The denial show

denial1

Canadian Press NewsAlert (Nortel)
Source: The Associated Press
Jan 14, 2009 8:45NEW YORK _ Canadian telecom giant Nortel Networks (TSX:NT) files for bankruptcy protection in U.S. court, shares halted.

As I suggested would happen, Nortel is bust. Now 30,000-odd workers and their families will have a very trying, sad day.

But that’s just the latest. On the phone yesterday I talked to a guy manning a booth at the big Boat Show in Toronto. It’s a big bust , he said. Meanwhile in Detroit, the big Car Show is a media morgue, a reporter friend called to say. Six manufacturers booked space, then didn’t show up.

So, then I read this. Interesting piece. The author sent me a note, saying “You had a big hand in this one. Thanks for writing.”

These snapshots are of a society under stress and the weeks between now and the Queen’s birthday will be bringing a boatload of sobering news. It is in this milieu that I mailed the last of a slew of books which were ordered here over the weekend – exactly the economic environment I expected.

All around us now is an envelope of disbelief and denial. Leading the charge, as documented in my last post, is the real estate industry, followed closely by the MSM, and then the government. These forces cling to the belief that by downplaying the reality of the situation they can ameliorate it.

But the big stories of 2009 will not change. Unemployment, then corporate failures, then housing equity collapse. It’s far too late in the game to stop any of those from having serious consequences for all of us. As I argued here yesterday, leaders in the public and private sectors need to be leading, not misleading. Nothing will be made better by tricking people into taking on new debt, for example, to buy assets which will cost less in six months.

A business columnist in the Toronto Star reviewed my book on Tuesday and was, as I expected, condescending. He’s treated me such for twenty or so years, whenever I’ve done something odd, which seems to be all the time. “There is a remote chance we could have a depression,” he said, in reference to some of my comments on real estate and being prepared for the unknown, “or have a meteorite strike the planet.”

Cute. And maybe he’s right. But there is one difference.

Nothing I can do will save my ass from an asteroid with my name on it. But there’s a huge amount I (or anyone else) can do to prepare for worse times. If the odds of a bad recession morphing into a deflationary spiral are just 15% or 20% – or even 5% – that should be enough to prompt some action. Get a weekly mortgage. Refi your credit card balances. Downsize your house. Plan on a garden. Get some reserve cash. Make your loans tax-deductible. Dump savings into a tax shelter. Rent out your basement. Get self-sufficient.

As I have said before, it’s all about insurance. And while my life may have been one risk-taking escapade glued to the next, I actually am a prudent guy. A 5% chance of economic collapse is five points too many for me.

Actually, I’ll take the meteorite.

howe

Listen to an interview with Garth, recorded today.

US housing prices nowhere near bottom

WASHINGTON (Reuters) – The housing market may have much further to fall because of the huge supply of unsold homes, and the time may be right for large-scale government intervention, a top Goldman Sachs economists said.

In a paper released on Tuesday night, economist Jan Hatzius said total credit losses may exceed $2 trillion, up from his March 2008 forecast for losses of around $1.2 trillion.

More than half of the total represents losses on residential mortgages, with the rest coming from commercial real estate, credit cards, auto loans and corporate debt.

Hatzius said the Case-Shiller index, which tracks home prices in 20 major cities, may have another 20 to 25 percent to fall by the third quarter of 2010.

111 comments ↓

#1 Wealthy renter 2 on 01.13.09 at 10:55 pm

Nortel is going bust, Barclays who bought the skeletal remains of AIG is now laying off their investment bankers. Morgan Stanley and Citi are merging their investment banking biz, which has so much overlap, hundreds more investment bankers are going to be jobless.

People like Derrin who post on here, who choose to be an ostrich,………sure hope you like the taste of squirrel.

#2 Dave in Calgary on 01.13.09 at 10:58 pm

I’m an engineer at a Calgary EPC (oil and gas) and I am glad there is a Chinook in town this week, as the door’s been swinging open with a lot people clearing their desks out. If it wasn’t +8 out, someone might have froze.

This week is round 1 of white collar lay-off week in Calgary. The EPCs are on the front end, but it will trickle down. They were nice enough to let everyone spend a crap load before Christmas before chopping then.

Just three more days this week and then I can stop holding my breath when the phone rings. For a while…

#3 Mark in Whistler on 01.13.09 at 10:59 pm

This spring will be very telling of what’s to come.
http://www.europe2020.org has been fairly accurate in predicting much of what’s happened so far.

Once again, here’s their prediction for this spring, March specifically.
http://www.europe2020.org/spip.php?article576&lang=en

When this came out Dec 16, I couldn’t believe what I was reading. Now as I watch the daily news unfold, it seems not so remote a possibility.
3 days till their next public announcement.

#4 Jon B on 01.13.09 at 10:59 pm

I’m currently shopping for some kitchen cabinets to be custom made for my latest reno project. Perhaps it’s a litmus test as to the state of consumer confidence in the Vancouver area. Many shops are booked until May while others aren’t interested in taking on more work. I don’t know if renos are getting suddenly popular as a cheaper way to change the living environment when you can’t sell it, or if these hard economic times just haven’t hit BC yet.

#5 midas on 01.13.09 at 11:21 pm

The TO STAR review of your book which I read in the paper today proves the point that there is a conspiracy: the politicians and media work hand in glove to hide the truth from the people. These are the BLUE pill boys, working feverishly to hide the truth from us. The question is why? If we all took the Red pill and figured out what’s wrong with the world could it not then be fixed? Politicians are liars and media whores are damn liars, and then of course there are the statisticians! Start thinking for yourself boys and girls, that’s why God gave you a mind! Don’t let it rot in front of the boob tube, and don’t think you are informed just because you read the paper or watch CNN or CBC or any of the other alphabet soup media or even this blog for that matter.

#6 Waiting for a Deal on 01.13.09 at 11:26 pm

I agree with you Garth.

Insurance is important, and for those that have lost or are losing the equity in their investments or their home, an insurance contract offers guarantees that financial investments can’t.

Mostly all life insurance contracts is unilateral meaning if I pay the premium then the insurer can’t cancel the policy.

Well, that can’t be said about many other things we take for granted. Utility companies might be able to keep the power running and then boy are we in big trouble.

I for one will be buying one of those in car solar panels and also increasing my life insurance.

I figure if things get bad, at least I will have “it” covered.

#7 Wealthy renter 2 on 01.13.09 at 11:31 pm

sorry, meant to say, Barclays who bought the skeletal remains of LEHMAN, (not aig).

#8 Investx on 01.13.09 at 11:34 pm

The Toronto Star article about Garth’s book can be found here:

http://www.thestar.com/Business/article/569766

By James Dew

#9 Bruce on 01.13.09 at 11:40 pm

I have just ordered your new book “After the Crash” from your website to add to the Turner collection.Garth, you mentioned in your last article to rent out your “basement.” My wife and I are in the plans of making a “Basement suite”  in our un-finished 3700sq foot/ home with a pool.I know you’ll say to dump the house, but we have no outstanding debt other than our mortgage which is not that big, and no-credit card debt and sizeable RRSP’s for our age. We have good equity in our home even if Real Estate prices correct another 15% more in Kelowna.Do we dump the house, or do we invest in the basement to make our mortgage interest and utilities and home improvments tax deductible? We want to make some passive income.

