519657

#127 kc on 10.18.08 at 11:51 am

123, Easy answer to why this isn’t getting MSM air time… damage control…. I feel Canadian banks are in over their heads. They don’t want bank runs nor do they want to fully expose the problems they are in. CDS’s are going to explode the world’s financial markets. just wait another couple months when the cash infusions that are being dumped in (at the moment) don’t solve anything. What we are watching is exactly the mess that happened in 1929, when major governments stuck their fingers into the free market by trying this and that to secure the credit bubbles that exploded. This time around thou the problem is enormous in comparison. When Lehman’s was allowed to fail it started the chain reaction of call to mark in the derivitaves, now they are trying to stick the cork back in the bottle, however the damage has been done. Just wait till JP Morgan Chase truely shows the cracks. The scape goat is Sub-Prime, however, do the math, it isn’t 100% the problem for the numbers do not add up. The bankster (conartists) were allowed to make so many unregulated rules that now when things are going bad the cracks show that the game is up.

If what the CON’s say about Canada’s banks were true, (we are sound… etc) would they be paniked to the point of 45Billion saftey net? I don’t think so. This is the tip of the iceburg here in canada; Major construction projects are at grave risk of being bankrupt.

Folks we have just witnessed the 3rd inning of the 9 inning world series being played out and there are many curve balls to be thrown yet.

#128 David on 10.18.08 at 11:53 am

The safest spot for money is Government of Canada Treasury Bonds. Finance 101. The thought that there are people who believe in reflating the real estate bubble is nightmarish. That is like getting another dog so that your lawn can look even worse.
Most likely Canada may have to move back to an old fashioned plain vanilla financial system without all the bubblenomics, credit default swaps and off the balance sheet liabilities. China has maintained a high level of economic growth with the most rudimentary Third World financial system coupled with a high savings rate.
Canadians are now paying the real price for this real estate bubble through diminished retirement savings, declining home values and a credit crunch.

#129 kc on 10.18.08 at 12:14 pm

#112 – “Another difference is that in Canada, mortgage interest is not tax-deductible, making it harder to buy a house. As a result, Canada did not have as strong a construction surge as the United States did during the boom years, and thus does not now have a big oversupply. ”

This fool is drinking from the same kool-aid, He didn’t do any foot work here in the west with his construction surge comment…. and we are witnessesing the end of the 1 in 12 DIRECT related jobs in construction here. that number has never in history been that high. where did he do his homework??

Politcal spin and comedians everywhere…… I am waiting to see what happens when the “let your house lend a hand” starts to go bad here with the economic downturn and the dire straights people will be in if/when things start to really set in for layoffs and job losses. here is another interesting thing to keep in mind over the last 6-7 year boom in construction, there are huge numbers of (self-employed) contractors out there that DO NOT get the joys of U.I. i hope they were able to save for the rainy days that are coming our way.

#130 wealthy renter on 10.18.08 at 3:16 pm

China has maintained a high level of economic growth with the most rudimentary Third World financial system coupled with a high savings rate.

I spend a lot of time in China, and the oft-quoted high savings rate for China really only exists due to the generation that lived under the Cultural Revolution. Millions of city folk living in state run housing were able to buy their homes for a fraction of their market value in the mid to late 1990s. This generation has also caught the tail end of wage inflation for professional workers, and has been able to save some money and prosper.

The younger generations are buried in debt up to their eyeballs and are not saving. A new home in Beijing may very well be luxurious, but it will run a professional couple 5 to 20 times income. Jan Wong’s lastest book Beijing Confidential talks about a bigshot in Lenovo, and his family’s mortgage in Beijing runs at 60% of the family income for a modest flat.

Many Chinese economists call urban China the biggest bubble in the world. While the Chinese miracle is real, much of it is built on mountains of debt.

#131 kc on 10.18.08 at 4:58 pm

As I was saying above about JP Morgan, here is a link to one financial websites that I feel is very informative for it gives insights by many respected economists, along with other very useful stats. if you want an insight into housing markets in US and UK they keep up with the numbers.

http://www.marketoracle.co.uk/

http://www.marketoracle.co.uk/Article6826.html