Man of feel

super1

Source

This is not going well for Superman.

He blew into Washington preaching bipartisanship, and yet cannot get the Republicans to support his trillions. He said he wanted a bailout plan to sign on day one, and will be lucky to have it on day 30. He appointed two key team members who investigation revealed were tax evaders. One’s in charge of the country’s money. The other retreated in shame.

His treasury secretary unveiled a bank rescue package costing a trillion, and bank stocks tanked, sinking the Dow 400 points. And this was on a day GM laid off 10,000 white collar workers and even Wal-Mart threw 800 out of its head office.

It wasn’t supposed to be this hard. So Superman got on a plane and went to Florida where he kissed an old woman in the audience who is now living in a car. He was preaching hope, in a town which has the highest foreclosure rate in the country.

Not far away, in Miami, a man was sitting at his computer sending me this message:

“I was turned onto your site by a friend of mine in Saskatoon and was amused at how you describe the scenario that perfectly depicts my current situation. I was fired (laid off is misleading as it implies some future rehiring) 2 weeks before Christmas as my company shut down 1 of its 3 South Florida Plants. I was owed a USD$21,000 bonus which I didn’t receive. I am currently receiving Florida Unemployment benefits to the pre-tax tune of $ 275 per week.

“My wife works part time and we have a 2.5 year old daughter. Luckily we bought our house before the crazy real estate boom was in full force but are still upside down on its value by 10- 15% which if we sold would  be equivalent to losing our 10% downpayment. Taxes and insurance in South Florida are ridiculous with no real benefit derived from them. Since I moved to Florida in 1989 my investments have  been halved 3 times despite buying equities, indexed funds, CD’s and several moderate 401(k)s.

“The whole thing is a big joke and it’s getting worse. This is no more middle class in the USA

“These are dark days.”

In Ottawa the governor of the Bank of Canada told the House of Commons finance committee, with a straight face, that the economy will grow next year by an astonishing amount. One of the greatest growth spurts in modern times, in fact. Meanwhile the Canadian dollar crashed by almost two full cents, and the price of a barrel of oil tumbled 5% in one day, to less than $38 US. Also in Ottawa, the CRTC announced that the profits of Canadian television networks collapsed by 93% last year, an indication of how companies everywhere are turning off their marketing taps as job-stressed consumers shut their wallets.

It is becoming clearer, of course, that Superman is but a man and the hopes of 300 million Americans are but hopes. It’s estimated a very large number of US banks are currently insolvent, and are being glued together only by government cash, or the expectation of it.

This makes me wonder, of course, about ours. Just as our real estate market is following the American one, as our economy trails theirs into recession or worse, as our job market collapses along with theirs, as our manufacturers shutter while American ones close, how can we be so unequivocal about our banks?

Because Mark Carney says so? Or Jim Flaherty? Are we to just carry on?

At least where Superman lives, they held a vote on a bank bailout. They debated it before the nation. They see the big guy standing unscripted in town hall meetings. It may not be going well for him, but at we can view that, judge it, and respond.

There may be little to envy about America at the moment. Still, we can covet truth. It never mattered more.

136 comments ↓

#1 Bottoms_Up on 02.10.09 at 8:19 pm

http://www.yourhome.ca/homes/article/585103

wow. when do the homeowners in Toronto revolt?

#2 Bobby in Victoria on 02.10.09 at 8:24 pm

The problem with all of this is that no one really knows what to do. The media, opposition parties and the people are screaming for the government to do something, so they throw money at it hoping it will get better. The US has thrown 8+ billion at the problem and things are still tanking.

Look at Mr Carney’s position today; 3.8% growth in Canada if……the US gets it’s house in order. I could have guessed that and I’m no expert.

I think one of the main problems is that there are too many experts, with too many vested interests.

The one who guesses right is the expert!!!

#3 No Fool.... on 02.10.09 at 8:31 pm

Bottoms Up, this is the amazing part:
“The 4 per cent increase cited by Miller doesn’t include a 9 per cent increase in water rates, the new personal vehicle tax, and the new user-fee system for garbage, said Councillor Karen Stintz (Ward 16, Eglinton-Lawrence.)

When those fees and charges are added to the property tax increase, residents will end up paying about 10 per cent more to the city this year than they did before, she said.”

Toronto is such a sick puppy.
So many levels of bull crap, the boots don’t hit the bottom run of crap anymore.

It may be the poorest run city in all of North America.

Mortgage payments just got tougher….to the tune of $200-300/yr for the “average” home. No service increase. Nice.

#4 Reg on 02.10.09 at 8:32 pm

Please read this for an eye opener…

http://blog.macleans.ca/category/business/

The first article is about Flim Flam Flaherty and how he intends to “school us” on finances.

In part, he says, “The task force, which will include representatives from the business, education, academic and volunteer sectors, will report to Flaherty with recommendations on how best to equip Canadians to make more responsible financial decisions.”

Seems to me a LOT of Canadians were doing just fine until the scam artists destroyed what was left of our investments and savings, since he and PMSH have lied and decimated what were good solid investments Canadians made.

Maybe the case should be made that rather than “school us” Canadians about finances, he should bring in some people and school the government about finances. Just like him and the other goof to blame us for the mess they made of things.

Totally disgusting.

#5 Andrew toronto on 02.10.09 at 8:35 pm

hum.. sounds like dejavu again.. what next world war III to create jobs

We can’t over-emphasise that the Great Depression did not become “great” due to the economic problems signaled by the 1929 stock market crash, but, instead, due to government policies undertaken to counteract the economic problems. The policy errors we are referring to do NOT include the Fed’s so-called failure to prevent the money supply from shrinking, but do include government actions designed to boost prices, expand credit, create employment, and re-distribute wealth. These actions delayed necessary adjustments, and as a result it took more than 15 years for the economy to do what it should have done in 2-3 years. As Franklin Roosevelt’s own Treasury secretary, Henry Morgenthau, lamented in an address to Congressional Democrats in May of 1939: “We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises … I say after eight years of this Administration we have just as much unemployment as when we started … And an enormous debt to boot!”*

It is commonly believed that the Second World War finally ended the Great Depression, but this is not true — the Depression didn’t finally end until government controls were eventually relaxed after the War. Preparing for and fighting WWII made sure that everyone had a job, but minimal unemployment does not necessarily go hand-in-hand with economic strength. In the former Soviet Union there was very little unemployment, but living standards were “third world”. Herein lies the problem with treating job creation as a primary goal of economic policy.

http://news.goldseek.com/SpeculativeInvestor/1234278682.php

#6 happy renter on 02.10.09 at 8:39 pm

This is beginning to scare me. I have no debt (no mortgage, no car payments, no student loans or credit card debt), but I do have Canadian bank shares and other stock mkt investments that, in hindsight, I should’ve dumped last summer. Now, I’m loath to sell at the low, and am hoping for a recovery in 3-4 years. I’m a young professional, and am wondering if I should spread my savings out over the 5 banks (given the FDIC’s insurance only covers CAD 100k per account)?
I mean, what is the long-term financial future of Canada? Are we talking total financial collapse, run on the banks, civil unrest, current devaluation (against which ones though?) I mean, is the 21st century going to belong to Asia (as they eventually turn their ship around from being export-driven to domestically-driven?) Are we talking about irreversible damage to western capitalism – a perma-lowering of living standards from which we will not recover in our lifetimes? (I’m 38)

#7 nobody on 02.10.09 at 8:40 pm

# 1 Bottoms_Up: Never. Canadians don’t know what revolt means. This is not Europe, where people go on the streets. Happy Friday Hockey Night!

