Opiate

condo22

TV screen shot of condomania on a planet called Richmond.

The Bank of Canada cut its key interest rate to the lowest point in history on Tuesday. Why?

“The outlook for the global economy has deteriorated since the bank’s December interest rate announcement, with the intensifying financial crisis spilling over into real economic activity,” the bank said in its gloomiest statement yet.

As a result, the dollar plunged to the 78-cent level. It’s now expected inflation will soon be less than zero – which, of course, isn’t inflation any more. It’s deflation.

Gosh, was it only six months ago economists were saying that was impossible?

On Tuesday, Suncor further slashed its capital budget – in half, actually. The company could lose $1 billion this year, with oil now in the $30 range.

Was it only six months ago Suncor was planning to spend $6 billion, while the Alberta oil giants were looking around for where to put a “tidal wave” of cash?

On Tuesday Bell said it would dump 1,500 workers, Bank of America sliced 4,000 and stock market traders drove markets hundreds of points lower as they watched the spectacle in Washington and worried about the global banking system.

On Monday came word real estate sales in Toronto have crashed by 50% this month. Last week Nortel went chips up. On the weekend the US bailed out its big banks once again. On Monday Britain did the same – after the mighty Royal Bank of Scotland announced a stunning $41-billion loss. Only a matter of time now before the UK nationalizes its banks. Then Washington.

If these were normal times, any one of these events would freak people out. They would portend a crisis in the making.

But, this is a crisis, so our media ignores it, as do many citizens.

Instead, it was wall-to-wall Obamarama. As if one man will part the waves of the flood engulfing us.

Meanwhile in Richmond, BC, buyers flocked to grab condos a developer was dumping on the market after creating a fake news event. In the middle of a housing price plunge, with the central bank desperately slashing rates, traders dumping banks, manufacturing and commodities in decline, and deflation stalking the land, why would they do so?

History will wonder.

157 comments ↓

#1 Marc on 01.20.09 at 5:00 pm

I hope those condo buyers lose their shirts. No bailouts for cash strapped speculators. Unless they were going to donate their profits to general revenue, then no bailout when they end up in the poor house. Might be some space under the Puttulo Bridge when the section gets replaced.

#2 Larry on 01.20.09 at 5:30 pm

The greater fools LOL

#3 questioning on 01.20.09 at 5:36 pm

buyers are all rich immigrants I guess..

#4 john on 01.20.09 at 5:43 pm

Hope Flaherty and Harper each picked up one!

#5 Jason on 01.20.09 at 5:53 pm

Hey, Garth, is anyone in Ottawa listening to you yet? This economic crisis is looking like a disaster that will blow away even pessimistic projections.

#6 dekethegeek on 01.20.09 at 6:00 pm

Unbelievable, people are still buying these “particle board, slapped together, leaky,mouldy, pieces of shite!”
Caveat Emptor greater fools!
the only reason people are buying these is greed. They figure they can sell them for more.
And the banks are still loaning people money for this crap! What the hell, the government bails every one out these days(except for me it seems) What’s next? baby boomers financially unprepared for retirement whining until they get bigger CPP Benefits? Man, when is this BS gonna hit the fan?
Good Luck all, I’m stashing, bullion,bullets and beans(beware) in my basement.

#7 here we go again... on 01.20.09 at 6:07 pm

i can tolerate the gloom and doom that this blog literally floats on. i have always enjoyed reading it, and i have posted some comments. but, comment #1 from ‘marc’ sounds like such a bitter piece of crap, that it makes me wonder why people even bother to make comments to this blog at all. it is THEIR money that THEY are unfortunately spending, at perhaps, an inappropriate time. we (including yourself i would hope) can only wish that others would see the flaw in their timing, and learn from their mistake. hell, aside from losing their shirts, lets go all the way and (you) wish their whole damn family 100 years of bad f$cking luck…..
be careful what you wish upon others…

#8 Paul B on 01.20.09 at 6:09 pm

Hi Garth – Bell’s announcement of offering a retirement incentive to 1500 eligible employees is hardly the sign of a depression. It has been shedding workers for years and has often resorted to buyouts and packages. And 1500 workers is small potatoes compared to some of the earlier packages. No panic here.

The other examples you give may be better support your thesis.

#9 TUT on 01.20.09 at 6:14 pm

I’ve been both in Port Coquitlam and Port Moody Onni offices and seen droves signing up to reserve a unit. The real sale seems to happen in two possible scenarios: a) You sign for 25% discount of the original price and get the unit or b) You make an offer for less than that, with a bottom limit of 40% off, then you have to wait until March 7th to know if your offer has been accepted and how much discount you’re going to get.
I looks like a perfect marketing stunt with lots of beautiful ladies in the front line and the same old technique of loading the buyers with anxiety to force a decision n the spot.
Garth, your question is totally pertinent: “Why they do so?”
For a more detailed document about this “thing”, please use the link below:
http://www.mylasso.com/FileWarehouse/Users/User_5333/Documents/combined_sales_process_and_faq.pdf
Regards
TUT

#10 Steve on 01.20.09 at 6:24 pm

Garth

Thanks for your great work and insights.

What do you think the consquences of the banks being nationalized will be?

Thanks

Steve

PS … got my book today!!!

#11 JGoh on 01.20.09 at 6:30 pm

It’s worth noting that even Obama spends a lot of time telling people that while the government has a responsibility to act how it can, people have to do their own work and roll up their sleeves to get through this. Politically, it’s pretty brilliant. Economically, it still looks like a million pebbles against a tsunami.

Still, bad times end…eventually. Just gotta survive the next year or two. Or five.

#12 Barb the proofreader on 01.20.09 at 6:46 pm

BBC wanted to interview people who were not Obama supporters.
They went to Virginia and interviewed a middle age couple, avid McCain supporters who had been thrilled over Sarah Palin.
At their home, with views of their property, the couple explained with tears and sadness that they had not been able to make their $7,000 per per mortgage payments for four months, on their 11,000 square foot home.
Also tearily, they showed the nude paintings and artwork they have up for sale now.
Marc, perhaps they can move to BC if there is any room left under that bridge.

#13 Alberta Ed on 01.20.09 at 6:49 pm

History will wonder why there were so many Greater Fools around, do doubt. Albertans are still in denial, from the What-Me-Worry premier on down to the delusional realtors who are still asking megabucks for particle board palaces and shoddy condos. It is going to be an interesting spring. Glad I read Greater Fool; After the Crash just arrived today (thanks for the classy autograph) and I’m anticipating that it will be a useful antidote to today’s Obamamania.

#14 Gonzo on 01.20.09 at 7:10 pm

Here’s a fun activity:
Compare the MLS listing price to the property assessment: For calgary these can be found at
http://dmzwww2.gov.calgary.ab.ca/fairshare/script/asmt_SearchOptions.asp

I’ve tried a few, and range around 15-20% less. And these are properties that have been on the market for months.

#15 dd on 01.20.09 at 7:20 pm

I hope these people don’t lose their shirts, really. I hope that the markets level out and that real estate prices do the same.

That is my hope. Anyway back to reality …

#16 jose on 01.20.09 at 7:23 pm

how short-sighted can people be? oh, well, I believe things will get a LOT worse before they get better, so many buying real estate now will get burned, i already feel sorry for them

#17 MS on 01.20.09 at 7:31 pm

Are these people nuts?

#18 dekethegeek on 01.20.09 at 7:42 pm

The Bank of England has cut its prime rate to 1.5%. The lowest its been since the bank opened in (wait for it) 1695.
Gee, if people havent realized there is some major poop flowing down the pipe they are gonna get covered in it.!

#19 TK421 on 01.20.09 at 7:50 pm

I wonder how the real estate crash is being covered in the asian media here in BC. I notice from the pictures that the majority of the frenzied buyers seem to be asian. Are they just sharks recognizing a good deal or are they blissfully uninformed and deluded?
Also, will this bulk purchase serve to boost the market or only help to chase it down to new lows?!

#20 Jonathan on 01.20.09 at 8:13 pm

Perhaps these ‘buyers’ were paid to be there, actors that is, used to help the company save face, and to stir any possible real buyers into action.

#21 North Vancouver Citizen on 01.20.09 at 8:21 pm

“”Meanwhile in Richmond, BC, buyers flocked to grab condos …. History will wonder”

Wonder?…I think you mean…N V C told you so.

>”Vancouver will become the Financial/Trade/Leisure Capital of North America”.<

#22 Jeff Smith on 01.20.09 at 8:41 pm

Those are the Homo Sapien equivalent of lemmings!

Hmmm… I wonder if lemming meat tastes similar to squirrels & racoons. They are rodens after all? arent’ they?

#23 Chris in England on 01.20.09 at 9:03 pm

Condom-mania?

“Condo” not being a word in common use here, I thought for a moment I was at the wrong website. But is it possible that cheap condoms can save us? Or am I blowing this up out of all proportion?

#24 daytripper on 01.20.09 at 9:11 pm

I recently came accross a flyer for a home builder in the north part of Oshawa that is following in the same footsteps as this condo developer in BC.

They are offering discounts of $70,000 to $100,000 off their original prices on all home models!!! The GTA downward spiral continues.

#25 North Vancouver Citizen on 01.20.09 at 9:31 pm

Mtge rates look enticing….

“”I’ve seen 4.49% so far on a 5 yr fixed and even lower on the 4 yr.””

Dominion Lending Centres

#26 Mike B on 01.20.09 at 9:50 pm

NVC 20 You might want to consider cutting back on the weed.

#27 TomOfMilton on 01.20.09 at 9:53 pm

#19 “Perhaps these ‘buyers’ were paid to be there, actors that is, used to help the company save face, and to stir any possible real buyers into action.”

Some may laugh at this insight which may have been intended as a joke but it does sound like actual business practice to me. Something you might expect from an organized “con”. Perhaps I’m getting cynical.

#28 Gord In Vancouver on 01.20.09 at 9:54 pm

Meanwhile in Richmond, BC, buyers flocked to grab condos a developer was dumping on the market after creating a fake news event. In the middle of a housing price plunge, with the central bank desperately slashing rates, traders dumping banks, manufacturing and commodities in decline, and deflation stalking the land, why would they do so?

History will wonder.

Things that make you say hmm….

Wasn’t this event supposed to take place on March 7th? Did someone feel insecure?

http://www.financialpost.com/money/wealthyboomer/story.html?id=1181254

I suspect that this pep rally, I mean sale ,was marketed heavily in Richmond’s and Surrey’s ethnic newspapers/media as none of the English-based ones made reference to it. I hope that recent immigrants didn’t spend money that they can’t afford to lose as Onni definitely wanted to ditch the units.

I feel sorry for, not jealous of, those who bought as 4-year old 2 bedroom units near the RAV line can be bought for less than what MAC charged ($340,000).

