Note: The following post appears on my current events site,, but I thought you might be interested, given the obvious impact on real estate over the next year. — Garth

Bank of Canada Governor Mark Carney. Ooops.


Dollar loses 7 cents in a single week

‘This is beyond volatile.’ – Stocks crash again Friday

Ottawa reveals it’s already in deficit

Canadian mutual fund star slashes staff by 20%

Here’s a prediction for you. When Parliament resumes for the briefest of sessions before Christmas, it will be to hear Finance Minister Jim Flaherty deliver an emergency budget.

This will come amid a backdrop few voters ever thought possible, when they were mulling over who to elect on October 14th. That will include a massive pullback in oil sands investments by the likes of Suncor and Petro-Canada, which started the process of bailing this week. Oil will be valued at least $20 a barrel less than the break-even point those companies need to proceed. Interest rates will have been slashed three times by a panicking central bank.

Real estate values will be tanking and new home construction ground to a virtual standstill. Layoffs will be starting on Bay Street, in the wake of Wall Street pink slips that will eventually number perhaps 200,000. GM and Chrysler will have announced preliminary merger plans – dooming not only at least one Ontario car assembly plant but redundant car dealerships in every city in the country.

The federal government will announce the likelihood of a small deficit this year and a big one next. That means absolutely no tax relief on the horizon for half a decade. Unemployment will soon rise and household equity fall. Billions more in public money will be shoveled into the financial system and there will be a few spectacular corporate bankruptcies brewing.

You will be basically unable to sell your home, unless you slash the price or take back financing. Even then, it will take months and months to find a buyer. Your line of credit will be withdrawn, called or the interest rate doubled. Double-digit rates will be common for car loans, if you can get one.

Debt, as you might imagine, will be toxic and harder to repay. Cash will be king. The stock market? Don’t ask.

You should expect these things. In fact, it might be wise to expect worse. And if you’re surprised, get over it. You’ve been had.

The Bank of Canada waited for a week after the federal election to deliver the gloomiest forecast since it was created out of the ashes of the Great Depression. If you doubt this, check its financial predictions, like an 85-cent dollar. It was printed before Thanksgiving.

Governor Mark Carney, himself a student of Wall Street and a Flaherty appointee, admitted the central bank botched its last forecast, that 2009 will be miserable and you should expect no recovery to start until at least some time in 2010. While this was happening, our finance minister was once again laying the ground for a budget deficit – just six days after Stephen Harper said there would not be one. Deficits today, as you know, mean higher taxes tomorrow. After all, that’s how we got the GST.

Speaking of which, will the Harper government increase it? Will it slash that $100 billion in new military spending? Will family income taxes rise? How about a cut in transfers to cash-strapped provinces?

Something’s about to give, and there’s only one certainty: You won’t get to vote on it.

That was last week. Oh well.


#1 RTbandit on 10.23.08 at 9:52 pm


Let’s not get carried away here. Goverments don’t have to raise taxes in times of deficits, they can use future surpluses to pay down borrowings without raising taxes, which we’ve been seeing for the past number of years (while cutting taxes).

I would suggest to you the BOC has reacted quite well despite revising their forecast…..and honestly, market correction and all, this happened really quickly. The BOC was not raising rates when others were let’s not forget. I believe the BOC and the Dept of Finance have reacted extremely well, intervening when necessary and proactively.

I agree with much of what you say around real estate Garth, but when you twist this in to polictics to bash the government due to your election loss, you lose credibility overall.

Every stock market in history has come back and this one will to as well. When the panic is greatest, it becomes the best time to take the opposite approach…..that’s how the rich get richer……

This is not about the stock market, but the real economy of which it is a harbinger. As for politics, if you are saying we get what we merit, I agree. — Garth

#2 Mini-Garth on 10.23.08 at 9:54 pm

So when do you think the absolute rock bottom will be? Lots of buying opportunities if you have cash.

#3 CalgaryRocks on 10.23.08 at 10:15 pm

If you live in Ontario you should be used to higher taxes by now. Even in good times! When you elect socialists this is what you get.

Someone’s gotta pay for charlieGoSurf and all his family to sit on their ass all day. They’ll even laugh at you when you’re on your way to work. Talk about having ‘du front tout autour de la tete’, hein charlie?

Thank God the rest of Canada woke up in time to reject the Toronto Liberal party.

#4 Danny on 10.23.08 at 11:15 pm


I’ve enjoyed your real estate blog for some time. I have happily kept track of real estate stat’s, and I was right along with you on your real estate predictions. I’ve kept my real estate money in cash and now command bids for houses that are up 30% of March list prices. I commend you for taking a stand against the herd and being proven right…and ‘more’ right as time passes.

However I have to say that ever since the election was called, your posts have taken on a political slant in just about every entry you have made. I understand that it was hard to seperate the task of the election from this site. But Garth, the election is over! You found out the hard way that most people vote the party, not the representative.

Get over it!

At a time that you should be giving us a hundred examples of “I told you so”, with this real estate market turning down almost exactly when you predicted, you instead spit out your ‘sour grapes’.

This blog is supposed to be about “The Greater Fool” book you wrote, yes? Not about politics, not about the stock market, but about something that you know quite a bit about, and were bang on in writing a book about.

When you quite whining, I’ll look forward to some better posts.

If you think the above is a “whine” you clearly have your own agenda. This post details some of the reasonable results of the current process. The federal government must bear at least some of the responsibility for current Canadian conditions, having made policy decisions based on politics, not economics. I may not have a seat in Parliament but I do have a position that matters – citizen. — Garth

#5 nonplused on 10.23.08 at 11:43 pm

#1 RTbandit said:

“Let’s not get carried away here. Governments don’t have to raise taxes in times of deficits, they can use future surpluses to pay down borrowings without raising taxes, which we’ve been seeing for the past number of years (while cutting taxes).”