#8 Van MD on 02.10.09 at 8:46 pm

Speaking of Canadian banks,

One of my patients revealed to me that a prominent bank she works at in Richmond has just laid off its entire mortgage division a few days ago.

This is indeed tough times, I better start flipping through my copy of After The Crash which was sitting on my desk for the past few days!

#9 Chris in England on 02.10.09 at 8:47 pm

“So Superman got on a plane and went to Florida where he kissed an old woman in the audience who is now living in a car…”

Because he kissed her? He’d better not try it with me!

#10 nonplused on 02.10.09 at 9:00 pm

I told a friend the other day that I thought real estate prices could be off up to 30% this spring in a worst case scenario, with which he agreed. I added if that happened, we’d probably have a Canadian bank fail or be bailed out by fall, to which he said “you’re crazy”. The unbelievable Canadian confidence in Canadian banks is like a religion. And amazingly, the only hard data to support the confidence is that Canadians “feel” their banks are safe when surveyed.

They might have been using slightly better capital ratios than their American counterparts, but they are still way overleveraged. And they are into all the same crap.

Part of the reason people think Canadian banks are safe is because of CMHC. But mortgages aren’t the only loans that are going to go down. Some combination of GE Capital failing (insures a bunch of mortgages) and commercial loan failures could sink at least one Canadian bank.

Of course they could just do the “landlord pretends tenant will catch up on rent, bank pretends landlord will catch up on mortgage” game they are playing in the US for a while.

Back to the bailout:

It’s nothing but a decriminalized plundering of the US treasury now. A modern day “sack”.

The Canadian one won’t be much better.

#11 North Vancouver Citizen Jr. on 02.10.09 at 9:03 pm

“”Still, we can covet truth. It never mattered more.””
Garth

The truth will be hard to swallow if Bernanke’s plan doesn’t work.

1/
B confirmed today that he utilized the “exigent circumstance” clause.

2/
That U.S. Banks to face a “comprehensive stress test” is the expected next step.

…Regardless, the future for the majority in North America, it’s back to the fifties…shared flats even rent out rooms.

Only for Royalty, Caymanites, Bermudians, the Cote d’Azur, a few Sheiks in Arab lands and Vancouverites will life continue as a bowl full of strawberries and cream.

#12 mattbg on 02.10.09 at 9:04 pm

I don’t think you can blame the bank stocks for the tanking of the Dow, unless you mean indirectly.

The bank stocks are so low in price now — below the informal $10 cutoff for being kicked out of the Dow, yet they are still there — that they are having less and less of an impact on the Dow average.

I was calculating this today just to see what is really going on, and if all of the financial stocks in the Dow went down by 20%, it’d lead to less than a 100 point drop in the Dow. They didn’t all go down 20% today, and the more heavily-weighted ones (AXP, JPM) went down less than the ones that are now almost inconsequential.

Bank of America and Citigroup could go bankrupt tomorrow, their stocks to zero, and it’d have less than a 100 point impact on the Dow with their current valuations (direct only .. obviously there would be broader consequences to the psychology of the market). Two years ago, the same would have dropped the Dow by almost 900 points.

#13 ThumbsUp on 02.10.09 at 9:05 pm

Tax evader nomination is the fatal blow to the market confidence.

After months of painful struggle, I made the decision to switch my ‘dollar cost average’ equity fund contribution to the money market funds, -even that I don’t feel safe. I’m convinced that an average Joe RRSP investor cannot beat the Tax evader and his friends, and Japan had shown us what’s ahead.

#14 Rhino on 02.10.09 at 9:14 pm

I saw Carney on Politics (CBC) this afternoon. That man is so obviously a CPC plant is it scarey.

His responses to questions touted the Party line – just like all the other robots, and he made several comments praising the great job the CPC purchasing of questionable real estate debt was.

My confidence of him just took a major turn DOWN. I strongly doubt he is impartial. Oh well… another indicator of CPC “competency(?)”

As to Obama… that poor man is in for one hell of a ride. Renewing Washington is like trying to turn an aircraft carrier around in Toronto harbour… without tugs!

#15 George on 02.10.09 at 9:23 pm

Excellent piece, what happens when circus americanus actually figures out those one syllable word meanings -hope, change, yes, we, can. And they’re all not happening like previously promised (hammered in). Lots of respectable financial analysts preach – it’s all about the psychology. The collective psychology! Shopping your generators Garth. Good calls on the merchandise.

#16 North Vancouver Citizen Jr. on 02.10.09 at 9:26 pm

“”Moscow to complete Iranian reactor in three months””

http://www.debka.com/index1.php

Why?…What’s in it for Russia?…Russia doesn’t need Iran as an ally…and not for the $$$…Reactors make for cheaper oil but Russia needs high oil prices for its own oil reserves.

#17 1 Bore E. parking lot on 02.10.09 at 9:27 pm

Never forget this is Bush’s mess. Yeah sure it spouted from 911.. but WHAT WAS IT ABOUT AL GORE..?

Me thinks Obama is sincere. The guy’s just in – he’s trying to find his feet and already the rats are knawing down below.

By contrast we’ve got the Sherrif of Nottingham trying to prop his castle. Where’s our Robin Hood?

#18 Gord on 02.10.09 at 9:34 pm

The Canadian propaganda machine will soon be unable to keep up the spin. The truth is just becoming to obvious. Tonight in our local community rag the real estate board featured an ad telling people the market was still sound, despite a modest correction in 2008 …2009 looks like it will provide stable real estate sales and maybe even a modest gain? What a joke
I predict that by year end 90% of real estate agents will be looking for a new job…good luck finding one. You had it too good for too long bottom feeders

#19 Coho on 02.10.09 at 9:36 pm

We have a fiat money system like in the US. How, pray tell, can people pretend we are in a better position than the americans?

We have a central bank just like in the US. Down there it is misnomered as the “Federal Reserve” In Canada it is The Bank of Canada. Both of these cancers are privately owned, which many people do not know.

JFK tried to remedy this. Please see below.

http://www.thetruthseeker.co.uk/article.asp?ID=7867

“On June 4, 1963, a virtually unknown Presidential decree, Executive Order 11110, was signed with the authority to basically strip the Federal Reserve Bank of its power to loan money to the United States Federal Government at interest. With the stroke of a pen, President Kennedy declared that the privately owned Federal Reserve Bank would soon be out of business. The Christian Law Fellowship has exhaustively researched this matter through the Federal Register and Library of Congress. We can now safely conclude that this Executive Order has never been repealed, amended, or superceded by any subsequent Executive Order. In simple terms, it is still valid…
_________________________________
We can talk of governement incompetence, stupidity, lack of foresight, oversight, and accountability all we want, but this cabal (which is above government and transcends national boundaries) runs the show. It is not dumb or incompetent. It is however, ruthless and doesn’t take kindly to opposition.

