The shepherd

obama1

Obama on the train. Obama at a rock concert. Obama at church. Obama’s motorcade. Obama’s speech. All Obama, all the time!

Watching coverage of the pre-inaugural inauguration events on US television is to realize that no US president has ever assumed office with such expectations. A poll released Sunday showed that 80% of Americans believe he will make the country (ie, the economy) better, almost immediately. Yikes.

And while there will be an Obamarama bounce for a few weeks or months, the reality is this guy is never going to live up to those expectations. Because he can’t. Nobody can. And even the mighty force of the American government will have a hard time keeping 2009 from being the single worst year since, oh, 1932.

From a distance here in our igloos, it’s perhaps easier to understand that this guy’s about to take one of the biggest gambles in economic history. Already inheriting a trillion-dollar deficit, he’s about to spent another trillion priming the pump. But this comes amid very worrisome news. Bank of America is in a profit freefall. Citigroup’s carving itself in half and selling off assets. More than a trillion dollars of unstable mortgages are coming up for renewal this year and next. House prices are falling at the fastest pace in five years. More than 2.6 million jobs were lost in the past year, the lion’s share in the last few months.

America has now accumulated almost $10 trillion in debt, a fact that profoundly worries every sober economist. Trying to spend its way into health after two decades of credit excess is an unproven strategy. Asking indebted citizens to borrow more with cheapo interest rates and spend more with a tax cut is also a danger. The odds are that every single one of Obama’s first four years will see a deficit in excess of $1,000,000,000,000, and that the American IOU in 2012 will be about $14 trillion – an amount so vast it will take generations of higher taxes just to pay the interest.

But this is America’s last, best shot to prevent 2009 from becoming 1932. So, I wish Obama well. May the shepherd’s magnetic and infectious smile, the assured swagger and the soothing, uplifting words inspire his American flock to spend again.

Tuesday will be glorious and historic. Then comes Wednesday.

78 comments ↓

#1 Kestral on 01.18.09 at 8:47 pm

If there’s a shepherd then there must be sheeple.

#2 Garthlover on 01.18.09 at 8:48 pm

Garth,
You’re beginning to sound like a preacher….spewing fire & brimstone

Repent. — Garth

#3 Millhouse a White Comedy on 01.18.09 at 8:56 pm

Obama is the tonic needed to lead the U.S. through this crisis.
He won cause he was the better choice – simple as that.

As the going gets tough, the poorest of Americans will trust him far more than some pale-face sonofabitch.

As for up here in igloo land we’ve got nobody like him.
If Harper lasts he’ll wilt.

#4 Keith in Calgary on 01.18.09 at 8:58 pm

And this is why interest rates will go thru the roof when the world stops buying worthless US debt. They’ll need to raise them to attract buyers. And our rates will follow…..

Every single country on the planet has serious financial issues right now and cannot afford to prop us the US and disregard the home front. On top of that……the US has reached the point wherein their debt is not even remotely repayable, and any sober prospective bond holder will soon realsie that and demand more than a 0% return.

#5 dd on 01.18.09 at 9:00 pm

Yes … the great deleveraging is taking place before our eyes. Not just in America but around the world. Can the government(s) step in to “releverage” back up to yesterdays prices?

Will the US rebalance the books? Only if the rest of the world spends like drunken sailors and steps in to take the place of the US consumer. Will China’s people spend all their income and not save a dime? Will India’s? How about South East Asia?

For the world to go back to yesterday, some country that has a population of 300 million has to spend every last cent they make on consumer goods?

#6 Kestral on 01.18.09 at 9:05 pm

btw, speaking of government closing down the banks, this happened in the US as recently as in 1990. I’m reading Gordon Pape’s “The Best of Pape’s Notes”, this is from page 51 dated January 1991:

“…during the Savings and Loan debacle in Rhode Island when the governor closed down half the financial institutions in the state of New Year’s Day after the company that insured their deposits declared insolvency.

Depositors wanting to withdraw their money found state troopers guarding the doors.”

Later on this is even more telling (keep in mind this was written in 1991 and he was talking about S&L!):

“The reasons behind today’s problems in the US banking system are much the same as those in the 30’s – overly aggressive loan policies during the previous decade, which came home to roost when real estate markets collapsed and overextended businesses went under”.

Everything old is new again. It’s just history repeating itself.

#7 Jonathan on 01.18.09 at 9:14 pm

I feel sorry for Obama. I’ve never seen expectations so high. And yet, I know, that whenever you put someone on a pedestal, they are bound to eventually fall from it. Especially when the ground below the pedestal is being rocked by an earthquake.

America was saving -2% of income. Today it is at 2.5%. By the end of 2009, that figure could easily be 10%. This is true for industrialized countries around the world. 70% of the US economy is consumption, so that is a reduction of 8% of GDP in the short-run. The US government will have to spend an additional 1.2 trillion just to make up for this short-term reduction. However, if the rule that taxed dollars lose 25% of their value through the government bureaucracy, then the US government will truly need to spend an additional 1.6 trillion per year.

Baby boomers are retiring and in the coming years, this will result in a long-term reduction in production. Furthermore, 30 trillion in wealth has evaporated in 2008. Retirements will be more thrifty, and spending will be mediocre.

In essence, Obama must present a plan that involves 2.6 trillion dollar deficits against a country who’s production will be inevitably be shrinking.

Good luck, but I think his task is impossible.

#8 POL-CAN on 01.18.09 at 9:17 pm

Ha…

I am probably going to get pounded for this comment but I can not help it :)

Meet the new boss…. Same as the old boss….