What planet are you from? Countries around the world have been “running deficits” for years but the only way they ever pay down borrowings is through default. Even Canada still has over $500 billion of federal debt, not counting provincial and civic debt. The amount we’ve ever paid off in a given year was just a pittance, a rounding error compared to just the interest alone. We’ve got to stop this sort of magic thinking if we are going to start having useful conversations about how to fix things.

Governments only have to debt modes: “Borrow”, and “Borrow more”. And eventually a third: “Default”. We’ll probably be getting to that third phase in a few years.

#6 Roger on 10.24.08 at 12:35 am


I enjoy reading your blog and I think you provide the only national forum for people to learn, read and discuss real estate. I respectfully ask that you keep the political issues on your other blog. It would be a shame to see the discussion here turn into heated bickering about politics and any constructive real estate debate pushed to the sidelines.

Thanks again for hosting this site and letting average folks know what is really going on in Canadian real estate markets.

#7 dd on 10.24.08 at 12:37 am


Two months ago I would have laughted at Garths rant. I am still very worried even after switching to cash months ago. After reviewing Roubini Global Economics discussion on Oct 23 2008 things might get alot worse.

#8 The Coming Depression on 10.24.08 at 12:39 am

Many of these points are discussed in my blog. The company closures, real estate crash and the coming DEPRESSION

#9 dd on 10.24.08 at 12:43 am

#2 Mini-Garth,

If oil is goes to $20 … TSX could decrease another 20% easy.

So Garth even with all this panic (stock markets could close for a week if it gets really bad) you are still a bear on gold. Isn’t this the time gold should shine. If the financial system is broke would the $ be worth more that gold? Or gold worth more that $

#10 Nathan in Edmonton on 10.24.08 at 12:44 am

I agree Garth. Everyone is looking for the bottom and it isn’t even close and the real pain hasn’t begun. There are no more artificial bubbles to create the illusion of a strong economy. Most of us will realize soon that we are poorer than we think.

#11 Brittanny on 10.24.08 at 1:33 am

OK, everyone that has Pension funds or RRSP’s in the stock market just lost it. Anyone who was depending on their home equity for their retirement just lost it. Anyone who has a job related to to something you don’t NEED is about to loose it. Wow, and we are just getting started.
I’m lovin it! Good bye Donald Trump wannabees and HELLO reality. Back to basics – real work, family and “a penny earned is a penny saved”

#12 cowpoke on 10.24.08 at 1:48 am

You want to know when the bottom is? Scary. OOps, I forgot thats the best time to buy. You first.

From October 21st 2008

Taleb & Mandelbrot

#13 islander on 10.24.08 at 2:30 am

Chicken Man’s answer was to tax the sh!t out of energy.
The New Communists won’t rest until everybody has the same amount to spend, regardless of who earned it.
The Green Party leader was so confident she told people to vote for other parties.
The least bad party was elected.
Not a great thing. But the least horrible thing that might have happened.

#14 David on 10.24.08 at 2:54 am

Calgary Rocks, why on earth are you blaming socialists for this mess? Why are you blaming Liberals? If you do not like their ideas fine and dandy, but the people who helped create this financial meltdown were of the free markets for free men type. The bracing discipline of the magical market is wonderful for Urdu speaking cab drivers in Calgary, but not so hot for people who happen to own oil stocks or financials these days.
I remember not that many years ago when people were saying that the ideas of Keynes and Galbraith belonged in the dung heap history. Government intervention is not so terribly bad a thing when the auto industry and banking sector need to be recapitalised. Revisionist on the fly ideology seems to be operative these days.
Paul Martin became a big hero for some dumb reason by offloading Federal responsibilities onto the provinces. Really like cleaning up after the dog by doing the shuck and jive with a spade and throwing all that nasty stuff into your neighbours back yard. This was labeled as brilliance at the time. This time around it will not work.

#15 Mark on 10.24.08 at 3:28 am

Knowing the bottom…. Look for something called capitulation in the market. You’ll know because it’ll be the day you see 20-40% off the index.

Regarding a recovery… The dot com never recovered and neither will real estate or the stock market. Sure over time you’ll get your money back as it trends with inflation but that may take a century.

Garth. Regarding the complete doom and gloom scenario I don’t quite see that, however I do see people having to actually work to earn money again.

#16 charliegosurf on 10.24.08 at 3:51 am

Very nice post garth, even more apocalyptic than ever.

hey the rock, yu seem to enjoy asstalk, typical albertans…thanks for yur comment about my panoramic forehead…for the record my wife brings the $, ive got one of the toughest job in the world, im a beastkeeper. 24/7 yr round.

yur mother wuld prob understand me better than yu do. when i get a chance to relax at nigthtime, i luv to read the likes of Monsieur Turner, they entertain me more than many. i try to entertain too, it’s fun.

did yu kno that a study said that if we wuld put a $ figure yearly for a wage for a kid caregiver it wuld amount in the six figures, maybe that’s more than yu do.

but the ambitions… that brings me to a very Sad fact of our society were the few Canadians kids are now raised by strangers, in daycare, bickering at each other, with their sad parent racing to work, tim hortons, the rink….

this relate to real estate, those parents have no other choice, coz it’s the way of life now, well yu probably know what i think of this. you got to wunder where the good is in this.

most people that believe to be canadian in this country dont want to have kids, its way more fun to go work (play)… siggh, man i had a union job once, it was a joke, id barely work on that shift, we had pool, snooker table, all sort of benefits, it was like a holyday club.

it’s the aboriginal, the imigrants, that make the kids in this country now,and keep the economy rollin, they work their ass off at the job yu would laugh at. look at the captain on yur team, that was the first wave, soon the Time tsunami will roll in and guy like yu will be almost, well yu know.

if i do these posts. it’s for giving a legacy to my kids, to show them that i cared about the world problems. Their future, the planet future most of all, we ow that lady everything, and some peoples have to assume leadership amids financials turmoil.

anyhow, got caried away again… nice canadien writing by the way, i know there is a nice set of hope gleaming on the horizon… just waiting to catch that swell….