These are the money changers of old. Same evil energy today as back then. They haven’t gone away.

Trying to “fix” anything while they still control the money supply is like painting over rotten wood.

#20 Garthlover on 02.10.09 at 9:48 pm

#3 North Vancouver Citizen Jr. on 02.10.09 at 9:03 pm said:

“…… Only for Royalty, Caymanites, Bermudians, the Cote d’Azur, a few Sheiks in Arab lands and Vancouverites will life continue as a bowl full of strawberries and cream…..”

Guess what? Even these very wealthy folks risk losing a lot in the coming/worsening economic crash. They are the ones who own malls that’ll sit empty when tenants go belly-up. Even if all their wealth is in cash, and their banks go bust, they lose it all. So much for that CDIC/FDIC insurance of $100k or whatever limits.

When you’re THAT rich, how many banks do you have to deal with to spread your risk? A paltry $2 million in cash assets will have those ‘rich’ guys opening accounts in 20 different banks. Yeah, Garth, I know you can set up insured accts in each family member’s name, joint accounts, etc, blah, blah, in order to cover your butt.

However, I’m sure it gets very hard to do when dealing with several millions.

And #5 ThumbsUp on 02.10.09 at 9:05 pm should feel NO SAFER, because MUTUAL FUNDS INCLUDING MONEY MARKET are NOT insurable!

He/she said: ” After months of painful struggle, I made the decision to switch my ‘dollar cost average’ equity fund contribution to the money market funds, -even that I don’t feel safe.”

#21 john on 02.10.09 at 9:53 pm

Nice to see consistently short and to the point blogs.

#22 Gonzo on 02.10.09 at 10:00 pm

Someone posted this link a few blogs ago. Thought I’d re-post it. It is the most elegant discussion of the challenges ahead that I’ve seen (no offense Garth).
http://www.chrismartenson.com/crashcourse.

This has been posted a few times, plus I referenced the key points in my book, ‘After the Crash.’ It’s all about the misunderstood nature of risk. — Garth

#23 Jolm on 02.10.09 at 10:09 pm

Wages are to high in the G7 COUNTRIES
and reality is setting in . Canada will
come out stronger . Stay close to family or friends
and help each other.

#24 Dale on 02.10.09 at 10:10 pm

Great work Garth.

#25 Blair on 02.10.09 at 10:14 pm

Tonight on Ottawa radio station, CFRA, a real estate broker spoke in an interview about the market in Ottawa. She told the audience in radioland how well real estate tranactions were doing in this new economy. She talked about how Ottawa was unique and how it is a good time to get into investment real estate.

Her arguements had 4 points in support of a good Ottawa market:
– Low interest rates (3-4.5% range) for mortgages with some introductory rates in the 2.99% range for new homes;
– Housing developers from Vancouver and Toronto telling her personally that they want to set up shop in Ottawa;
– “We” are not affected like other markets in Calgary or Toronto as the local tech industry and Gov’t provides a better environment; and
– Vacancy rates are about 1% which means real estate is still an option to invest in.

She also spewed the news of having closed 7 deals in February already. You couldn’t help but wonder what she could be smoking. Of course, she was a Realtor, so who could blame her for saying what she said.

So, Garth, here is the million dollar question…is Ottawa in a bubble much like the folks in Victoria think they are in, or am I surrounded by a bunch of “Greater Fools”?

#26 Jolm on 02.10.09 at 10:20 pm

The economy will improve and Banks are suffering the
most and are not to blame . The Western countries
have always done better than closed market economies.
Go to old Russia a see for yourself .

#27 Pat G on 02.10.09 at 10:36 pm

I wish Obama the very best! I truly believe he cares about the people and, while he and his advisers may make some mistakes in this new kind of chaos, I trust him to do his best. I think he will be a fairly fast learner and he has a lot of courage and, yes, integrity.

As for Mark Carney, Jim Flaherty and Steven Harper — I just can’t get over their colossal nerve! Who could respect any of their M.P.’s that support them?

#28 Vancouver_Renter on 02.10.09 at 10:44 pm

This is UNBELIEVABLE! Listen to the testimony from Harry Markopolos, the financial fraud investigator of the Madoff ponzi scheme (starting at 0:54 in this video):

http://www.youtube.com/watch?v=9spj1BjKvTU

It’s not just consumer confidence and faith in the government to do the right thing that is suffering today. Like many people, I’m beginning to seriously question the stability, honesty, and reliability of our entire financial and political system. I’m getting so disillusioned.

I consider myself to be an honest man who will dependably adhere to the rules and laws, paying my taxes and contributing my “fair share”. But when you start to feel like the entire system is corrupt – the financial system, the political system, taxation – it really makes you wonder is you are a sucker. Like my father in law once said, “Investment and taxation relies on the perception of fairness and a level playing field. Once everyone stops believing that the system is just… it’s game over.”

I contribute to RRSPs and buy investments only to learn the system is fraught with fraud and corruption – and that I’m just a pawn in a rigged system. Here in Canada, naked short selling and stock manipulation are completely out of control, and the regulators do absolutely nothing about it.

My business pays never-ending fees, taxes, arbitrary penalties, etc assessed by the government leaving me with very little for my family, while organized crime and drug operations earn tax free fortunes. Half the nice homes in this city seem to be owned by mobsters or individuals with dubious sources of wealth.

Bailouts go to billionaires and special interest groups (big unions for one) while my little struggling business gets absolutely nothing.

The realtors and banks lie and lie and lie. “Now is a GOOD time to buy!” and “You’re richer than you think!”
Whatever. My banks nickel and dime me to death with one hand while taking $75 Billion in taxpayer dollars with the other. They privatize their gains and socialize their losses.

And whatever happened to the obligation of directors and senior officers in a company to serve their shareholders? Today it seems like CEOs treat the companies they run like a horn-of-plenty, where they rob from the shareholders until they get caught… and then skip town. The same holds true for investment managers.

I naively used to think that corruption happened primarily in “other places”, like third world countries. Now I see that it is all around us, and in all forms at all levels of business, law enforcement, and government.

Practically everything these days, including cash, is just questionable paper in my mind:

-Paper dollars printed without limit.
-Paper bank account statements from institutions that may or may not be in trouble.
-Paper debts and IOUs with insolvent counterparties.
-Paper stock certificates that may be worthless “failure to deliver” toilet paper in a systemic failure (read about “Naked Short Selling” here http://en.wikipedia.org/wiki/Naked_short_selling)

This is why I like gold right now. Sitting in a safe deposit box, it is real, tangible, and not the liability of anyone else. I don’t care if I don’t make money in holding it… I’m more concerned about preserving my nest egg.

#29 Cornholio on 02.10.09 at 10:46 pm

Garth

The question is whether or not Superman is a poker player on not. If you knew you were going to have to borrow a ton of money and that you could lower your borrowing cost with a speech about a plan that had no specifics could you pull it off without too much collateral damage.
Stocks went down but money flew into what one day will be worthless treasuries which not only drug government borrowing cost lower but all rates.
This has also set up the shorts for a squeeze.
Maybe he isn’t or maybe if he is he won’t win but that’s what happened today.
One never know’s does one?