Thanks,

See you at the Money Expo

#10 Happy Renter in North Van on 01.13.09 at 11:53 pm

Garth, mentioning “Toronto Star” and “condescending” in the same sentence is just repetiton…

#11 squidly77 on 01.14.09 at 12:09 am

wanna see a calgary realtor coming un-glued
read here
https://www.blogger.com/comment.g?blogID=7588496932754350322&postID=5781483774669645325&page=2
leave a comment of disgust

#12 Kilt on 01.14.09 at 12:14 am

I came across this review as well

http://www.nationalpost.com/related/topics/story.html?id=1152078

might be the same review…

Kilt.

That was a review by the National Post of a media release on my book, not the book itself. Another great moment in Canadian journalism. — Garth

#13 nonplused on 01.14.09 at 12:14 am

I think all the denial is to be expected for a couple of reasons.

The first is that the economy is a really hard thing to understand. It involves thousands of feedback loops and the psychology of each participant and all sorts of individual and collective operators trying to maximize their position, resource inputs like oil or fish that are poorly understood and badly managed, and a strange collective agreement to exchange all of this for pieces of paper issued by guys who probably don’t understand the economy any better than anyone else.

If anything, the guys at the top like Paulson and Bernanke are only proving that their highly studied understanding is at best a partial glimpse of the whole thing at a time no longer relevant. It’s a very complex system that evolved pretty much beyond the scope of individuals to understand it. It’s like a beehive. None of the bees understand the hive or how it came to be as a whole even though each of them built a little bit of it.

So I think people treat the economy like a microwave oven or a cell phone. I mean, who really knows how these things work? Sure somebody in a design shop might, but most people have no idea why the old coffee goes in cold and comes out warm. We take it for granted or as a given. The economy is the same way. We assume there must be someone who designed it and it will always work because we can’t ever remember it not working.

Even people like Garth who have a good sense how to interpret the news (Something smells rotten here! The coffee is still cold!) don’t understand everything that is going on. But it’s a rare breed that bothers to investigate further.

The second factor is just the limits of the human mind. We all think we’re really smart because we have fancy degrees and such, but the fact is we are apes. We aren’t even different enough from other apes to have our own genera on the tree of life thingy yet, and probably won’t for another couple million years. The only major anatomical differences between us and other apes are (roughly in order of importance) a change to the vocal tract that allows a wider degree of vocal communication, a larger (but not hugely so) cerebral cortex, and a change to the hips making upright walking easier.

But in the end, for all the advantages of the larger brain, we still only experience life “3 seconds at a time”. After that the experiences are on their way in to the limbic system where they become a memory, a dream, or forgotten according to the whims of a system that developed millions of years ago and hasn’t changed much since by the looks of it.

The economy is a very complex system. Complex systems are inherently unstable (just ask Microsoft). A change in one component of the system can cause large unanticipated consequences in other parts of the system. Setting interest rates to zero or deregulating the lending industry, or heavens, both, can lead to spectacular credit bubbles, for example. But it was probably something even simpler that lead to those changes. Some congresspersons thinking affordable housing through low cost lending might be a good thing, for example. Or a massive overreaction to a spectacular terrorist attack, another possibility.

The truth is that the government itself has no idea how the system will react to new legislation even if that legislation is written with the best of intentions. The road to hell is paved with good intentions, as they say. The government that governs least, governs best is another of my favorites. Or just “leave well enough alone”. That’s why I am always so suspicious of a new “green plan” or “carbon credit system” or “school reform”. The people suggesting the changes don’t know what the result of those changes will be, they are only guessing. It’s also why I think the bailout mania is going to end in tears. Never before have so many large actions been taken in such a short time and thrust upon a system so weakened. It’s bound to break something and it will be worse than having done nothing in retrospect.

The system has “collapsed” before, but it rebuilds itself just like a bee’s nest after its damaged. It just takes a little while, and the bees are mad as heck for the first little while until they get back to

#14 nonplused on 01.14.09 at 12:15 am

work. The bees are mad as heck until they get back to work.

#15 The Tallyman on 01.14.09 at 12:46 am

Ah– the good old days when all we had to worry about were meteorites!

I believe a threat as huge the real estate and economic meltdown are global leaders with no vision and a fixation for violence(world war)

They are drowning and in panic mode withholding truth to suck in a few more fools to run up debt in order
to keep their heads safely above water a bit longer.

Patriotism and optimism sure but at what price?
Have citizens become nothing more than logs to toss on the fire to keep the elite warm at their pig banquet?

Anybody not taking control of what is still in their power to do will probably get an ass kicking and discover the boot is on the foot of the govt they so blindly and foolishly believe.

On a planned trip to Alaska people would at least bring a sweater and it’s mind boggling that many are naked and by their own choosing in the eye of this storm.

The odds of Govt dropping by your house to “help” are just about as good as Ed McMahon and the prize patrol delivering that big winner check.

No matter… how poor…or how small your property,
You still can do lots to prepare for some degree of autonomy should you ever need it.

Take it from a prepared guy with a 425 sq ft condo.

Garth, Don’t know how you fit all the blogging, media interviews and prudent planning in your 24 hr day.
Much appreciated!

#16 real estate expert on 01.14.09 at 1:03 am

“”But there’s a huge amount I (or anyone else) can do to prepare for worse times… Get a weekly mortgage. Refi your credit card balances. Downsize your house. Plan on a garden. Get some reserve cash. Make your loans tax-deductible. Dump savings into a tax shelter. Rent out your basement. Get self-sufficient.””

Garth

The word is spreading…

“”There is a form of direct action we all can take…send a strong signal by saving; by not being a consumerist sheep…By not spending more than you can afford to pay for in cash…By not enabling the debt-binge…We need to encourage capital formation but we can’t get there from here until the bad debt is flushed out and savings are rebuilt and it isn’t going to be painless.””

http://market-ticker.denninger.net/

#17 supersocco on 01.14.09 at 1:05 am

It is going to take awhile for Canadians to get out of the denial stage…perhaps a year.

#18 K-town Cowboy on 01.14.09 at 1:34 am

When do you think interest rates will head upwards again?

What effect do you think Canadas demographics will have on any economic recovery?

#19 Zoronqueen on 01.14.09 at 1:36 am

http://www.edmontonsun.com/News/Alberta/2009/01/13/8005096-sun.html

Brent: unbelieveable how politicians can give themselves a raise while literally people are freezing to death on the streets.

Can anyone suggest how to speed up a realtor in giving me a termination contract. This realtor has been away for a funeral, on holidays and now sick so I’ve been waiting patiently but I really need to get the house on the market with another realtor….

Also the last similar house sold in Dec for listing price of 320K what is a reasonable amount to make it attractive?

#20 The Dude on 01.14.09 at 1:50 am

The goverment will downplay the situation to the end and when its all over they will admit it was a bad one.
Just look at the unemployment numbers they are far worse than what it is. We have never before had so many self employed Canadians. Do you think these numbers show up in the stats when they run out of work?!!! About 10% of const. workers I know are self employed in one form or another!!

#21 Brittanny on 01.14.09 at 3:31 am

Yes, this is not a joking matter anymore as more and more people are finding out that they are not excluded. Hard to see the new paradigm when you are in it. Hang on to your hat as you may need it in the future to pass around.

#22 TomOfMilton on 01.14.09 at 5:18 am

Amen brother! Well…except for the meteorite. I personally want a fighting chance.

Twenty years of being condescending likely goes hand in hand with having achieved very little in original ideas, thought and experience of his own.
“It is so much easier to criticise than be correct” and sorry I don’t remember who said it.
I like your response to that TO Star article and I hope you don’t mind me using the same logic in speaking with friends and family. I will try to quote you properly!

