Car dudes testify in Washington. No gas.

In light of last night’s decision in Washington not to bail out the automakers (at least immediately), GM is considering bankruptcy. Meanwhile Bank of America is cutting 35,000 jobs, the BCE takeover is pie-eyed, US retail sales have crashed five months in a row, stock markets are eviscerating and our finance minister said this morning Canada “could be devastated” if we allow fear to becone panic.

I wrote the post below for my political blog yesterday. The point is not to blame Ottawa for the global mess, but rather to lament politicians in power thought so little of citizens that they did not inform us of what they knew, so we could all make correct choices. I thought it might add to the discussion ongoing here. File it under ‘devastated.’ — Garth

For most of this year, Canadians have been shielded from the truth about the economy. This should bother you. It should enrage you. It’s information you should have known.

We were told the banks were the strongest in the world, and yet Ottawa found it necessary to give them a $75 billion bailout. Also telling is the fact three of the Big Six – including our largest bank, RBC – are out flogging new stock right now to raise more money, despite a terrible environment on Bay Street.

We were told there’d be no deficit. But there is already. Now the prime minister calls red ink “essential,” and the Parliamentary Budget Officer says we could have a shortfall of up to $14 billion.

We were told there’d be no recession here. “This is not the United States,” Mr. Harper said pointedly during the election. But now there is, of course. The central bank made that official on Monday.

We were told the value of our homes would keep on rising, that the US real estate meltdown would pass us by. The Canadian Real Estate Association said this, and bank economists, Canada Mortgage and Housing and most urban real estate boards.

But real estate sales have fallen as much as 70% in major cities, and average prices have plunged up to $175,000 in Vancouver, $56,000 in Calgary and $45,000 in Toronto. Buyers are staying home as sellers flood the market, ensuring more price drops.

We were told the economy was strong and would stay in positive growth, boding well for jobs. And yet last month we lost more than 70,000 in a single four-week period. The central bank slashed interest rates to the lowest point since the 1950s in panicked reaction, and the car companies teetered on the brink of collapse.

We were told Canadians were safe, and our households were far less indebted than those to the south. And yet today the Bank of Canada is raising the awful spectre of widespread anguish, as more and more families face losing their homes. “With household balance sheets under pressure from weak equity markets, softening house prices, slowing income growth, and record high debt-to-income ratios, a severe economic downturn could result in a substantial increase in default rates on household debt,” the bank says. If this happens, it adds, so much for Canada’s ‘strong’ banks. “Should this scenario materialize, the banking sector would suffer significant losses from the rising vulnerability in the household sector.”

Could this be why the Royal, TD and Scotia have been selling stock in a bid to raise cash for the coming storm?

More importantly, why has this information been kept from Canadians for the past critical months? Wouldn’t a warning have helped us all give more attention to personal debt levels, to paying off mortgages or, especially, to avoid walking into new debt at absolutely the worst time?

Well, I may not be sympathetic to the current government for many reasons, but I’d say this fits a pattern:

* Bring in zero down payments and 40-year mortgages at the wrong time, turning a good housing market into an unsustainable bubble.
* Cut the GST, rather than income tax, in order to encourage consumer spending, despite rapidly rising debt and a national savings rate of nothing.
* Run a federal election campaign on purpose before the economy falters badly, then lie to voters about what to expect.
* Take $75 billion in ultra-safe government securities which were backing our currency and use that to buy high-ratio mortgages from the banks, without disclosing this to Parliament.
* Bring in an economic statement that cuts spending when every other government in the world is scrambling to try and prevent deflation and a collapse.
* Shut Parliament.

Cavalier, out-of-touch, uncaring, dishonest. It underscores one reality: You’re on your own.

This economy’s in very bad shape and there’s worse to come. Doing nothing is a choice you no longer have.

Update: Washington may use bank cash to bail car guys


#1 Den on 12.12.08 at 9:47 am

Yep. Welcome to a Tory government. It’s obvious (as though it wasn’t before…) that Harper and his Reform Party care about $$$ and not us. Maybe all this inaction will clear the way for Harper to run for Alberta premier, and then maybe Flaherty will try for the leadership of the Conservatives in Ontario.

I guess this is balance… Obama gave the US hope, so we had to crush said hope here with Harper’s “don’t bother me I’m busy trying to win elections”, vision.

We’re sooooo screwed.

#2 Rose-Marie on 12.12.08 at 9:58 am

All of this really has me worried. Are GIC’s safe in the banking system? We sold our house last year and are currently renting but all of our net worth is currently held in GIC’s with Scotiabank, maturing in August of 2009. Most of it is insured some is not. Any thoughts?
Thank you!!

Do not exceed CDIC limits. Other than that, it’s a coffee tin buried in the backyard. — Garth

#3 kc on 12.12.08 at 10:02 am

Surprise Surprise Surprise,….. who would have thought it…. Duh…

I guess Harper’s Texas Army signing wasn’t for not…. We are going to see an economic revolt in the streets in our (proud) country….. We canadians in the next couple years are going to make a stand for taking back and ANGER will spill out…. I feel strongly that the gap between the rich and poor and the haves and have nots is going to be the breaking point… when masses of the population are destitute and facing being wiped out from over burdening debts and mortgages while facing homelessness… watch out on a street corner near you for the upheaval that will make the mid 30’s ottowa march look like a walk in the park…..

#4 Peter @ Canadian Banks on 12.12.08 at 10:07 am

It doesn’t matter if it’s Liberal or Conservative government, as the end result will be the same more or less. Politicians think only how to get re-elected, and use every possible avenue to achieve it. Now suddenly our economy can be devastated if fear turns into panic. What happened to the “very special and different” Canadian economy and real estate? At the end we are no different than the rest of the world.

#5 The First Rick on 12.12.08 at 10:19 am

Well said Garth, please run for parliament again.

#6 squidly77 on 12.12.08 at 10:28 am

below are just simple judge how healthy are our banks

#7 gold_bug on 12.12.08 at 10:48 am

Prices and values are different things most of the time. It’s assets and especially liabilities in these times, that count.
When you buy precious metals, it’s nobody’s liability. When you have a mortgage, it’s bank’s asset, and your liability.
When you have the Fed in US unwilling to disclose recipients of $2T funds, and our Finance Minister who exchanged AAA assets ($75B) for the investments nobody can value, you have a big problem. Let’s not forget $10B (or greater) ABCP liability here as well.
Middle class will be wiped out…

#8 David on 12.12.08 at 10:51 am

I doubt the government has any answers for dealing with asset price deflation. Monetary stimulus continues to be the magic answer for lenders who will not lend, consumers that will not consume and maxed out debtors who refuse to take on more debt. One would think Harper as an economist would have caught on by now. He looks like the last one to know these days.