#30 Soylent Green is People on 02.10.09 at 10:51 pm

re #6 happy renter on 02.10.09 at 8:39 pm This is beginning to scare me. I have no debt (no mortgage, no car payments, no student loans or credit card debt)

You’re young, don’t sell. You have pu-lenty of time to wait for a rebound.

p.s. Hi Superman, where’s your mask, and oh yeah, heh, what’s for dinner tonight?

http://www.youtube.com/watch?v=-_cdbByTeNE

#31 Dave on 02.10.09 at 11:08 pm

“”Moscow to complete Iranian reactor in three months””

http://www.debka.com/index1.php

Why?…What’s in it for Russia?…Russia doesn’t need Iran as an ally…and not for the $$$…Reactors make for cheaper oil but Russia needs high oil prices for its own oil reserves.
——————————————————

you guys hide under your bunkers worried about your neighbour stealing from your garden. Countries like Russia, India, China are all on the ball. Its called preparation. The solution to an energy crisis isn’t by buying a generator at your local Canadian Tire

#32 David on 02.10.09 at 11:14 pm

Watching Carney’s pathetic performance today provided ample evidence that this incompetent should be forced to walk the gauntlet and be cashiered at the first available opportunity. This uber housing bubblemeister seemed to miss the events of the past 3 years and blissfully tried to rationalise away any responsibility for the catastrophe which is now resulting in hundreds of thousands of pink slips across Canada.

#33 Nicholas P on 02.10.09 at 11:18 pm

Once again Garth, my enthusiastic applause!

There was a time when I diligently forwarded links to your and other websites sounding the alarm bells for people. However, I am slowly beginning to loose faith in people’s ability to discern between the basic truth and the lies, manipulation and truely sociopathic behaviour that our ruling elite is displaying here in this country and abroad.

The time will soon come to take cover with those who had the eyes to see the truth.

Keep it coming If and or when this blog goes strangely quiet, i will know the time has come.

#34 Apocalypse Now on 02.10.09 at 11:19 pm

The Dust Bowl cruelly appeared at a most inopportune time in the 30’s and exponentially expanded the crisis that was already underway due to a well planned and deliberate contraction of credit by banksters (not because of the stock market crash.)

In this greater depression that has now begun look for 4 dustbowls:

1. Famine due to (man made) natural causes as in HAARP and other secret technologies. Fossil fuels which are erroneously identified as such have little or nothing to do with global warming. Global warming or ‘climate change’ as is now politically correct way of identifying it is caused as much by automobiles as the 2004 tsunami was caused by a kid throwing rocks into the Indian ocean.

2. Disease as in Pandemic disease, bird flu being the most likely candidate to help cleanse the Earth of billions of ‘useless eaters’ or goyim as they have been termed by useful eaters such as Henry Kissinger. This pandemic will also be just about as natural as a man’s death with a bullet to the head is death by natural causes. This is why there is no doubt that the pandemic is coming because someone somewhere has the little glass vial that will one day soon be broken open, and you won’t have a Level 4 Hazmat suit.

3. Mad Max Anarchy as the worldwide economic collapse accelerates. A preview of this has been seen this past winter in Greece, Iceland and some former Soviet bloc countries. The answer to anarchy is martial law and it is coming to North America, yes even to Canada! Iron fist in a velvet glove as Garth recently mentioned in one of his blogs. Again the economic problems can and should already have been fixed with the trillions that have been thrown at the ‘crisis’. However, the fixers have no intention of fixing anything; therefore anarchy, rioting, looting, bloodshed, death by natural causes such as a baseball to the head are all headed our way and there is no possible way to stop it. Head for the hills, a lot safer than Yorkville or Yaletown.

4. The War that will truly end (almost) all wars. All those shiny bombs and weapons straight out of Star Wars movies, there’s gotta be some general somewhere who is itching to use those babies! When did man ever create a weapon he did not use? When did man ever learn from history? 3/4 of the planet’s population is slated for slaughter and you are worried about the future of real estate. Wake up buddy!

Real estate is going to ZERO, as in 0, nada, nothing. No matter what price it will be offered at there will be no no fool great enough to buy it. These are strange times we are living in!

#35 Torquemada on 02.10.09 at 11:36 pm

Does anyone know how CMHC insurance works from the bank’s perspective? I can’t find any answers on CMHC’s website

Assume that anything less than a 20% downpayment requires CMHC insurance. Then assume that 0% downpayment mortgagor defaults on day one of the mortgage.

Is the bank insured for 20% of the mortgage value? Meaning that if the bank cannot resell a property for 80% of the mortgage, they will suffer a loss.

Or is the bank insured for whatever it’s overall loss is on the property (100% of the mortgage – whatever it realizes on the resale of the property)?

If it’s the former, then banks are in trouble. If it’s the latter then the government has already pre-bailed out the banks and the banks should be fine. (Assuming they haven’t made too many ridiculous construction loans).

Any help would be appreciated.

#36 Happy Renter in North Van on 02.10.09 at 11:43 pm

Happy Renter… you’re 38… you’re not a “young” professional anymore…

Face it, you’re a middle-aged, middle-manager…

#37 marnic on 02.10.09 at 11:48 pm

Happy Renter…

Do you honestly believe that if a major Canadian bank goes broke (and if one does there’ll be the mother of all runs on all the others), you’re going to see your $100,000 from the government?

#38 everthing is a con on 02.11.09 at 12:07 am

happy renter I two am 38. and yes you have the right questions. but hey you already have the answer. your just thinking out loud. i know someone who can really set you on the path of understanding his name is alan watt.
http://www.cuttingthroughthematrix.com

#39 Anon on 02.11.09 at 12:08 am

#16 North Vancouver Citizen Jr.

“”Moscow to complete Iranian reactor in three months…Why?…What’s in it for Russia?””

Money for a different type of fuel. Russia and other FSR’s have large Uranium deposits. The Former Soviet countries have doubled their production in the last ten years, and Kazakhstan will become the largest producer in the world in the next couple of years.

#40 Ghost of Tom Joad on 02.11.09 at 12:09 am

Good post Coho. You’ve got it exactly right, which is why there is no recovery coming for Canada or the United States.

Games just about over. The new game is going to be about survival. Welcome to the New World Order.

#41 dd on 02.11.09 at 12:45 am

Depressing news. Going to get more depressing my the feel of it.

#42 squidly77 on 02.11.09 at 12:55 am

Bank of America and Citigroup could go bankrupt tomorrow, their stocks to zero, and it’d have less than a 100 point impact on the Dow with their current valuations (direct only .. obviously there would be broader consequences to the psychology of the market). Two years ago, the same would have dropped the Dow by almost 900 points

that would be your worst nightmare come true
and i for one believe that they are as good as gone
scared yet.. http://www.starland.com/news/2003/images/030724joker.jpg

#43 Sam on 02.11.09 at 1:10 am

In case anyone missed this in the Toronto Star:
http://www.thestar.com/Business/article/585024

http://www.thestar.com/Business/article/584938

Another thing I don’t understand how can the rental prices go up in this environment. I am in the market to move to another rental and I am seeing slight increase in rents over the last 3 months. Is this crazy or short term hoax ? I appreciate if someone can please shed some light ?