#23 TS on 01.14.09 at 6:05 am

Hi Garth, the Matt Gurney piece hotlinked in your posting was an interesting observation, especially from someone so firmly entrenched in right wing policies. I read a couple of the other pieces written by Gurney that were listed underneath the piece you featured. Here is a guy so firmly entrenched in his idolization of Harper that I’m sure his heels click when he even hears the name.

I wonder how these neoCon zealots will feel when some of their friends and relatives begin feeling the grip of this recession. Will they keep to their ‘let them eat cake’ philosophy when they witness the human tradegy of recession touching their friends, or perhaps even themselves?

I had to chuckle to myself when reading the Gurney pieces and wondered what he would be thinking and feeling if he was one of the many jouralists who have been recently laid off my the MSM and had no employment prospects in the hopper. It is easy to be smug when one is isolated from reality.

There is a fine balance between self reliance/prudent financial self control and the need for governments to extend a helping hand. For a country to be truly successful we need both.

I agree with the notion that a society is best judged by how well its most disadvantaged citizens are treated. By that measure Canada still has a long way to go.

Running a small business today is scarey. Having been downsized from corporate life over 8 years ago I can attest to the fact that generating an income for one’s family is no easy task. At some point you have to be able to convince someone, whether it is a consumer or a business-to-business client, to part with their money because you are providing them something of value that will help them or their business.

We should expect the same of our tax dollars. I have no problem whatsoever paying taxes. But let’s ensure that our dollars are going to promote entrepreneurship, creativity, environmental sustainability, and provide social justice to those most in need. And, the ranks of those in need are swelling each and every day.

#24 HalifaxFamily on 01.14.09 at 6:35 am

Nortel is toast. Ottawa, look out!!!

http://business.theglobeandmail.com/servlet/story/RTGAM.20090114.wnortel14/BNStory/Business/home?cid=al_gam_mostview

#25 Herb on 01.14.09 at 6:58 am

Your political blog would be great about now, Garth. All of the reporter’s observations and your own expectations have a great deal of human misery attached to them. Those of us well-off enough to follow your recommendations might be all right, but what about the others? Can we tolerate mothers begging in the street?

Individual acts of self-preservation and charity are great, but how do we force those in political and economic power to do more than blame the victims? Even if we had the ear of government, what would we tell it? Who will speak and act for the greatest good of the greatest number?

What we don’t need in an economic crisis is proof of the irrelevance of politics.

#26 real estate expert on 01.14.09 at 7:32 am

“”Nortel Bankruptcy is being actively discussed, not the thing 30,000-odd workers and their families want to hear.””

Garth

“”Toronto based Nortel to file for bankruptcy protection…..a move that will likely see what was once Canada’s great corporate success story broken up and sold to foreign rivals.””
———————————-
“”Meanwhile in Detroit, the big Car Show is a media morgue, a reporter friend called to say. Six manufacturers booked space, then didn’t show up.””

Garth

GM still expected to file CH 11…UAW is in denial.

…..More tough news for Ontario……

#27 pbrasseur on 01.14.09 at 7:50 am

Read the Star review and agree also that it is condescending.

Not to say that I agree with Garth on everything, but I appreciate that he is intelligent and not following the trends which is more than we can say about most MSM who seem to have problems thinking logically.

I think Garth’s point of view is very much worth knowing and may indeed save a number of people from getting into trouble. Besides what can be wrong with telling indebted people they should be more prudent?

For example I have a friend who wanted to buy a second condo near Montreal as an investment. He doesn’t believe me when I say the RE market may well crash, but at least he listened to my advice when I told him “at least why don’t you wait six month to see where the market is going”. By then there’s a pretty good chance I’ll have realized that buying is more a risky bet than an investment.

#28 real estate expert on 01.14.09 at 7:53 am

…A little good news…

Obama Boom North of the Border?
by Sean Brodrick 01-14-09

“””Canadian Stocks Could Skyrocket!

About 70% of Canada’s exports go to the U.S. So if the U.S. catches a cold, Canada gets pneumonia. Likewise, the reverse is true. If the U.S. starts to recover, Canadian stocks should be on the launch pad.”””

http://www.moneyandmarkets.com/obama-boom-north-of-the-border-29246

Are you serious? Did you see who wrote that? Sean Brodrick, a stock pumper. “He is Weiss Research’s small-caps specialist, especially in natural resources, and is the editor of the company’s Red-Hot Global Small-Caps and Red-Hot Commodity ETFs, as well as a regular contributor to its daily e-letter, Money and Markets.” — Garth

#29 Kash is King on 01.14.09 at 7:54 am

Hi Zoronqueen.. if you need to speed things up with your realtor, it’s like any other complaint in the business world.
Just go over their head to their boss.
Contact the owner/manager of the realty office, and I’m quite sure they will address your concerns ….pronto.

#30 Kash is King on 01.14.09 at 8:07 am

#24 HalifaxFamily: ====> “Nortel is toast. Ottawa, look out!!!”

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

This is just the start for Ottawa. What follows ballooning deficits is gov’t downsizing.

The mid ’90’s downsizing of the federal civil service was a direct result of many years of big deficits. This put a giant chill on the Ottawa RE market.

There will be 5 years minimum of pain for Ottawa as people know this, and will pull in their horns.

#31 Zaza on 01.14.09 at 8:16 am

My friends has talked to one of the well-known GTA realtors (15 years in this business). They are friends.
She said that she had not a single sale from September…

#32 Mike (authentic) on 01.14.09 at 8:47 am

Breaking News:

Nortel Networks (Canada) just filed for Bankruptcy.

How many people work at Nortel?

Mike

26,000 full-time, plus seasonal and part-time worders. Thousands more at suppliers. — Garth

#33 Grantmi on 01.14.09 at 8:47 am

Garth;

I’m headed to the Western Lumber Retail Assoc. Trade show next week in Saskatoon!!

I’ll let you know what I see!!

#34 PTDBD on 01.14.09 at 8:53 am

We can’t be in Hard Times because I still remember our Prime Minister during the recent election debates. In a relaxed, smiling, calm manner he assured us that the country’s economy was strong. Do you remember how he accused Dion of panic?

We can’t be in Hard Times because Harper has annointed 18 more Senators. Each has their own office, travel perks, salary and pension. That’s not belt tightening.

We can’t be in Hard Times because Harper has expanded his Cabinet to 37 politicians costing the taxpayer nearly $4 million more. Does that sound like belt tightening to you?

We can’t be in Hard Times because MPs increased spending by $3.7-million on office budgets according to the “Hill Times”.

All of the above will flash in my mind when Flaherty gives his “deperate measures for desperate times” Budget delivery and speaks of “belt tightening”.

#35 lgre on 01.14.09 at 9:24 am

Good job Garth, keep up the good work and let the media baboons spew their BS, eventually even dumber of the dumb will awaken.

#36 dd on 01.14.09 at 9:25 am

Garth

“A 5% chance of economic collapse is five points too many for me.” I hope you are right.

Thanks for your hard work.

#37 dan on 01.14.09 at 9:37 am

WE need a good old depression to punished those who were financially stupid with credit. We need a depression to teach the young ones 20-40 years old about debt and the evils of credit. People have lived on credit as if it was their money. The good life on credit is over. Many people will lose everything homes,cars, and jobs. The sad part is those cars and homes were NEVER theirs to begin with. We are going to see alot of people trading places in the coming depression.

#38 Backbacon Crusader on 01.14.09 at 9:45 am

I’m betting that Siemens picks up the shattered remains of a once proud Telco supplier.