Those thinking that Obama will change/fix anything better not hold their breath for too long. TPTB do not want change. They want to preserve things the way they are…. Hence all the bailouts and the too big to fail bs….

#9 Dee on 01.18.09 at 9:22 pm

They’re seriously considering the “Aggregator Bank” idea.

http://blogs.wsj.com/economics/2009/01/16/wsj-interview-fdics-bair-fleshes-out-aggregator-bank-idea/

And Brown is considering a second bail-out package.

So much hope is being pinned on Obama. I wish him well.

#10 Kestral on 01.18.09 at 9:34 pm

To #7 Jonathan

The Baby Boomers will be retiring, but Generation Y aka the Baby Boom Echo aka Millennial aka “a bunch of whiner kids who had it easy all their lives and are about to get the proverbial b-tch-slap” will pick up a lot of the slack.

As a Gen X who had to put up with the Boomer B.S., I look forward to treating their kids the way they treated Gen X.

(As said, everything old is new again, meet the new boss, same as the old boss, et al)

#11 Darryl on 01.18.09 at 9:48 pm

I feel sorry for the guy.
I was thinking that Bush may have stolen the election for a third time by declaring martial law(he likes to change the rules as it suits him). He may have stepped back and looked at what he was in for and decided “on second thought” It also looks like the GOP knew what they were doing when they brought on Palin.Without her they may have won the election. Whew !

#12 Bobby on 01.18.09 at 10:05 pm

It’s going to be interesting to see
how he handles the black swans

#13 Observer on 01.18.09 at 10:52 pm

I am not a religious man, but I do know the stories. I can’t help but remember the biblical story of a man riding through town praised by the people and bedded with Palm Leaves only to be crucified the next week.

#14 JET on 01.18.09 at 10:55 pm

Just my two cents here – what will happen if those 80% of Americans actually do as Obama will say, and he will more thank likely tell them to spend, spend, spend again. The media will oblige of course. I wonder how many percentage of the people in the world share the same sentiment as the Americans – it would appear at first glance, Obama is not only a sheppard for Americans but for many in the world. Perhaps, just perhaps, the sheep that took the economy down will bring it back up? Just some wishful thinking…

#15 Midas on 01.18.09 at 10:56 pm

The more things change, the more they stay the same.

Meet the new boss, same as the old boss.

By the time 2009 is over,people will be wishing for the good old days; of 2008 that is!

Just look at Mr. Obama’s Economic team; all old school establishment boys. CHANGE is the last thing any thinking person should expect, for the better that is!

#16 subprimenow on 01.18.09 at 10:58 pm

“Meet the new boss…. Same as the old boss….”

No kidding. He voted FOR the bank bailout remember. I think he is torn between doing what is best for the people that voted for him or doing what is best for the bankers that got him this far. Goldman Sachs (Paulson’s gang) was his biggest campaign contributor. The people will get a stimulus and the banks will get trillions. All of it will be added to the deficit as Garth points out. Same old story.

He’s caught between a rock and a hard place…

#17 kitchener1 on 01.18.09 at 11:23 pm

Good luck to him, he’s going to need it. 09 and the following 3 three years is going to change the whole American (and Canadian in a bigger way) mindset of “we can have it all now”.

It will effect all generations alike from the boomer down to the millennials. People will revert to buying only what they truly need and the excess of the last 20 years will be nothing more then memories.

Obama promised a lot of things to everybody, now its time to deliver.

#18 Peter on 01.18.09 at 11:31 pm

the combination:

Obama+economic crisis = USA crush

the USA citizens chose hollow demagogue as a President of USA.

the USA on the speedy way down and it will take Canada to the free downfall to the lots.

#19 RC51 on 01.18.09 at 11:39 pm

An FYI to anyone-

The coming depression is completely predictable ( I have recently come to realize through my readings on generational cycles). We are likely already in it.

We have just been party to the largest boom IN HISTORY. After this tremendous boom, there is an equal BUST. Just as day turns into night, economies must expand and contract. There must be liberals and conservatives, in order to have balance, and not unchecked extremes.

Certainly one out of every four of us will loose our jobs between now and 2012- myself included.

Generational cycles, once you know about them, can be studied and used rather accurately to predict the future with a high rate of accuracy.

The depression, the crash of stocks ( much further ), the bursting of the tech and real estate bubbles, the oil bubble, the bond bubble et al is an absolute certainty. The timing is the only question. If have my time frames, but do not have the time or space to go into it here.

My point is to say to those who come on here and post how they are scared, angry, melancholy or disenfranchised, is to say that we are going to make it through. There will be shortages. Food, gas, electricity, money will all become scarce at one point or another for us Canadians in the next 15 years. If you accept that it is a certainty, you will prepare, and therfore be prepared, so it wont really be to big of a problem. Those who do not accept it, and dream and wish for their lives to maintain the status quo- you will be the ones we read about who are in the streets, begging and homless. You have been warned.

Terrorist acts will be coming in North America for certain as that is the generational cycle we are in. Look to 2009 or 2010 for a big one on our turf. It is about every seven to ten years. 1993- first world trade center attack, 2001- 9/11, Mid 2009-early 2010 it will happen again, as the newly elected vice president warned how Obama will be tested as Bush was in the early days of his presidency. World war three however will not come until after the depression, as world war two did not come until after the last one, and great wars are fought every 40 years or so. WW3 will likely be between asian countries though as we will no longer be considered a super power. China vs Russia or something…

If there was any time to be alive, and have a chance of surviving a depression with your health, family and finances in tact, ( if you take proper measures ) it is most certainly now. the next great Bull Markets for all starting late twenty-teens!