#29 Zoronqueen on 01.20.09 at 9:55 pm

In edmonton all day the radio was talking about the innogoration and how it’s the best tims e to buy a house as the interest rates are so low. Now I’m about to list again so hopefully there will actually be a buyer…..

Garth,
thanks for all the tips in the book. IMO for a couple like us it would be best to probably best to have as safe with bullion. In edmonton there is seasoned wood at zellers for cheap $4.

#30 ed pet on 01.20.09 at 9:57 pm

#3… a lot of them are speculators… not rich immigrants..
a lot of people in the banking system give prefferential treatment to their own kind (belive it or not)
asian will help asians get the loan, (east) indians will push the people from their side of the world, and so on…
a lot of the “investment” is done by pooling resources by several members of familiy; don’t change the look on your face if i tell you that 2 families will live crammed in a shity condo, buy another and rent it out, with the hope to resell it, etc… they are simply manipulated by others…
don’t read wrongly into the post, for i came to this country with 2 suitcases and few hundred bucks in my pocket from eastern europe some 15 years ago.. so i understand the mentality of some immigrants… even if i don’t align with them

#31 dotava on 01.20.09 at 9:59 pm

#7 here we go again… on 01.20.09 at 6:07 pm

It is not wish – that was produced most likely by people like U. Economy has the laws – and RE is badly broken and has to be fixed. Sorry body if you didn’t make it. ;-)

#32 squidly77 on 01.20.09 at 10:10 pm

it was common for realtors to *pay people* to stand in line overnight then call the media as to create a false sense of panic
its an old and tired realtor shim sham scam not unlike media announced home auctions and the infamous bait and switch..these are common con-men plying there trade

somebody in vancouver should be able to find out how many were actually sold

#33 Steve on 01.20.09 at 10:13 pm

OK. OK.

I’m a big believer in your gospel, Garth. Thumbing my way through “After the Crash” now.

But I’m one of those “Ivory Tower” bank/insurance guys and have been fighting for air time to get people to understand what’s been happening in the U.S. since 2006, then in the UK, and now in Canada.

It’s not looking good and the conscious and intelligent among us understand this.

But everyone…please give Obama a chance. No, he can’t live up to all of the expectations. But he is one of the few leaders in the last few hundred years that has a chance to deliver real change. And that’s what we need.

No matter how big and important we think we are in Canada, we need the U.S. to deliver. Otherwise, Garth’s scary predictions come true. And I don’t think anyone REALLY wants that.

#34 dotava on 01.20.09 at 10:14 pm

#9 Steve on 01.20.09 at 6:24 pm

Steve – by my experience is safer to have the money in government banks than in private but I am not sure that there is any other that private here in North America (had a money in collapsing countries on both – government and non – government pay full amount – private went bankrupt and government (taxpayers) pay again – unfortunately I didn’t get all off my money (most likely Madoff syndrome). :-)

#35 Eduardo on 01.20.09 at 10:17 pm

Hey Garth,

First off I think your headline today should read “housing just got cheaper” and will continue to get cheaper as the BoC drops rates on March 3rd again.

Second, I’ll let you in on a little secret on the oil sands… “cancelled” means revamped and back in development (ie back to the first phases of the project). “delayed” meant still working but behind schedule anyways so we are looking for smarter, cheaper ways to do things.

Third, don’t think that companies like Suncor that printed money for the past 3 years burnt it all in a furnace. Oil is cyclical and I said it before and will say it again that oil will touch 60$ again this year. Also, for the record, there’s a thing called hedging… Suncor has roughly 60,000 bpd hedged at 60$.

Lastly, I agree that those new condos are complete pieces of crap.

#36 RM on 01.20.09 at 10:20 pm

Hey, if they got the $$ and/or can get approved for financing in this economic climate under more stringent borrowing conditions, and they wanna buy, God bless ’em.

#37 dotava on 01.20.09 at 10:25 pm

#11 Barb the proofreader on 01.20.09 at 6:46 pm

Let’s make charity donations for them – they need more than kids in Africa and other pure countries that we use there child slavery to produce cheep goods for us (if you exclude profits).
Barb – those people bring us all where we are now.

#38 Investx on 01.20.09 at 10:38 pm

Why are those condo purchases so bad if they are already significantly discounted?

#39 frank on 01.20.09 at 10:51 pm

Marc, you should be careful wishing financial ruin on people – not sure why you would wish that on anyone, nonetheless uninformed people who got caught in the hype! If they want to invest at this point and they have the money to do so, then let them. I’ll be here waiting to pick-up THEIR discounted units when prices continue to tumble and they’re forced to sell.

#40 squidly77 on 01.20.09 at 10:57 pm

Eduardo
nothing scary about $60 oil
but $20 oil chills the bones
http://www.bloomberg.com/apps/news?pid=20601082&sid=a7VU68EVE.jE&refer=canada

think about moths and blue *balled*

#41 Seriously on 01.20.09 at 10:57 pm

Steve #32, please explain how Obama is one of the few leaders in the last few hundred years that can deliver change, and what change will he deliver?

#42 dotava on 01.20.09 at 10:59 pm

#17 dekethegeek on 01.20.09 at 7:42 pm

Check this out:

Is Britain Bankrupt?

British banks are ‘technically insolvent’

#43 dotava on 01.20.09 at 11:04 pm

#18 TK421 on 01.20.09 at 7:50 pm

Or they are trying to unload US$ that they collected (?!?) and as lower our CAD$ is we are paying more for monkey business done by south.

#44 EW on VI on 01.20.09 at 11:05 pm

Wow, quite a hate-on start to this blog from #1 Marc. Fortuneately it was tempered by several other more constructive comments. The fact is we know nothing about those people buying the condos. Some bloggers
called them greater fools, but perhaps they sold their real
estate two years ago, and are now scooping up a relative bargain. They were called immigrants, but they could be first or second generation canadians.

The decision to buy is personal, hopefully based on means and needs. The real estate market is just that, a market, where buyers and sellers are free to negoiate, compromise, or part ways and look to make deals elsewhere or another time.

So dont hate these people, and dont pity them either, just let them be and do what is best for you and yours.

#45 nonplused on 01.20.09 at 11:05 pm

#19 Jonathan

Good call that!

Across the highway from me there is a “dense rural” project going in (where they build a subdivision outside the city limits to get away from all the troublesome regulations like building footprint as a percent of lot size and sidewalks and streetlights and all that). When they opened the sales office they “had people camping in tents all weekend to get in”. That was last year and there are still lots available. A couple houses are under construction though.

There are a couple of these subdivisions around here now. It’s starting to look more like Houston every day! Only no outdoor kitchen or swimming pool. And priced 150% higher.

#46 dotava on 01.20.09 at 11:06 pm

#22 Chris in England on 01.20.09 at 9:03 pm

Your dad unfortunately forget to wear one. :-(

#47 nonplused on 01.20.09 at 11:07 pm

#21 Jeff Smith

even in hard times you can’t eat real estate lemmings, or hired actors.

#48 CM on 01.20.09 at 11:10 pm

Dear everyone in Calgary,

Don’t worry, prices are going to stabilize soon. Why? Because incoming CREB president Bonnie Wegeric says so.

source: http://www.calgaryherald.com/business/Incoming+real+estate+chief+sees+stability+ahead/1199501/story.html

Q: What is going to happen this year?

A: In a general sense, we probably agree with the Royal LePages and the Re/Maxes and the CMHC (Canada Mortgage and Housing Corp.) that things are going to stabilize this year.

Q: What does that mean?

A: Our listing count is probably going to go up in the spring. But I don’t think it’s going to go as high as it did last year. Sales will be probably a bit slow to start with, but they’ll pick up later on. And it depends on the weather, doesn’t it?

So as long as the weather holds, we’ll be fine!

#49 nonplused on 01.20.09 at 11:12 pm

#28 Zoronqueen

Gold bullion goes in a safety deposit box. Silver bullion and maybe 2 months of spending cash goes in the home safe.

Don’t keep anything at home you aren’t willing to barter your life for.

#50 dotava on 01.20.09 at 11:13 pm

#32 Steve on 01.20.09 at 10:13 pm

R U or company that U work for will provide me with insurance that I don’t have to pay since I am in depth over my nose?

#51 Nicholas P on 01.20.09 at 11:14 pm

OK Garth,

so where do you see these two historically massive events in relation to each other?

Do you take a coincidental or a conspiratorial vue of these global events?

Make the connection Garth, there is something more to this than Free Market Economics and an African- American leader with a strikingly traditional Muslim name coming from nowhere to be chosen by the people as the “leader of the free world”!

When was the last time a historical figure conspicuously came to prominence under such times of upheaval in every sense of the word?

God’s speed. Enjoy the road.

And stay away from those Afghani Opiates. I hear our boys are ensuring another bumper crop again this year.

Judging from today, it seems like most everyone else was under the influence of it in it’s prescribed in it’s street form.

#52 dotava on 01.20.09 at 11:17 pm

#37 Investx on 01.20.09 at 10:38 pm

Go by one and find by yourself. :-)

#53 Third Chimp on 01.20.09 at 11:23 pm

I have been reading “doomer” and peak oil sites for a very long time now. Any blogger such as our host can sometimes make an over the top comment, which could still turn out to be wise depending on how events unfold. Overall, Garth is to be applauded for striking a pretty sensible balance between sounding the alarm and keeping his feet on the ground.
Judging from the comments, most people here are not placing the RE picture into the context of a failing global financial system, which is showing itself to be incapable of absorbing the decline in easy energy. I’d like to recommend Dimitri Orlov’s site for a very relevant comparison of the collapse of the SU (Soviet Union) economy with that of the US. http://www.energybulletin.net/node/23259

As someone who lives on 1/4 of what I did three years ago (by intention), I can tell you that I don’t miss any of it, and am overall feeling more in control and happier (but not zero stress – as it should be).

#54 Third Chimp on 01.20.09 at 11:25 pm

I mean to say – some stress is OK

#55 The Tallyman on 01.20.09 at 11:28 pm

Opiate, perfect title indeed.

Addicted to BS and heading to the bar
on the TITANIC for one last drink.

Can’t muster any sympathy for those fools.

#56 nonplused on 01.20.09 at 11:51 pm

Oh ya, one more for Zoronqueen late thought in case anybody suggests the dumb idea of protecting your bullion with guns.

I don’t think guns are a good protection plan. Looking indiscrete is better.

I didn’t invent this phrase but can’t remember the author’s name: “I don’t believe in carrying a gun. If someone wants to shoot me, they are going to have to bring their own.”

That said I am not against the legitimate ownership and use of guns; shooting squirrels and gophers, target practice, hunting, civil defense, and rebelling against dictatorships.