P.S Garth, why are you so biased towards Obama ?!?!?

#44 squidly77 on 02.11.09 at 1:10 am

heres big trouble and it has nothing to do with housing
http://bloomberg.com/apps/news?pid=20601087&sid=aXWQEydhsoUI&refer=home

#45 kc on 02.11.09 at 1:24 am

I just read this essay and it completely blew my mind for its accuracy and straight vision of history. Not to mention where we are today and what lays ahead. (funny how this ties into today’s topic of Obama)

the research was written by, “Mr. Strauss and Mr. Howe” They look at history with how each generation fits into the cycles of 80 year periods then broken into quadrants. And by doing so they mastered that quote:

“Those who cannot remember the past are condemned to repeat it” this is lengthy, however, worth the 1/2 hour to read it. (no I am not a tinfoil hat guy)

Full essay: http://www.marketoracle.co.uk/Article8800.html

“They are able to trace these turnings back to 1500 with remarkable consistency. They have broken U.S. history into the following cycles of history: Revolutionary Cycle (1701-1791), Civil War Cycle (1792-1859), Great Power Cycle (1860-1942), and the Millennial Cycle (1943-2???). Within these cycles are four distinct generations, that have a consistent persona because their parents had similar views, they listened to the same music, read the same books, were taught the same curriculum, were bombarded with the same marketing messages, and experienced the same set of unique experiences.”

#46 patriotz on 02.11.09 at 3:04 am

Down there it is misnomered as the “Federal Reserve” In Canada it is The Bank of Canada. Both of these cancers are privately owned, which many people do not know.

The Bank of Canada is and has always been a Crown Corporation.

The formal ownership structure of the Fed is a bit more complicated, but its executive (BoG) is appointed by the President and confirmed by the Senate, just like cabinet members.

#47 Jacqueline on 02.11.09 at 6:15 am

I think one of the reasons government spending doesn’t work is because it actually scares the hell out of people because it means they are really freaked out.

#48 Jacqueline on 02.11.09 at 6:16 am

That applies to the bank bailouts, monster stimulus packages, etc.

#49 Rick on 02.11.09 at 6:28 am

Garth–

“Still we can covet truth?” Seriously? You think anything coming out of our Congress here in America is truthful? TARP (if that’s the bank bailout to which you refer) wasn’t debated with anything serious in mind. Congress had received e-mails, petitions, phone calls, and faxes showing the people were 300 to 1 against TARP. The only debate was how much pork to throw into it. Congress still thinks it exercises control over TARP and is protecting the American taxpayer (and over the GM bailout). If the bank bailout to which you refer include the trillions Bernanke is throwing to the banks, there is not truth in that at all. He doesn’t disclose what he is doing, what garbage paper he has bought, he lies to Congress. Congress does nothing in response. It is all a farce and a charade.

You had best hope Canada doesn’t covet the same truth Americans get because if it does, you are truly screwed just as we are.

#50 Anxious on 02.11.09 at 6:55 am

Hi Guys:

Just a quick ask. Does anyone know if Desjardins Credit Union have any skeletons hiding in their bank vaults? Tried opening up an account at Scotia and they told me to come back next week and make an appointment. I don’t think it was because they were super busy but understaffed.

#51 john on 02.11.09 at 7:35 am

Great post Garth,it is so refreshing to read your blog and your honesty. You bring hope by reality!

#52 Midas on 02.11.09 at 7:44 am

#29 Vancouver Renter wrote:

This is why I like gold right now. Sitting in a safe deposit box, it is real, tangible, and not the liability of anyone else. I don’t care if I don’t make money in holding it… I’m more concerned about preserving my nest egg.

Gold will not only protect your nest egg; it will make it grow exponentially in the days ahead. However, why do you trust the foxes to guard the hen house? What makes you think that it will be safe in a bank safety deposit box? Do you not recall that FDR ‘confiscated’ gold in ’33. Took it (read stole it) right it out of people’s safety deposit boxes! The FDR playbook is being deployed again, so watch out. Take responsibility for your wealth, don’t trust anyone with it, least of all banks!

#53 john on 02.11.09 at 7:45 am

#28 PatG..As for Mark Carney, Jim Flaherty and Steven Harper — I just can’t get over their colossal nerve! Who could respect any of their M.P.’s that support them?
<<<< wow is that not the truth…cowering puppies there to pick up their paycheques with no regard or backbone to represent the people who supported them!

#54 Reg on 02.11.09 at 8:00 am

For those who think your bank deposits are covered for a max. of 100,000 CDN.

http://www.thestar.com/article/526341

In part, “You can have up to $500,000 in eligible deposits if you have savings in your own name, in a joint deposit, in trust, in an RRSP and in a RRIF at a member firm.” As well, you can go even higher if you have money in trust for future beneficiaries.

#55 Rhino on 02.11.09 at 8:13 am

Anyone notice the online poll in the G&M?

Have you or your significant other been laid off within the last few months?

I have
9% 210 votes
210 votes

My significant other has
5% 129 votes
129 votes

We both have
3% 73 votes
73 votes

Neither of us
83% 2037 votes
2037 votes

Granted… “not scientific”. However, with 17% already experiencing job termination, and a situation getting worse, how can our government only project single digit unemployment?

Maybe because so many will not get EI, combined with those who already run out of benefits…

#56 Toronto C9 Renter on 02.11.09 at 8:21 am

#25 Blair wrote:

“…here is the million dollar question…is Ottawa in a bubble much like the folks in Victoria think they are in?…”

Blair, I lived in Ottawa until 2001, had a few real estate investments there and I still watch the market.

I’m guessing you’ll see a drop or protracted stall but nothing too dramatic. Prices are just so much lower than the other major markets, and have never experienced spiking like Toronto, Calgary, Vancouver. Ottawa is a great city with lots to offer yet average price has never been over 300k, and at the high end $1M buys alot (which it doesnt anywhere else)

I’m not saying I’d buy there today, but personally wouldn’t lose any sleep if I owned there. Besides, with 5 yr mortgates available at below 4%, maybe that real estate agent has a point

#57 JamesT on 02.11.09 at 8:32 am

@Andrew toronto #5

“We can’t over-emphasise that the Great Depression did not become “great” due to the economic problems signaled by the 1929 stock market crash, but, instead, due to government policies undertaken to counteract the economic problems.”

What a load of BS. By 1936, the GDP of the US was greater than what it was in 1929, *before the crash*. The bottom was reached in 1933, the same year Hoover (and the Republicans) were booted out of office. Deja Vu?