While Nortel is declaring bankruptcy, I can say with at least some confidence they won’t be completely and totally out of business. Someone is going to pick up their product base. It’s simply too valuable given how many businesses are using Nortel phone systems across the globe. Nortel produces some excellent technology, they were just run into the ground by literally a decade of bad management.

Not saying this isn’t a sign of the dread economic times we’re in, but what I am saying is that while this is probably going to result in one of the biggest mass layoffs in Canadian history, it’s not going to be a complete destruction of the company. It will be sold off piecemeal to telecom companies that have cash on hand

#39 smwhite on 01.14.09 at 10:05 am

#16 real estate expert

In order to downsize my house, don’t I have to sell into the buyers market, and from what I see, nothing is moving… That piece of advice is a little late.

Vancouver, soon to OWN the most FINANCIAL CAPITAL.

Well the “Star” and “NP” are running the classic game of interference, mocking the points that have lead the country(and world) into this [email protected] storm.

It’s the classic debate tatic, make the points of your “opponent” seem silly and trivial instead of actually arguing why those points are wrong. This way the general public will dismiss you as a quack. More and more of these articles will be pumped out and target the likes of those warning of the red morning sky.

From their lame perspective your trying to sell books and from my perspective, guys like James and Kelly are trying to sell RE advertising space. This is the core issue, media is the problem, they continue to try and discredit the truth, instead of acknowledging that there is a serious problem with economic fundamentals.

They don’t have answers, just rhetoric… At least Garth is giving some direction, and it ain’t off a cliff like the MSM propaganda machine.

#40 real estate expert on 01.14.09 at 10:09 am

#28 Garth

…There will be a pickup for Canadian Commodities to supply a $1 Trillion U.S. infrastructure investment.
…Will not support Ontario’s Manufacturing base.
…Ontario’s auto industry may require “100% Nationalization” if/when GM/Chrysler go Ch 11

#4 Jon B
Shhhhhh

…Predictions by REE…

Ireland, Montenegro and Hungary and other EU countries on verge of financial collapse.

If all out War comes to the Middle East…If Gas supplies to Europe continue to be cut off… look for Civil Unrest to envelope Britain/U.K…..just for starters.

Look for a breakout of war between India/Pakistan.

Look for continuation of ongoing 15 year settlement of Siberia by China….that will lead to war with Russia too.

Look for Civil Unrest to begin in Asia and many emerging economies.

Eastern Canada is in tough times…Garth has forsight and balls to call it the way it is.

btw, Montreal’s biggest winter economy is…..snow removal.

#41 smwhite on 01.14.09 at 10:15 am

#30 Kash is King

I agree, Ottawa is still recovering from 2001 and the tech bubble. A lot of those working at Nortel went to other corporations like Bell & CGI whom depend heavily on the teet of the Government of Canada.

As stated yesterday, Kanata is having a time with commercial as well as residential real estate. Barhaven is next on the residential side.

Seems the city goes as does the hockey team! :)

PS sorry about the italics in the above post, I’m not a think as I smart I am…

#42 dotava on 01.14.09 at 10:18 am

For Sale: $354,900
http://www.realtor.ca/propertyDetails.aspx?propertyId=7852020

That house was model house build by “Campanale” in 2000/2001 and selling price was around $239K CAD what were around $158K US ($0.66 US per $1 CAD at the time), today they are trying to sell that house for $354K9 what is around $290K US ($0.8159 US per $1 CAD). More over – when house was build no rear neighbourhood but now there is new development. Since house doesn’t have a fenced yard (even after 8 years) I am really curios why they think that value of the house almost doubled ($290K US now vs. $158K US then)?
Feel free to comment. ^o)

#43 smwhite on 01.14.09 at 10:19 am

#40 real estate expert

I would have said drunken 18 year old Amercian frat boys and “danseuse” as driving the winter economy in MTL.

#44 Andrew toronto on 01.14.09 at 10:29 am

Garth with the credit spread heading lower ..has of yesterday , Is this not an indication that credit is lossening and loans will become accessable once again.. although more bad news can cause it to go back up .. although with the alt -A mortgages still in the pipeline and trillions of worthless derivatives still out there ..not sure what to make of it

The TED spread is at 0.99, sharply lower. (improved)

The TED spread was stuck above 2.0 for some time. The peak was 4.63 on Oct 10th. The TED spread has finally moved below 1.0, although a normal spread is around 0.5.

#45 Experience of Japan on 01.14.09 at 10:33 am

Sincere question — I’m not trying to be snarky or contrarian, so please bear with me.

Does anyone know what the Japanese experience was like?

Did they need solar, seeds, generators, and chickens in Tokyo?

Did their electricity go down, or water dry up?

Did the yen become valueless, and did Japanese businessmen start trading in gold?

Were there even any close calls to any of the above?

If it were to happen, why would our equivalent to their lost decade be so much worse than the Japanese experience? Because this time it’s global?

I describe that experience in my book. Nothing more than middle-class office workers ending up running fruit stands. I’m sure that was cool with them. — Garth

#46 David on 01.14.09 at 10:36 am

Back at the height of the tech bubble circa 2000 Bay Street could not absorb enough new shares issues from Nortel. Since Nortel was part of the great new tech frontier there was no possible way to establish a business plan or model that could work in the boundless future of technology. Wasn’t the future wonderful?? At one point in 1999 Nortel was about 20% of the TSE market cap, the proverbial 900 lb. Gorilla in the living room. Nortel was at one time Canada’s largest company with a market cap of $366 billion in 2000, shares and bonds issued by Nortel are now totally worthless. Canadians might as well accept that our leadership in telecommunications technology has been ceded to China permanently. This is well past the denial stage. The too big to fail argument does not hold much weight.
If Canada’s once best capitalised company is now worthless what does that say about other corporations or the housing market?

#47 Jelly on 01.14.09 at 10:37 am

EVERYONE,

Please “watch inappropriate language”, any language basically that a priest would not use…

DERRIN AND REAL ESTATE EXPERT MAY CURL UP IN THE FETAL POSITION AND CRY…
(Seriously)

#48 Jelly on 01.14.09 at 10:42 am

IS ANYONE LOOKING TO BUY REAL ESTATE IN CALIFORNIA OR ARIZONA IN THE NEXT FEW YEARS?
ANY OPINIONS?

I know that obviously Cali is more property tax but I just wonder how much more.
Also, Arizona is so freaking hot.
I am thinking multi-family and vacation property for family and friends.
I was thinking of Detroit and then changed my mind(kidding)
Anyone know about owning properties in the US, any headaches to be aware of?

#49 Jelly on 01.14.09 at 10:46 am

Hilarious!….
http://www.youtube.com/watch?v=bNmcf4Y3lGM

#50 eddy on 01.14.09 at 11:09 am

“Turner, the ex-Tory, ex-Liberal, ex-MP, ex-journalist, was churning out his latest of many books in the midst of the biggest financial meltdown in decades.”

what he really means:
“no one should be allowed to change political parties, or engage in multiple professional activities at any time, for any reason.”

I really love ‘churning out’- what a put down. Someone should send this guy a Mavis Beacon typing program so he elevate himself above the other typists at the star .

#51 jess on 01.14.09 at 11:12 am

#37- 1. One that is made to bear the blame of others.
2. Bible. A live goat over whose head Aaron confessed all the sins of the children of Israel on the Day of Atonement. The goat, symbolically bearing their sins, was then sent into the wilderness.

tr.v., -goat·ed, -goat·ing, -goats.

To make a scapegoat of.