You need a group of armed people for civil defense to work. When someone breaks into your house, your best defense is not your own gun but those of your neighbors, who come to your aid. If you are on your own it is probably better to give the guy the gold. He will have a gun too, already aimed.

#57 Banks' Malaise on 01.21.09 at 12:04 am

Global malaise unnerves Canada’s banks

http://business.theglobeandmail.com/servlet/story/RTGAM.20090120.wbanks21/BNStory/Business/home

#58 Bill-Muskoka (N.A.M.) on 01.21.09 at 12:09 am

Hello Reality Check!

#59 bailoutsLOL on 01.21.09 at 12:55 am

Meanwhile in Amerika: National Association of Home Builders: Prices to Fall 29% in 2009

http://www.lvrj.com/news/breaking_news/37937384.html

falling knife imo

#60 Midas on 01.21.09 at 12:59 am

Spring will not only bring flowers, it will bring rather large dose of reality, particularly in the RE market. Then there will not be enough sand in the Sahara for people to hide their heads in. Game, set and match where RE is concerned in Canada. Put your money under the mattress, the returns will be better than for these condo buyers. At least you’ll have your money!

#61 Vancouver_Renter on 01.21.09 at 4:11 am

Here in Vancouver it’s interesting to observe Chinese culture versus Canadian culture. Yes, I know, Sheila Copps would be outraged at my politically incorrect view that Canadians have a unique culture. After all, in her world we are a “multicultural society” and there is no such thing as Canadian culture.

But I grew up here. And I remember my high school classroom in the 1982 was not multicultural. The term “multicultural” didn’t even exist in our vocabulary. We were all a single culture – Canadian culture – regardless of the color of our skin. And a key part of our Canadian culture was humility. Anyone who flaunted wealth was considered to be odd.

Wealthier families looked the same as less prosperous families, and we all interacted with each other. Few people were interested in showing that they were richer or better. I specifically recall a friend of mine from Europe saying that Canada was special in the world because of that fact.

But much of Vancouver is now majority Chinese. And they have imported their own culture from back home rather than adapt the humble Canadian culture that I grew up with… and it is all about displaying wealth. Again, it’s politically incorrect to speak the truth these days, but this is what my friends and I have observed. Several friends with Asian roots wholeheartedly agree with me. And the best way to show others that you are wealthy and successful is to actually make it a priority in your life to make lots of money and take lots of risks.

Add to this truth the fact that many of these Chinese immigrants are very new to capitalism. They’ve only witnessed the upside of capitalism – prosperity, bull markets, easy credit, the good life, etc. But only some are now starting to clue into the downside of capitalism – margin calls, over-leverage, insolvency, asset price free falls, fear, etc.

Adding these two characteristics together, you end up with a lot of people who can’t say no to an “opportunity” to buy a slightly discounted condo. The rest of us aren’t so anxious to take that risk because we remember capitalism at its worst…

Back in 1992, one condo building in a Vancouver suburb had a similar “discounted to market price” blowout when the real estate market had turned down after years of never ending price appreciation through the 1980s. There was a mob of buyers excited to get “such a good deal”!

Well, I bought two units thinking that I was going to get rich quick. I was young and dumb. Over the next 9 years, I watched the assessed value on my units fall to 1/2 my “good deal” purchase price. It’s a lesson I’ll never forget… What goes up CAN come down. WAY down. For years.

So maybe this Chinese cultural difference combined with a limited exposure to real estate busts helps to explain what is happening in Richmond. I am convinced that Chinese immigrants have greatly contributed to driving Vancouver prices to these lofty levels, as Chinese money and immigrants have been pouring into this city for several years now.

All this being said, I am quite confident that all of these Richmond condo buyers will be deeply regretting their purchases within the next couple of years… and learning a valuable lesson about capitalism to boot.

#62 TheWhiteKnight on 01.21.09 at 5:34 am

Oil may be headed to $10 but rest assured it will come back with a vengeance. By 2011/2012 we’ll be seeing $200 oil.

So you can speak about deflation and stir up the doom and gloom but what you should really be worried about is the inflation that is coming down the pipeline. Figuratively and literally.

You’re only kidding yourself if you think that trillions upon trillions of dollars injected into the worldwide economy will not have any effect on prices.

#63 Meo on 01.21.09 at 6:31 am

Garth,

I thank you to publicize the fact that media outlets have an agenda which originates from its owners who happen to have huge stakes in some very crucial parts of the financial markets. The direct result of that is scheming, pimping some real estate agenda in these bad economic times.
Through your posts I can flair a bit of self promotion and self indulgence, which is your clear agenda. One day you will be wrong in your prediction as you are merely human.

Wouldn’t be better for all readers if you investigate who are the prominent players who are responsible for this global economic mess today i.e. big banks, wall street, etc.?

P.S. BTW, where’s your credentials? Are you an economist?

#64 Meo on 01.21.09 at 6:36 am

I forgot to add…

You attract some very bitter posters here that are either renters or previous home owners who, sadly, got foreclosed. Now that their world has collapsed, they see others fail. They seek revenge by posting some twisted words here that claim that home buyers/owners are all mentally challenged… man, they’re bitter.
If you folks here are so smart, where were you all two years ago?
Speculating on real estate in Alberta?

#65 TS on 01.21.09 at 6:59 am

There were some interesting themes in Obama’s inauguration speech…

reducing carbon emissions and an strong emphasis on creating power through solar, wind and geothermal (sounds like The Green Shift)

reducing health care costs (hmmm…less private medicine in the US on the horizon?)

getting out of Iraq

stabilizing Afganistan

finding creating ways to spread the pain of unemployment through reducing work hours per week rather than laying people off (hmm…future government restrictions on how downsizing can be accomplished?)

the elimination of policies based on dogma (are you listening Stephen?)

investing in infrastructure and scientific research

more government oversight of financial markets and financial institutions

an end to rapid consumption of world resources

the possibility of more formal government regulation and intervention in other areas of the economy

Perhaps he is only one man. But one man can inspire hope and build confidence…and it’s those emotions that will ultimately form the foundation of any economic recovery.

For those of you interested in seeling the actual text of Obama’s speech it is readily available by doing a Google search.

#66 North Vancouver Citizen on 01.21.09 at 8:37 am

#51 Third Chimp and #59 Vancouver Renter

“”As someone who lives on 1/4 of what I did three years ago (by intention), I can tell you that I don’t miss any of it, and am overall feeling more in control and happier (but not zero stress – as it should be).””

…Yes it is best to be grounded, living and enjoying the moment vs being caught up in this multi decade “Consumerism Lifestyle”

and Vancouver is the place to live…the next elite, subtle yet luxurious, baroque with a touch of renaissance, Financial/Trade/Lifestyle Capital of North America…where Mainland Chinese, ex Pat Persians, long time Sikh and old WASP $$$ come to live.

…btw, there are two new towers just starting construction here in Central Lonsdale, North Vancouver…where did the construction $$$ come from?

#67 North Vancouver Citizen on 01.21.09 at 8:50 am

2010 Olympics update…

“”Dave Cobb with the organizing committee says the new financial plan doesn’t look radically different from the previous $1.6 billion operating budget unveiled in 2007.

But he says fine-tuning has been done with an eye on keeping a strong contingency in case something goes wrong.

With sponsorship commitments now topping $750 million and tickets to the Games nearly sold out, the Vancouver Olympics appear to be in a healthy financial position.””

#68 Future Expatriate on 01.21.09 at 8:51 am

I agree. They were shilling the lines, as they always do. Probably no more than one out of ten were real actual buyers and not out of work actors. Ratio might have even reached one out of twenty, depending on how many people were there, especially at the beginning.

Few folks left are that stupid.

#69 OntarioHouse on 01.21.09 at 9:01 am

Meo #61
Some people might have still been in high school several years ago and were too young to purchase. Now that they’ve grown up, shouldn’t they also get a fair chance?
There are others here on this forum who sold their rental properties at the height of the boom and made a lot of money. These are smart business people. They understand the concept of buying low and selling high.
Most on here are very educated on how a housing cyle/bust works. With this knowledge in hand they are careful not to overpay for a house. This is smart, saves them money.
PS: The only homeowners that are mentally challenged are those who overpayed for their homes and that borrowed too much money. Home ownership is great if it’s done wisely.

#70 gee on 01.21.09 at 9:27 am

Garth,

I have been reading your stuff for some time now. While I appreciate that you offer insight not found anywhere else, I think you have gotten to a point where you’re preaching to the converted and rallying a crowd that seem to find some pleasure in watching a crumbling economy from the sidelines.
Like I said, I do appreciate what you have to say but would love to see a more productive approach of suggestions and ideas.

Well, you can start it off. I would welcome a discussion on positive things we can all do to improve our collective lot. — Garth

#71 Drummer on 01.21.09 at 9:42 am

Guys, I find all this talk of blaming Chinese and other immigrants for our troubles quite disturbing.

You’re using the same logic that Hitler used, you know. And it led to something called the holocaust. And most of us don’t want something like that here.

Don’t be an ass. Don’t hate.

#72 Niergen on 01.21.09 at 9:44 am

#59:
I totally agree with you as I am a Chinese immigrant.
Bad things is that our fellow chinese realtors (may be not all) try to cheat every time. There are some web forums to discuss to or not to buy. Those realtors are telling people like “if you buy to live there, you should not care the price going down or up”. What a crap.

#73 Downsized and Delighted on 01.21.09 at 10:14 am

Sales are down? Not in my neighborhood. I just learned that a number of $1 million plus homes sold last month. That’s the trouble with statistics, isn’t it? Doesn’t tell you much about specific areas that you might be interested in – just lumps them altogether with the worst case scenarios (ie. those properties that will always be a bad investment)

There are also new infill homes being built here -even knock down houses are selling. NONE of this happens in a housing bust (like the U.S.)

The market has slowed, but is definitely not dead. And what were you expecting? If the market went gangbusters indefinitely, it would have to go bust at the end. But by slowing down, it could possibly sustain itself. And what’s wrong with that?

Where is your neighbourhood? — Garth

#74 Chris in England on 01.21.09 at 10:22 am

#22 Chris in England on 01.20.09 at 9:03 pm

Your dad unfortunately forget to wear one.

=======

Yes, Dotava – insults always help. By the way, thanks for the links you posted – very interesting. I wonder how long it will take before all this information is turfed out into the open and no-one can happily ignore it any more? Someone the other day posted a link to the Europe2020 website that predicted March 2009 will be the month when the whole world realises what is going on. I hope 2 months is long enough for me to organise what I need to do to get out, solvent.

#75 SSS on 01.21.09 at 10:30 am

Looking at the people who are buying condos. I have noticed several time and may be many of you did this as well, some times I enter a shop its empty but the moment I enter, people start comming in.. I think these people are payed by the realtors to excite potential buyers..