#9 Happy Renter in North Van on 12.12.08 at 10:53 am

I just make the assumption the MSM and governments generally lie to the population to make them compliant and easy to control… Anyone with two eyes and half a brain can figure things out for himself…

#10 Rasputin on 12.12.08 at 10:54 am

Obama may give the US people hope but there is no doubt he will be the president who makes the “our country is bankrupt” announcement. So much for hope.
Also If the Libs, Ndp or whomever was in power, they would have done EXACTLY the same thing as the Conservatives.
The play book is being read from Washington. Goverments around the world are coordinating their efforts. As far as telling the people what the worst case scenarios are…what is the use? Create a panic? That is pretty much the opposite of leadership. Could you imagine what the outcome would be if the PM told the people “Housing prices will crash, sell now and save yourself.” ?

Look, in any crisis maybe 5 % of the affected people will realize what is going on and will take the steps required to save themselves somewhat. This board is populated by that 5% group. Politics really don’t matter one bit at this point. It’s coming down to individuals and families who are paying attention do do what is required.
We truly are lucky that this board exists. I don’t always agree with Garth politically but I am very grateful for his efforts. He can say the things that the people in power cannot.
We can save ourselves…maybe. The rest of the people … that’s why they are the rest of the people. They won’t get it until they already got it, good and hard.
I hope I’m wrong but that is how things look from here.

#11 $fromA$ia on 12.12.08 at 11:02 am

Garth, the points you listed at the end of your thread have not been put forward properly in the last Liberal Media Video by Stephan Dion.

These points need to be brought forward if the Liberals(coalition) are going to have any chance at swaying the publics opinion!!!

Most people I talk to are skeptical about the coalition, namely Liberals. Of course then I answer back with a question, I ask what do they think of a conservative in Flaherty bringing in the 40 year ammortization.

Then they stop and think… They say, ya what was all that about!?!??

All these facts need to come out in Late January for the coalition to have a chance.

#12 vtj on 12.12.08 at 11:03 am


Excellent summary of the extent to which we are collectively kept in the dark and thoroughly misled by our supposed leaders.

Besides exercising our right to vote, can you offer any suggestions as to what we as individuals can do to improve our collective situation in the future? I’m feeling pretty powerless in the face of all this nonsense.


#13 bc girl on 12.12.08 at 11:07 am

Garth, thanks for telling it like it is. I’m looking forward to your new book.

Our government bailed on us, first by lying and misleading us, and then literally shutting down at the worst time. On both counts, it was to keep power. It’s pretty disgusting and corrupt. Stephen Harper is a little tyrant.

#14 Eric on 12.12.08 at 11:10 am

This reminds me of the reptilian part of the brain ruling. Things are going bad – the Cons (aka Regressive Conservatives – or is it only Harper who thinks for them?) are digging in their heels and following their own dogma.
They don’t look at the bigger picture – they don’t believe that this is anything but a hickup caused by the USA. We can drive this car by looking in the rear view mirror. They will do what they believe will work – cut taxes – increase consumption. Economics is not a science – it is rooted firmly in human fear and euphoria – and so it is possible to have several different religions – blame bad outcomes on this or that ….

My beef with the Regressives is that they are not inclusive – they don’t seem to listen to any other viewpoints, they have a hidden agenda, and they sure as hell are not fiscally conservative (keep a surplus …) but that’s because they follow their dogma first and foremost. It’s Bush lite – put the foxes in charge of the henhouse – those who rule don’t believe in ruling or regulating – they believe in the freedom of the markets to fleece j- they believe in a price on human life and the things necessary for life (water, air?) and they believe in building a higher house of cards – instead of being self reliant (food, energy, production, …).

#15 Indicator on 12.12.08 at 11:13 am

What people won’t tell you outright and that includes you Garth…is that we are headed into a Global depression.

Anyone notice when picking up the paper and viewing the Business section, almost every piece of information is negative? Even during the 80’s an 90’s their were glimmers of hope found within those papers.

Everything is BAD and will get worse.

Garth, you are right.. They did not inform us, just like in the US or in fact the world. It has always been, “survival of the fittest” in any respect. Just like the Sales reps telling you to buy stocks into a company when all they want to do is sell. Its too late for the “outsider” and in some respect to the “insider”.

Yes, we will get out of this super-recession. As all markets are cyclical. But this one will be a LONG one.

Maybe this super-recession is what everyone needs. A back to reality approach and remember what really matters: “Family”. Perhaps closeness is on the verge or rather will distance the heart. Who knows?

Keep your pennies people, because “everything matters” here on out.

#16 pbrasseur on 12.12.08 at 11:22 am

Politicians in power always try to downplay economic problems, no matter what party they do that everywhere all the time.

They do it to avoid getting blamed but also to avoid smashing confidence levels. Confidence is key obviously, no need to explain why.

BTW you forgot to mention that this government has cut corporate taxes and increased drastically infrastructure spending, two very appropriate measures. It is simply not true they are have done nothing.

Funny, you complain about this government not doing like all the others in the world but when they do ($75 billion bailout to help bank’s liquidity) you complain about that too…

(Anyways I find is perfectly acceptable to avoid spending all now and keep some ammunitions for later in this crisis)

Garth I’m not sure you become more credible by getting into partisan politics. Your comments sound like sour grapes to me!

The truth is this government is not perfect but is not particularly bad either. For sure a Dion gov would be no better!

#17 Alex on 12.12.08 at 11:31 am


The banks cannot be trusted and they may have liquidity problem next year. Even keeping money in GIC or Money Market may turn out risky.
My another concern is that our national currency and US dollar can become worthless if things continue to deteriorate the way they do now.
I am going to purchase two 1000oz silver bars at my bank an store them in the vault. I don’t trust this fiat papers anymore…

#18 HalifaxFamily on 12.12.08 at 11:32 am

I wouldn’t blame it on the Conservatives. You play with the hand that you are dealt with – it’s a greedy world out there, with people trying to make money off each other for doing unproductive work.

I do agree that cutting the GST probably wasn’t a great idea. Cutting income taxes and forcing Canadians to save probably was a better idea. The 0/40 mortgages were probably because it was getting harder and harder to get mortgages…. due to the inflation of house prices (secondary to globally looser loan requirements). If it wasn’t the conservatives, it would have been the Liberals allowing for 0/40.

just my humble opinion.

#19 dekethegeek on 12.12.08 at 11:48 am

Garth, I agree with most of what you have said as far as the Tories lying to the public to save their own bacon ( but hey! eventually liers get caught in their own lies so let them twist in the wind). I hear that they are filling 18 seats in the Senate before Jan 27th ! !! Talk about stirring up the voters wrath! Idiots!
You have been warning everyone who would listen for months if not years (as have numerous other financially astute people) that the economy( housing prices, personal debt, etc.) was a ‘bubble” that was going to burst with dire consequenses.
Garth, I hate to say it , but the majority of majority of people are financial idiots who couldnt balance a bank account if they had an accountant sitting on their shoulder! They are the same people that will continue to say the economy is “fine” right up until the banks fail and then they will be standing there with no clothes and penniless, wondering what happened.
I read the financial section of newspapers and listen to economists on tv and the radio. This meltdown isnt a surprise to me ( or you !) The only thing that surpised me was how long it took to materialize.
As the Roman salesman said to the uneducated dolt buying a broken down horse cart, ” Caveat Emptor”
(Let the buyer beware).
Two more major megaproject Olympic Venues open today The Olympic Ice skating oval and the ‘Peak to Peak” Gondola in Whistler. Dare I say that hundreds more construction workers have recieved their final pay cheques ? Stay tuned for more ramblings from the left coast

#20 Roy on 12.12.08 at 11:52 am

They all lie ! Here in B.C. aka The best place on earth . Colin Hansen and Gordon Campbell claim that the Olympic Games are going to save the day. After 2010 everything will rebound and house prices will increase as a result of the spinoff. Ticket sales are strong and none of the major sponsors have backed out including G.M….They also claim that B.C. is insulated from the economic woes due to our high natural gas revenues. The truly sad part about all of this is that these jackasses are in their second term. They also still have a strong standing in the popularity polls . As I have said before Their are no victims only volunteers. I guess we the taxpayers can look forward to paying for these Olympic games for the next 50 years.