#20 JET on 01.18.09 at 11:53 pm

* my previous post – shepherd, not sheppard – too much driving in Toronto!

#21 Peter on 01.18.09 at 11:58 pm

Khusain Obama+Economic Crisis = USA crush

garth, why do you afraid to publish this opinion?

Just did. His common name is Barack. — Garth

#22 nonplused on 01.18.09 at 11:58 pm

“America has now accumulated almost $10 trillion in debt, a fact that profoundly worries every sober economist.”

– I think it has been alarming the drunk ones too. Richard Daught (the Mogamo guru) has been ranting about it for years.

…”the American IOU in 2012 will be about $14 trillion – an amount so vast it will take generations of higher taxes just to pay the interest.”

No generation ever pays back the previous generation’s debt. It will be defaulted on as soon as the boomers are no longer able to pay the interest, either outright aka Argentina or through inflation aka Zimbabwe.

#23 nonplused on 01.19.09 at 12:09 am

I hope that the US economic experience doesn’t turn the country aggressive as happened to Germany in the 30’s. Especially since Canada is the new Austria. Remember, Hitler didn’t become the Hitler we know by himself. It was a mood that overtook the whole country. Hitler was just the right nut in the right place.

The answer to the old conundrum “if you could go back in time and kill Hilter, would you?” has an easy answer. It wouldn’t have made a stick of difference. War was the only way out for a desparate people.

The unpayable US (and Canadian, we still have a big whoping debt outstanding despite not adding to it for some years) will have a similar affect as the unpayable German war reparations.

Different cause, same result: unpayable debt.

#24 Da Hk Kid on 01.19.09 at 12:25 am

I’m just waiting for the the debtor countries to start calling in those debts as forget about 0% return and worry about -XX% losses as the US cannot repay them.

Plus with the USD bubble looking for a pin you can bet they will want their money sooner than later.

But again, how to repay the debt will make the world a very scary place.

#25 confused and a little crazed on 01.19.09 at 12:27 am

Hi Garth,

Your defecit # is a bit off. i ‘m sorry I can’t find the link. I think it was part of
http://patrick.net/housing/crash.html.

where there was an article noting the “$ “sign of the defecit digital board had to be dropped to add another digit to the counter…. yep that’s right there is an digital counter on the side of a finance instution counting the defecit as the interest is accumulated. It’s over 11 trillion… I don’t think they added the 700 billion yet

I believe China holds about $400 billion at that US IOU

#26 Investx on 01.19.09 at 12:35 am

The Obama worship is amazing… and troubling at the same time.

#27 $fromA$ia on 01.19.09 at 12:49 am

Garth is not a preacher, he sells books for $ not free watchtowers for everlasting life..

#28 Happy Renter in North Van on 01.19.09 at 1:00 am

Garth, totally agree with your analysis… Anyone who thinks Barack Obama will be fundmentally different than his predecessors should read “The Limits of Power” by Andrew J. Bacevich… the author lays out a persuasive case as to how the American President is trapped in a system of “American Exceptionalism” which feeds the need of a failing empire of consumption, devoted to military, as opposed to diplomatic, triumphalism… The world’s ecstatic reaction to Obama will surely be followed by disillusionment and disappointment…

#29 Future Expatriate on 01.19.09 at 1:41 am

The Clintons were able to fix the mess left behind by George H.W. Bush in all three of his terms (including the first two so-called “Reagan” terms.) They and their advisors are the only ones who have a chance to clean up after Dubyah’s debacle (economic, military, and social.)

Luckily, Obama seems to know his limitations, and is happy to make the speeches, bask in the adulation, while wiser more mature minds actually run things behind the scenes.

Can even the Clintons clean up after “Dubyah’s Armageddon”? Time will tell.

If they can’t, believe it, no one can. Credit the Clintons for being content to let Obama reap the credit.

Or the whirlwind…

#30 Zoronqueen on 01.19.09 at 2:51 am

Garth,

Just got through the “real estate” portion in “After the Crash”. It’s a good read so far.

Are you suggesting to get out of real estate even though rent is still very expensive $2995 per month? The house is realistically about 470K

http://edmonton.kijiji.ca/c-housing-house-rental-BRAND-NEW-2-STORY-IN-MAGRATH-W0QQAdIdZ74685578

#31 Barb the proofreader on 01.19.09 at 3:51 am

Last year acquaintances moved back to Calgary for the second time. They waited, and rented, while house prices dropped for 5 months. Then in December they bought the southern exposure side of a brand new duplex, close to downtown in a great neighbourhood, when the price was lowered to $950,000.
They’re aware it will continue to lose value, for awhile, but they also state that this is it, they’re never moving again.
Well…. ulp… as long as their confidence in their new jobs holds true, I guess that’s one way to do it, but personally my nerves would be frayed in no time.

#32 TomOfMilton on 01.19.09 at 5:14 am

There has got to be some other way besides “spending” to work at a problem like this. Something othe than w
r as well. I can’t help but feel that it was spending money on things that do not have real value that gets us into a mess ke this. I think it will be painful but perhaps wiser to spend on tangibles. Not just spend in general.

#33 TomOfMilton on 01.19.09 at 5:16 am

“something other than war as well”
sorry for the bad typing. I’m on a PDA…and in the bath tub. *snicker*

#34 somecatch on 01.19.09 at 6:07 am

This is bang on. There is no possible way this man can live up to the expectations that have been created. As much as I admire the man, there’s a real possibility Obama will turn out to be a one term wonder, and, an absolute disaster for the world economy. During the election campaign, I watched a clip where commodities guru Jim Rogers was asked what he thought of the presidential candidates. His reply was quick and crisp: “neither of them has a clue!”