#76 an f-ing joke on 01.21.09 at 10:56 am

http://www.calgaryherald.com/business/real-estate/Incoming+real+estate+chief+sees+stability+ahead/1199501/story.html

The new Calgary real estate board president, well, sounds like a complete airhead to be blunt. I Noticed the herald is not allowing comments on this article. hmmmm wonder why????

Calgary home prices are down 21% not the few points she says. HOW CAN THEY PRINT THIS BULLSHIT! it is so frustrating. And I am a realtor!!!!!!

I think prices will go down at least 10% this year, another 10% in 2010. They will go down more if this is a depression after all.

I just listed a place $80,000 below the last realtor, to bring it into “reality”. We will see. I told them not to hold their breath. it is mid $500’s now. They paid $350 in 2004????!!!!

#60 WHITEKNIGHT
Agreed, the trillions being spent around the world will get some results, producing some optimism around the world and oil will shoot up, but sooner than you say. I say in mid to late 2009, up to $150 again. It will crash again back to todays level in early 2010 due to a severe recession or depression. You cant stop a recession/depression by PRINTING money which is what is happening.

It WILL NOT cause inflation, since inflation is an INCREASE in the money supply, and the world is losing many more trillions than are being “printed”. Also keep in mind not much of the money lost or “printed” exists anywhere but in a computer somewhere.

Peak Demand for the worlds largest oil consumer is the real story, not peak oil. As the largest consumers of oil go the way of the dinosaur- the baby boomers- much less oil is needed and the truth is, on a bright note, the world is on the edge of many seemingly impossible technological breakthroughs to reduce the need for oil.
China will not become the super power ( and therefore consumer of oil many people predict, as their population is too old, and their economic peak has been passed by their age and lack of new born babies to come in and replace them.

#77 Larry on 01.21.09 at 11:05 am

Got your signed book yesterday Garth cheers.
With all the latest economic news and the high cost of living here in Calgary, my wife suggested that although it might sound daft that we consider moving to the countryside or back to some village in Europe and buying a farm. I smiled and said it ain’t as daft as you might think. #59 excellent post BTW.

#78 Mike (authentic) on 01.21.09 at 11:06 am

Buck Rodgers in: 2009 The Collapse

Buck: The sky’s falling! The Sky’s Falling!

(Buck thinks to himself)…maybe if I close my eyes it won’t be falling….

(…after a few hours he takes a peek…)

Buck: …the sky’s really falling!

“Stay Tuned! Will Buck move quick and get out of the way or will he refuse to admit the sky is falling and be crushed”

Mike

#79 Mike (authentic) on 01.21.09 at 11:13 am

#74 an f-ing joke:

“The new Calgary real estate board president, well, sounds like a complete airhead to be blunt. I Noticed the herald is not allowing comments on this article. hmmmm wonder why????

Calgary home prices are down 21% not the few points she says. HOW CAN THEY PRINT THIS BULLSHIT! it is so frustrating. And I am a realtor!!!!!! ”

Honestly I have no idea how they can spin such lies. After this depression is all over there will be a lot of changes to the way people sell homes, the data they see as truthful and who they trust.

Many of the people blamed the Reators 100% for what happend, but it’s possible they are not 100% to blame as Realtors where the most influenced by those above them. Realtors were front line in the brainwashing war. Now they are waking up and seeing the damage first hand…

Mike

#80 Sularezi on 01.21.09 at 11:24 am

# 68 Gee – I agree that the majority of people here seem to ‘enjoy’ from the sidelines the freefall. However, I find this blog more of a ‘reality check’ on the reality. Different kind of people with different education and professions have their say. That’s great, because you can filter out and produce/visualize a mainstream.
Sadly, that mainstream is fear, depression and great uncertainty.
All I wish is we and our families go through these years safely. Then, we can build again what we lost.

#81 MikeB on 01.21.09 at 11:27 am

Ok so best case scenario is that someone pays still very high prices for a home pretty much anywhere in Canada, especially the new “centre of the universe” city of Vancouver BUT gets a super low interest on their mortgage. FOR HOW LONG… maybe 3 years then what. We need to pay for all this stimulus stuff. We need people to invest in the country with bonds and so interest rates go up. So then you are stuck with your huge principal , devalued house/condo, and rates go up and you are now paying through the nose for that house.
Talk about a suckers play. Plus this kind of drop of rates smacks of desperation or maybe they know something we all don’t know. Maybe something Garth has been writing for over a year now.

#82 blackout on 01.21.09 at 11:32 am

#59 Vancouver_Renter,

your post was extremely ignorant and racist. you’ve got it wrong. chinese tend to be very secretive about their wealth.

#83 squidly77 on 01.21.09 at 11:41 am

#80
calling a spade a spade is not racist
you play the race card as its your only defence

#84 The Tallyman on 01.21.09 at 11:43 am

#69 Drummer

Don’t take drugs!

#85 wjp on 01.21.09 at 11:50 am

Well, you can start it off. I would welcome a discussion on positive things we can all do to improve our collective lot. — Garth

One thing I would like to see is the government get out of the bailout business. Those who invested in ABCP should eat the losses. I don’t see them offering to bailouts those who have suffered losses in their RSPs.
The way out, in my opinion, is to put more money in the pockets of individual taxpayers especially in the low and middle income areas. Subsidizing industries that will benefit Canadians long term is another initiative I would support; but not to industries that offer products that are not in demand. I would like to see investment in solar, wind and alternative energy. Canadians also must stop spending on credit and move to paying cash.
Governments must use the taxpayer’s dollars just like I operate my personal finances, you don’t spend what you don’t have and if you can’t afford it, you do without. You also have some set aside for emergencies. Unless we collectively move to fiscal responsibility as citizens and governments, we are only postponing the inevitable by printing money in the Central Bank’s basement.

#86 smwhite on 01.21.09 at 11:52 am

#77 Mike (authentic)

I’m starting to see that also, most realtors are just feeding their clients the same perpetual bullshit they receive from their local RE boards, CREA, CMHC and other lobbying groups.

But the problem that lies ahead is the lack of understanding from the current federal government, they don’t get it that no matter how low interest rates are, when people have their credit maxed, they can’t spend, they just get a deal on the money they already are up to the shoulders in.

Home prices have to come down to affordable levels with the current salary structure on planet earth.

Instead our finance minister thinks he and the other players can continue to artificialy prop up these inflated prices and keep the credit party going.

Its been said before, anybody that stayed out of the RE market did so because they knew fundamentals were out of wack(the basic 3 x salary for a home spiel) and these are the people with the available credit, the future potential buyers.

Now why would somebody that understands that “principal” is the major factor to consider when borrowing any money, not interest, after waiting out the storm we were told would never come, jump into the market in the next 6 months?

To help “save” the Canadian economy?

If the conservatives want more people into the market, raise minimum wage and stop with the bullshit “theatrics” with the useless “tax cuts” they have presented in the past 2 years.

If there is one piece of legislature in the upcoming budget that promotes the propping up of the bubble, I’ll lend my vote to another party.

#87 prairiegopher on 01.21.09 at 11:56 am

Can we suck more fools into buying deflating property? Yes we can!

Can we convince more people to invest in a declining stock market?
Yes we can!

Can we convince people Alberta is a super power immune from the rest of the woes in the world?
Yes we can?

Damn this Obama stuff really works!!

#88 The Tallyman on 01.21.09 at 11:56 am

Looks like a lot of real estate Klingons posting on this topic who are in over their head and grasping for any piece of false hope are miffed by the realists peeing on their parade.

A bad buy in a bad economy is just bad…
no matter what color, race or creed.

It’s too late for you Klingons. It’s over.
Put on your helmets.
Your baby on board stickers can’t wimp you out of this one.

#89 smwhite on 01.21.09 at 12:01 pm

#74 an f-ing joke
Sorry if duplicate folks…

It WILL NOT cause inflation, since inflation is an INCREASE in the money supply, and the world is losing many more trillions than are being “printed”. Also keep in mind not much of the money lost or “printed” exists anywhere but in a computer somewhere.

The debt is still in the system, it doesn’t disappear and just go away to the sea Billy.

Next your going to tell me the whole “broken window” adage that destruction of wealth is good for the economy?

Well somebody owned the window, the window cost money and the destruction of it means the original purchaser is out $.

You must be on Obama’s new crack commando financial tiger team…

#90 Jonathan on 01.21.09 at 12:02 pm

North Vancouver Citizen.

No argument that Vancouver has attractive qualities, but it’s never going to be the financial capital of North America. You have to beat out New York, Chicago, Toronto and then about a couple dozen more N.A cities before you even find Vancouver’s name on the financial list. That would take, oh I don’t know, a century to complete.

Second, trade capital? It has great access to Asian markets, but that may make it more of a port than a trade capital. Most trade these days is done in services, so unless you get another five or six million people living there, your not even going to look like a contender for a capital. The GTA exports about 170 billion a year of goods and services to other countries. The entire GDP of BC is about 190 billion.

Third, leisure capital. Sure that could be. Beautiful place, but it is still a city. I think Kelowna and Muskoka make great Canadian leisure capitals. If I had to choose a city in North America however I’d go with Miami.

Vancouver is a great city that will always have one of the best environments in the country. For that reason, people including myself will always want to live/retire there. However it is a long way off from being the financial and trade capital of NA.

#91 Bermygoon on 01.21.09 at 12:13 pm

#59

Great post and very true. Many new canadians have never seen what it is to have their savings dissappear. I would think it is the same for many new immigrants not just chinese.

Oh well part of capitalism is there has to be winners and losers. If you don’t know who the losers are then…

#92 Jelly on 01.21.09 at 12:15 pm

I just got “After the Crash” in the mail.
Thanks for the autograph, Garth!
I am glad I went through the Xurbia site for this.
Too bad I can’t just sit and read it all day today…
(Sigh….)

Regarding that 1.1 million dollar home in TO that went
UP $100,000 in one month, I emailed the realtor to see what he had to say for himself. He said that it was underpriced and that they were turning down over $900,000 offers on the house. I really doubt that, I do not care how nice it is on the inside, if it is near to a housing project and in a really rough area, Good Luck!!
It would be very interesting to see how long it takes to sell, if it does at all. It sounds like the builder has a few houses for sale and really should sell before it gets ugly!!

As for Calgary, I think a lot of people are still in total denial mode. Speaking to a few people, they insist Alberta is in the strongest position in all of Canada and that this will be a short lived recession, 6 months to a year, a lot of people are thinking. I find that hard to believe since it just started! People can be so stubborn and just believe what they want to happen…

#93 Watching in Van on 01.21.09 at 12:22 pm

#80 – Blackout

Actually – Vancouver_Renter has it dead-on. He is not making a racist remark but an accurate observation.