#17 pbrasseur on 10.24.08 at 7:49 am


man you’re sure in a goog mood today ;)

Look, lets not get too far ahead of ourselves here with the gloom & doom.

Sure the situation is bad, and it will get worse at least in the real economy. Those who have “been bad” as you say will pay a dear price and that even includes several countries.

This is called a recession, I guess it’s been so long since we had one it looks like the end of the world.

It is not.

It’s just a recession, we’ve seen those before, so calm down! There are many much much worse places than Canada to get throught this, but even they will get throught it.

Human ingenuity and progress is still alive and will continue.

Bet on it!

#18 Winston Smith on 10.24.08 at 7:56 am

Garth, you largely predicted this economic trouble. One of the resons you cited was the lack of wage growth for the vast majority of Canadians combined with an increasing cost of living.

Yet during the campaighn, as we were entering a recession/depression, you didn’t mention immigration. During a period of growth it has greatly contributed to keeping wages down; what will be the impact of 250,000 immigrants entering the country every year in a period of rising unemployment?

Do you think adding more would be workers to a declining economy in crisis is a good idea, or did the Liberal party whips keep you in line?

#19 pjwlk on 10.24.08 at 8:43 am

Wow… and they call me negative…lol. Great post Garth. I’ve had a feeling for a few months now that we are going to be in for a ride far deeper and worse that I had ever imagined possible. I’ve mostly kept my mouth shut because I’m tired of being ridiculed and having to explain myself constantly. My father grew up during the great depression, I remember his stories well. I pity those who have not prepared…

#20 John on 10.24.08 at 9:18 am

Anyone who doesn’t realize how bad the economy is by now never will. So a little less doom and gloom and a little more advice would be appreciated. Don’t drive away your audience with constant negativity.

I’d like to read your thoughts on how to react to these situations.

#21 Nicholas P on 10.24.08 at 9:30 am

to: RTbandit on 10.23.08 at 9:52 p;

I am mortified at the naivity which seemingly market savvy investors such as yourself seem to display in these extraordinary times of market manipulation by the PTB.

“…..and honestly, market correction and all, this happened really quickly. The BOC was not raising rates when others were let’s not forget. I believe the BOC and the Dept of Finance have reacted extremely well, intervening when necessary and proactively.”.

Are you kidding me!?!?

The Bilderberg action plan is playing out perfectly and the mignons are playing their part to perfection. Harper, Dion, Flaherty, Ignatieff, McKenna… it doesn’t matter anymore. They all play for the same team, and you ain’t on it.

When the financial freight train hits this country those guys will have conveniently jumped off the track, while the rest of us are standing there staring at them pleading for direction holding our pennies out trying to figure out what’s going on.

The left-right, liberal- conservative political paradigm is no longer valid. There are 2 teams in this game, the haves and the have-not’s.

#22 Ydgrunite on 10.24.08 at 9:32 am

RTbandit: “Every stock market in history has come back ”

Well, the Nikkei has still not recovered to its 1990 level. Everyone has reasons why things that happen elsewhere could never happen here, but, at a time of unprecedented use of the word “unprecedented” among financial commentators, we should not rule out any outcomes.

#23 midas on 10.24.08 at 9:43 am

The ‘experts’ have been wrong every step of the way and they will be proven wrong again. We are now going off the side of a cliff economically speaking and are yet far from the bottom. Those who plan their financial affairs based on predictions made by the BOC, the corporate media and politicians will be buried by the avalanche that is ever growing bigger and bigger. This should surprise no one for the warning signs have abounded for the past two decades but in earnest since the crash. Sold my house in a choice neighborhood in suburban TO and lost 100 K in one year (why I bought last year knowing what I knew is another story) but I figure its still better than losing 200 K next or 300 K the year after. Prices in this neigborhood where average prices were 750K in the spring have dropped 150K in the past 6 months, a full 20% decline and the carnage has just begun.

I continue to be a ‘bullion bunny’ despite the low ‘spot’ prices of gold and silver (try buying some gold and silver coins and if you can see the spread between the spot price and the real price – bullion prices will soon bury the phony and manipulated spot prices once and for all.) Value investments for the coming year and decade:

Gold and Silver
Arable Land

Cash is probably an even worse investment than real estate and will lose 50% purchasing power by this time next year even in a seemingly deflationary environment. There has already been a real increase of at least 10% in the cost of food and even though oil may decline in the short run, there is coming a crisis in the next 9 months as predicted by VP to be Joe Biden that will drive oil back to mid 100’s and maybe 200 or more.
Head for the hills!

#24 smwhite on 10.24.08 at 9:52 am

#1 RTbandit,

I would suggest to you the BOC has reacted quite well despite revising their forecast…

So if the BOC botched all its forecasts for the majority of the past year, wouldn’t that mean the reactions it had based on those forecasts are wrong?

Maybe Carey should come on the blog and see some of the nice things that I and others have had to say about his forecasts back in the spring and the summer, he still can’t say that “R” word yet and Canadians in a 2 week span have watched their purchasing power disappear by 20% and their portfolios drop over 1/3, and its going lower.

Some of the talking heads are actually stupid enough to come out and say this is good for exports? Good for who, the people south of the border that usually buy 75% of our goods, they ain’t got a pot to piss in.