#35 Bottoms_Up on 01.19.09 at 6:55 am

“The most valuable homes in Ottawa are owned by either property developers or high-tech moguls.”

http://www.ottawacitizen.com/Sports/Rockcliffe+palace+Ottawa+home/1193234/story.html

#36 Cornholio on 01.19.09 at 7:41 am

“The Clinton’s were able to fix the mess ”

The Clinton’s along with Rubin’s strong dollar policy outsourced American Jobs, they made adjustment to the CPI which understated inflation, the scam about a balanced budget just like the banks off balance sheet BS. Keep on dreaming.
Obama is a corprate sateist all the way. The fleecing of the American public will continue in the greatest theift in history.

#37 pbrasseur on 01.19.09 at 7:46 am

Obama is just an image so far, he represents something but the guy himself hasn’t proven anything yet. For one I suspect him to be a weak leader.

Not just the US is in trouble, Europe may be in even worse shape, much of east Europe won’t escape depression, mainly due to european-Monitary-Union. Next in line Ireland, Greece, Portugal, Spain and others..

Another great article form Ambrose Evans-Pritchard

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4278642/Monetary-union-has-left-half-of-Europe-trapped-in-depression.html

This guy’s on the ball, a great journalist that puts many others to shame.

#38 613 Happy where I am on 01.19.09 at 7:56 am

A little history lesson… this Obamamania reminds me of Trudeaumania …. I was in high school when this happened and it completely disolved with the FLQ crisis and the civil unrest…

The US is in for an eye opening experience… I would hate to be Obama because the situation is sooooo bad, economically, socially and people are hurting big time…

He in a bad place without much manoevering possible and with the media flying around like buzzards…

The really bad thing is that this “historic”innauguation may backfire and put race relations back before the civil rights era of the 60s.

#39 Peter on 01.19.09 at 8:11 am

Thanks Garth.

I know his common name is Barak, but Khusain is more associated with the Crush.

So, the coming Real Estate crush will be just a small detail of much biggest Crush for the North America, Europe and whole our western civilization.

It is very sad, but I hope our western civilization will survive, despite very hard or even tragical years we are entrancing now.

The Real Estate crush will certainly add a lot to social disturbances we are expecting to suffer in Canada and USA.

#40 Bottoms_Up on 01.19.09 at 8:23 am

Obama is a different animal than Bush; just like Bush was a different animal than Clinton. There will be changes to the way things are done. He will persue peace talks more aggressively than Bush ever did. He will make rational choices regarding the use of the military (‘Weapons of Mass Destruction’ will not be coming out of his mouth).
If there’s anybody that can help get the US of A on the right track, it’s Obama. Can’t wait.

Oh yea, and China will never call in their loan because that would cripple the US, the driving force of their own economy. It would be suicide. Think about it, would a casino send their high rollers into gambling rehab? Unlikely! They will keep them ‘in the game’ for as long as possible. It is our job to figure out how long China will keep the US ‘in the game’…

#41 mattbg on 01.19.09 at 8:41 am

One thing that worries me quite a bit is that the standard economic line is that x% of GDP is an acceptable level of debt, and the consensus seems to be that, currently, the US may be approaching the limit of safety with what they are currently taking on but that they’re not yet in a danger zone.

But this assumes that their current level of GDP is based on something real and not a false economy (such as an accumulated expansion of financial trickery and unsustainable suburban sprawl). If you justify debt based on its relationship to GDP, but that measure of GDP isn’t sound, then you may take on far more debt than is safe simply because the numbers tell you its safe to do so.

#42 Bill-Muskoka (Not Anymore) on 01.19.09 at 8:45 am

Garth,

Just a few reality points.

1. There is far more to America’s success as a country than money, i.e., the economy. America is its people working together, not having petty fights, not preventing people from taking skill sets across their State lines like we do here.

2. President-elect Obama has repeatedly made it CLEAR that solving the current mess Bush created will take time, maybe years.

3. Obama has also made it clear that success will only come when the people pull together for the common good. Government can lead, but it cannot solve the problems.

I suggest everyone start actually listening to what he says, rather than some voice that is NOT his.

He knows something Canadians seem to miss…’It’s the PEOPLE Stupid!’ Not the ‘stupid people’ who will make things turn around. But people need a leader. It is too bad Canada doesn’t have any. We did with Paul Martin, JC, PET, but the current crop are not going to make it.

Oh, Ignatieff may sound capable (at times), but then to some Harper does as well. Sorry, but neither of them cause me to feel excitement, hope, or secure in any manner whatsoever. They are just damn politicians looking for power.

And please, someone tell Iggy his smile looks like the Grinch even at its very best! No need to say anything to Harper because his concept of a smile is the same as a puckered arsehole.

Americans are saying in unison ‘Yes, We CAN!’ What are we Canucks saying? Hello? Is anybody home? I hear NOTHING!

#43 mattbg on 01.19.09 at 8:47 am

“May the shepherd’s magnetic and infectious smile, the assured swagger and the soothing, uplifting words inspire his American flock to spend again.”

His campaign, though, seemed to encourage the other approach — to make do with less, to live within your means. I saw one interview where he connected obesity with the price of food being too low. As Mark Steyn pointed out recently, the Europeans loved him for this language but their own economic recovery may depend on a return to hedonism.

The other problem is….spend what money? It does start to look rather insane that all of the economic recovery cards seem to have been blown during a period when things were good — a war during a boom, low interest rates during a boom, high credit availability during a boom. And now we’re entering a slowdown and there’s no more room to borrow, even if you make money free.