The Chinese culture here is quiet different. They strive to have wealth and to make sure to show it. A large majority carry expensive $1,500 hand-bags, wear designer Jeans at $350.00/pair, latest runners, jackets as status symbols. They drive expensive, flashy cars – even the teens have exotic sports cars. It’s all about showing wealth. My real estate agent even confirmed that asians will over-bid on property and get into bidding wars because it’s all about winning, being first, saving face and proving a point. The chinese especially love Richmond because they believe the name sounds like “Richman”. Many chinese coworkers told me that tid-bit of trivia.

I dare you to go into any Holt Renfrew location in either Vancouver or Calgary and tell me what the majority of people you see in there.

That said, I believe that only 1 in 5 has a lot of wealth, but that doesn’t mean that the other 4 out of 5 aren’t maxed out on credit to keep with the status quo.

#94 an f-ing joke on 01.21.09 at 12:23 pm

#77 Mike

People blame whom ever is the easiest to blame. People tend to do, what ever is the easiest to do. In the case of preparring yourself and family for a deppression, the easiest thing to do is nothing, and that is what most people will do. The media only gets quotes from realtors who toe the line. I did an interview for BNN, gave my real opinion, and they didnt use any of it on air. It is for sure there are many realtors who will only ever see the world through dollar sign glasses. Avoid those ones, use one who has a track record of success you can prove, that you like personally and that is a full time preofessional and you will probably enjoy them and the experience of using them. I have become friends with many clients over the years. If any one is dissatisfied with their realtor- get rid of them! And a note on commissions…on scale realtors earn what many sales people earn. We get a higher fee because what we sell is the most expesive thing most people ever buy. Legally, the realtor is on the hook for many things and the risk is high, and not understood by the public. Therefore our compensation for risk is proportionate to the risk. Yes I know commissioned diamond sales people dont go into the public and say “now is a good time to buy”. My feeling is the right time to buy is when it is right for you and your family and your needs. If you choose any time to buy/sell other than that, you are speculating, and deserve what you get, good or bad.

#95 greyhound on 01.21.09 at 12:28 pm

Just a comment on our neighbourhood in Calgary – I think people are trying to get a jump on the spring rush…

My wife and I were looking to buy last spring (before reading Greater Fool – thanks again for that one Garth!) – at the time there were 2 houses we looked at in our area that we liked (Oakridge – 500K homes). The houses stayed on the market for months with some minor price decreases. I noticed this morning that they are both listed on mls again – for 397 and 398K…just a 20-25% price drop from last spring…it’ll be interesting to see how this plays out.

FYI Garth – got the signed copy of the new book yesterday – thanks again for all of your advice (and everyone elses on this blog) – because of it we are happy, renting, saving and sitting on cash in the bank. Cheers.

#96 Dependent on myself on 01.21.09 at 12:44 pm

# 71 Downsized & Delighted.
I am a Realtor, have been through many ups and downs in the market. I was a builder in the 1980’s, yes, remember 20% interest?

I don’t know of any market that is up or even holding their prices from last year. Is it possible you are looking at list prices rather than sales prices? Classic and understandable error that people make, even Realtors.

I just listed a property, in a very desirable area. The last comparable sale was over $300,000. That was in July 2008. There are 9 listings. Sellers are still wanting the $300. A few sellers thinking they are progressive listed at $289,000 after being for sale for 4 months.

I recommended $249,900 to the seller. They agreed.

The property is available right now, it is a hot deal. You should buy it. Financing has never been lower, we are at the price bottom.

#97 Tom on 01.21.09 at 12:56 pm

#91 Nonsense, Vancouver is a rich place. You see a lot of well-off people in nice cars from all ethnic backgrounds. As a relatively large % of the population is ethnic Chinese it follows that you will see rich Chinese people almost as often as you see rich white people.

The fact that you see this as a negative thing and even notice it at all says everything we need to know about your views on race. You quite obviously categorise people according to their skin colour, ergo you are racist.

You seem not to have much time for Richmond. Actually if the rest of Canada was more like it, our country would be a better place – According to Statistics Canada, residents of Richmond have the greatest life expectancy in Canada, the lowest obesity and smoking rates and low serious crime rates.

#98 LY on 01.21.09 at 1:05 pm

The Chinese people have different cultures. Many Chinese who came to Vancouver are from HK and from affluent mainland China cities like Shanghai. #87 Watching in Van observations applies to them. The clothes they wear, car they drive, house they stay are important and regarded as status symbol.
There are also oversea Chinese from Malaysia, Vietnam, Philippines, other parts of Mainland China that are more conservative. They are not showy like their HK counterparts and live simpler lives. They keep their wealth profile a secret. There are exceptions of course.
Just sharing. I belong to the conservative section.

#99 Watching in Van on 01.21.09 at 1:10 pm

re: Onni Condo – Richmond.

I saw this response on another blog and felt the need to post it. It is by far the best explaination I’ve come across:

http://vancouvercondo.info/2009/01/correction-not-crash.html/comment-page-2/#comments

jesse Says:

January 20th, 2009 at 12:24 pm
The Onni play is right out of the “false scarcity” playbook. The basic play is to have as many people bidding over a limited supply as possible. The way they did it here was a straight first-come-first-served system and the “lucky” few get in. The rest are left out. Step 1.

Step 2. Take the phone numbers of the unfortunates who did not win. Wait a few days as regret piles up then call them up. Miraculously, a few initial buyers backed out and another place has become available. “You were next on our waiting list so we are offering you the chance to buy in.” But, see, we only have a slightly larger unit available at $50K more. Need an answer now as we have many names on the list.

Step 3. Those on the waiting list are up-sold to a larger place and if you look at the “discount” offered, it turns out to be not that much — the price structure is such that the effective “discounts” do not scale with square footage (i.e. a larger place is overpriced so net the listed discount is still not much of a discount at all).

Step 4. Continue to other developments. Rinse and repeat.

The long and short is these places likely did not “sell out” right away. They were mostly fake sales, all part of an elaborate bait-and-switch scam to claw back the “discounts”. The time pressure put on the marks is immense. Trust me — these guys are expert salesmen. You cannot ever win in this type of environment unless you don’t play.

By the way, I commend the marketing firm for a job well done indeed. Unethical, but well done.

#100 Watching in Van on 01.21.09 at 1:17 pm

YLTNBoomerang Says:

http://vancouvercondo.info/2009/01/correction-not-crash.html/comment-page-2/#comments

January 20th, 2009 at 12:51 pm
MAC Liquidation is totally a marketing ploy and the proof is:

1. You need to register for the liquidation for March 7th – but this was actually just a ploy to get a list of interested buyers who were then contacted with a pre-opportunity to purchase FLO at liquidation prices prior to the March 7th liquidation.

2. The announcement that FLO sold out all 55 units:
http://www.vancouver-real-esta…..ondos.html

I don’t know whether they really did sell out but would not be suprised if the developer “sold” the ones that were not picked up at market prices (25% below original list is just market price today) into a holding company for the March 7th Auction. The news that FLO sold out will push more people to register with MAC to be contacted for the next building to pre-liquidate to again line-up and sell at market prices (25% below list).

By the time March rolls around, the (up to) 40% reduction from original pre bubble burst prices will still just be market prices.

This is a great marketing plan from Onni and MAC’s perspective but is horrible for the buyers who clearly are undeducated and still believe that they can make a quick buck in Van real estate. It will be interesting to see what the selling prices are for FLO now and what the liquidation prices are on the remaining units in March to see how much negative equity the new owners are suffering from.

Wait until Vancouver condo’s start going this way…I’m thinking 60% reductions from original list (well, maybe 80% for the Olympic village)

#101 marx_engels on 01.21.09 at 1:28 pm

Hope this will not happen:
“Owners of capital will stimulate working class to buy more and more of expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable.
The unpaid debt will lead to bankruptcy of banks, which will have to be nationalized, and State will have to take the road which will eventually lead to communism.”

Karl Marx, 1867

#102 Drummer on 01.21.09 at 1:42 pm

Hey Tallyman,

I don’t.

What’s your problem? Don’t like the ethnics?

Deal with it. The future is multicultural, you dinosaur.

#103 Linda on 01.21.09 at 2:04 pm

#59 – your “yellow peril” assessment of Richmond is an insulting stereotype and generalization. The Chinese community isn’t a homogenous group – everyone chooses to buy for different reasons.

#104 Watching in Van on 01.21.09 at 2:12 pm

#95 – Tom

Actually I do have time for Richmond…I’ve been living here for 4 years now! Also, in regards to crime rate: I’ve had my car broken into 3 times stuff stolen and my windows and door frame damaged. Had a hit-and-run last year resulting in 5k in damages. Also, had a break-in in my apartment and was totally cleaned out. The individuals that did that jammed a screwdriver into the dead-bolt and robbed me while I was at work.

Any other smart-a$$ things you want to say about Richman(d)? You probably haven’t noticed that the drivers here are horrible either!

#105 Jelly on 01.21.09 at 2:19 pm

Watching in Van,

I totally agree with you. I have observed and heard a lot of what you said- even out of Asian’s mouths!Generalizations are made about white people all the time and somehow that is not “racist”. People love to pull out the politically “correct” race card just to try and disagree with you and shut you down.
Give me a break, every nationality has “pecularities” unique to their culture that anyone with a brain has observed. It does not mean when I meet someone with that nationality that I assume everything about them. There are obviously exceptions to every rule. But as long as you are not saying awful things about some cultures, it is generally pretty harmless. (I don’t think saying people like to show off that they have money is particularly a horrible characteristic)

#106 Kash is King on 01.21.09 at 2:23 pm

#99 marx_engels: That quote, that’s for real ??!

Gadzooks ! We’re going farking commie?

#107 Karl on 01.21.09 at 2:25 pm

#99 Marx_Engels:

It’s been a while since I read that stuff, but are you sure that’s a Karl Marx quote?

It doesn’t sound very much Marx to me. I can’t find it in Google Books or Google Scholar.

#108 Vancouver_Renter on 01.21.09 at 2:28 pm

#69… “Guys, I find all this talk of blaming Chinese and other immigrants for our troubles quite disturbing…. Don’t be an ass. Don’t hate. ”

A little off topic but… Growing up in Vancouver, we were taught to feel shame and regret over what we did to First Nations people 100+ years ago. We came in with our wealth and large numbers, overtook their prime lands, and displaced their culture with our own rather than assimilating into theirs. Today we compensate First Nations’ people for that “historical wrong” with tax-exemptions, land, and mountains of cash.

In the last few years, I’ve observed that history has repeating itself. Only this time wealthy Chinese are coming in, ignoring and displacing our Canadian culture – and bidding up real estate prices beyond what our children can ever hope to afford, forcing them to move away.