#21 Gord In Vancouver on 12.12.08 at 11:59 am

Today’s post heavily emphasized job losses.

Let’s all pray that Vancouver doesn’t suffer from massive job losses during the upcoming year. Such a tragic event will make the city’s most pessimistic predicted real estate price drop look like a pipe dream.

Why will this happen?

1. Vancouver’s Appeal

Vancouver residents, unlike those in other regions of the country, are much more hesitant to relocate as they’ve already fallen in love with their city’s climate, culture, etc. A large percentage of today’s visible minority immigrants, who are even more resistant to relocation, moved to Vancouver when Canada’s economy was in better shape.

IF Vancouver’s job market slumps, there will be, compared to other Canadian regions, considerably more people competing for fewer jobs. A Vancouverite is, theoretically, much more willing to hunker down and take a smaller salary than his Canadian counterparts.

Simple logic says that this will kill salaries and, possibly, force some Vancouver residents into cheaper housing.

2. Vancouver’s Lack Of Economic Diversification

Until the early 1990’s, Vancouver’s economy was much more diversified than it is today. Nowadays, a large chunk of Vancouver’s economic activity centers around tourism, gambling, and other service-related industries. Virtually all of Vancouver’s well paying manufacturing jobs – those that pay over $50,000/year have disappeared.

Recent construction work due to the real estate boom and need for 2010 facilities has raised Vancouver’s average salary figure to a mark over $40,000. As I said earlier, much of this work has already been completed.

There’d better be another form of economic activity that can replace Vancouver’s recent construction work or its average salary figure will tumble to the low $40,000’s – barely enough to support a low end mortgage.

#22 Rental Crunch? on 12.12.08 at 12:03 pm

More ammo for Garth…

Globe and Mail: A rental crunch on the horizon

#23 john on 12.12.08 at 12:35 pm

#3 kc on 12.12.08 at 10:02 am —-I think your absolutely right–i really wonder if Harper’s goal is to totally destroy our economy? He is appointing 18 new senators at a coat to taxpayers of over $6,ooo,ooo.oo a year,he also has made 25 new patrionage appointments at a cost of “god knows what” (since his budget recieved lack of confidence) And…………. he is giving oil rich Alberta $105,000,000.00 (under the guise of “infrastructure”) to pretty up the Calgary stampede grounds and the Northlands collisium in Edmonton.What a disgrace and an insult to every taxpayer in Canada!

#24 My_View on 12.12.08 at 12:36 pm

Maybe its a blessing for the Canadian government being shut down, no dumb spending.

As for the American Auto Industry, they will survive. Maybe only 2 brands and fewer plants, but I doubt the government will be driving around in Toyotas.

#25 Alex on 12.12.08 at 12:48 pm


Do not bury a coffee tin in your backyard. Split your money between several GICs in different banks. Make sure each GIC contains less than 100K and is insured by the CDIC.
My only concern is if all big six go belly up, will there be enough CDIC insurance funds?
Garth, in one of your books you wrote that in such a case CDIC will not last longer than 15 minutes after the crash.

#26 TLC on 12.12.08 at 12:48 pm

the prices are dropping in Calgary much faster and by a MUCH greater amount than you state on your latest blog topic.

Calgary peaked in July 2007
at average price of $507,000
and the average price today is $431,000

I am a realtor here and much of my business is coming from people who call me after the previous agent failed to sell the clients home.

Just did a price reduction of $30,000 yesterday on one of my listings- puts it under $350,000 now and it will sell. I am selling a lot of homes still, but they must be priced below “market value” or forget it.

Also high end is seeing HUGE drops- I have a listing at $725,000 that started at $989,000 last year with another realtor and we have ZERO showings.

Also, I sold a nice home yesterday, after it being on the market for only six days, for only a few thousand below list. If sellers want to sell, they must go “low”.

The clients who are not selling, are the ones not taking my advice, and typically the people who dont really want to sell any way, and will sell if they “get their price” ( something I am sick of hearing, like as if people can dictate to the public what their home is worth) and people who bought at the peak, and are dreaming of selling for more and even dreaming to break even.

I sold a house for a guy who wanted to flip who built new last year, I sold it for him for an $80,000 dollar loss to his pocket.

Also, that fluff piece of “journalism” showing that Calgary realtor saying it was a buying frenzy in December is something very offensive to me. Please, we are not all like that and that was just tastless.

If you want to sell, you can sell. If you want to buy you can buy. Be realistic, look at it for the long term, you will be fine. Like everything else now, prices will and always do, come back in line with what peoples wages allow them to pay…its that simple.

#27 john on 12.12.08 at 12:52 pm

GM will shutter its North American plants for all of January
38 minutes ago

By The Canadian Press

General Motors Corp. says it will cut another 250,000 vehicles from its first-quarter production schedule by temporarily closing 21 factories across North America.

The move affects most plants in the U.S., Canada and Mexico. Many will be shut down for the whole month of January.

#28 OntarioHouse on 12.12.08 at 1:00 pm

I think it might even be a good idea to spread the money to several banks if the amount exceeds the CDIC insured limit of $100,000.

#29 Bermygoon on 12.12.08 at 1:06 pm

I here what you are saying Garth but these officials basically can’t tell the truth, as telling the truth would even cause a bigger panick and a bigger problem. At least we aren’t the US government who was stupid enough to run huge debts during the good times. Furthermore the Canadian government has been smart enough not to give a useless ‘free’ cash giveaway!

Also, I don’t feel sorry for anyone that believes a word CREA says, all anyone has to do is look into the ‘comments’ to see how crazy they are. The average citizen has known for a long time hard times were coming, you even wrote a book about it. If they didn’t know they had their heads in the sand and they get no pity from me!

It is easy to pass blame for this mess but I take the look that is all relative and if you take a look the clowns in charge to our south I think our government has done a pretty good job.

#30 braincoil on 12.12.08 at 1:47 pm

Ditto The Fist Rick – I’m one of your Halton voters :-)

#31 Calgary_rip_off on 12.12.08 at 2:06 pm

So this is capitalism at its best. Did you ever see how much the executives are paid? Let them NOT be bailed out. Free enterpirse is just that, free. And for freedom comes responsibility.

Of what relevance is this to house prices outside of areas perfused with auto workers? Not much.

The for Calgary/Cochrane is still whacked and totally insane. Check out the house prices!!! It STILL is out of this world prices.