#3 CalgaryRocks,

Yes a better alternative is the “Ontario Harris Rejects”/ “Right Wing Alliance Conservatives”.

ALL politicians have had their heads up their ass minus maybe old Garth here and a few south of the border like Ron Paul. We labeled them as crazy, doom and gloomers, chicken little etc. because they were ruining the game of charades we’ve been playing since 2003.

Government and banks pump the system to create growth, and have no problem with irrational exuberance on the way up, yet when it comes to paying the serfs and peons to keep their salaries in line with the “growth” they’ve created, they come out with bullshit CPI and GDP numbers that are flawed in their calculations… Ha ha!

The conservatives helped creates the problems and sure as sugar, they’re here now with all the answers to help fix their blatant [email protected] ups.

This is a problem that faces Canadians whether your a conservative or liberal, whether your from western Canada or the Atlantic provinces, the economy doesn’t care.


As for politics, if you are saying we get what we merit, I agree. — Garth

They majority of folks will get a surprise and Harper will be as loved as much as Mulroney come the end of the debacle.

#25 smwhite on 10.24.08 at 9:57 am

#16 pbrasseur

I agree on your take that a recession isn’t the end of the world, but if those in power can’t even admit we’re in a one, how can they react with proper policy to help mitigate the damage?

#26 Calgary Rip off on 10.24.08 at 9:57 am

Nice post Garth:

So things are going to get better in Calgary, eh? About time. Houses are still DOUBLE what they are worth. It’s amazing the amount of idiots in this city(sellers, buyers, realtors) that think a $180,000 house is worth $400,000!

So you are saying that it will totally tank? Great!!! It’s about time to get back to reality.

This unbridled reliance on business as the new King in town has breeded a serfdom population that worships the dollar instead of what they do have.

Truly amazing that there is so much panic in the news lately, given that most people have their health, can work, and arent deathly sick. So all those people on wall street and main street that arent sick, boo hoo, you are suffering a little. Are you homeless and cant work? Unlikely. So shut the hell up and quit your whining.

If those whiners are likely to continue, the United States and Canada should adopt a style of socialism similar to Sweden. Otherwise, go migrate to Siberia.

#27 Dave on 10.24.08 at 10:26 am

Folks, not only has Garth lost is MP job but he is also going through a completely natural post-election adrenaline crash.

Garth, my suggestion is a tub of Hagen Daz and two prostitutes.
Enjoy. :-)

I’ll need to borrow $75. — Garth

#28 Downsized and Delighted on 10.24.08 at 10:28 am

Well here I am with my latte ready to read Garth’s “survivor checklist” and WTF is this? Do I dare turn on BNN and check the market or should I just take a valium and go back to bed?

Bed. — Garth

#29 Brian on 10.24.08 at 10:49 am

Why does the Bank of Canada work outside the Government Garth. Is it private like the Federal Reserve. Money as Debt. We are heading into a Depression because of Central Bank Polices.

#30 dotava on 10.24.08 at 10:53 am

#3 CalgaryRocks on 10.23.08 at 10:15 pm

Cow-boy you are brain washed bonehead – did you ever in your life bin in country as Sweden (socialistic – by your standard). More likely you didn’t went much further than your backyard.

#31 Alex Givant on 10.24.08 at 11:02 am


I know banks can call unsecure line of credit or credit card. Can they call home-equity line of credit?



Depends on your loan agreement, and whether the LOC is registered against the property or unsecured. — Garth

#32 squidly77 on 10.24.08 at 11:20 am

the gubberment dropping the ball..expected
people fueled by greed and RE wiped out..expected
RRSP,s wiped out..expected
people acting in sheer panic…expected

the only thing that surprises me
is that people are surprised….

kd on sale at sobeys.. 5 for $3.99

#33 squidly77 on 10.24.08 at 11:25 am

bought a trailer for my ski-doo large enough to hold 200 gallons of premium fuel
if the heat goes out this winter..its balls to the wall south bound until either the fuel runs out or the snow runs out

candles on sale at london drugs

#34 Rasputin on 10.24.08 at 11:27 am

Opec announced a production cut of 1.5 million BPD. Ha Ha Ha Ha. I call bull. The Opec nations are all in debt up to their eye balls. Their revenues were barely servicing their debts. Now with falling oil prices their revenues just got halved. So now they come out with straight faces and volunteer to cut thier own revenues? Bull. Every country in that den of vipers will cheat on the agreement. This was pure posturing and jaw boning. It’s all they had. Nice try though.

#35 God on 10.24.08 at 11:34 am

According to this site Commodity Carriers will COLLAPSE in 6 months! We have bigger problems than housing, its called FOOD!

#36 dboy on 10.24.08 at 11:35 am

Was just watching ctv am news: union one credit union (i think) projects a 13 % decline in BC real estate for 2009 and a further 5 % for 2010. That would represent a 26% decline top to bottom for BC.

Also two major Vancouver developments are in trouble: The Ritz Carlton on West Georgia and the V6 development is just a big hole in the ground.

Perhaps my $130,000 per year income will actually allow me to buy something over 600 sq feet!

take care

#37 No Fool.... on 10.24.08 at 12:39 pm

My fiancee and I pull in $140K/yr combined and Calgary and we rent.
This place is really really going to be hurting in about 6 months.

#38 CalgaryRocks on 10.24.08 at 12:47 pm

dotjava, I lived in 2 countries and 4 cities since 95. My parents came here a 2 kids and 2 suitcases from a commie country so spare me your love 4 socialist bs.

Let me pack your suitcase and give you a donation towards your emigration to Sweden.

Anyways, if I wanted to be a welfare bum I’d move back to montreal and let the rest of Canada take care of me.