100+ years ago, we were the bad guys for taking over. Today, we are the bad guys if we object to being taken over. You can’t have it both ways. How about cutting off all special treatment to First Nations people and telling them “Don’t be an ass. Don’t hate.”?

#109 Gold Bug on 01.21.09 at 2:34 pm

Few observations and questions (some related to Garth’s book “After the Crash”)…

I visited a medium-size shopping mall close to where I live:
1) a Dollar store is going out of business, and is selling inventory at 30% off
2) Loeb (local food store), similar to Thrifty’s in BC, imports garlic from China; package of 4 is 99 cents. I used to see apples, canned food from China as well. How can anybody compete with this?

Questions:
a) Will local farmers die off because of much much cheaper imported food?
b) people working in service industry for $10+/hr may not be elligible for EI, I think, given the part-time employment, if they don’t have the hours. Service industry will be affected by the economy slump, how will these people survive?
c) To pay for inreased EI claims because of rise in unemployment, to pay for Afhanistan war and Fed Government’s $75B “contribution” (read “freebie”) to the banks, taxes will have to go up, social/retirement/etc benefits will have to go down. Who can pay these increased taxes? Oh, before I forget, $4B went to the auto-industry.
d) Will the CRA (actually, Financial Minister Flaherty) remove the provision whereby the proceeds of the sale of primary residence are generally tax-free? If they do, many people will initially slow down with the sales of their primary residences, however, there will be a delayed but more powerful reaction.
e) TFSA introduction will help people (who have the money) save on taxes. Will the CRA (actually, Financial Minister Flaherty) introduce new RRSP limits to compensate for TFSA (reduce RRSP max contribution by TFSA contributed etc)
f) Does anyone have a graph of how gold performed in Japan over the last 50+ years? Remember, Japan was a savers’ society that trusted the government much more than Western economies; not sure if they had a bank run like UK (Northern Rock)… I want to compare how their stock market performed over the last 50+ years…
g) Ben Bernanke is a prof; Paulson is Goldman Sachs guy; Carney is Goldman Sachs guy; Geithner is Goldman Sachs guy; It seems to me none of these guys really know how the markets work, otherwise they would have their own private businesses, not salaries or salaries + stock options; our Fed Gov’t did contact Buffett once I think… Why not have Jarislowsky, Schulich, Sprott, Garth and other investment gurus as advisors to the Gov’t? The Gov’t is supposed to be good only at governing and shouldn’t be running businesses (or bailing them out), so let’s get some experienced brains on board; that is far better than changing financial prognosis from “Sunny” to “Stormy” over less than 6 months.
h) I sometimes think we are in between US and UK with respect to what’s happening; neither are doing well. Some UK measures are scary, such as a short-lived initiative for their central bank to print money without Gov’t oversight… See what Jim Rogers thinks of sterling
http://www.thefirstpost.co.uk/people,1878,soros-business-partner-jim-rogers-predicts-end-of-sterling,72058
i) What are the consequences of bank nationalization by the Gov’t on depositors/shareholders?
j) I don’t know if banks know of real financial world either, given that they are in current predicament of buying assets that cannot/could not be valued. Why do we let these people decide how to get us out of trouble?

#110 Greg W., Oakville on 01.21.09 at 2:37 pm

Hi Garth, reminder; tonight at 9pm CBC radio ‘ideas’
(Jan 21, 2009)

Part 2, ‘Climate Wars’ by Gwynne Dyer

You can now down load part 1.
http://www.cbc.ca/ideas/podcast.html

Climate Wars – Part One

Global warming is moving much more quickly than scientists thought it would. Even if the biggest current and prospective emitters – the United States, China and India – were to slam on the brakes today, the earth would continue to heat up for decades. At best, we may be able to slow things down and deal with the consequences, without social and political breakdown. Gwynne Dyer examines several radical short- and medium-term measures now being considered—all of them controversial.

PS, I’m part way through your new book. Thank for the reallity check.

#111 Vancouver_Renter on 01.21.09 at 2:38 pm

#60… “You’re only kidding yourself if you think that trillions upon trillions of dollars injected into the worldwide economy will not have any effect on prices.”

Total worldwide debts from Bank of International Settlements:

Interest bearing debts = $52 trillion
Contingency debts = $60 trillion
Derivatives debts and bets = $596 trillion

Bailouts = a few trillion

Hmmm, the bailouts seem like a drop in the bucket compared to all the contracting debt out there. Both hyperinflationists and deflationists have valid arguments. I used to be in the former camp. Now I’ve been converted to the latter – at least for the next couple of years.

#112 Gold Bug on 01.21.09 at 3:01 pm

Compact vegetable urban garden

http://www.squarefootgardening.com/

#113 a renter on 01.21.09 at 3:30 pm

#71 Downsized and Delighted…

Re your comment…”Sales are down? … I just learned that a number of $1 million plus homes sold last month”

Check out this link if you haven’t already, its Chestnut park’s Toronto Market view for last month…

http://www.crworks.com/partner/items/chestnut/42.pdf

…Buried among the predictable spin (“Toronto’s economy is strong” etc) is an interesting stat on high-end sales. Apparently down 61% for 1M+ properties.

In my neighborhood (C9) there’s been virtually nil sales since Nov, and price drops to date seem to have no effect

#114 TheFirstRick on 01.21.09 at 3:32 pm

I’ll bet the next time Garth posts a photo showing the lemmings lining up, he will photo shop the faces. One simple step to prevent a fervent wrangle about cultural abnomalies, real or perceived.

#115 Just another Joe on 01.21.09 at 3:34 pm

To #69 Drummer

Well #59 wrote his point of view. No hate, no blame. However your comments are quite offensive. Hitler was a maniac as many other dictators. Nothing to do with #59 trying to explain the difference in cultural background of Chinese and Canadian peoples. However, as a immigrant myself, I consider quite important to embrace Canadian way of life since this is a Country that gave us a new home.

#116 go green on 01.21.09 at 3:35 pm

#84 smwhite on 01.21.09 at 11:52 am

“But the problem that lies ahead is the lack of understanding from the current federal government, they don’t get it that no matter how low interest rates are, when people have their credit maxed, they can’t spend, they just get a deal on the money they already are up to the shoulders in.”

How do they get a deal? Do you think a bank would agree to a consolidated bill payer loan in this economic climate? I doubt it. And, credit card charges on balances are increasing, not decreasing, IIRC.

“If the conservatives want more people into the market, raise minimum wage and stop with the bullshit “theatrics” with the useless “tax cuts” they have presented in the past 2 years.”

Agree, but only when the price of homes become realistic. Plus, we should be investing in low income housing.

I recall about a yr. or 2 after we bought this house (in ’91) an RE agent knocked on our door asking if we’d be interested in selling, for a ‘tidy’ profit. He had a buyer who had previously lived on our street, moved away, then returned & wanted to live on our strret again. Yes, we could have made a good profit, but we bought a ‘home’ not an investment. We have never regretted that decision. We have great neigbours who have supported and looked out for one another over the years. Money is not everything.

#117 Wealthy renter 2 on 01.21.09 at 3:35 pm

Met one of the big Calgary home builders today, who just wanted to give me his card, to let me know that they are giving their homes away. He said,” literally, they are 100,000 off!

Also recieved an exclusive offer to family and friends the other day, the Arriva condos are being “given away”….10% off was the give away.

Methinks this are “great deals” for those less informed…………. So the dumping begins.

#118 Charles Oxley on 01.21.09 at 3:53 pm

#7 nonplused on 01.20.09 at 11:12 pm and #28 Zoronqueen

“Gold bullion goes in a safety deposit box. Silver bullion and maybe 2 months of spending cash goes in the home safe.”
——
On wrh.com and rense.com a month or more ago, there were a few links which said that since States (in the US) were going broke, people had gone to their safety deposit boxes to take all stuff out, only to find the boxes were empty.

Apparently, this was done in collusion with the banks. Once all the paper records — held by the banks — is destroyed, the rightful owners have no claim, as proof of ownership cannot be verified.

California is still on course to be completely broke by Feb. ’09, at least US$40 bln. in debt, with no assets to back it up, which is why welfare cheques and the like have been cancelled, and there are a few dozen or so other states headed down that same road.

Re: March 2009 — that is when sheeple realize that the shit has already hit the fan (deflation), followed by late summer / fall when hyperinflation begins seeping through the cracks.

It is the age-old story of trying to plug a leaky dike with a piece of chewing gum. The gum won’t hold, so the leak becomes a flood.

Humanity has been there before and will head there again. The only way sheeple learn is through the experience of the moment.

#119 go green on 01.21.09 at 4:10 pm

I meant to mention the following yesterday re messy wood stoves. Yes, they create lots of ashes too. But, if you live in an area that has really acidic soil, all those ashes help to raise the Ph in the veggie and other gardens. Just make sure you don’t put them too close to a house. Those ashes/embers, have been responsible for a few house fires.

#120 questioning on 01.21.09 at 4:10 pm

#106 Vancouver_Renter

did “the first nation” say welcome to the second??

We do say welcome to the immigrants…

#121 Slice on 01.21.09 at 4:10 pm

Interest and mortgage rates may be low right now, but you won’t pay off much capital in 5 years, and what will you do if mortgage rates are at 8% in 5 years?

Your monthly payments would go UP about 50%, so a monthly payment of say, $2000 would be $3000

Do you think 8% mortgages are an outlandish possibility?

Could you afford it?

#122 eddy on 01.21.09 at 4:15 pm

watching in van wrote

“The Chinese culture here is quiet different. They strive to have wealth and to make sure to show it. A large majority carry expensive $1,500 hand-bags”

this is quite a contrast to Toronto, Gerrard and Broadview, they sometimes plug

DELETED. You know why. — Garth

#123 Vancouver_Renter on 01.21.09 at 4:23 pm

#106… “Did ‘the first nation’ say welcome to the second??”

Apparently yes. Direct from the GVRD web site…

“In his writings “Voyage of Discovery” Captain Vancouver describes how he was officially welcomed by the local natives.”

#124 Barb the proofreader on 01.21.09 at 4:23 pm

Bill Muskoka (N-A-M) 01.19.09 5:56 pm – Hi Bill, thanks, all’s well. It’s Chinooking, so what’s not to love about that. Glad you like the acronym.
Great 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, and so true. (I guess it’s matter of waking the people. In Canada, Steve is just hoping enough people will simply stay asleep and not notice what he’s done.)

#125 Darryl on 01.21.09 at 4:27 pm

smwhite#84

“If there is one piece of legislature in the upcoming budget that promotes the propping up of the bubble, I’ll lend my vote to another party.”

All the governments are doing the same thing. Not one of the Canadian parties would do otherwise. They are convinced that they are doing the right thing.
my opinion anyways.