#52 Nebbio on 01.14.09 at 11:20 am

You can add the boating industry to the list of those whose representatives blow total smoke and are reported on verbatim by the mainstream media. Today’s Globe and Mail includes a story on page A12 whose headline reads “Droves of boaters drown out economic worries”. A typical cheerleading piece of drivel. Are we supposed to believe that, while their cottages are plummenting in value and their portfolios have plunged, wealthy Canadians first thoughts are of rushing out in freezing temperatures to purchase a new boat? Gimme a break!

#53 George on 01.14.09 at 11:31 am

Garth,
You are a sharp as a tack on the Martin Weiss pump party. Every couple of days you reveal more skin in the game knowledge wise.

By the way did I tell you Real Estate Expert has sold me on Vancouver. Almost embarrassed to admit it.

#54 Observer on 01.14.09 at 11:32 am

THE UNLTIMATE SIGN OF DENIAL!

A Vancouver news station is conducting a pole after reporting the public thinks the media is blowing the economic situation out of proportion. A full 88% of respondents believe this to be true. It’s really incredible to hear the comments left by some of the respondents.
Darwin’s theory at it’s finest.

#55 Observer on 01.14.09 at 11:33 am

re: ULTIMATE

#56 Kash is King on 01.14.09 at 11:36 am

NE1 watch Biggest Loser last night? ( indulgent fluff,I know…)

The big girl ( oh wait they all are) Joyelle?? is her name? She was tempted to take the $5k offered to anyone who would leave the show then and there.
She mused how she lives at her mom’s place, and that this $5k would allow her to buy a house, since they are going for $5k in Michigan, and she could get out on her own.
They then kept upping the offer to $25k, but nobody took it….
Seemed like she had regrets all night.

Coulda bought 5 houses and been a landbaron lol.

#57 J.B. on 01.14.09 at 11:45 am

Dan – Nobody needs to be subjected to your form of ‘punishment’. And don’t lump 20 – 40 year olds into the same category as wreckless spenders. I’m 53 so I learned all about the last Depression from my parents and I wouldn’t wish it on our society.

#58 AM on 01.14.09 at 12:17 pm

“By the way did I tell you Real Estate Expert has sold me on Vancouver. Almost embarrassed to admit it.”

George, are you serious? Vancouver’s economy has been driven by Olympic contruction and selling real estate. Where is that heading now?

#59 AL on 01.14.09 at 12:44 pm

http://business.theglobeandmail.com/servlet/story/RTGAM.20090114.wconfboard0114/BNStory/Business/home

Seems to me a 10% drop in prices for 2009 wasn’t on the books a few weeks ago. If this is now coming out in main stream media, wonder what the actual numbers will be like.
Garth, you might want to revise your predictions lower. ;)

Kilt.

#60 Mrs Loquacious on 01.14.09 at 12:48 pm

Garth, you are my hero. So much of your insight has saved my husband and I from the ravages of mortgage death .. I mean, debt ;)

My question is, how much are the national banks in bed with these RE cheerleaders and other blind leaders? I was at the bank yesterday speaking with an investment banker, who at one point during the discussion casually mentioned to us that if we were hoping to enter the RE market at some point, to do it now. He further elaborated that the market, being “low” at this point, will climb again in the spring, and it will be harder to secure a good mortgage rate and a good price if we wait for another 2 or more years. In his mind, the RE market is due to recover in a mere couple of months. His rationale is that the great land of Vancouver is somehow sheltered from the financial debacle plaguing the rest of the continent, and even shared a touching anecdote about an American couple who drove all the way up to Vancouver to invest and shelter their money. He cited his sources to be the bank’s top investment gurus, and he scoffed at the idea of trusting any blogger’s opinions to that of the experts in his bank.

I promised him I’d see him in 2 years to see who was the greater fool, and am quite confident that if he still has a job by then, he will be eating crow.

In the meantime, Garth, many kudos to you for sharing your insight and leaving this bear a much more relaxed, debt-free renter.

#61 OntarioHouse on 01.14.09 at 12:59 pm

I cant believe the amount of information control that is here in Canada. On American television you see debates, you hear different sides of views being presented. In Europe they tell their people the truth about the severity of the economic downturn. In Canada all they do is lie and cover up. Crooks.

#62 North Vancouver Citizen on 01.14.09 at 1:00 pm

aka: real estate expert

…I acknowledge “expert” is over the top.

#53 George

“”By the way did I tell you Real Estate Expert has sold me on Vancouver.””

lol…tell you what… if you ever visit I’ll give you #1 official North Shore “local” royal tour.

re: Martin Weiss….I agree with his “commodities” requirement for the U.S. $1 trillion infrastructure investment….I never mentioned Gold.

…In fact Garth suggests investing in gold…I find that a little surprising.

#63 TS on 01.14.09 at 1:08 pm

The latest report from the Conference Board of Canada is now predicting that even with a multi-billion dollar stimulus package, Canada will not be able to avoid a recession. This prediction is from the same organization that only 11 WEEKS AGO predicted that Canada would escape a recession altogether!

It makes a person wonder how the highly paid economists who are on staff at these kinds of organizations can be so wrong…and so quickly. It also makes one question whether businesses should be shelling out hundreds, and sometimes over a thousand dollars, for analysis and reports that have only marginal accuracy and relevance.

#64 jess on 01.14.09 at 1:09 pm

#57- i agree – WHAT If: young people are deciding not to have children … what would happen to pension plans are new “financial products” being created as we speak…

#65 David Bakody on 01.14.09 at 1:11 pm

Garth and friends ….. we all read about Harper’s plan to drive salt into the politcal crop of the Liberals …. nuff said on that true as it is …. one other clause in the Harper/Flaherty Autumn financial disaster …. Why in heavens name would any government invoke a “NO STRIKE” clause on any union that just signed a 4 yr low wage contract? I as a few others wondered aloud in Tims ….. to-day in the NYT I read Washington (Big Business) is thinking about wage freezing …. next wage roll back (that comes with long periods of deflation) ….. OMG ….. Harper true and blue …. fuzzy blue sweater wolf in sheep cloths stuff …. and when the government does it big business follows …. you mentioned pension plans Garth …. suspect they are on the list also. No need to list past Harper broken promises on financial matters … so stand by …. it may start sooner than you think …. do not ever believe Flarherty’s line about Canada in last -out first …. big fish eat little fish and we will get the scraps from Washington … and that you can take to the bank … it will be interesting to see if any journalist approaches Harper/Flaherty on that ….. none to date.

#66 Sail1 on 01.14.09 at 1:13 pm

The Gods have spoken.

http://www.nationalpost.com/news/story.html?id=1176483

#67 questioning on 01.14.09 at 1:14 pm

61 OntarioHouse: agree with you…

this world is full of lies..liers…

#68 OttawaMike on 01.14.09 at 1:40 pm

Re:Martin Weiss
Actually Martin Weiss is part of the Dr. Doom cult(Schliff, Roubini,Schiller,Garth;)and was calling for his followers to place their money in US treasury bills, with his logic being that the money is safest there. I have access to his newsletter via a colleague but do not place too much credibility with his advice as it swings wildly from week to week. That being said his newsletter is still one piece of my financial info sources.

#69 rory on 01.14.09 at 1:40 pm

hey Real Estate Expert aka NVC …i like what you have to say …it might be going against the grain but at least it is not rants …gives one pause to think (thinking is important) about ‘things’ mentioned …I would like to hear more (real reasons) about why Vanc is the next financial capital …if I was one of the 10 guys that owned the world why would I choose Vanc …I can ski, golf, and sail on the same day or I could just take my big jet and fly to where the best of each is …hmmm …food for thought but really please tell me WHY you think this…I need food for my brain.