Unless house prices fall about $200,000 its not even worth noticing.

#32 Calgarian Marked on 12.12.08 at 2:36 pm

Lots of opportunity during hard times – “If you can afford to do it now is one of the best times to make long term investments.”

and some outrageous self serving information with a Calgary focus here:

#33 RimmyJ on 12.12.08 at 2:49 pm

Why is anyone surprised at the state of today’s economy? The last forty years of government expenditures has put this country in deep debt that will just be dumped on our children and grandchildren. It will likely never be repaid. I am furious about what the conservatives have done by buying high-ratio mortgages with safe government securities held by the Bank of Canada. However, not too many people complained during the good times, over the last forty years, when successive Federal Governments ( during which time the Liberals controlled Parliament 67% of the time) created this debt because that is what the people wanted.

As Garth says, “you’re on you’re own” during this crisis.
Well , I suspected something was developing as far back as 1987 (remember the market crash) and so I started searching for relevant information. In 1993 I read the book , THE GREAT RECKONING , by James Dale Davidson and Lord William Rees- Mogg and started mentally preparing for what lay ahead. As the bubbles developed in the 1990’s I just knew it could not last. Then in 2004 I read CONQUER THE CRASH by Robert Prechter Jr. Since then it has been more than mental preparation. I have been laughed at and ridiculed along the way because of my views by most everyone but my immediate family.Now my family and I are more than mentally prepared. I don’t like what lies ahead any more than anyone else but we are prepared as best as possible. I have no doubt now that what we face will be worse than THE GREAT DEPRESSION.

#34 nonplused on 12.12.08 at 3:26 pm

So how safe is a Canadian t-bill mutual fund in your brokerage account?

How safe are any securities held through a broker?

If you buy CEF (physical precious metals fund) but your broker goes belly up, does he take your precious metals position with him?

No speculation please looking for someone who knows how this stuff works.

#35 smwhite on 12.12.08 at 3:32 pm

Couldn’t agree more with Garth on the article in question, the lack of honesty and integrity from the head of the CPC is disgusting. I understand not wanting to rock the boat, being afraid of creating mass panic, but it was bad policy that put our housing market over the edge and the players should stand up and say they mis-calculated, it would go a lot farther then utilizing the Republican Neo-Con policy of NEVER admitting wrong doing, or at least not until the end of your term in office.

Check out Ron Paul’s argument on the “Fat Three”:

The answer is switch the big three car plants here in Canada to Toyota, Honda and Nissan, let the inferior products die.

#36 Makeorbreak on 12.12.08 at 3:34 pm

Even if one spreads his money in GICs under 100,000$ in different banking institutions doesn’t mean he should’nt bury cash in his backyard.

Imagine if the bank goes bust and you have to get in touch with the government, fill out papers and have to wait to get your money back…even if you eventually get it back, you will need money on hand. That’s why I thought about buying a safe and keeping a few thousands dollars in it.

So I went out looking for safes and I saw some at Office Depot and Wal Mart for a reasonable price. Even a fireproof safe is only good for about one hour. So if your house burns down for a few hours, so does your safe and your cash.

Burying money in the backyard in a tin can is at this point what I intend to do. Except that this is winter (here in Ottawa) and everything is frozen outside. So what do you suggest I do? Bury it under the snow in the winter and as the snow melts, dig a hole in the soil in the spring?

I also have a shed outside. I could put the tin can there. But the shed may also burn if the house burns. Also, what are some ways of keeping the paper money free of bugs, humidity, mold and dirt? Wrap plastic around it?

Thanks for any advice you may have.

#37 Calgary_rip_off on 12.12.08 at 4:02 pm

“average price today is $431,000”

This is for Calgary. Why anyone would buy when things are priced like that?

The median will probably never approach the pre-bubble status.

So what will happen is many a desperate person buying overpriced properties in Calgary. All this is great news for realtors and sellers. But no one else.

News flash!!!

Calgary Median House price 2009: $200,000 SFH

Bring it on!!!!!!!!!!!!

#38 Calgary99 on 12.12.08 at 4:16 pm

First time poster. Reading for quite a few days. You’re doing some noble work. It is free market, let the fittest (and the efficient) survive. By auto bail-out, you only gain a few extra months. Then what? What is an American car that is assembled in Mexico, parts from China…

#39 Nathan in Edmonton on 12.12.08 at 4:52 pm

Our politicians have lied, and our main stream media was despicable in their enthusiasm to report these lies without critical analysis of the true facts. But I have little sympathy for people who bought the lies outright and thus made some poor financial decisions. Our current crisis has been predicted for years and available to anyone willing to do a little research.

Canadians where given a “preview of coming attractions” by looking at the states for the past two years and anyone who thought it wouldn’t happen here is indeed a greater fool.

#40 dekethegeek on 12.12.08 at 4:59 pm

Garth, If you have the time. Go online and listen to some of the “desperation” advertisements that are on the AM Radio station CKNW in Vancouver. Just Google CKNW News radio.
Over the past few days I have heard several “local” celebrities advising the listener to “Spend money and keep Vancouver working!” or “Be the first person at the company Christmas party to talk positively about the local real estate market!”
This is the drivel that is being spoon fed to the ignorant masses of Lotusland. Fluff and Candy to keep people happy and spending money! If it wasnt so patheticly sad it would be hilarious. And you wonder why the average consumer is so deep in debt. This economy is screwed.

Yeah, heard them. I did an hour-long interview Sunday night on ‘NW and was quite amazed at what I heard during the commercial breaks. Desperate indeed. — Garth

#41 john on 12.12.08 at 5:36 pm

GM shutting down all its plants in Canada for the month of january–scary!–when you look at the whole picture>terrifying!–what about all the part supply companies?,the truckers?,and all the related industries and so many of the employees who live paycheck to paycheck? the huge loss of cash flow to our economy?—-oh well for all the Harper supporters>>> those 18 new senators,and those 25 new patrionage appointments are celebrating and swilling back our tax dollars immune to the everyday problems in Harpers “technical recession”

#42 JET on 12.12.08 at 6:05 pm

Ottawa and Ontario just announced a 3.3B auto bailout – why announce it Friday evening I wonder other than to sooth the autoworkers’ worries. They should have done it on Monday morning to give the markets a boost!

#43 The First Rick on 12.12.08 at 6:11 pm

#21 Gord In Vancouver


BC’s 6 Billion dollar a year hydroponic marijuana industry will be the only industy left standing. What do you think drives Campbell’s delluded thinking?

#44 BoC warns on further credit tightening on 12.12.08 at 6:17 pm

Unless I’m misunderstanding debt service ratio, this looks plain ugly.

According to the Bank of Canada:
Under a worst-case scenario developed by the bank, the proportion of households with a debt-service ratio above 40% (the amount of net income used to service debt) would rise “substantially” and hinder their ability to meet financial obligations. “This would lead to substantial losses for the major Canadian banks,” the review said. “Household indebtedness could act as a channel of contagion for an external shock and could affect the wider Canadian financial system through higher loan losses, while also causing a tightening of credit conditions.”