#126 TrueGritCalgary on 01.21.09 at 4:29 pm

#99 marx_engels, think what you may of Lenin, Marx and Engels, but you have to admit that they were shrewed observers of the true evil nature of unbridled greed as personified in capitalism and imperialism/globalisation.

#127 smwhite on 01.21.09 at 4:35 pm

#114 go green

They get a deal because the bank knocks off half a percentage point from the full percent off received from the BoC. Anyone with a LOC or mortgage got a bit of a break yesterday… Just like anyone with a floating rate on their cash or equivalent holdings is getting punished for saving, they lose interest.

The “market” responded properly by selling off our dollars, leaving it below 80 cents.

Also, historical norms of home prices are 3 times average salary earnings, so I’m not sure why you agree and then say “but”?

Anyways, all government in our country can do at this point is help ease the trauma of over extended borrowers by lowering interest rates. Maybe government is hoping they’re possibly suicidal and get “in” deeper? I can’t see another run up on housing despite the talk coming from those in the industry that are really hoping milking rates will start it all over again.

Most people will take advantage of the low cost of borrowing and pay down debt. But we haven’t seen the budget yet, so maybe they’ll be another reason to bring crazy back.

So again, the announcement by the BoC went out that more money was getting injected in the system and the market reacted by lowering the value of our dollar. For deflation(and the cockamamie theory of it being any kind of long term issue ) to run its course, doesn’t the value of money have to go up, and the supply of money/credit go down. (Our dollar has dropped 20% in comparison to the world’s reserve currency in the last six months)

One more time, there is a big difference between asset deflation and deflation in consumer goods(Even disinflation). We’ve seen over-valued assets drop from the heavens in the past year and start to come back in line with the “fundamentals”.

So while there could be a short period of consumer price deflation, its the equivalent of day trading and speculating, the bigger move will be by world governments doing their best to inflate their currencies, and cheapen their debt.

Does anybody really think the USA will allow deflation to expand the amount of real $ they owe? Ben Bernake says not a chance and so does his printing press.

So go move all your equities out of the stock market ASAP and into cash, but you already missed that opportunity back in the early summer when it was apparent that assets were over valued. Many of you that listen to this deflation nonsense and now decide to move your money into cash equivalents are going to have you savings destroyed by being the guy that shows up to the party late and reacts after everything happens.

What really kills me is people kick and scream when they’re taxed higher, but have their heads up their posteriors when they get taxed(destruction of the value of $) via low interest rates. In fact we celebrate the destruction of our wealth!

#128 Alex Curylo on 01.21.09 at 4:35 pm

“Any other smart-a$$ things you want to say about Richman(d)? You probably haven’t noticed that the drivers here are horrible either!”

Ah, all the mudflinging reminds me of this old joke —

Q: What’s the most popular cars in Richmond?

A: Mercedes, BMW, and courtesy car!

Messr. Ly has the right of it, though — the all bling all the time thing is not a typical racially Chinese attribute, it’s specific to Hong Kong culture in particular. Since most Lower Mainlanders formed their initial impression of Chinese when massive waves of Hong Kong residents were fleeing in advance of the mainland takeover, the ‘Hongcouver’ lifestyle is what they associate with them.

#129 David on 01.21.09 at 4:44 pm

It is impossible to imagine anyone having the real estate bug these days. The enthusiasm for real estate runs the good chance of running into a banking system wanting to limit its exposure to residential real estate. Interest rates might be at historical lows during the first phase of a deflationary cycle, but long term rates will eventually climb when the US greenback shows signs of serious weakness. Anyone taking out a cheap interest rate mortgage on an overpriced home might get a whole lot more than they bargained for 5 years from now. A 1% increase in interest rates means an 11% payment hike. Families would have to looking at some pretty serious capital appreciation or run the risk of some nasty financial whip sawing over the next decade.
Alberta’s prosperity does not look all that durable these days and from all appearances there was no Plan B when it stopped raining US dollars on the oil industry.
It is almost impossible to believe that the Royal Bank of Scotland hit the financial skids so hard this year with the UK government now owning 80% of a 300 year old financial institution.

#130 Barb the proofreader on 01.21.09 at 4:54 pm

#115 Wealthy renter 2 – 01.21.09 3:35 pm
My new neighbours fell for the “$100,000 off” line – still paid $950,000 on a duplex. 5 other new duplexes, $850K — $1.4m were finally taken off the market last spring, summer. That Aviva project is rumoured as lots of speculator ownership. Same for a luxury condo — a hole in the ground for a year now. A home nearby is up for sale, bought on spec by a notorious realtor — probably won’t be able to sell it.
From that small sample, it would seem those speculators are stuck searching for people to fall off the turnip truck.
A Calgary agent told me near 2 years ago, the board squiggled numbers to obscure the decline in the market.

#131 go green on 01.21.09 at 4:55 pm

#116 Charles Oxley on 01.21.09 at 3:53 pm

On wrh.com and rense.com a month or more ago, there were a few links which said that since States (in the US) were going broke, people had gone to their safety deposit boxes to take all stuff out, only to find the boxes were empty.

Apparently, this was done in collusion with the banks. Once all the paper records — held by the banks — is destroyed, the rightful owners have no claim, as proof of ownership cannot be verified.”

————

Charles, I’d be interested in receiving those links, if you can find them. I presume, if they had them in SDB’s, the only records would be the ‘sign-in signatures’. I find this rather implausable.

Been reading parts of Garth’s ‘After the Crash’, especially about should one invest in bullion. Still not sure, but we could put 10% into gold. Its also risky. Have a bro who’se been buying gold for many years. Only found out last year as his pension is based on the market & questioned if he was worried.

We’ve got Euros (cash) here and overseas – family gifts. Just don’t know whether we should be buying gold with those Euros. We always keep cash on hand in our home safe as we experienced a week without electricity and are now ‘mostly’ prepared.

I’m ‘financially mentally challenged’. :-).

#132 Jim Tuba on 01.21.09 at 5:13 pm

Just bought and started reading “aFter the Crash”
One of the most depressing reads really ive had. Unfortunatly I dont believe its fiction.
I dont understand how the government says things improving again by the 3rd quarter of 2009. If thats true i am the greater fool for not buying a home in the last 4 years.
I bought a 1918 built home 19 years ago in Hamilton,ontario. Id be lucky to get today what i paid for it then (269,000)
Its in hamiltons first heritage district with large 80 year old solid homes and a few mansions also. Its a rental so i havnt lost anything but i never would have though after 20 years i can not get what i paid for it. I bought it at the 1990 bubble. It dropped massivly the next few years and since it was a rental and i wasnt losing anything i had to keep it or take an instant 90,000 loss.
The good thing is its triple brick with lots of gorgeous woodwork and solid not particle board, so its not going anywhere. Its paid off now entirely by renters.
I still rent myself and find nothing wrong with renting.
we rent a farmhouse and have our own gardens for vegetables and some goats and chickens.
Im waiting for big price drops now to buy one of these farms(or this one)
Finished city living

Jim

#133 Dave on 01.21.09 at 5:22 pm

#109,
You make an error in referencing $700 trillion of global debt.

This is GROSS debt, and many of these derivatives are offsetting. (ie on parties loss is a counterparties gain). I read somewhere (Boston Consulting?) that global assets (excluding residential real estate) was $110 trillion at in 2007. I’m guessing we’ve see a drop of 20% in that number globally in 2008?

However, I agree with your conclusion that gov’t spending is an insufficient offset (as it is only 10-15% of the global economy, and thus unable to offset the slowdown in consumer/corporate spending.)

#134 North Vancouver Citizen on 01.21.09 at 5:22 pm

#88 Johnathon

…thank you for your many compliments.

the problem with Vancouver is its affordability.

…You see, the city is expensive because the city over the years has been ignored by Eastern Canadians…I kid you not…and since bought out by Chinese, who control Richmond and thruout V…exPat Persians pretty much control North & West Van while the long term resident Sikhs control the south end.

It seems WASP population in the core Municipalities are outnumbered by the above statistics.

The griping you read on this board are mainly hard working Caucasians who cannot afford to buy and who’s background would not allow multi families sharing one home.

#135 Bill-Muskoka (N.A.M.) on 01.21.09 at 6:01 pm

#122 Barb the proofreader on 01.21.09 at 4:23 pm

Obama began ‘teaching’ Steve what real openness and transparency is about today…his First Day.

Seems Canadians understand those terms as well Follow Obama’s lead on transparency, PM told

Saying ‘the fog is thickening’ in Canada, Information Commissioner pounces on U.S. President’s decision to have more official documents released to the public

Sounds like Halifax will need to sound the Fog Horn again! Either that or Oddawahaha heeds to hire the two guys from the DQ commercial ‘Yeah! They’re THICK!’

Yesterday was a dream come true for many millions of people worldwide. I was ELATED and watched the entire inaguration in HD on ABC who had the best coverage.

#136 Future Expatriate on 01.21.09 at 6:04 pm

RE: #71

Garth, “Downsized and Delighted”‘s neighbourhood is the same place they got their “sales” from… up their wazzoo. Thanks for calling them on it.

Why, in my own neighbourhood, I HEARD twenty! 10 million dollar houses sold…

These shills just make it up as they go along.

#137 go green on 01.21.09 at 6:30 pm

#88 Jonathan on 01.21.09 at 12:02 pm

Jonathan – I went out to BC in ’75 to visit friends & with the thought of moving there. Yes, it was beautiful, but I also heard from them about the endless rainy, grey days during the winter & the high cost of living relative to salaries. As much as I loved the Rockies, Vcr., Victoria & the Okanogan, etc, I felt cut off from the rest of Canada. I’d love to visit BC again, but its not Lotus land for me. Miami – Each to his own.

#138 Bonnie N BC on 01.21.09 at 6:54 pm

North Vancouver Citizen on 01.21.09 at 5:22 pm

kid you not…and since bought out by Chinese, who control Richmond and thruout V…exPat Persians pretty much control North & West Van while the long term resident Sikhs control the south end.

Are you really serious?

Dear North Van Citizen

These comments leave me cold and weary. Great generalizations – do you really live in North Van?

Who targets people because they are not a mirror image of you? Answer that and we can have a dialogue.

What a disappointment in the whole scheme of condo mania to focus on ethnic groups.

I suggest people keep their bigotry in check when they comment on a real estate blog.

#139 van on 01.21.09 at 7:04 pm

Wow, just glancing over the responses for this post, I can’t help but notice all the blame the chinese communtiy are getting for the rise and fall in real estate prices in Vancouver.

Canada is a multicultural country made of immigrants. There are a lot of ukranians in Edmonton, do I blame the Ukranians for pumping real estate prices in Edmonton? No.

If you believe all these chinese people in Vancouver have tons of money and aren’t in deep debt, than you need to do more research.