#39 Rose-Marie on 10.24.08 at 12:51 pm

This is the first post that I have ever written, yet I check in everyday to read your articles and the comments left by the others. I have read all your books and my husband and I have great faith in your insights and predictions regarding real estate. I appreciate your honesty and the reality check that you are providing to Canadians. I wonder if you mind commenting on the viability of owning land. Will it see the same declining value that residential real estate will have? We currently own one of just a handful of half acre residential building lots left in the area of Horseshoe Valley (a small enclave of custom homes located in a golf course/recreational community about 15 minutes north of Barrie,Ont.) We have liquidated all other real estate that we owned and are currently renting, waiting to see where the market is headed. Our plan was to then build a small practical sized bungalow as you suggested in your book as having a reasonable chance of holding/retaining future value. However, my husband and I are now debating the fact of whether or not to sell the lot and not own any real estate at all. Will this be the kind of location (golf course/recreational) property that baby boomers will find appealing in the future? Could you please offer your thoughts on whether land will retain it’s value or have less volatility than homes in the near future? Any insight you could offer would be greatly appreciated! Thank you!

#40 brazer on 10.24.08 at 1:28 pm

#37 No Fool

My fiancee and I pull in $140K/yr combined and Calgary and we rent. This place is really really going to be hurting in about 6 months.

similar story with me and my girlfriend..similar income and we sold 6 months ago and rent. no debts + strong income is the only reason why we not only sleep at night, but occasionally smile, knowing that we didn’t get fooled like most folks.

#41 brazer on 10.24.08 at 1:31 pm

hrysler to cut 25% of salaried workforce

In Canada, Chrysler employs about 10,000 people and operates a car assembly plant in Brampton, northwest of Toronto, a minivan factory in Windsor in southwestern Ontario and parts operations in Toronto.

About 5,000 workers are likely to lose their jobs, although the company would not say how many contract workers it has.

#42 brazer on 10.24.08 at 1:34 pm

AIC cuts work force by 20%

The mutual fund company handed out pink slips on Thursday to 53 out of some 290 employees, AIC’s chief executive officer Jonathan Wellum confirmed in an interview…

AIC, which is Canada’s 19th largest fund company, with $4.6-billion in assets, saw net outflows of $86-million in September.

#43 brazer on 10.24.08 at 1:36 pm

Financial crisis spreads to forex market

Money has flowed into the U.S. dollar, the Japanese yen and the Swiss franc at the expense of just about everyone else, on fears of a deep global recession. Commodity currencies – in Canada and Australia in particular – have slid violently as commodity prices come down and traders bet their economies will take a hit.

#44 brazer on 10.24.08 at 1:39 pm

TSX just getting hammered…next stop 8000.$TSE

#45 john on 10.24.08 at 1:43 pm

Hey Garth,

Please provide more information on the banks ability to call in Lines of credit (both secure and unsecure) as well as credit cards. Thank you!

An unsecured line is unsecured. It can be called in 10 minutes. — Garth

#46 dd on 10.24.08 at 1:55 pm

G&M talk on the CDN US $

#47 dd on 10.24.08 at 1:57 pm

36 dboy,

I hope you are right, however, if there is more unemployment and lower prices for goods … wages will be coming down too. Watch for wage roll backs starting soon.

#48 dotava on 10.24.08 at 2:10 pm

#38 CalgaryRocks on 10.24.08 at 12:47 pm

Similar to your case – only difference is that I was that parent with wife and 2 kids and much more luggage. I suggest you to go back to school and learn – will help you in future. Related to donation – will be nice if you can afford – but you sound to me like someone who still lives on parents’ expense.
BTW welfare – in Nordic countries consider as a help for unfortunate people that stay out of the job – what we will experience unfortunately very soon. :-(

#49 Maybe the only Optimist left in the world on 10.24.08 at 2:13 pm


I have been reading your blog for some time now, and would just like to add my two cents.

First, i completely agree with your views on the real estate bubble. I myself have recently bought a house, and could not see the need to buy into some new development in the middle of nowhere. I believe there is a pride in owning a home, and was sick and tired of renting places where you couldn’t even paint or own a dog. There has to be something more to life than sitting in a studio apartment socking away your money in order to capitalize on someones downfall ( I will tell from first hand experience you wont end up with any friends this way). At some point you have to get on with life and get married and have children. Most people start out in life with little and work very hard to get to the point they are at. The zenith of mans existence is not monetary.

Back to my point. The issue I have with your blog recently is that the everything up here is about the end of the world. I am a member of the younger generation (25 and under). From what I read here, you say that there is no hope and that we should abandon this country and look elsewhere for a life (Most of us would not be in this country if it wasnt for our ancestors leaving Europe or the UK. As bad as it gets, people will still live here, banks will still function, people will still need things, food, gas, clothes etc.

I am too young to remember 1981 (wasnt even born yet) but I understand that it was just as bad as now. Things will come back. Unless what I talked about does happen, a mass exodus of a generation to another part of the world then there will still be people here in 50 years making a living. Will it be the standard we are accustomed to now (maybe, maybe not) BUT THINGS WILL GET BETTER.

You need to start including optimism in your BLOG, EVERY HOUSE IS CANADA CANNOT BE OVERVALUED, everyone in Ontario will not lose their job. Things will change. I only hope that the greed and deception that we have seen in the last twenty years will be remembered by generations to come. If not then yes, we truly are doomed.

Just my two cents. And please less political rhetoric and end of the world statements.

Be as happy as you want. But also be accurate. The statement, “From what I read here, you say that there is no hope and that we should abandon this country and look elsewhere for a life,” is crap. Of course there is hope, and lots of opportunity – but not for the majority of people who are living on credit, consuming more than they require, shackled to debt or who have failed to prepare. They will indeed suffer losses. Optimism is no antidote. Hope you have more than that, and youth. — Garth

#50 Jon B on 10.24.08 at 2:14 pm

Remember the old days when people had to “save up” to buy expensive stuff? Got a feeling this ancient practice will resurface again soon.