Recovery takes time, but if you actually look at some of the numbers from that era you will see that the whole notion that WWII got the US out of the great depression is a MYTH.

http://www.ourfuture.org/blog-entry/2009020603/fdr-failed-myth

#58 North Vancouver Citizen Jr. on 02.11.09 at 8:55 am

“Vancouver Olympic Athelete’s Village” entering final phase construction… buyers have been lined up for two weeks for purchase after the Games.

and can you believe this?…prices have yet to be set!….

http://adaptivereuse.net/wp-content/uploads/images/redneck-mansion.jpg

#59 Bill-Muskoka (NAM) on 02.11.09 at 9:18 am

I was thinking last night about how things really work in government. People forget that the ones who actually make government function are not the politicians, the PMO Ministers, but the ones who have made a career dedication to public service. They are the ones we need to acknowledge, not the egomaniac bozos in the HoC or Senate.

Like someone at the Vatican said a long time ago ‘Popes my come, and popes my go, but we will be here carrying on to the future.’

Remember to thank someone in government the next time they help you. These are real Canadians who do the job. They Git ‘er DONE!

As to Obamaman…He is one man, with Constitutionally assigned powers. He is doing better in three weeks than the former clown did in EIGHT YEARS! So those being critical of him I say ‘Step up, STAND UP, Rollup your sleeves, and GET TO WORK HELPING! Stop being armchair quarterbacks/generals and DO YOUR PART.

We all know what happens when people want a Messiah instead of a wise leader. They turn on them because the Messiah didn’t do it all for them.

I suggest reading an old book by Richard Bach (Jonathan Livingston Seagull) ‘Illusions: The Adventures of A Reluctant Messiah’.

In fact Richard Bach is one of the finest philosophical authors in recent history. Read and learn about reality and real life.

#60 Charles on 02.11.09 at 9:20 am

re 37 Happy Renter in North Van on 02.10.09 at 11:43 pm Happy Renter… you’re 38… you’re not a “young” professional anymore…

Face it, you’re a middle-aged, middle-manager…

*******

That is so funny; I was thinking exact same thing when I first read it….

#61 hobbygirl on 02.11.09 at 9:20 am

In response to happy renter, I also am around your age, have no debts but do have a paid off modest house. I owe it all to the wisdom of the bedtime stories my dad used to tell me of life during the depression on the western prairies. I saw the homestead he grew up in for three winters which made a typical backyard shed look like a luxury home. I remember the true story of a child he grew up with committing suicide because he was caught stealing a lard sandwich puts into perspective the extravagence we’ve seen the past few years. Dear old dad used to get so angry in his later years complaining how worthless money has become, reminded him of money being burned in Germany serving for Canada in WW2. He saw people with wheelbarrows full of money which was barely enough to buy a loaf of bread. We are doomed to repeat history as we have NOT learned.

God rest his soul my dad used to say ‘it is better to be rich than to live rich’ which stuck with me in practice as an adult and I still WORRY about losing everything. I have $ in the bank and afraid I will lose it, I live in a community (Thunder Bay) which has the lowest real estate values in Canada and fear the drop in value although we are 1/2 the cost of major Cdn cities. I’ve read Garth’s autographed book (thanks, by the way) and I still am not sure how to protect what I have. It’s also a huge risk buying 500 g’s of gold when you still need money to shop (at least today anyways). Does anyone out there have a crystal ball to help us out?

#62 gonetheredonethat on 02.11.09 at 9:26 am

To Happy renter:

We have split our savings to keep within $100K with interest with each CDIC member. Note though we could with TD Waterhouse, BNS, RBC direct investing, get 2 to 4 issuers per Bank (Bank of Nova Scotia, Montreal Trust, Scotia Mortgage are different CDIC members but all BNS). It took us weeks to arrange, joint accounts rules etc…

I have come across info that said that BMO & CIBC are directly benefiting from the US GOV. bailout of AIG which might have become a big ?, apparently.

It is now clearly said that US banking system is insolvent, and possibly same in many other countries. Dig Nouriel Roubini on the web; he spoke in DAVOS, wrote on FT of London, England etc…

Times are dangereous even to savers.

I have faith and I pray.

#63 Alex on 02.11.09 at 9:32 am

To #6 Happy Renter

Stock market is a fraud, it will be completely devastated this year. Get out of virtual money and buy gold and silver.

#64 Alex on 02.11.09 at 9:35 am

To #47 Patriotz

No, The Federal Reserve is privately owned and is NOT the part of the Government of the USA.
Google its history please…

#65 Mike B formerly just Mike on 02.11.09 at 9:43 am

If people really want to know about Carney just google and see his bio as done up in the Globe… He was never elected by anyone and he basically pushed his way into the job. People should really watch this guy because he might have some leanings towards helping his ex employer Goldman. They would love to get their mitts on some things in Canada and Carney might be their gateway.

#66 David Bakody on 02.11.09 at 9:45 am

Canada posts 1st monthly trade deficit since 1976

Just wondering if Alberta and those in Ontario still believe Harper/Flaherty words of Canada’s Economy it as strong as the Canadian Shield …. and our banks are the best in the world.

David

#67 PTDBD on 02.11.09 at 9:51 am

The Travelling Salvation Show

President Obama is still in campaign mode, where he seems more comfortable. Someone has to tell him that he doesn’t have to go through the application process anymore….he has won the job.

He compared the problem to being at the bottom of a hole. The first step would seem obvious…stop digging. Yet. yesterday nearly a trillion of stimulus debt was approved by the Senate. Mr Geithner then introduced his plan, which would require another 1.5 to 2 trillion.

Bubbleeconomics blown up by balderdash bafflegab just won’t work anymore.

#68 JamesT on 02.11.09 at 10:22 am

@Coho #19
“We have a central bank just like in the US. Down there it is misnomered as the “Federal Reserve” In Canada it is The Bank of Canada. Both of these cancers are privately owned, which many people do not know.

JFK tried to remedy this. Please see below.”

Get your facts straight: Kennedy wrote E.O. 11,110 to phase out silver certificate currency, not to issue more of it. Records show Kennedy and the Federal Reserve were almost always in agreement on policy matters. He even signed legislation to give the Fed more authority to issue currency.

http://www.geocities.com/CapitolHill/Senate/3616/flaherty9.html

As for the whole privately owned Fed… that is true, but you probably believe that a small group of wealthy Europeans own it. Again CHECK YOUR FACTS.

http://www.geocities.com/CapitolHill/Senate/3616/flaherty4.html
http://www.geocities.com/CapitolHill/Senate/3616/flaherty5.html

I’m so sick of this whole Money Masters BS. Greed and overspending is the reason for this whole mess. Everyone needs to look in the mirror because we are all in someway responsible. Passing the buck, blaming someone else or the system as a whole has also greatly contributed to this mess. People need to acknowledge and take responsibility for their actions if we ever hope to break out of this cycle.

#69 Al on 02.11.09 at 10:25 am

#25 Blair,

Regarding Ottawa, I have personal observations. It doesn’t seem like there was a big bubble like BC or Ab, but price growth was stronger than it should have been. I’d anticipate a 10-15% deflation based on this. However, there is also a recession to take into account. Government employment should have a minor stabilising effect, but prices tend to be set on the margins so don’t count on that for much. With price correction from a minor bubble + recession effects, I’d anticipate at least 25% down from peak and 30-35% likely.

#70 whiterock on 02.11.09 at 10:27 am

#27 Derrin, your quote “This is a typical V shaped recession. We will go in hard and come out fast.
Let us all know when a Canadian bank collapses.
Not going to happen.”