#44 mattbg on 01.19.09 at 8:50 am

Jonathan, I feel sorry for Obama, too, because he didn’t create the situation he will have to deal with. But he put himself on a pedestal to get elected, so he has to share some of the blame for his inevitable fall.

#45 Bottoms_Up on 01.19.09 at 9:23 am

#41 mattbg on 01.19.09 at 8:41 am
——————————–
Good post. How do real estate prices and stock portfolios figure into the calculation of GDP? I’m not an economist so I’m truly looking for an answer here.
Thanks.

#46 Bill-Muskoka (Not Anymore) on 01.19.09 at 9:23 am

#21 Peter on 01.18.09 at 11:58 pm

His name is not Khusain. I suggest you try reading a little more.

#47 Peter on 01.19.09 at 9:24 am

” Obama has also made it clear that success will only come when the people pull together for the common good. ” – Bill-Muskoka (Not Anymore)

It is exactly what told Russian communists.
We all know the results.

Now I’m confused: who won the cold war?

USSR or USA?

By the way, the people of USSR had free (no cost) state owned apartments.

May it is a good idea to solve the Real Estate crisis in USA and Canada?

May be, Khusain Obama will create the USSS -the Union of Soviet Socialistic States with free Real Estate?

#48 JO on 01.19.09 at 9:29 am

While he is a bright man who has charisma by the boatload, he is being advised by the wrong people. Much of his proposed government will be former Clinton people (any chance Hillary will somehow come in power in the next few years ??). I will not repeat what I have said countless times before, so I will say only that he better enjoy any honeymoon phase he has in 2009 and any respite in the economy, because 2010-2012 will be far worse. You cannot walk away from excessive debt and excessive spending without savings, paying off or defaulting debt, and experience the inevitable bankruptcies and pain that will come with it. The solution cannot be the same as the problem that caused it. Mr.Obama is headed for Bush like opinion ratings by 2011. We must stop these ideas from being implemented by Canadian politcians and their Keyensian fools: Most importantly, I ask fellow Canadians to do the following:

1) Contact your MP – advise them against all bailout and excessive stimulus spending on a huge number of infrastructure projects. We need some infrastructure spending but not 1000 projects which have been submitted to the gov’t. The focus needs to be on reforming EI to improve benefits and re-train all unemployed workers and to cut income taxes for working/middle class and businesses. Once the economy shows signs of stabilzing, we need to cut government spending and balance out the tax system by raising consumption taxes modestly while keeping income taxes low.
2) Boycott any business that recieves bailout money in any form. Yes, if GM or Chrysler get our money, don’t buy their cars.
3) Sign the Abolish the Fed (by extension the BofC) petitions sponsored by well followed and respected private analysts. Mish’s Global (Google it) is a good start. So is Endthefed.com.
4)Paydown your debt and save money. Do not become trapped by the credit/consumption system.
5)Tell as many friends and family to do the same.

JO

#49 Bill-Muskoka (Not Anymore) on 01.19.09 at 9:31 am

#3 Millhouse a White Comedy on 01.18.09 at 8:56 pm

the difference between Obama and Bush, or Harper is like the difference between the King of the Scots, and the King of Scotland.

The former led the people for the people’s benefit and that the land belonged to the people.

The later believed the people were there to do his every whimsical will and was a self-centred tyrant, one who believed that the land was for his pleasure.

The former was a William Wallace, the later King Edward (Longshanks).

#50 Bill-Muskoka (Not Anymore) on 01.19.09 at 9:35 am

#47 Peter on 01.19.09 at 9:24 am

Thank you Peter for more of your inate negativity. You may leave now and frolic with your ‘Everyone’s the enemy, but me’ friends who are still living in the 1950’s and the Cold War. Personally, I had more than my fill of your ilk as I lived through the entire thing.

I suppose you think Canada is a Pinko-Commie country? Maybe a rat-shit country like Hairy?

#51 Peter on 01.19.09 at 9:56 am

Toronto crushed!
http://www.torontorealestateboard.com/consumer_info/market_news/index.htm

Sales 50% down

TORONTO, January 19, 2009 — Greater Toronto REALTORS® reported 888 sales during the first half of January compared to 1,776 in the first 15 days of 2008. “According to Statistics Canada the economic situation throughout Canada changed noticeably over the past year with job losses in the fourth quarter of 2008. Toronto is not immune to this, the GTA housing market has been impacted,” according to TREB President Maureen O’Neill.
Avr. Price Jan 2009 – $ 332,495
Avr. Price Jan 2008 – $ 367,574

10% down!

#52 jess on 01.19.09 at 9:57 am

GREG MCARTHUR AND JACQUIE MCNISH

From Monday’s Globe and Mail

January 19, 2009 at 4:31 AM EST

“U.S.-based mortgage insurance companies are pressing the federal government to fully guarantee their home insurance policies in the pending federal budget to expand their market and possibly help resuscitate Canada’s struggling real-estate market.

According to people familiar with the lobbying campaign, two leading mortgage insurers, Genworth Financial and American International Group, are fighting to raise existing government guarantees of private mortgage insurance to 100 per cent from the 90-per-cent level that has been in existence since the late 1980s…

Such a move would make the federal government ultimately liable for all of the hundreds of billions of dollars in insured mortgage debt.

=========
So does this mean we (the government) keep the foreclosed houses and the shareholders keep the fees?