…Combine that with this from RBC…

Regionally, the cost of carrying a detached bungalow ranged from a high of 69.7 per cent of income in British Columbia to a low of 35.4 per cent in Atlantic Canada. Among a selection of major cities, the range was from a high of 74.8 per cent in Vancouver to a low of 40.4 per cent in Montreal with Toronto at 53.3 per cent, Calgary 47.3 per cent, and Ottawa 43.3 per cent.

… with those two pieces of info side-by-side, it’s hard to not think that our banks aren’t in big, big trouble.

Even if you assume that a significant portion of homeowners have paid down their mortgages below the “40% threshold”, there are car loans, credit cards, student debt…

How long ’til this hits?

#45 Will Lever on 12.12.08 at 6:59 pm

Rasputin’s comment above is the truth. Conservatives, NDP and Liberals would all do the same thing. There is no way out and those that take due diligence to read and control their destiny and wealth will do better than those that follow the mainstream of anything. I know a number of very smart engineers, nurses, and computer scientists that have no idea what is going on. They continue to believe whatever their Investment Professional at their bank or their realtor says as the truth.

Thanks Garth. Your book put me on the path to doubling my portfolio twice between June and October of 2008 using an inverse ETF (HXD on the TSX). I am calling my first born Garth.

#46 Marc on 12.12.08 at 7:09 pm

Garth, if you have heard the Vancouvers economy is working ads, you should have seen the news the other night. People were questioning, if we are being encouraged to keep spending, why have credit card interest rates not dropped? Short term lending rates have been slashed, but credit card rates have not, and have even gone up.

I do not think the ads are meant for people to keep spending what they do not have, or cannot afford to pay back, but the Global news never brought that up. Going into further debt is not a solution to this financial problem in my opinion.

#47 Cara on 12.12.08 at 7:26 pm

Burying your money in a tin can in your backyard is rather foolish – it’s not like today’s backyards have a lot of square footage for a nice new hole to go unnoticed. If you want to attract thieves, keep a bunch of cash in tin cans around your house and yard and “buried under the snow” LOL. I’d rather take my chances with the CDIC, and maybe a home safe, than with your local pothead and a B&E.

Also, what good is a 1000oz silver bar going to do in the event of a major calamity in finances? Look at Zimbabwe right now – no one wants silver. They want food, clothing and clean water. Are you going to trade 1000 ozs of silver for a case of water? I think not. It’s the commodities of daily life that will be most valuable in a crash, not giant chunks of precious metal screaming “Kill my owner and steal me”

#48 The Tallyman on 12.12.08 at 8:05 pm

It’s pretty bad when it is easier to believe a used car salesman than our leaders.

Just spend. Borrow, spend.
Even as the wrecking ball swings our way nary a one of those elected prostitutes would give a heads up if it meant going against the interests of their pimps (Finance)

We are on our own.
If you don’t do moonlight gardening
Keep good banking records.

I just can’t decide if the Maxwell House or the Nabob
can is more rust resistant.

#49 islander on 12.12.08 at 8:55 pm

@Happy Renter: Most astute, concise and accurate comment in this blog’s history.

We should trust our own eyes, ears and brains. Not expect politicians to tell us the truth when NOT telling the truth is what gets them re-elected. And that goes for politicians of all stripes. To blame one party and not think another would do just the same is to believe in Santa Claus.

#50 islander on 12.12.08 at 9:12 pm

JET asked: “Ottawa and Ontario just announced a 3.3B auto bailout – why announce it Friday evening I wonder other than to sooth the autoworkers’ worries. They should have done it on Monday morning to give the markets a boost!”

As a former member of the media, I can help you out with that. Media members works bankers’ hours, for the most part. The majority of reporters work 9-5, M-F, as if news doesn’t happen at any other time of the day or week.

By the time the bailout was announced, the vast VAST majority of reporters would already have been half in the bag at their local watering hole.

Even if the reporters were still sobert at 5 in the afternoon, who would be picking up the phone on the other end of the line? The politicians have already flown back to their home constituencies for the weekend. Heck, with Parliament under seige by Bolsheviks and controlled by fascists, there ARE no politicians in Ottawa, probably.

So the earliest anybody is going to be dealing with this issue (not including the gaseous TV punditry shows) would be Monday. For stories that will run Tuesday. By that time, the next crisis will be put on the table and the sheeple, having been desensitized to the enormity of the bailout(s), will shrug and quitely hope that the inflation tsunami heading our way somehow leaves them, their homes, their jobs and their loved ones standing.

#51 gold_bug on 12.12.08 at 9:25 pm


Silver is an industrial metal as well, in a great shortage.
It is a pure supply and demand play, and its time will come during the rebound. Now, it may be a bit early. New silver ETF in Dubai, BTW…

#52 Future Expatriate on 12.12.08 at 9:28 pm

Cara #47: This isn’t Zimbabwe. There will always be rich folks living in nice big guarded houses where you will be able to go into, through the back door, like a domestic, in the dead of night, and trade your gold or silver coins to fill your wheelbarrow full of newly inflated cash to buy your loaves of bread for the next few months.

That’s how it’s worked, and how it will always work, except in the case of places like Zimbabwe, where the only rich are the “leaders” of government in walled-off palaces behind an army of guards and they don’t mind killing gooses that lay golden eggs.

Our rich are just a tad more ethical, and pragmatic. The precious metal grey market here will do just fine, thanks.

Gold is not for optimists; it’s for realists who can afford to gamble.

#53 john on 12.12.08 at 9:38 pm

JET on 12.12.08 at 6:05 pm Ottawa and Ontario just announced a 3.3B auto bailout – why announce it Friday evening I wonder other than to sooth the autoworkers’ worries. They should have done it on Monday morning to give the markets a boost!
>> My thoughts on that—3.3billion or 33 billion is not going to change the outcome! The Harper government should have been honest and told them months ago to get their act together because there would be no bailout from public funds (and there should not be).The companies would have been forced to restructure and had time to prepare for the inevitable.The government kept them in limbo neither side did anything–well now here we are–that 3.3 billion will be eaten up in no time and they will be back at the table.The UAW refused to make any wage concessions –well excuse me! if the taxpayers are going to be burdened with a 3.3 billion dollar debt then we damn well should be setting the terms! So all that really has been acomplished is about a 3 month grace period for the auto companies to enjoy the big wages and life style while the rest of Canadians struggle to put food on the table——-and last but not least -for Harper to gain some popularity for the election in February when he gets his ass kicked out thru lack of confidence and he snivels to the GG for another election.

#54 Dawn in Calgary on 12.12.08 at 9:39 pm

US Based, but another glimpse of the future.


Why home values may take decades to recover

By Dennis Cauchon, USA TODAY

Rick Wallick moved into a new, three-bedroom $200,000 home in Maricopa, Ariz., in October 2005. Today, the home is worth $80,000.

The disabled software engineer stopped making mortgage payments this month. His $70,000 down payment is now worthless. His dream house will be foreclosed on next year.

#55 RimmyJ on 12.12.08 at 9:49 pm

To : Makeorbreak(#36)

If you are serious about burying money in the back yard this is what I suggest instead of using a tin can.