You completely discredit yourself with that kind of definitive comment. No room for any other outcome there. So you know the future. You are either an idiot or a god. No doubt you see yourself as closer to the latter. By the way, do you live in north vancouver?

#71 Ron on 02.11.09 at 10:40 am

Am I just being paranoid?

On Monday I used the expression “need and greed” in the comments section of this blog. On Tuesday I noticed that the daily picture at The Automatic Earth was of a seed & feed store and the caption read “Walker Evans Need & Greed December 1935.”

Strange coincidence?

#72 pbrasseur on 02.11.09 at 10:49 am

#53 Midas

“Gold will not only protect your nest egg; it will make it grow exponentially in the days ahead. ”

Well that would be a change, in the long run gold (as other commodities) has barely beaten inflation.

But since you know best go for it….

#73 Pat G on 02.11.09 at 10:52 am

#36 Renter in Vancouver
Now, more than ever, we need honest people to stand up and fight against dishonest, self-centred people who take advantage of their positions and distort society.

Even if it’s tough sometimes, you can at least stand tall and feel proud that you are not a weakling who would give in to unprincipled behaviour. I hope you sleep with a clear conscience.

It is inspiring to see that Obama has told overpaid CEO’s that they can no longer take advantage of taxpayers and still collect obscene bonuses. We need some re-balancing in the ways people are paid.

#74 Jelly on 02.11.09 at 11:07 am

Vancouver Renter re:#29

Good Post.

Man, do I hear you regarding being nickle and dimed as a small business owner in Canada.
Total Sham!
Farmers gets treated horribley as well!
What a crock we tell our children, everyone is equal, things that are not fair-try to change it.
Yeah right, we are powerless to do anything.
Bosnian war criminals after all of the horrible atrocities they have done are ALLOWED to go free. (it is common knowledge that the US,UN, the Hague, Nafta, Nato, etc. say they are looking for criminals but never ‘find them”.) Yeah right, with all their resources and spies?
Not as difficult as they would have you believe.
This has gone on for political reasons as well as money, since the Nazi war criminals were able to escape to South America and live out the rest of their lives in peace.
Sorry, I know it is a harsh subject for the morning but it is a harsh reality. You can always find people if you really want to if there is a 5 million bounty on them.
I just saw a movie last night regarding this called, The Hunting Party so it has been on my mind…
Drugs would be a lot harder to get in our society if it was not so profitable for certain individuals.
I get annoyed at all the lies and posturing that we all know is not true-rules that apply to you and I do not apply to many criminals who are untouchable!!
Sickening!
Organizations are always passing the buck and doing disgusting, immoral things…

#75 Dave on 02.11.09 at 11:40 am

Kazakhstan will become the largest producer in the world in the next couple of years.
————————————

Australia and Canada say hello

#76 AM on 02.11.09 at 11:42 am

#44 Sam
Regarding rents going up, it appears to be supply / demand
Am a renter in TO although presently in London England. Around a year or so ago, you were getting I free month for a years lease but noticed that those incentives started declining mid last year, at least in my neighborhood as supplies declined. As people sell or are forced out of their homes, they have to rent and so rents will go up as the rental supply decreases.
The rental market declined as tenants started buying homes with the 0 down 40 years mortgages over the last 4-5 years. I feel this is now reversing and vacancy rates will fall thereby increasing rents over the long run.

#77 Future Expatriate on 02.11.09 at 11:43 am

“Superman” is a clueless empty suit, who can’t figure out why all the GOP who worshipped him into office don’t want to play footsie with him anymore.

Clueless; hopeless; brainless. No more perfect President OR description of Amerika in its Last Days.

“Superman” is Bush, with half a brain and sex appeal and not a damn thing more.

#78 Andrew toronto on 02.11.09 at 11:43 am

“There is a mysterious cycle in human events. To some generations, much is given. Of other generations, much is expected. This Generation has a rendezvous with destiny.” Franklin Roosevelt – 1936

President Roosevelt was correct. The generation he was speaking to was already dealing with the worst financial crisis in the history of the United States, the Great Depression. By 1945, over 400,000 of this generation had lost their lives. Another 600,000 men were wounded. Much was expected and much was sacrificed. Every generation has a rendezvous with destiny. The generation that won World War II passed the ultimate test and proceeded to produce the next generation, the Baby Boom Generation. Their rendezvous with destiny is underway. Will it be a rendezvous with history that results in World War III, the collapse of the Great American Republic, dictatorship, or a return to the original Constitutional principles upon which this country was founded? Many of you are probably thinking the idea of WW III, collapse or dictatorship is crazy.

I know that an individual can learn from the past. I’ve always thought that poet George Santayana’s quote,

“Those who cannot remember the past are condemned to repeat it”, is profound and worth studying.

http://www.financialsense.com/editorials/quinn/2009/0210.html

#79 bob on 02.11.09 at 11:54 am

#53 Midas,

how does one buy gold without a paper trace? it seems to me even if you hold it in your hands the government with little ease can trace purchases of gold.

#80 sail1 on 02.11.09 at 12:16 pm

#1 Bottoms_Up

They had a chance to get rid of the bum. I guess, crying the blues now is going to fall on deaf ears.

#81 Jeff Smith on 02.11.09 at 12:22 pm

By the way, is Obama a handsome guy??? I am stumped by this. Being a guy, I am not really good to make a judgement. However it seems a lot of the females I know are hot for this guy. I know a woman who actually think our PM Harper is ugly but she think this Obama guy is the most handsome man in the world. Whats going on? What do you guys think??? Do you like his bluish purple lips?

#82 WakeUp on 02.11.09 at 12:27 pm

What does it matter what the value of my house is? I live in my house. It is shelter from the cold, it is not an investment. It’s gone up 100% so what if it goes down 50%? All the other houses around me will go down 50% too. So you want me to sell and rent as I speculate that house prices will come down? It doesn’t make sense and it doesn’t matter.

You need a place to live and that’s the bottom line.

#83 Greg W., Oakville on 02.11.09 at 12:44 pm

Hi #19 Coho on 02.10.09 at 9:36 pm,

Thanks for the link/info to the artical about the
“Federal Reserve”.

This also covers the reality of the Federal Reserve.
The movie ‘America: Freedom to Facism’ by Aaron Russo also covers the FR information, for anyone that would like to see the information presented in the movie format. Try a web search to watch movie on line free. also/or try;
http://www.informationclearinghouse.info/article15399.htm
or 3min Trailer-youtube – Part II 3min
http://www.youtube.com/watch?v=c4tfu5Hq7g8
or youtube part 1 of 11 (the movie)
http://www.youtube.com/watch?v=3ueEfRXZCVA&feature=related

Don’t forget about the deals signed, like
NAFTA and SPP!