#53 Bill-Muskoka (Not Anymore) on 01.19.09 at 10:04 am

If the goverment actually wanted to do something they would lower and restrict the interest rates on mortgages and credit cards. They would eliminate Compound Interest altogether. People would then be able to actually reduce their debt, put the money back into the economy, and things would turn around much faster.

In fact, usury has become the Pig Trough of society. No matter how hard people try to ‘clean up’ their debt, the mud of compounded interest sticks like glue to weigh them down back into the mire of financial slavery to make the ‘investors’ lives more pleasant.

But, they haven’t the balls to do something like that. No, they pretend to act by talking about tax cuts, which in reality means service cuts. The Oddawahaha Gangbangers still think it is their responsibility to build hockey rinks, personal train routes, and whatever else they deem to be beneficial to their own short term career security.

#54 john on 01.19.09 at 10:08 am

Great Post Garth,i wish Obama well but i think he is facing an impossible task. Our present lifestyle is not sustainable in this worldwide economic disaster yet our Governments are emptying the coffers trying for a miracle cure. Personally i don’t think the bottom is even close.Wise people control their spending in these uncertain times preparing a nest egg for basic survival.Our governments are doing the opposite makes me wonder where we will turn when our nest eggs are gone and the Governments are broke? To move up one must first find the bottom.

#55 Grantmi on 01.19.09 at 10:11 am

#11 Darryl – It also looks like the GOP knew what they were doing when they brought on Palin. Without her they may have won the election. Whew !

Mr. D: You’ve got to be kidding me!!

Talk about conspiracy theories! Pick a VP Candidate that will so defile the public that you will NOT get your party elected to the highest office in the world!!

Dude…. please pass the bong!

http://tinyurl.com/237dfr

#56 Peter on 01.19.09 at 10:13 am

“I suppose you think Canada is a Pinko-Commie country? Maybe a rat-shit country like Hairy?” -Bill-Muskoka (Not Anymore)

You are very wrong.
I do not think about Canada.
I live in Canada.
As you understand from my accent, I was born in USSR and it is the main reason why I am not politically correct moron and I have a great immunity against cheap demagogy of Khusain Obama.

I’m very sad when I see that the western civilization is creating suicide, but I can not help.
You are very lucky you do not understand what is waiting for you after the next corner of the History.

Enjoy your good time; it is shrinking.

#57 PTDBD on 01.19.09 at 10:17 am

A symbol of hope for a country and world desperate for salvation. I think we all want him to succeed, yet he is only one man. He must inspire and lead and rise above words, for like Bush, it will we by his actions that he will move the world.

He lost a momentous opportunity to lead by example by bypassing this lavish inauguration spectacle. Yes, some of the cost is borne by private donation, yet the major portion falls onto the taxpayer. If the country is in financial peril, if he is trying to encourage belt tightening and living within realistic budgets, then this
first act of punch-bowl spending does not set the needed example.

It appears as business as usual, if not even more expensive….and grandiose speeches cannot change that.

#58 Bobby in Victoria on 01.19.09 at 10:22 am

Just wait until the people who voted for him realise that no, the government is not going to cover their mortgage and car payments. Already the tone is changing, with the call for greater individual responsibility and to be accountable for ones actions.

The UAW was instrumental in voting him in the NE. Just wait till he says that their contracts are not sustainable if the Big 3 are to survive. And just wait till he moves all those CAW jobs back to the US as a prequisite for further auto loans.

Yes, change is coming, but not what we are hoping for.

#59 mattbg on 01.19.09 at 10:32 am

Bottoms_Up, I think it’s more to do with the creation of jobs and the increased availability of money to spend. If there is a housing boom going on, more jobs are created in construction not only of houses but also of strip malls, shopping malls, civic infrastructure, etc. And further in the sales of things that fill those houses — furniture, more TVs, art for the walls, etc, etc.

Also, when people feel more wealthy, they spend more money. They are able to borrow against the inflated value of their houses and spend that money. The creation of wealth out of thin air with all of these fancy financial instruments (CDS, CDO, derivatives, etc) also puts more money in peoples’ pockets.

All of the jobs created by these industries throw money into the economy and GDP would go up because of it. If most of the growth was based on false pretenses then the growth will evaporate. If we’re borrowing based on an ability to pay that is supported by evaporated growth, that sounds like it could be a problem!

The US is “good” for a lot of debt, I imagine.. but there must be a tipping point where it’s just overwhelms the system. If the debt continues to mount, at some point, people will stop seeing it as a good investment… though that always assumes there’s a safer alternative because you have to hold your savings in one currency or another.

#60 POL-CAN on 01.19.09 at 10:39 am

GTA TREB mid month update is out

TORONTO, January 19, 2009 – Greater Toronto REALTORS® reported 888 sales during the first
half of January compared to 1,776 in the first 15 days of 2008. “According to Statistics Canada
the economic situation throughout Canada changed noticeably over the past year with job losses
in the fourth quarter of 2008. Toronto is not immune to this, the GTA housing market has been
impacted,” according to TREB President Maureen O’Neill.

http://www.torontorealestateboard.com/consumer_info/market_news/news2009/pdf/nr011909.pdf

416 had 369 sales at an ave $350,835 (in 2008 it was 800 at an ave $394,205)

905 had 519 sales at an ave $319,455 (in 2008 it was 976 at and ave $345,745)

#61 mike from oakville on 01.19.09 at 10:41 am

i just read that flaherty is considering guaranteeing 100% of genworth and AIG’s mortgage insurance.

am i the only one that thinks this is idiotic? what possible incentive do they have to not just guarantee every policy they see?

and they’re going to use our tax dollars for this “bailout” of US insurance companies?!

http://www.globeinvestor.com/servlet/story/RTGAM.20090119.wmortgage19/GIStory/

#62 North Vancouver Citizen on 01.19.09 at 10:43 am

Auto Prices About To Crash

Mike “Mish” Shedlock

With unsold cars stacking up by the day, demand falling faster, and bailout silliness getting sillier, I have three easy to make predictions.