(1) Purchase a short piece of 4 or 6 inch diameter PVC (plastic) sewer pipe and two end caps, readily available at a building supply store.

(2)Take your money and roll it into a size that will fit into the pipe. Place the money in a Ziploc bag and wrap tightly with duct tape. Then wrap again with another layer of plastic and again completely wrap in duct tape.

(3)Insert your money into the pipe, cap each end and wrap duct tape tightly around the ends to seal the joints. Once again, wrap the pipe completely in two or three layers of plastic and completely wrap the whole pipe tightly with duct tape.

(4)The pipe can now be buried. To be more sure that no moisture can enter the pipe try to bury it in a well drained sandy soil well above water table.

How do I know this can work without damaging side effects ? Because I have done it when we used to live a long way out in the country. Certainly, a much safer environment than in a crowded city but it can still be done.

A word of caution is in order, however. Tell no one what you have done, do the job very discreetly(like planting a flower garden) and make sure you leave a note in your safe deposit box for your survivors(just in case) showing exactly where the loot is buried.

And for those who live in a rural area,and don’t want to bury the PVC pipe underground, you can always dump a load of manure over the pipe. Not too many people(especially city slickers) are going to go looking there for buried treasure.

And I don’t care how many people think I am nuts.There is no doubt that we are in a deflationary spiral heading for depression. There will likely be at least one bank failure, just like in the U.S.A. , and it doesn’t hurt to have a few thousand dollars available for the necessities of life when bank holidays once again become a normal part of our life, just as in 1929-1932. I am not talking about burying all your life savings. That definitely would not be wise.

With 30 day U.S. treasury bills being auctioned off at 0% yields this week (yes it’s true) CASH IS KING! In fact, at one point, the yield was negative. In other words, the purchasers were willing to pay the government for the privilege of owning T-Bills.

#56 Jeannie on 12.12.08 at 9:49 pm

Rimmey 3. would you mind sharing some of Robert Prechter jnr’s thoughts on the present global downturn?
How does he feel about the U.S. dollar? gold?

#57 EJ on 12.12.08 at 9:50 pm

So with all the economic turmoil, insane housing prices, people losing their jobs, and deflation setting in, we still have greedy crackpots calling for higher prices.

Yep, let’s get rid of one of the few perks and inflation-inhibitors that Winnipeg has and jack rents up. They’ve already squeezed the new home buyers of everything they have, it’s time to squeeze the renters out onto the street now.

I wouldn’t be surprised if the RE industry was behind the PPMA in this propaganda effort.

#58 pjwlk on 12.12.08 at 10:00 pm

440,000 jobs in Canada related to the automotive industry. Ford Oakville – Only 5 weeks production scheduled between today and May 2009! Yeah, it’s different here in Canada…

#59 Gord In Vancouver on 12.12.08 at 10:08 pm

#43 The First Rick


#60 charliegosurf on 12.12.08 at 11:00 pm

The Greatest D

the devastation file

well, snow is flyin and im bound to go away screaming like a shootin star….im gettin tired of hearin about all thiss stuff, like a 33’s skipping, iwounder if all my life now we will be in a economic nigthmare…

imagine a world without possesion, i wonder if you can, imagine a world where people are all even, iwonder if you would. imagine a world without war iwounder if yud love.

my imagination as no limits, yours too, if the nigth sky is filled with stars and each sinle one is represented by one human being, will you streak across and make adifference???

the time has come, rigth here, rigth now, the blogs are changin this planet for the better of humanity….im the next election, vote for the blog party, and make the difference.

this world depends on you.

#61 Adi on 12.12.08 at 11:17 pm

Anyone here knows if money in Saving accounts are ‘safe’? Is there any insured limit as for the CDIC-GIC stuff? Thanks for any response to this.

#62 dd on 12.12.08 at 11:42 pm

#37 Calgary_rip_off,

Unless we are in a depression median house prices should not go to these levels.

If house prices are at these levels even you will be worried for your job.

#63 CalgaryRocks on 12.13.08 at 12:32 am

Imagine if the bank goes bust and you have to get in touch with the government

Russians have a long standing tradition of losing all of their savings in bank failures and currency devaluations. It’s like a yearly thing over there, almost.

So what they do now is save almost nothing and spend it all rather than keep it in the bank. The retail industry is literally going gangbusters over there.

What savings they do have, they keep in USD & Euros under their mattress, quite literally.

#64 The Tallyman on 12.13.08 at 12:32 am

Can’t believe it.
On CBC National news, the Gov of Michigan
is asking citizens to buy stocks in the auto industry.
That’s like the captain on the Titanic begging passengers to buy umbrellas.

I feel sorry for the workers but asking the general public to put their heads back up their butts and continue believing in Santa is just to much.

It’s too late for an industry that has had decades to get it right but refused to put out quality products to compete with the foreign car makers.

Bush should just install a Drive Up window on the side of the White House for the Big 3 and be done with it.

#65 The Tallyman on 12.13.08 at 12:43 am

CDIC does that stand for:

Cannot Dispense Immediate Cash… sorry try again

Guess we’ll find out sooner or later.

#66 The Tallyman on 12.13.08 at 12:48 am

If you leave a little coffee in those cans,
You can use a few twenties to light the campfire
and pour some Nabob down your neck to soothe those apocalyptic jitters.

Ok… Ok… I’m going to bed now!

#67 kc on 12.13.08 at 12:53 am


Yeah, heard them. I did an hour-long interview Sunday night on ‘NW and was quite amazed at what I heard during the commercial breaks. Desperate indeed. — Garth

what day and time? i was looking for this in the audio vault and wanted to hear it.


It was 8-9 pm PST last Sunday. Brad Brooks show. I am on it again 7 pm PST Jan 25th. — Garth

#68 Raincouver on 12.13.08 at 2:44 am

This economy’s in very bad shape and there’s worse to come. Doing nothing is a choice you no longer have.

As the great humanitarian Henry Kissinger once said, “Everything you do will be wrong. Including nothing.”

#69 derrin on 12.13.08 at 6:27 am

What would you have done Garth.
I would call you an armchair politician. Sitting on your couch calling the plays.
Silly plain silly.
I guess all the countries like America, UK, South Korea , Japan…….and the list goes on.They must all have conservative governments or S.Harper setting policy for them as well. I mean they are in the muck aren’t they……huh…..I mean duh.
I can’t remember Garth are you a liberal or a conservative.
Give us a break……..
If I had the time I would go back as I am sure awhile back you were telling people to mortgage their house and invest that cash in the stock market.

You keep talking about saving money. I remember the Conservatives brought in a tax free savings account. Didn’t they? Ya, they did. Where is that piece of info in your blog.
I am not a conservative in fact I may have voted Liberal if it wasn’t for the french school boy leading the party for the last few years.
You bash Harper for running a defict now. How about Trudeau! We spent years trying to get out of that hole he put the country in.
So let me get this……the government should spend so we Canadians can save…….yup makes sense.
Sure does golly gee….Mr. Turner.