#70 Kestral on 01.14.09 at 1:47 pm

As the old saying goes, Denial is not just a river in Egypt. The water have been parted and they’re about to come crashing down, everyone gets wet, but not everyone has to drown if they prepare.

#71 Harold on 01.14.09 at 2:03 pm

All these dire predictions from Garth, the same Garth who in 1998 told us on another web site that Nortel would go back up, just as soon as the tulips bloomed in Saskatoon.

So why should I believe him now?

Eleven years ago the senior executives of Nortel lied to Bay Street, thus most analysts (including me) saw value in the company. Like most tech plays, however, it was never more than a short-term hold. And so your comment means what, exactly? That you were dumnb enough to own it for the past decade? — Garth

#72 George on 01.14.09 at 2:15 pm

Hey #62,
I’ll give you the royal Southern California tour so that you can see firsthand what the collapse of public support mechanisms in only their infancy looks like here. Then of course there’s the historic worst drought on public record. Bankrupt state February 1. The biggest mother bubble of them all – the public debt bubble that one St. Martin suggests throwing money at. Westwood Boulevard, Westwood near UCLA is 50% empty for lease space. 50%! The Block of Orange by Disneyland has probably 300,000 sq. ft of closed for lease space. 300,000 sq ft. Friendly Santa Clause shootings ten minutes from home. This one’s a train wreck. Surfing at Jordan River. Skiing those three mountains like REE says. Bark at me if I’m wrong but Vancouver’s got game.

#73 islander on 01.14.09 at 2:16 pm

I’m no fan of politicians, so Garth gets no points from me for having been in Parliament, but having been there he was Kim Campbell’s Revenue Minister (Finance? can’t remember) so he must know a thing or two.

James Daw (the Star reviewer) knows what about economics?

It’s insulting to have some Ryerson pencil-neck who knows shorthand and the inverted pyramid try to tell me about economics. Mind you, I wouldn’t be caught in public holding a copy of Pravda.

Here’s the reality: As of Monday the 12th, there were 52 MLS sales in Greater Victoria. That projects to about 125 for the month. Last January? Nearly 500. If anyone’s wondering about off-board sales, they’re virtually non-existent in this city, unlike Edmonton and Calgary (to name two).

The guy who used to live downstairs has installed cabinets for 20 years. He’s down to two days a week. Two of his contractors have no work. One barely has any.

Alas, with revenues down about 20% at Canadian newspapers, guys like Daw will soon be finding out first-hand (as Matt Gurney did in that FP piece) that joblessness if very very real.

#74 PTDBD on 01.14.09 at 2:30 pm

England’s planned reform of Banking Bill raises fear that they could print money without having to declare the amount.
Telegraph.co.uk

The paperprestigitization process is in full gear now. It’s smokin! (UK Banks rise on hopes of more bailout)

#75 Bill-Muskoka (Not Anymore) on 01.14.09 at 2:52 pm

Garth,

ROFLMAO! I can hardly wait to read your next book ‘Sheeple’ You Baaaaad, Baaaaad Boy you!

#76 smwhite on 01.14.09 at 3:01 pm

NEWSFLASH

We are in a “technical” recession(Harper’s words not mine).

Just like the US government in late 2007 and early 2008, denying the obvious in your face truth, only to admit a year later, yeah, its a recession. So instead of people being able to brace themselves for the crash of the cliff, they were told to continue driving at 80mph towards it.

How can anyone with any sort of clue look at the current environment and with a straight face(or keyboard) say, things are fine?

Today was another “sell-off” day in the markets, everything is down pretty much 3%, unless its gold or oil… Then its only down 2%… Get ready to hit new lows…

And the negative nelly’s on this blog are the ones drinking the “kool-aid”? You have a choice, believe that everything is peachy keen and your beloved McMansion is really worth its inflated 2008 value, or open your eyes and STARE at the best leading indicator of the economy, the stock markets, which are back to the same levels of 1998 & 2003…

So much for the Japanese being the only ones that “lost” a decade.

#77 Makeorbreak on 01.14.09 at 3:24 pm

KashisKing: About the biggest loser last night, Joêlle is indeed the biggest loser.

What a big mistake she made! The odds of her winning the $250,000 are smaller than her taking the $25,000. She could have bought a house cash for it (in Detroit). Anyways, she is probably going to be eliminated in the next few weeks…she isn’t taking the whole thing seriously. Funny how greed can run people.

#78 PTDBD on 01.14.09 at 3:30 pm

We can’t be in Hard Times. Export Development Canada already has $180.6 Million in in unsecured loans to Nortel customers, according to Sci-Tech.com. Yet now……….. EDC makes additional $30M available to Nortel

BNN says that the Canadian goverment has “a pot of money”. Unlimited, it seems.

They are dreadfully wrong. The government has NO money. It’s taxpayer money.

#79 Gonzo on 01.14.09 at 3:52 pm

#37 Dan
I don’t understand how you could wish the depression on 20-40 year olds to teach them a lesson. Some people seem to think that just because they were prudent with their money and are in good economic shape, they will be spared from the effects of a depression if there is one. Sure, you may fare better than most, but what about your friends and family. How will you feel when your brother/sister with young kids gets laid off and goes bankrupt and comes asking for help. Will you help, or will giving them a lecture on proper fiscal responsibility be more satisfying.
Maybe this is a bit of a rant, but I feel like some people are genuinely happy that a depression is coming, so they can show all those losers out there that they were wrong to buy that house/new car. What you don’t realize is that life will suck for you and your loved ones. I don’t see how you could wish a depression on anyone.

#80 hmm.. on 01.14.09 at 3:55 pm

#3 Mark in Whistler

very interesting link u provided ,good quality analysis in many articles
thanks

#81 Herb on 01.14.09 at 3:57 pm

Got the books to-day, Garth. Thanks for the fast service.

Handed “Greater Fool” to my wife in the spirit of the old cartoon in which a man answered a knock on the door, opened it to behold the Grim Reaper, turned to his wife and said “It’s for you, Dear.”

Noticed the “XURBIA” return address. Do I attach the personal political significance to it that it appears to have?

#82 rory on 01.14.09 at 4:11 pm

Hey Gonzo, no one wishes bad things on anyone but I rememeber my parents not owning a home until their mid 30’s and it wasn’t the best on the block and was never reno’ed …4 of us shared (can u believe it) one small bathroom and 1 TV and all I ever rememebre was one car until I got old enough to work after school and pay for gas etc …they never had fancy vacations …so yes depressions are bad …living large month to month bad…needing 2500 square feet 2.5 bathrooms, 4 bedrooms and your only 25 – really bad …lessons will be learned by all including us smug baby boomers …unfortunate, but everything always (well usually always regresses to the mean (and probably overshoots) …ignore that at your own peril…cash flow is king.

#83 john on 01.14.09 at 4:19 pm

Excellent post Garth–i read Matt Gurney’s article WOW is that reality! I wonder how much longer our real estate companies and politicians will continue (or be able to) to try and give us a snow job and how much longer our politicians will be throwing out billions in no-win bailouts? Hopefully there will be enough of our tax dollars left for basic survival,health care and other necessary services?–i wonder?