1) Hundreds of dealerships are headed for bankruptcy in 2009
2) The Fed Is Destined To Become World’s Largest Auto Dealership
3) Cars are going to get cheaper, much cheaper. Auto prices will crash. Liquidation sales later this year after the 2010 models come out are going to be fabulous.

It makes no sense to buy a car now, no matter how good the deal looks. The deals will get progressively better as the year rolls on.

http://globaleconomicanalysis.blogspot.com

#63 RC51 on 01.19.09 at 10:45 am

just a thought- whom ever is elcted president in 2012 will go down as either the best or worst president of all time. The market has crashed. This is the bounce right now. Once the trillions of dollars hit the economy in the us and the billions hit it here, you will see the markets rise back to 13,000 or so. Oil will climb back to the 150 mark, maybe higher, as optimism comes back to the people and the consuming starts again around 2011. 2012 will see the markets crash to the dow 3500-4500 level, oil to 30-40 a barrell where it will stay for a decade due to the low employment level and much lower economic activity world wide. These are some well thought out predictions based on genrational cycles from a great book I am reading that just came out. wont say the name so i dont put any water on garths fire for his new book, but you should get both. The book i refer to has depression in the title and you get it in the same section you will find garths book. again, get them both!

#64 Bonnie N BC on 01.19.09 at 10:45 am

Garth
If there had been a blog the day before FDR took office I am sure there would have been people saying many of the same cynical things.

The President Elect has his work cut out for him as you so skilfully pointed out. However, I don’t think we should underestimate the psychological influence of this iconic man and his determination and ability to inspire and tell the truth to his country.

As long as Barack Obama maintains his pledge to tell the truth to the American people that bond is very powerful in times of adversity. Ghandi did it, Churchill did it, JFK did it and so did Dr. King.

Let’s put it this way – how confident would Canadians feel if it was John McCain standing on the podium with Sarah Palin?

#65 Steve outside Canada on 01.19.09 at 10:47 am

To me Obama is just a figure. Watch him delivering speeches….He constantly look to the left and to the right. Never in the centre. He constantly reads the speeches on the screens prepared by others. Like I said, a figure…..somebody is pulling the ropes behind him….

#66 PTDBD on 01.19.09 at 11:07 am

When governments are broke, they print more paper or go to war and abandon all social contracts.

Local governments such as California, consider issuing IOU’s and cancel social contracts to the poor. (IOU’s instead of tax refunds possible)

#67 Barb the proofreader on 01.19.09 at 1:46 pm

Hi Bill-Muskoka (N-A-M),
Did you read the line “As you understand from my accent” in #56?
Seems Hairy is quite the comedian, or 12, he had to let us know that was an “accent”.
Hilarious.
One more sleep.

#68 Bill-Muskoka (Not Anymore) on 01.19.09 at 1:49 pm

Seems the Americans are paying attention to Canada as well.

Gloom in Canada contrasts with joy in U.S.

#65 Steve outside Canada on 01.19.09 at 10:47 am

Any other pitiful petty observations you wish to share? All use the prompters. He also looks right into the eyes of people and has a genuine smile.

How about Steve here in Canada? Think his presentations aren’t scripted? Yeah, and polar bears have been spotted in Miami!

#69 Darryl on 01.19.09 at 2:19 pm

#55 Grantmi

ROFL .Great picture. Wasn’t the bong but the scotch. My comment was more tongue in cheek though. The Bush part though…. :)

#70 dekethegeek on 01.19.09 at 3:11 pm

#21 Peter
WHAT IN THE HELL WERE YOU TRYING TO SAY????
” Equals USA crush ?” W.T.F.?????
either i dont understand “Looney-speak” or you are e total REE-BAA-TARD ( my apologies to all mentally handicapped people everywhere!)
#21 Please go to another website where all the Conspiracy theorists gather together naked and type with one hand while they self abuse themselves with 120 grit sandpaper.
BYE BYE MUCHACHO

#71 Future Expatriate on 01.19.09 at 3:16 pm

#36… rofl… more anti-Clinton “astute” political analysis… by no less an expert than one who calls himself “Cornholio”.

Next time why not try using “Vince Foster”?

Con spin and clueless “What do I tell my children?” home schooling housewives notwithstanding, the 90’s are going to be THE nostalgic decade of fond remembrance for at the very least, several decades, if not the majority of the 21st century. “The longest run of peacetime prosperity in the nations’ history” is fact, not spin.

#72 bobotheclown on 01.19.09 at 4:23 pm

The Americans are so desperate that they think Obama will change the world. For their sake, I hope he does, but in reality, I doubt he will. He is just another puppet for forces bigger than the government. A talking head. Nothing more.

#73 Bill Muskoka (N-A-M) on 01.19.09 at 5:56 pm

#67 Barb the proofreader on 01.19.09 at 1:46 pm

Yah, he is da von mit der accent. Probably the product of, yet another, neuron mutation in his widdle brain!

Hope things are well for you? We got another winter storm yesterday here.