#51 Andrew toronto on 10.24.08 at 2:18 pm

There is simply no way that all the holes around the planet can be plugged for much longer; it’s a matter of days now. Trillions of dollars ‘worth’ of global equity value have vanished today alone, regardless of Wall Street. We have started down the path towards the worst financial crisis in history, an unprecedented event. Don’t listen anymore to anyone anywhere saying there ‘might’ be a recession. This is a depression, and it will be much worse than the Great One.

How it will unfold is impossible to predict, but one thing is for sure: the rich will attempt to save themselves at the cost of the poor. And that should be a wake-up message for all of you. Politicians and bankers everywhere will keep insisting that their particular economy is in better shape than the others; they will continue to say this until it is no longer credible. I just see Canada’s central banker and Treasury secretary pull that very rabbit from the same old hat. No matter that personal debt in Canada is higher than in the US, I guess. Politics and economics are faith-based systems.

Politicians lie; it’s an integral part of their job description. It gets them votes. You vote for the guy and gal with a happy tale.

Your where right on about lies being put out there Garth we in Canada are no different..

we need to be very prepaired waiting patiently for that survival kit..

#52 My_View on 10.24.08 at 2:42 pm

People are commenting on Garth blogging about politics and the stock markets as if the 2 things have nothing to do with the housing bubble. Thanks a million Garth, because at least you have the balls to tell it as it is. People in Garth riding and others want to keep their heads in the sand. Be optimistic, lie and what ever it takes never speak the truth. Garth & others have been warning about this mess for years. His fellow comrades called him Chicken Little. Now the Canadian government is announcing recession and interfering in the so called free market. Sure politics and the stock markets should be talked about on this blog, it’s all connected and its actions have a direct reaction to this stupid housing bubble the government help created.

#53 CalgaryRocks on 10.24.08 at 2:47 pm

dotjava ,I left home after college and got a second degree at my own expense since then.

Everything I have achieved , I did it from scratch, and with the same opportunities offered to all Canadians, such as education that is good and affordable, which is why I scoff at these whinners that were born here, with a silver spoon in their mouth but still can’t make anything out of their lives.

#54 dboy on 10.24.08 at 2:53 pm

dd – i work for the federal govt and my salary is negotiated until 2012. I should be okay – i hope.


#55 RimmyJ on 10.24.08 at 3:14 pm

Garth states that we can expect difficult times ahead and “if you’re surprised, get over it”. A few(very few) of us are not at all surprised. I ,for one, have been preparing for over five years for this day. I wish I didn’t have to but that’s the way the cookie crumbles. Sometimes it’s necessary for people to learn the hard way. The Ponzi scheme that we have witnessed over the last twenty or so years has collapsed.
Once again, for anyone interested in learning what is really going on,I suggest you purchase a copy of Robert Prechter’s book” Survive The Crash” . Everything he predicted in 2002 is well underway. There may be time yet to make some preparations.You can also check his website at He has steadfastly maintained that we were headed for deflation.
I would also suggest the website by Martin Weiss. He recently changed his outlook for the worldwide economy and now sees powerful deflationary forces. Especially look for some of his previous articles on the use of inverse and double inverse ETF’s to protect your portfolio during these volatile times. Horizons BETAPRO ETF’s have several good funds in Canada. Believe me , if used properly,you can protect your portfolio in this volatile market if you are not selling your holdings. Alternately,if you have the stomach, you can essentially short the market with these ETF’s. But don’t look to any ” buy and hold” financial advisor to help in this area with ETF’s. It is true that, when investing, you are on your own.

#56 Dawn in Calgary on 10.24.08 at 3:15 pm

#37 No Fool

My fiancee and I pull in $140K/yr combined and Calgary and we rent. This place is really really going to be hurting in about 6 months.

#40 similar story with me and my girlfriend..similar income and we sold 6 months ago and rent. no debts + strong income is the only reason why we not only sleep at night, but occasionally smile, knowing that we didn’t get fooled like most folks.


Almost in exactly the same boat here. $145k combined but rent instead. We’re lucky — our rental is quite large, allows us to have a dog and includes a big jacuzzi. Hot tub party for self-congratulatory renters, anyone? ;-)

Seriously though, even with only one small (5K) credit card as debt, I’m about one step away from cashing out of the bank and burying everything in the yard. I might sleep fine, but I’m picking up on a sense of panic in the wider herd, and it’s making me antsy, whether I’m ok or not.

I’ll be over here, in the hot tub, with my tinfoil hat on.

#57 dotava on 10.24.08 at 3:17 pm

#49 Maybe the only Optimist left in the world on 10.24.08

I love it – seeing intelligent conversation between two generations (I belong much closer to Garth). First at all Garth is realistic and he just bringing the facts to the table – your optimism is welcome (BTW – we are not pessimist either) but things that you can’t deny – simple that we are hitting for disaster. If we start to think rationally – we can come with better solution and get out of this mess on less painful way.

#58 john on 10.24.08 at 3:17 pm

Hey Garth,

Can the banks call in mortgages or Home Equity Lines of Credit at any time?

Can they renegotiate a more favorable rate before term?


Check out your contract. Most LOCs today are variable rate, unsecured loans which can be increased in cost or called at any time. — Garth

#59 CalgaryRocks on 10.24.08 at 3:17 pm

andrew – you can find your survival kit at

I have no affiliation except for having implemented much of it for many years.