#84 john on 01.14.09 at 4:23 pm

:-)–Wow am i looking forward to your next book Garth –“sheeple” (what an appropriate title :-) )

#85 john on 01.14.09 at 4:37 pm

#50 eddy on 01.14.09 at 11:09 am—-its idiots like you that try to twist the facts and attempt to camoflage the yellow streak running up your back with statements proving your lack of common sense and intelligence—“fast eddy” your not!:-)

#86 Bermygoon on 01.14.09 at 4:45 pm

Wow crazy negative today. I picked up another 10k US index funds today. Should be able to sell in a month or so when the general public forgets how bad things are. I have been doing this for a bit, in and out, range trading and have been doing real well. Although it helps that I wasn’t in the market till the S&P got below 1000.
Range trading right now is a good way to make some easy cash. Buy on the bad news (there is a lot) and sell when there is no news and things appear all rosy again.

#87 Bill-Muskoka (Not Anymore) on 01.14.09 at 4:54 pm

‘Technical recession’? Is that like the guy who thought because he had cheques left he still could write them without money in his account? ;-)

#88 maria on 01.14.09 at 5:20 pm

I am so glad you have this blog going!
I read about solar energy, at xurbia and makes sense ..
thank you for the information

#89 jose on 01.14.09 at 5:23 pm

No surprises here, deep debt = deep recession, no spending, non-existent saving rating as unemployment rises, housing will take it on the chin hard, 40 years/0 downs will be down and out, Canadian banks will suffer and clamp down on lending = more recession.

All self inflicted = incredible and they still believe Keynesian economics = unforgivable.

I predict a W shaped recession, (buy 1 get 1 free), first a deflationary cycle (they will bring us out of it with the printing press), 2nd a hyper-inflationary period that will see interest rates go up up up…

#90 CTA on 01.14.09 at 5:34 pm

Last 2 years I’ve been very successful financially and expect this year to be spectacular.
Thought I brag a little; just a break from hearing all the hardship stories.
Also, those that drive new SUV’s and wear nice clothes should NOT go to food banks (reference to previous blog) SHAME on them! Food banks are for those who are way down and out!

Garth, I just bought your new book. Looking forward to reading it.

#91 dd on 01.14.09 at 5:42 pm

#76 smwhite

“”We are in a “technical” recession.””

So it is technical. Does that mean that technically there will be no layoff? Technically what does Technical mean?

Rose coloured glasses Harper is wearing.

#92 Bobby on 01.14.09 at 5:46 pm

More good info
http://ashizashiz.blogspot.com/

#93 Canned Goods and Buckshot on 01.14.09 at 6:02 pm

#13 nonplused
Excellent post. The complexity of things like the economy, the stock market, even the human body is immense. Medical doctors don’t claim to have all the answers, yet some economists seem to think they can massage the great machinations with infalibility.

Some posters seem to say “What’s different this time?” especially with respect to Japan’s lost decade. What many people don’t realize is we will have a lot of unknown unknowns. I lifted this from Thomas Homer-Dixon’s book _The Upside of Down_. The breadth of the current problems, the interconnectedness of globalized economies, and environmental devastation including global warming are just some of the “unknowns”. We don’t really know how these will play out. But what about the effects of trends or events that we have not predicted? We have no historical context to measure these unknown inputs. The mainstream media fails us in not discussing these issues. They don’t fit into a 30s second sound bite or a 3 paragraph article.

I feel we need to be much more self-sufficient. I applaud Garth for his Xurbia site. Yes, he might make a buck, but most people don’t criticize their MDs for making a buck after getting good advice or treatment. I fear so many people will be caught unprepared that we should not expect government to come to the rescue in the event of a widespread crisis. They will be overwhelmed.

#94 Another Albertan on 01.14.09 at 6:03 pm

Boats: Over a year and a half ago, it became cheaper to buy new small off-shore fishing boats than it was to buy them used. Prior to that, it was possible – if you were clever – to buy boats on the east coast of the US and sell them on the west coast. The boating industry has been in trouble for a while.

Nortel: The future of that company was sown back by the mid-90s when Jean Monty was CEO. I had a good discussion 6 weeks ago in Ottawa with a fellow Northern Telecom/Bell-Northern Research alumnus. It was unanimous that the company was already making bad decisions back then. Subsequently, Monty became CEO of parent BCE… and we know what a precipitous course that company took with various acquisitions and divestitures in past years, well before the recent LBO failed. Like the auto and banking industries, what has occurred is the summation of years of managerial decisions of dubious quality. This is simply the culmination.

#95 North Vancouver Citizen on 01.14.09 at 6:17 pm

#61 Ontario House

“”I cant believe the amount of information control that is here in Canada””……U.S. knowledgeable citizens???….Europe gets the truth???

…Let’s work backwards….

Europe will soon break out with lots of Civil Unrest…can you say, Canadian Mosaic X’s 10….with lots and lots of….here it comes…ready for it?….huge families of unskilled and religous dominated “Muslims”….most from North Africa, “Pied Noir”, aka Black Feet.

…Remember, religous/ethnic Muslims breed big families too.

I haven’t got physical stats, just know its so from info from friends and relatives.

…Seriously, in time, the Canadian Mosaic, especially in Toronto will explode…as will the American Melting Pot in Michigan U.S. A. and the illegals from Mexico especially in California.

The sh*t has not hit the fan yet, by any stretch.

….So if one acknowledges Vancouver’s current high cost of real estate as a barrier to attracting unemployed, the current wealty Iranian, Shikh and Asian Vancouver residents, plus the isolation of Vancouver’s location and finally the fact Vancouver is truly a gateway to the Far East and Western U.S.

Two caviats…..there is a homelssness/druggie community that has not been delt with and likely more important, at some distant point in the future, the U.S. will “conquer” Canada, in the name of North American security and its own historical “Manifest Destiny”…Thomas Jefferson.

Lastly…I remember nearly 20 years back after moving here, every time I had CBC weather reports on tv from Toronto, it was….whatever the weather was in Toronto and its raining in Vancouver….I’d poke my head out the door and guess what…..not a cloud in the sky…honest injun.

Now that was A 1, prime propaganda.

jmo,

#96 Just a Girl on 01.14.09 at 7:05 pm

#13 nonplused

Just got home from work, read the blog, chuckled my way all the way through your post! As if it’s not bad enough, we apes often make life decisions based on ‘biology’, not reasoned thinking.

Been tracking homes in the Highlands, Edmonton neighbourhood for the past 2 years (former owner there) … just for curiousity’s sake. Two years ago, the cheapest tear-down home could not be had for less than $300K (ie. lot value +). Now there are two listings for the first time in 2 years @ $199,900. For those who like simple math, that’s about a third, no?

#97 DaHK Kid on 01.14.09 at 7:16 pm

Nortel news was pretty much expected by all those working there. The realignment in 2005 was to regroup technologies, remove the cross matrix reporting and shared serviced model so that vertical BU’s could be established for potential sell-off.

The problem is that they couldnt (as usual) do the marketing. Over the last few years many employees have left to RIM, Acatel-Lucent and government jobs.

I dont see this news changing anything for employees as they knew exactly what was going on however bay street and main street may use this news to realize that YES Canada is in trouble.

Canadians, please get your heads out of the sand early for once, oh sorry, that would have been 12 months ago.

#98 Mistor Fistor on 01.14.09 at 7:26 pm

I can only really speak for Ottawa and the Valley but this town is hurting BAD. There is a bus strike and it has lasted since Dec. 10th. Nothing can kill a cities economy faster than a transit strike. People are still oblivious but the writing is on the wall. I could see this city loosing 1/3 population in the next year if this keeps up. Where will they go I do not know but with Stevie in power there will not be much chance of staying the course in this freezing town. In the first 4 weeks the strike has cost the “citizens” 280 Million. And that is not a linear track. It is minus 30 outside and you cannot get a taxi to save your life. Sick people are panhandling at the hospitals because they are told to go home but cannot afford the $50 taxi. Corrections workers and Elementary teachers we are told are next, but when the cuts come who else will say no and go on strike. Allot of people are down to working 2 days a week from 5 days because the business is just not there. How long can anyone do this for. Every Canadian should be watching this battle closely because if it can happen here it can happen anywhere. Although Vancouvers stike lasted six months and they are still thriving. Although Vancouver does not have -30 for 4 months.