On CBC Radio edmonton the other day, they were doing profiles of people who needed a financial makeover because they were deep in debt.

Guess what? All the people profiled had Caucasian names. All the people had family incomes of 120-150K a year and all the people profiled bought big houses at inflated prices that they now cannot afford and are HOUSE POOR.

Everyone from Canada is an immgirant. There are a lot of white people in a lot of cities. There are a lot of chinese in vancouver. A lot of flipino in Winnipeg. A lot of Ukranians in Edmonton, etc.

Of course there will be more rich chinese people in vancouver because there are more chinese people in vancouver.

There’s a lot more rich Ukranian, Jews, in Winnipeg. So what?

Don’t blame your financial situation on other people. Look to yourself.

#140 Vancouver_Renter on 01.21.09 at 7:20 pm

#88… “The griping you read on this board are mainly hard working Caucasians…”

The key issue to me is this… My father, who served in the Royal Canadian Air Force, paid his taxes for half a century. The rest of us have been working hard and paying our taxes for decades as well. Those taxes were used to build our cities and our infrastructure. Together, through public and private enterprise, we transformed Vancouver into the wonderful city it became.

But why did we do this? The answer is a simple one; our goal was to build a better home and better life for ourselves and our children.

So when I see an entire city being completely overtaken by wealthy immigrants I wonder, how does this serve Canadians? Average Canadians can’t reasonably afford a house in Greater Vancouver anymore. Only wealthy immigrants can. Our children are being forced to move away and can expect a lower standard of living than we enjoyed.

Some people will call these views racist. But in my opinion it has nothing to do with race. Remember, Canada is a sovereign nation. We have the right to say no to levels of immigration that fly in the face of the objective I stated above: to build a better home and better life for ourselves and our children.

For the record, I absolutely support a mix of immigration from a wide variety countries. But, my goodness, keep it at a level that puts Canadians first. That’s what countries like Australia do. How would Chinese feel if Japanese immigrants overtook the city of Shanghai, importing their wealth, language, and culture, and bidding up prices beyond the reach of Chinese and their children? Would any objections be met with “Keep quiet, you are a racist?” I doubt it.

#141 Gonzo on 01.21.09 at 7:32 pm

I agree with the sentiment on this board that the next few years will suck. I think we will see deflation in the short term. The U.S.’s big problem, however, is the risk of coming out of deflation into hyper-inflation… personally I think the U.S. is in deep trouble. I think though, it’s important to point out that Canada is not the U.S.. Yes, there are similarities, but there are important differences which I believe will allow us to fare better, and recover more easily after the next few years.
Here’s a short-list… I’m by no means an expert on any of this, so please comment if you disagree:
1) We are resource rich. We are net energy exporters. While the U.S. is currently our biggest consumer, this could easily change. Once the U.S. fails, other countries (Asia) will increase their consumption. We can easily trade with them instead
2) Our debt burden is smaller than the U.S. The U.S. cannot pay back their debt. The only way is through inflation. I don’t think Canada you can say the same for Canada
3) We have free health care. If you live in the states and are struggling to afford food, do you really think health care is a priority if you are well? Then when you’re sick……
4) We have more friends around the world. When the U.S. doesn’t have the economic/military power to get their way, look out.
5) Less guns. Safer cities.

I for one am thankful I live in Canada… personally, I don’t think there are many better places to be in to weather what’s coming.

#142 Jimster on 01.21.09 at 8:15 pm

I can see it now, a long line of shill posers, hallucinating on caffeine; half believing they will get a piece of the action, following the same MO CNBC and BNN use to lure in the suckers.

But hey, they may be on to something. Once the derivative mess (500+ trillion?) implodes and Obama starts the serious money printing, we are going to see some major debasement of currencies, likely globally uniform, if the new world order get its way. In that sort of an endgame you likely will not want to be holding cash. But gold, guns and food are always handy. With the higher taxes that are on the way, the glut of inventory in buildings, and the fact that interest rates have only one way left to move, be very careful with were you buy. I have heard it said that it would be cheaper to abandon Toronto and build a new one down the road, then try to repair it.

PS: I have many Asian friends, and they all seem to love to gamble. Some do very well at it.

#143 Jimster on 01.21.09 at 8:35 pm

Gonzo

1. There is a lot of energy resources in Canada, most of it owned by US and companies.

2. Whereas the USA prints up money out of thin air when it needs it, Canadian politicos ( for some bizarre reason) borrow the money from private (US) banks at interest. Once rates go up, Canada will be in deep dodo and beholden to our US masters.

3. Yes, lining up for free health care is a plus, if you don’t mind the government using it as an excuse to pry into your private life and push you around.

4. Friends? Money talks, BS walks. BTW; MONEY = ARMORMENTS!

5. More personal firearms = More freedom!

Canada is an OK place if you aren’t afraid of freezing to death and don’t mind taking your orders from the queen of England. Yes, the USA is on the ropes, but unfortunately they are not going down any time soon.

#144 Alex Curylo on 01.21.09 at 8:37 pm

@van:

“Wow, just glancing over the responses for this post, I can’t help but notice all the blame the chinese communtiy are getting for the rise and fall in real estate prices in Vancouver.”

That’s because last decade, everything they’re saying would have been provably accurate, as anyone with the money to get the hell out of Hong Kong was getting the hell out, and Vancouver was a strongly preferred destination because real estate was a pittance by Hong Kong standards and immigration was essentially on sale for $250K/family, chump change by those same standards.

So TEH CRZY RICH ASIANZ stereotypes you get here were formed through observation of the Hong Kong exodus and its effects on Lower Mainland property values, and are completely provable by examining records of the period.

“There are a lot of ukranians in Edmonton, do I blame the Ukranians for pumping real estate prices in Edmonton? No.”

That’s because (I’m assuming) ostentatiously rich Ukrainians did not as a massive group over a period of a very few years completely reshape the income distribution of greater Edmonton municipalities last decade.

If they had, I submit that Edmontonians would almost certainly have the same odd-appearing stereotypes of Ukrainians that Vancouverites have about “Asians”.

Time to bury this thread, kids. — Garth

#145 Partisan Spectator on 01.21.09 at 8:41 pm

Interesting comments…
Whenever a country faces major economic issues, a racial card is played first. Everybody starts looking for a scapegoat…

#146 Rich Renter on 01.21.09 at 8:42 pm

#137 van

“Everyone from Canada is an immgirant. There are a lot of white people in a lot of cities. There are a lot of chinese in vancouver. A lot of flipino in Winnipeg. A lot of Ukranians in Edmonton, etc.”

I take great offence to your statement. You called some posters here “white” but when referring to chinese in the same sentence, you called them “chinese” Why not say yellow, since you’re into talking about colour of skin!

Wouldn’t it have been less racist of you and more approriate to say some people of “European” decent instead of “white”?

#147 Gold Bug on 01.21.09 at 9:40 pm

#109 writes:
“…Total worldwide debts from Bank of International Settlements:

Interest bearing debts = $52 trillion
Contingency debts = $60 trillion
Derivatives debts and bets = $596 trillion…”

#131 Dave writes
” #109,
You make an error in referencing $700 trillion of global debt.
This is GROSS debt, and many of these derivatives are offsetting. (ie on parties loss is a counterparties gain).

Many of these derivatives may not be offsetting ; because there is no clearinghouse, somebody will be in a big trouble because of counterparty risk; domino effect

#148 Seriously on 01.21.09 at 9:47 pm

A co worker and I were talking one day, we were discussing real estate. His family moved from Hong Kong to Vancouver about ten years ago. He said to me, and I quote “Arent you glad so many asians moved to Vancouver, they raised the price of your parents houses”.

#149 Torquemada on 01.21.09 at 10:24 pm

“I recall about a yr. or 2 after we bought this house (in ‘91) an RE agent knocked on our door asking if we’d be interested in selling, for a ‘tidy’ profit. He had a buyer who had previously lived on our street, moved away, then returned & wanted to live on our strret again.”

You actually believed the realtor? This is the oldest trick in the book. The realtor was just trolling the neighbourhood looking for listings. The homesick buyer doesn’t exist. The realtor was gambling that he could sell your property quickly. And when it doesn’t sell because the nonexistent homesick buyer ‘backs out’, guess what, you’ve signed up for an exclusive listing agreement with the realtor.

#150 TheComingDepression on 01.22.09 at 1:10 am

Jimster-“Yes, the USA is on the ropes, but unfortunately they are not going down any time soon.” I think you better do some serious reading. You can start here: A HUGE collection of doom and gloom reports
http://www.thecomingdepression.blogspot.com

#151 The First Rick on 01.22.09 at 1:27 am

#137 van on 01.21.09 at 7:04 pm
…………
Everyone from Canada is an immgirant.
…………
==============
Really? Actually I am a 5th generation Canadian old enough to have both witnessed the birth of multiculturalism and observed the fractionalization of our citizenry because of it.

I am anything but racist, but statements like yours test me.

Can you kindly tell me how long I have to be in Canada to “really” be a Canadian singularly? Since I was born before we hyphened ourselves, can I choose the first discriptor? or is there a retroactive clause I missed in the contract?

I’m just wondering, because when Trudeau set forth the multicultural ideal, he failed to tell my family what we “were/are.” At the time, as is now, we are unhyphenated Canadians and certainly not “immigrants.”

#152 HalifaxFamily on 01.22.09 at 5:38 am

The bubble is still here. I use this as part of my contrarian economic analysis. There will be more pain to come.

This is absolutely ridiculous. I wonder if the condos were marked up, and then marked down to make it look like there was a ‘sale’.

#153 Jimster on 01.22.09 at 8:11 am

TheComingDepression :

Yes the USA is in BIG trouble, but the same trouble that the rest of the world is in. My point is that when we all go down, the status quo will be maintained.

#154 TheComingDepression on 01.22.09 at 5:57 pm

Jimster agreed the rest of the world is in trouble but the US is WORSE. First the US goes down then the world. Its called a GREAT DEPRESSION. Incidentally, ALL US BANKS ARE INSOLVENT. HSBC needs 33 BILLION to start. Read this article about the banks:
http://thecomingdepression.blogspot.com/2009/01/banking-system-is-insolvent-says-us.html

Anyone honestly believe CANADIAN BANKS are OK?

#155 New Kid on the Block on 01.23.09 at 1:55 am

I have a very wise friend who has helped me out of many many a pressing problem and after I presented him with the problem his answer was always the same!
He Would Say Chris Please tell me…… Where you will be in 40 yrs?
I am 47 Now.
Have a great day =-)

#156 Xanadu on 01.23.09 at 3:29 pm

Good post.

#157 Ralph on 01.25.09 at 3:20 pm

I don’t see anything wrong if these people want to buy condos. Providing they can pay cash and have a guaranteed source of income.