Alternatively you can load up on rice, beans and water. :)

#60 Kate on 10.24.08 at 3:22 pm

“…there is a pride in owning a home, and was sick and tired of renting places where you couldn’t even paint or own a dog. There has to be something more to life than sitting in a studio apartment socking away your money in order to capitalize on someones downfall…”

I find it interesting that the alternative to owning a house is to rent a studio apartment. This seems to be a false comparison. I think that our standards for owning quickly become much higher than our standards for renting. If you read Garth’s book, he does not recommend renting a tiny place for a family, but a reasonably priced home you can afford (which will currently be less than a mortgage payment in almost every city in Canada).

#61 charliegosurf on 10.24.08 at 3:39 pm

@ calgary rocks, again….

In the event you loose those suitcase one day, come to Montreal, they will welcome you with an open Red hearts, give you everything you need, especially love.

You will see really why this is a great country, your neck can change colors… dont be so brainwashed, you deserve better after all these efforts.

Imagine your new nik, Montreal Rocks, that would be something to brag about for real. you would see what the meaning of a good kitchen party is, enjoy women that are not so stuck up as grandeprairiegirls…

You would drink beer in a glass bottle too, so you dont mess your neurones with aluminiun residue, that beer would be cold for free too since they are not charging extra for this there…and at the corner store on top of that!

I live on the west coast for the magnificient location, but man i missed that east coast feeling, people are so nice there, from the peg to st-john. those people are not so much in the rat race.

They will fare better in the coming dark days, because they know how to stay united and have fun. anyhow i hate falling in the west vs east kiddy game. But like lots of westerner waiting for a normal life here, i can only be happy with what is happening now.

Farewell brothers and sisters!

#62 Pete on 10.24.08 at 3:46 pm

Well said Garth, People are living in la la land and they hate reality. It’s true people can not handle the true and would rather hear lies from morons like Harper and his CONservative buddies . People are going to get slapped in the face from reality. Reality is slapping them right now with the stock market. Soon reality will slap people on main street. You are a good man and I alway have said you are a true conservative but it’s to bad the working man is stupid and lacks the ability to think on their own. I think the Liberals were smart to let Harper and friends win without a majority as the economy crashes and the blame will go where it belongs to on the CONservatives.

#63 charliegosurf on 10.24.08 at 3:52 pm

so spare me your love 4 socialist bs.

watch you’re writing Calgary rocks, are you turning like me, ahahahaha.

kiss your mom for me tonight when she reads that bedtime story for you, hope she made you a good lunch today!

#64 PeterSchiff2 on 10.24.08 at 4:06 pm

I am also a a young person and if anything Garth is standing up for us. He doesnt want us to be taken advantage of. Why should our age group be forced to take out abnormaly large mortgage debt just to afford a house? It makes the banks and old people (sellers) richer but does nothing for us. He wants us to wait and get a good price. He doesnt want us to get stuck paying bubble prices. Thats all.
Garth doesnt sugar coat. The WORLD will be going through difficult times, not just Canada. The truth is the truth. All the optimism in the world wont change whats coming.

#65 flex on 10.24.08 at 4:12 pm

#9 dd on 10.24.08 at 12:43 am
#2 Mini-Garth,

“If oil is goes to $20 … TSX could decrease another 20% easy.”

Ummm….if oil goes to $20, the TSX will drop more like 50%.

#66 dd on 10.24.08 at 6:33 pm

#65 flex,

Sorry, I meant $50. And yes if oil went to $20 TSX would drop another 50%,

#67 dd on 10.24.08 at 6:37 pm

#59 CalgaryRocks,

Surv Kit

Spend less that you make year after year
Don’t purchase more that you need
Cash is good
Invest with fundamentals in mind
Choose your partner (wife, husband
wisely (like minds in money)

#68 JO on 10.24.08 at 7:27 pm

The disaster so far has made most credible bears’ dire forecasts look optimistic. Not only are portfolios down with house values, the purchasing power of that remaining balance if sold for cash (CAD$) has also taken a severe hit. So the true loss in wealth is much greater (30 % market decline plus 30 % CAD $ in last year = 60 % decline in true buying power). Now it’s true the value of most everything else is coming down, so it is a question of relative declines. The cost of filling up is down a lot and the cost of commodities overall should help prices and costs come down over the next 2 years or so. This is, for now at least, deflation folks. When it becomes hyperinflation is the question. The Fed has exploded the monetary base in the last 2-3 weeks and gold is seeing a major divergence between spot and physical. It may have some more downside left but it might not be a bad idea to accumulate some bullion to add an insurance buffer when the inevitable collapse in all currencies happen. Keep some wiskey and smoke packs handy for money ..just in This has been a spectacular decline. And now we hear the same idiots who got us into this mess tell us it’s the free markets’ fault. Make no mistake, markets were never free to begin with. Many people in the last 4-5 years were put into the largest loans (mtgs) of their lives with 5 % or less down and little networth and poor financial habits – thanks to mortgage insurance and deposit insurance programs. Most of this debt was never priced nor otherwise underwritten according to true free market principles. So many of these questioniable mortages would not have been made without government NHA / mortgage insurance and deposit insurance in the first place- the ones that would be made would have higher rates and stronger covenants. In the end, the prudent and innocent savers and homeowners/investors will suffer at the expense of the reckless and otherwise weak borrowers and banks who made these stupid loans under government mandates. Banks simply wined and dined a bunch of politicians back in the day and got an act which charges new mortgage payers an insurance premium to payoff the bank who lent out the money. And of course, if the whole system gets clogged as it is now, the taxpayers pony up. What a system. A gigantic ponzi scheme. The sucekrs being those who have GICs at deposit taking FIs (in US as CAD system appears OK so far)which has been the basis of the loans. This will end badly. The system has to be completely overhauled. People are supposed to be rewarded for being frugal and prudent, not punished.