Sorry for the rant but I am very bitter

#99 dekethegeek on 01.14.09 at 8:27 pm

Hmmmmm , #95 North Vancouver Citizen and Real Estate Expert are the same person?!?!? W.T.F.? Do you make crazy statements as one persona and then argue with them as the other?
Hmmmmm, is it something in the North Van water supply? Hope not, cause Burnaby is drinkin the same cloudy swill . Yes folks after a $600,000,000 water treatment upgrade and when it rains( never rains out here)the water turns a murky brown. Anywho, I digress
Are ya smoking a little of your grow op ? I’m just curious as to whether schizophrenics pay double the taxes a sane person pays?
Just sign me as “curious” dekethegeek or ‘confused” nerdtheturd to whomever replys.
:)-

#100 Kanata has lots of Squirrels on 01.14.09 at 9:16 pm

“Nortel is toast. Ottawa, look out!!!”

Nortel was empty already. Whole office areas were empty other than an Ottawa U professor doing strategic analysis for some research paper on the company.

Ex-Nortel developers have found homes in competitors or other IT companies or the government over time.

I’m sorry for any pink slips being released in the next few months mind you … must be stressful.

Competitors also having offices in Kanata will buy parts of the company if the Federal Government doesn’t help them.

The government ministries need a 10 year home to renovate and rebuild ministry building in Ottawa Centre and Kanata empty offices will fill up…

Kanata has lots of land, squirrels and we can walk to work…. if there is so much issues with Nortel layoff, the federal government will start up a couple of IT infrastructure and systems projects and folks will continue going a la Kensyian economics model for the capital. It’s nice being in a town where the biggest employer can print money.

Garth, I got your book today and my wife was relunctant to give it to me … read 2 chapters and enjoying it so far. Thanks for the autograph.

She asked if we should stock up with 1 month of canned food :-) … I’m winning her over slowly. Next is a safe and a stash of cash, a wood oven, and solar panels … just in case.

Kanata

#101 Kanata has lots of Squirrels on 01.14.09 at 9:31 pm

Mistor Fistor,

I just read the ottawa transit strike tread. The issue is the union and greed.

1. Bus services should be an essential service and a union should not be able to terrorize a city like that. I feel bad for those small shop owners that had no shoppers downtown due to the strike. The citizens are with the city and I hope those bus drivers get nothing.

2. I work at a tech company that has growing sales but no raises this year since we need to stay the course and keep the business growing and re-invest.

3. Let me know next time you see someone panhandling to get home, I’ll pick them up and drive them. I’m seeing a lot of chatter on charity drivers in Ottawa these days.

4. Work close to home. Ottawa is small so make sure you don’t live far from home and a bus strike is not that bad …

5. I live in vancouver for 15 years and most in a downtown condo in Yaletown that values went nuts … now if you have a family you only can afford a suburb home, need to take the one 2 lane highway or city streets and what take 30 minutes to drive in a bus strike take 1 hour in Vancouver. Vancouver sucks for it months of rain and no sun. In ottawa, cold days with sun = dress warmly and go snow shoeing or x-sking in your back door!!!

#102 whiterock on 01.14.09 at 9:50 pm

#99 “Are ya smoking a little of your grow op ? I’m just curious as to whether schizophrenics pay double the taxes a sane person pays?”

An insightfull diagnosis, deekthegeek. Paying double the taxes seems logical to me in this case.

#103 Gord In Vancouver on 01.14.09 at 10:09 pm

#4 Jon B

I’m currently shopping for some kitchen cabinets to be custom made for my latest reno project. Perhaps it’s a litmus test as to the state of consumer confidence in the Vancouver area. Many shops are booked until May while others aren’t interested in taking on more work. I don’t know if renos are getting suddenly popular as a cheaper way to change the living environment when you can’t sell it, or if these hard economic times just haven’t hit BC yet.

http://www.news1130.com/news/local/more.jsp?content=20090114_134531_40364

Pawn Shops doing more business during economic downturn

Lyle Fisher NEW WESTMINSTER (NEWS1130) | Wednesday, January 14th, 2009 10:42 am
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NEW WESTMINSTER (NEWS1130) – It’s a sure sign our economy is in a slump. More and more people are going to pawnshops to get some quick cash.

Michael Isman with Royal City Jewellers & Loans says business has been brisk for the past several months. “We noticed an immediate increase the 1st of August, and it continued into the fall and early winter. And it’s starting to pickup again in January.”

Isman says his shop is seeing a lot more jewellery being pawned and fewer electronic products.

#104 Ralph on 01.14.09 at 11:06 pm

I think to put things into perspective for the drop in real estate prices. One needs to remember where the prices were just three years ago. Where I live prices jumped 55% from just 2005 to beginning of 2008. So if the price of real estate drops by 30%, it is still up 25% from 2005. Which is still pretty good.

Problem was that ordinary people were getting greedy in trying to keep up with the Jones’. They were buying holiday trailers, huge pickup trucks, boats, big screen TVs, etc, etc. Most of it on credit. It was nothing more then a huge pyramid scheme.

What about all the doom and gloom we hear so much about? I say don’t panic. Try to think things over with a clear mind. Put together an action plan like Garth suggests. If it is any consolation we still have it pretty good as a society, compared to other parts of the world.

#105 K-Money from Vancouver on 01.14.09 at 11:41 pm

What I am waiting for is the outcome of the Olympic Village. What a scandal… If I didn’t live in Vancouver I would be laughing right about now.

#106 K-Money from Vancouver on 01.14.09 at 11:45 pm

Imagine how many hospitals, school and community centers that money could have built. Then again, where’s the profit in that.

#107 patriotz on 01.14.09 at 11:47 pm

.huge families of unskilled and religous dominated “Muslims”….most from North Africa, “Pied Noir”, aka Black Feet.

“Pied Noir” was the term for French people living in North Africa, not North Africans living in France.

Not too surprising since you seem to get everything backwards.

http://en.wikipedia.org/wiki/Pied-noir

#108 Wealthy renter 2 on 01.15.09 at 12:43 am

#99…OMG! ROFLMAO!!!!!!!

#109 Van MD on 01.15.09 at 2:59 am

One of my patients lost her job last week, while another had to lay off some of his employees this morning; he also lost a sizable chunk of his retirement investment from this financial situation.

If this keeps going, I suppose those antidepressant-manufacturing Pharmas will see a steady increase to their revenue… As for me, I’ll get ready to see more depression counselling cases, some of which probably should include an urgent referral to financial counselling!

#110 OntarioHouse on 01.15.09 at 8:48 am

#95 North Vancouver Citizen
I think you misunderstood my post. I was talking more about real estate issues/bailouts and stuff. Like when they had that big bailout in the US there was actually debate and talk about it on American television. Here it would have been done quietly and without anybodys input. It would not have been given too much media exposure.
When there’s negative real estate statistics, the industry controls how that information gets published. They quickly write articles or get someone on tv to sugar coat the statistics and to fight back.
It’s always positive, positive, positive, despite the facts showing otherwise.

#111 smwhite on 01.15.09 at 9:59 am

#91 dd

Amen,

Technical recession is like saying we’re not not in a recession…

Technically, its bull dung coming from the top!

They call it trickle down.