BTW, thanks for the acronym (N-A-M), I am going to change my handle to using it. Perfect! LOL

#74 Jeannie on 01.19.09 at 6:12 pm

Harry S Dent..remember him ?
He has a new book coming out about now “The Great Depression Ahead”
His site if offering some interesting free video’s.
If you’re interested in cycles such as the Elliot Wave, and Kondratieff waves, you’ll find these educational.
He would appear to be on the same wave-length as Garth Turner.
Try googling Harry S. Dent jnr. official website.

#75 Extso on 01.19.09 at 8:24 pm

Do you remember the Aaron Russo’s movie “Trading Places”?
I give away an idea for Obama’s tomorrow’s inauguration cartoon:
While Obama is giving the presidential oath two man standing aside.
One of them giving $1 bill to another and saying, “You win!”
You would guess who they are after watching Aaron Russo’s “America, freedom to fascism”.
And ask yourself’ “Where money come from?” Then watch 3.5 hours documentary “The Money Masters”. You can find it on Google Video.
Then search Wikipedia for “Fractional Reserve Banking” and “Money Supply”.
Also search You Tube for “Money as Debt” and “Schiff”.

Then read A. Suttons books (and other his books):
“Wall Street and Bolshevik revolution”’
“Wall Street and FDR”,
“Wall Street and rise of Hitler”.

Thank you Garth for your website. I started following your site since March 2008.
Also I am very grateful to the gentleman who posted link to the website http://www.webofdebt.com where I started my own research (also bought the book “The Web of Debt”) and it is getting more and more interesting.

#76 Alex on 01.20.09 at 12:29 pm

Below is part of the article related to the discussed subject:

Revolutionary Situation in the United States
by Zack Lieberberg

…If you thought the crisis we are currently going through was limited to the crumbling financial institutions, you were wrong. The sad state of our economy is only one side of it. This crisis has been in the making for decades; it involves every aspect of our lives.
The international prestige of the United States is at its lowest in, at least, a century.
The American political machine with its ongoing political debate between the two parties about the better future of this country has deteriorated into an unabashed race for power.
Liberals, abusing their ever growing influence, succeed in taking away our liberties — for example, the liberty to openly and publicly celebrate Christmas or to speak the truth when the thought police finds it politically incorrect.
The very same government that sends our soldiers to foreign lands to fight for obscure goals tries them for murder when they perform their duty and defend their lives and the lives of their comrades.
We could overcome this crisis, but we need a leader wise and strong enough to lead us out of it. George Bush does not qualify for the job. And neither does John McCain, who has failed to even acknowledge that the country is in the throes of a total crisis.
What’s going to happen?
A century ago, the obvious inability of the Russian monarchy to provide desperately needed leadership brought forth a young, charismatic leader who promised change, took the country from the tsar’s weak hands, and destroyed it as thoroughly as was possible. His name was Vladimir Lenin. His minions killed more Russian citizens than did the two world wars combined. His successors enslaved Eastern Europe for half a century. His followers turned China, North Korea, and Cuba into giant concentration camps. His legacy lives on in Putin’s Kremlin.
In the 1930’s, when Germany found itself leaderless and falling apart, a young, charismatic leader came forth, promised change, and took the country from the weak hands of an elderly chancellor. His name was Adolf Hitler. Supported by the enthusiasm of his compatriots, he led Germany through a brief renaissance to complete destruction, along with most of Europe, killing about 70 million people in the process. His legacy lives on in various neo-Nazi organizations across the world.
Today, the United States is in a strikingly similar situation. At the time when a strong leader is most desperately needed, the ruling elite finds itself unable to provide one. A young, charismatic leader comes forth and promises change. His name is Barack Hussein Obama. And I believe he is going to deliver on his promise of change, even though the most basic arithmetic tells us that it cannot be fulfilled. Why?
Because Barack Hussein Obama is, essentially, a foreigner. He may (or not) be born in the United States, but the values shared by the American people, the values that made this country great and prosperous, are as foreign to him as his Arabian, Kenyan, Indonesian roots are to us. He has nothing vested in this country. All his life here, he was closely associated with its enemies. He will destroy it with no regrets. The very fact that seven years after the devastating attack visited on the United States by Arabs, the Americans are going to place an Arab into the White house demonstrates the depth of the crisis we are in.

#77 TomOfMilton on 01.20.09 at 10:29 pm

#62 “With unsold cars stacking up by the day, demand falling faster, and bailout silliness getting sillier, I have three easy to make predictions.”

I’m just passing on some related experience in car shopping that we went through shortly after Garth’s deal of 1/3 off a new vehicle:
– Local dodge/jeep dealers were not acting hungry after Christmas. No deals and bored dealers.
– The place where Garth got his deal did a fancy two step to make it seem like the same deal could not be had in the new year
– Hyundai is plumb out of their minds in that they are wanting MSRP plus ENORMOUS fees. Their discounts are…INSULTING!
– Now in the paper I see the Jeep compass being advertised at local dealership for 17k…and the very same models that the bored sales people were offering to us for $25k
– wife said screw it.
– we are just going to wait now for exactly what we want at a much lower price
– benefit to whole thing is that we have done our homework and now know what we want…and what a good deal is…and when the sales person is just laughable
-your time shopping is not wasted!

#78 Barb the proofreader on 01.21.09 at 1:25 am

#73 Bill Muskoka (N-A-M) on 01.19.09 at 5:56 pm
Hi Bill, all’s well. Chinooking here, but sadly it’ll be back to winter in a day. And glad you like the acronym.
I liked that line you used earlier, “He knows something Canadians seem to miss…’It’s the PEOPLE Stupid!’ Not the ’stupid people’ who will make things turn around.”
Good one… so true. (It’s matter of waking those people. Steve is hoping they’ll just stay asleep and not notice what he’s doing.)