#69 bcgirl on 10.24.08 at 8:21 pm

Garth, I discovered this site a little while ago, and have since read your book Greater Fool. I appreciate what you’re doing, and the comments people are making here.
I’m out of real estate as of April, renting, cash in the bank. I’m relieved to be out of the market, although as some people are implying here…current conditions almost make me want to stuff the mattress.

I’m so glad this is a forum where other Canadians are…too inundated with the US perspective.

Thanks again Garth…good job with all of it.

#70 FDR walkabout on 10.24.08 at 8:25 pm


Let me assert my firm belief that the only thing we have to fear is fear itself.

#71 wealthy renter on 10.24.08 at 8:31 pm

No Fool, Brazer, Dawn

My wife and I are in a similar position as you folks. I think we are bit older, with a little more income, and 23 combined years of hard earned savings. I enjoyed reading your stories. We are both worried about the state of the economy, and the financial problems of the world, but we are ready. If we both lost our jobs (very unlikely,) we could probably move to Eliot Lake ON and live well for a very long time.

Savings = Freedom

I am also thankful that my working class parents pushed me hard to get a top notch education (my wife same,) and we could both pack and move to other countries to find employment if we needed to.

Skills = Freedom.

We both live very well, but we still live WAY below our means. It is really tempting for us to buy Beemers and drop thousands on shopping trips at the Eaton Centre, but we are peasants and drive Corollas and shop at Sears Outlets.

We are the idiots that were mocked a little by friends for not buying a McMansion (way beyond our means) and for not dropping all of our savings into the TSX to make 20% per year. I would guess that there are people who truly understand the stock market system, and have profited handsomely over the years. I applaud the fortitude it takes to make those kinds of risks.

I guess we will still have to continue to live within our means.

As always.

#72 dd on 10.24.08 at 8:42 pm

#40 brazer,

So true. The whole real estate industry has made everyone look like fools.

Most on this site have side stepped the fool makers.

Cheers to all.

#73 Reality Bites on 10.24.08 at 9:26 pm

#11 Brittanny – For your information, true reality does not include the ‘family’ crap you speak of. That domestic family stuff is actually the root cause of all of the McMansion-building, sub-prime perpetrating, consumerist horseshit behaviour which has caused the present global economic collapse.

I know not any single individual who got up one morning and said “gee, today I’m going to go buy an edifice that has a bunch of small useless rooms which I don’t need and won’t use, takes 2 days to vacuum and clean, is two hours commuting time from work instead of the ten minutes I have now, will put me in debt for the rest of my days for no good reason, and will prohibit me from going out and enjoying life so that all my cash can go towards payments for that edifice”.

It’s the self-aggrandizing knocked-up wannabes in their suburban overpriced chipboard hell-holes who are responsible for all of this mess.

#74 kc on 10.24.08 at 11:32 pm

UMMMM is this the start in saying that maybe the bubble is starting to burst here on the west coast? The global newscast was saying tonight that (imagine this) the case shiller report that states the vancouver area is over priced by 100% and that rent to buy ratios are so out of whack that a place @ $700K is beyond being affordable when compared to wages in vancouver…. and here is the Vancouver sun’s newspaper article…

And here is poor little ol’ me with $50K in the bank and debt free…. guess the Down payment that I never became sucked into is starting to pay off….

Housing may dip until 2010
There’s a light at the end of the housing tunnel, but it’s faint

#75 brazer on 10.24.08 at 11:34 pm

Currencies Fall as Fears Spread and Stocks Slip

“This is a panic in the way of the fine 19th-century panics, where we all run around like headless chickens,” said R. Jeremy Grantham, chairman of the Boston-based investment firm GMO, who had predicted stocks would tumble. “I have been in the business for 40 years, and I have never seen anything like this.”

#76 The Coming Depression on 10.25.08 at 12:31 am

No doubt , with over 25 years of research, that GOLD and SILVER bullion/coins will outclass everything. Over the next few years when the cashout selling has been completed, we will see bullion double, then triple. I sold an few income properties in 2000 and put all of it in GOLD and SILVER,removed myself from the stockmarket a few months ago, sold my home and now rent. Has anyone here tried there local coin shop for some silver maples/bullion? ITS SOLD OUT. Silver and Gold has now separated itself from spot price. WHY?

I value your visits here, and enjoy your site. But try to keep each of your posts from sounding like a beer commercial. — Garth

#77 Stu on 10.25.08 at 9:19 am

All the world ending talk is nonsense…

… unless of course you happen to think the world in its correct state means 4-car families living in enormous houses in the suburbs; being able to buy a speedboat/car/computer two days after deciding you want one instead of saving for it; using your house as an ATM machine to fund things like new kitchens and other stuff you don’t need; going out partying every weekend; buying the latest gadget the moment it’s released even though you don’t need it; spending $5 a day on coffee; buying a cottage; eating out more than once a week; paying for a nanny; becoming rich overnight without really doing anything; getting into $10,000+ of debt to “gain” an Arts degree you’ll never use… in these cases “your” world is indeed over and good riddance to it.

A little lesson in saving and not living off money you don’t actually have is exactly what’s required.

#78 dd on 10.25.08 at 12:42 pm

#76 The Coming Depression ,

Sure have a lot of advertising on your site. What are you trying to sell us?

#79 Derrin on 10.27.08 at 2:11 am

I just read Garth’s Blog. That’s it for me. I will not return to this site as it has a negative tone of a know it all SOB.
Enjoy retirement…….and get off the “sky is falling soap-box”. Things are tough and will be tough…. we all know that.
Let’s take a breather from Garth’s river of doom.
Boycott this site. And don’t buy his book!