That rant is not worth responding to, since you are a bigot. However I will mention that the new tax-free savings account has another more common name. Cash. — Garth

#70 derrin on 12.13.08 at 6:44 am

Also just for all you liberal fans.
Your new leader Mr. Ignatieff loves Canada so much…..that since 1978 until 2005 he hasn’t even lived in Canada!

How is that for a grass roots leader.
He loves Canada so much he lives somewhere else for 27 years.
Sounds great.

#71 Canned Goods and Buckshot on 12.13.08 at 8:16 am

Just read the G&M Saturday morning Garth. That must of been some kind of political pressure from your peers. As a Canadian citizen raised in the Catholic tradition and in light of your blogs (read pennance) I forgive you.

#72 poorguy on 12.13.08 at 8:28 am

and I thought there is no subprime here.

#73 Makeorbreak on 12.13.08 at 9:12 am

Cara: My house was built in 1970, so the backyard is quite large and fully fenced. Plus, the hole wouldn’t have to be very big to secure a tin can. CDICs or not, I do think you need a supply of cash money on hand for everyday purposes in the event of a bank run or bust. I don’t even trust security safes in the banks. In the 1930’s those safes were seized. A home safe needs not be too big so you can carry it outside if need be.
Since most of them aren’t completely fireproof, I’d rather just hide the money somewhere in the house. Someone told me the freezer is a good choice, since it will be the last thing to burn in a fire.

I am also having a woodstove installed in case of an electricity shutdown (that will be perfect for some squirrel fondue…). Things look extremely dire indeed, the depression is starting to affect every sector of the economy. On the news yesterday we learned the shipping industry is going down the drain. This will mean stock on the shelves are going to disappear very fast. Thankfully I started to stockpile more than a year ago. True, food, clothing and essential staples may worth more than gold.

#74 Tom on 12.13.08 at 9:25 am

Maybe more Canadians will get off their backsides and vote in future, give that the last election saw the lowest turnout in history.

We can’t complain if we don’t get engaged and constantly remind politicians that it’s US who really hold the balance of power.

#75 Makeorbreak on 12.13.08 at 10:11 am

RimmyJ: Thanks a lot for your advice about burying cash, but what about winter? Do you suggest the pipe gets buried in the spring and stays there all winter? Our winter here are harsh (Quebec-side of Ottawa). What about if you need the money right in the middle of winter, and there is snow and ice above it?

I even thought of hiding it in a bird house outside. There wouldn’t be any shoveling to do to recuperate it. Sorry for my English, French is my first language.

#76 Midas on 12.13.08 at 10:14 am

Conservative / Liberal / NDP, all the same; not a dime’s worth of difference between them. Political parties are just distractions created to give us an illusion of democracy.

The reason for holding precious metals, gold and silver is that when hyper inflation hits as it inevitably must the price of these metals will go to the moon. That will be the time to trade them in for tangible goods; farmland, fuel, water and food which you will have picked up for pennies on the dollar in today’s money. GIC’s, money market funds, T-Bills etc. will pretty much be worthless even if the banks survive since they will lose so much of their purchasing power. 100K in paper money will buy you 10K worth of stuff in the year or two ahead. A 1000 oz. bar of silver that Alex has (#17 above) may actually buy you the family farm.

The other commodities of value will be things like coffee, booze, cigarettes, and even toilet paper. Mad Max? Yup!

#77 Makeorbreak on 12.13.08 at 10:19 am

Garth, I wonder what you think about insurance companies. If banks fail, an insurance company may very well fail too. Could any claims be jeopardized in the future? Will the company do everything not to honour the contract?

I suspect a lot of desperate people near foreclosure are going to set fire to their houses. This can only result in bigger premiums and tighter coverage for the rest of us.

#78 Renta on 12.13.08 at 10:37 am

MakeorBreak said: “I’d rather just hide the money somewhere in the house. Someone told me the freezer is a good choice, since it will be the last thing to burn in a fire.”

Bad choice – because that’s the first place a theif looks when he breaks into your home. The sock/underwear drawer is the 2nd place.

My grandmother hide money in cans in the backyard for years. she also lived through the depression. Only my mom had the “map”. After she died, my mother went to retreive the treasure and found King George bills – perfectly preserved.

#79 Bob on 12.13.08 at 10:45 am

#74 Tom

Do you really think that if Liberals or NDP were in power that things would be better? LOL moron.

#80 vtj on 12.13.08 at 10:50 am


Wow, what an eye opener! Thanks for posting.

Prior to purchasing a home this past year, I was amazed to have been offered a 40 year mortgage without even asking. I only realized a couple of days before signing the paperwork that I was inadvertently setting myself up for such a ridiculously long amortization . When I called my mortgage broker and asked her to clarify things for me, she mentioned that it was common practice for people to go for the 40-year option and had assumed that this was the product I was interested in as well.

Luckily, I took the time to review the paperwork before signing the documents. I now have an amortization of 25 years and am actually working to kill the thing off within 10 years via the pre-payment privileges that I negotiated prior to signing.

Thought I’d post this to give people yet another heads up. It’s been said many times but I’ll do it once again – take the time to fully understand what you’re getting yourself into before signing anything!


#81 Bob on 12.13.08 at 10:50 am

#53 John

All your posts are bashing the Condervatives. You are such a moron. Read # 69 he basically tells it like it is. I usually vote between Liberal and Condervative but I am so sick of your ignorance.

#82 CDIC on 12.13.08 at 11:37 am


CDIC insures you for up to $100,000 per institution (not per account, not per GIC – per institution).

If you have $75K in a savings account and $75K in a chequing account, you’re insured for only the $100K — you’d lose the additional $50K in the event of a failure.

If you have more than $100K and you want it to be insured, put some at one bank and some at another (and another, and another). Having $500K in GICs all at one bank is not what you want.

Be mindful that what you think of as two separate institutions may not be. For example, PC Financial uses CIBC as its banking partner. So, having $75K at CIBC and $75K at PC isn’t going to do you any good, since they are one bank as far as CDIC goes.

It’s probably a good idea to have paper copies of your statements. If you don’t have one already, call your bank and ask them to provide it to you.

Only bank accounts and GICs are insured as far as I know.

You can get all of the details here:

If you have joint accounts they’re calculated differently. Check the CDIC web site for details.

#83 CDIC on 12.13.08 at 11:41 am

Side note… Only Canadian funds are insured. Foreign currency (eg, USD) are not insured. Money markets are not insured, either (they’re mutual funds).

#84 Kitchener1 on 12.13.08 at 12:05 pm

RE: #77 Makeorbreak
I suspect a lot of desperate people near foreclosure are going to set fire to their houses. This can only result in bigger premiums and tighter coverage for the rest of us.

Funny that you mention that, I noticed in the last rescession in and around the GTA quite a few “arsonists”(spelling?) would all of a sudden be active. Watch for these “arsonists” to burn down new-yet to be built subdivison lots. lol

#85 Blacksheep on 12.13.08 at 3:25 pm

Garth says,

“Cavalier, out-of-touch, uncaring, dishonest. It underscores one reality: YOU”RE ON YOUR OWN”


When people finally realize that:

-You are responsible for you’re own family.
-As a societiy we face a massive economic crisis,
37 years in the making.
-Most governments do not necessarily have our
best interests as their top priority.
-Fiat currencys may be at risk.
-CIDC repayment promises are frighteningly open
ended, read the fine print.
-Gold spot is paper, but gold bullion has been money
for 5000 years.
-Prudence suggests, PREPARE FOR THE WORST,

Take care.

#86 islander on 12.13.08 at 6:07 pm

Derrin, the book where Garth suggested people mortgage the sh!t out of their houses and buy into the stock market was published in the mid-90s and was called The Plan.

Had people followed The Plan and invested in, say, tech stock, they would have been annihilated.

In Garth’s defence, people who followed that strategy would have done OK had they invested in a balanced portfolio. At least until the past six months.

But also in Garth’s defence, no investment strategy is forever. You have to adapt along the way.

But in Derrin’s defence, he makes a good point: it’s blind partisan folly to lay this on the doorstep of a conservative/Conservative government. Regardless of labels, governments of all stripes across the world are rushing to print money to bail out private industry. Refusing to respond to Derrin’s point because he uses a fairly mild perjorative to describe Chicken Man seems a little weak, frankly.

The book was called “The Strategy.” It did not recommend mortgaging homes but rather taking tax-deductible unsecured equity lines of credit. It did not recommend buying stocks, but rather investing in actively run mutual funds with LOC payments made through systematic withdrawal plans, and only as part of a balanced portfolio managed by a professional, not a do-it-yourselfer. Anyone doing what would have achieved diversification by having both financial and real assets. Derrin is a dink.- Garth

#87 derrin on 12.13.08 at 7:53 pm

Typical Garth… answer to the real question.
You are a bigot.
“A bigot is a person who is intolerant of opinions, lifestyles or identities differing from his or her own”

I hope your reference to me being a bigot…….is because I chose to use “French school boy” to describe Mr. Dion. How is that bigotry?
Writers reference and describe people acting as an “English school boy”.
Grow up and show your cards for what you are…………. a pissed of politician with no seat.
If not then answer the question.
Should the government being running a deficit or not.

The way I see it the government should not being throwing cash around. If they want us to elect them. I mean every country that is throwing huge amounts of cash at the problem are manufacturing based economies. These economies need resources once the wheels start to turn again. Canada’s economy is not going to re ignite until the rest of the G20 start to get the machine greased up and going.

By the way everybody is so doom and gloom. I guess the media has you captured. If you really look around you might see something different.
GDP Growth doesn’t make the world go round. We can do quite well with sustained levels and a little more sharing from the top(CEO salaries, city officials, politicians, high salary individuals……etc.)

How about some of that Holiday spirit 365 days of the year. Giving is good especially when you have too much. The whole idea of creating wealth should be for everyone and not a select few.


I don’t answer to you. The door is over there. — Garth

#88 CZ on 12.14.08 at 1:34 am

Just in case someone may really think to bury cash in back yard – never do that.

When all the banks go bankrupt, the real value of paper $ worth will be close to zero. If you really want to preserve your wealth, try bury bullion. That was what people have been doing in the 30’s and other tough periods.

#89 Fred on 12.14.08 at 4:54 am

In all the talk about bailouts for industries…I’ve seen very little about what impact the failure of 1, some or all of the “Big 3” would have on the economy…What tax revenues would cease, what pension liabilities would have to be assumed, what decrease in real estate in Oshawa, Oakville, St Thomas etc would materlize. I did find a report out of the US claiming a 3 yr cost of at least $400 Billion (US Only). So even if Canada is only 1% of that $4 Billion seems like a deal compared to the carnage that could come.

#90 Adi on 12.14.08 at 12:18 pm

To CDIC: Thanks so much for the details, I will keep that in mind and read more on this matter, since my GIC matures next week. I need to transfer that amount in savings accounts, because I will use it for a downpayment on a home, when I will consider it is the right time to buy.
Marry Christmas to all here, and have a Happy New Year! As a friend of mine said recently, as long we have food for our kids, we are ok to go through the tough times lined-up for us next year.

#91 teepee on 12.14.08 at 1:12 pm

Calling one who disagrees with you (#69 – derrin) a bigot or other perjorative does nothing for your credibility.

Act like a bigot, get called out a bigot. Nothing to do with credibility. — Garth

#92 Zoronqueen on 12.15.08 at 5:54 am

My point to the poor getting screwed…..

Under Mayor David Miller and his progressive allies on Council, the City’s welfare reserve fund has been depleted to pay for day-to-day operating expenses. From a high point of $94.4 million in 2003, it has been taken down to a mere $8.3 million. This means that we are going into a major international economic downturn with the income support system of the largest city in the country ready to collapse at the first test.

There are already more evictions taking place under McGuinty than during the Harris years. If jobless rates shoot up and income support systems are further restricted, an epidemic of economic evictions will ensue.

The role of the police in poor communities will be stepped up in conditions of worsening poverty and destitution. If we look at the history of the Great Depression, we can see how local authorities responded in that period to the explosion of homelessness that took place. The police were used to ensure that those without work and housing received a very clear message that they were unwelcome and should move on.

#93 Calgary Realtor on 12.15.08 at 1:30 pm

Hello, I was wondering where the big spike in hits for my blog came from and I see it was a link to my site posted here as a ‘self serving’ link. I am the self serving realtor who wrote a blog about affordability in real estate in Calgary. I just thought that I would post a response.

I have never read this blog before but I like Garth’s style. I do agree with what he is saying in this post that we were not well informed by our government. People should have been given the information instead of the continual denial. Would it have helped? Possibly but most likely not. This is a Global crisis. Could we have been better prepared perhaps but everyone is suffering so pointing fingers isn’t going to help we need a collective solution. Collective on a global scale but also within our own government.

After reading through the messages posted on this board it is no wonder that some would take offence to my post ( for its optimism of the Calgary Real Estate Market.

The global economic situation is dire and seems to worsen every day. We have not seen economic times like these in our lifetime and it is anyone’s guess as to how things will turn out. We are seeing unprecedented cooperation between world governments and still the global markets continue to crumble.

Japan, South Korea and China met for their first annual summit to discuss how to generate consumer demand in their countries. Germany and Canada are both waiting to see and will announce budgets at the end of January. I think that everyone is curious what will happen when Obama takes over presidency of the US.

Everyone at this point is speculating precisely because these are unprecedented times. However, if we all adopt the attitude of absolute pessimism does that not perpetuate the ‘self fulfilling prophecy’.

Do I see hard times ahead? Absolutely. Has Calgary’s real estate market hit rock bottom? Not yet. Are there deals to be had in the market? Definitely. Can you invest in properties that are cash flow positive right now? Yes. Are some people looking for that as an option? Yes. Should you buy if you want to sell again next year? Probably not. Should you do your research? Always. Should real estate be a long term investment? Yes. Does anyone know what is to come? No.

#94 K-town Cowboy on 12.16.08 at 9:07 pm

Why would the gov’t leave the banks with the high quality mortgage, like yours and mine, and take the junk? I think it is likely the other way ’round. The gov’t bought the good stuff and is gettig a higher rate of return than the ultra secure gov’t securites.