The director ‘Aaron Russo’ has given interviews you can find on the web, for anyone that may be interested. like, Film maker Aaron Russo goes into depth about the Federal Reserve and the world bankers. interview 36min
http://ameriborn.com/?p=220

#84 Carole AB on 02.11.09 at 1:04 pm

#6 Happy Renter said: “and now I think I should spread my savings out over the 5 banks”

Does this include internet banks? I know Garth has warned about this. Here is another WARNING: my 80 yr old father moved his money out of his internet bank without my prompting two weeks ago…he remembers well leaving school at 13 to work when his father lost his job in the great depression in Toronto. He never returned to school. Like many of his generation he stayed with the same employer and worked his way up until retiring at 65. (This makes more sense to me every day.) Now he worries about his $2000.00/ company pension. He says things are very scary.

BTW, my sister and her husband moved several hundred thousand out of the same bank a few weeks ago….I am serious here….how many more are quietly doing the same?

Here is something about unintended consequences of Trillion dollar bailouts, by James Quinn Wharton School of Economics for anyone who may not have read it:

http://www.opednews.com/articles/Unintended-Consequences-of-by-Jim-Quinn-090108-731.html

#85 Two-thirds on 02.11.09 at 1:26 pm

@ #44:

In Edmonton, I have noticed rental price increases as well. Have visited a couple of the lowest-priced houses, but still, the common asking price for a 3-bedroom, 1200 sqft. *duplex/townhouse* is $1500/month!

Is this what this year will bring, scores of “accidental landlords” by the summer, putting overpriced rentals on the market?

At current mortgage rates and assuming a 20% down payment (which I have), I could buy a brand new, equivalent duplex today, for $300 less than that… :o

Is sanity somewhere to be found in this world, or did it crash along with oil prices?

#86 Tony on 02.11.09 at 1:29 pm

Garth,

Thank you for the post. Reporting on the experiences that people are going through right now is real and can’t be disputed. It helps us understand the severity of the times we live in.

The actions of our government should certainly be scrutinized throughout this ordeal. My concern is that many of the elected MP’s are local business people or lawyers that do not have the proper credentials to make the difficult fiscal/economic decisions required of them. Long term thinking to a politician is to the end of his/her term in office. I suspect there is nobody in our government that could do a better job during these times – especially a dumb ass Liberal. If I remember correctly, the last time they were in power, they were in back rooms of pubs stuffing brown paper bags full of cash down their pants – just like we used to stuff half-bags of weed down our pants when were young. Obviously, the bigger your balls, the less weed you could conceal. I’ve often wondered how the Liberals of that day could stash away so much…

#87 V on 02.11.09 at 1:38 pm

#53 Midas…. if it comes to the confiscation of privately held gold, even if you don’t store it within the bank, how can you avoid the paper trail that will lead them right to your doorstep ? Is now the time to buy it at $900+? Even Garth has come around to recommending a small percentage of one’s portfolio be held in gold, what are your thoughts?

#88 Jeanette on 02.11.09 at 2:21 pm

Coho…you would be amazed how many people think the Federal Reserve is part of the US government. The member banks themselves are of course private.

The Fed is supposed to advise how to regulate banking activity, much like the SEC is to the stock market. Both are a total disaster.

#89 Bill-Muskoka (NAM) on 02.11.09 at 2:29 pm

Well, well, well isn’t this a surprise? (NOT!)

Merrill executives blasted on bonus plan

Cuomo made the claims in a letter sent Wednesday to U.S. House Financial Services Chairman Barney Frank.

“In a surprising fit of corporate irresponsibility, it appears that, instead of disclosing their bonus plans in a transparent way as requested by my office, Merrill Lynch secretly moved up the planned date to allocate bonuses and then richly rewarded their failed executives,” Cuomo stated.

“Merrill Lynch had never before awarded bonuses at such an early date, and this timetable allowed Merrill to dole out huge bonuses ahead of their awful fourth quarter earnings announcement and before the planned takeover of Merrill by Bank of America,” Cuomo said in the letter.

And followed by this, again, unsurprising news:

Canada records first trade deficit in 30 years

With exports falling at a faster pace than imports, Statistics Canada reports a trade deficit of $458 million compared with a trade surplus of $1.2 billion in November.

Our economy is Rock SOLID!…isn’t that what Steve and Dim Jim told us? When did they say that? Now consider the timing between the gain and loss. What happened? Did a seagull crap on another oil rig? The port at Vanacouver shut down due to snow? What a crock of Keystone Cops manglement.

#90 Bill-Muskoka (NAM) on 02.11.09 at 2:34 pm

And more unsurprising (albeit who would have thought the Swiss would take it up their’s?) news:

Second Swiss bank loses billions

Switzerland’s Credit Suisse has joined the list of banks revealing disastrous results for 2008 after it reported losses of $7.1 billion (8.2 billion Swiss francs).

The country’s second largest bank lost 6 billion Swiss francs in the last quarter of the year alone, the bank said Wednesday. The figures compare with a $6.7 billion profit for 2007.

The bank’s losses were revealed a day after UBS posted a worse than expected loss of nearly $17 billion — the largest ever by a Swiss group — and announced 1,600 new job cuts.

#91 kc on 02.11.09 at 2:37 pm

#45 squidly77

That should be awake up call. Countries are asking the important questions and I don’t blame them for questioning the bonds, T-bills.

#92 Bill-Muskoka (NAM) on 02.11.09 at 2:38 pm

Global alert issued for 85 terror suspects

Interpol has issued a rare global security alert for 85 suspected al Qaeda-linked terrorists wanted by Saudi Arabia.

The “orange alert,” issued on Tuesday, comes after Saudi Arabia asked for Interpol’s help last week in apprehending the 83 Saudis and two Yemenis.

Interpol Secretary General Ronald Noble said the alert is unprecedented.

“Never before has Interpol been asked to alert the world about so many dangerous fugitives at one time,” Noble said in a news release.

Hmmm…seems the Glory Days of Bush and his Saudi friends are OVER. Now we see ACTION! I wonder what President Obama told them? I can bet it wasn’t ‘Want to come over and help me clear brush at the ranch, and then we will all go hunting with Dick Cheney.’

#93 Chris in England on 02.11.09 at 2:53 pm

On the subject of banks

When the Head of Risk is dismissed for advocating caution, there can only be one result – and we’re in it.

http://news.bbc.co.uk/1/hi/business/7883409.stm

#94 David Halfkenny on 02.11.09 at 2:58 pm

It is obvious that you do not have anything good to say about anyone.

When you look at the mess that was handed the President and the manner in which he is handling it we could only be so lucky to have leaders of this type in canada.

The world has not come to an end. It is about time we got off this bad news bear stories daily and look for something positive that could end up helping people.

#95 Vancouver_Renter on 02.11.09 at 3:01 pm

#54… I don’t believe there was gold confiscation in Canada in the 1930s. Plus Canada is a very pro-gold business country; Vancouver is the capital of the world for gold company head offices. Also, when gold confiscation occurred in 1933, the US was on the gold standard where dollars were exchangeable for gold. This is not the case today. Reading old news stories there was plenty of warning that confiscation was coming in the 1930s, with political figures asking other politicians to deal with the rumors. Finally, a more appropriate target for confiscation would be huge ETFs like the GLD fund.

I’m not sure people would accept gold confiscation today. There would probably be a revolution.

One question I have, though. In the 1930s in the US, did banks open up personal safe deposit boxes and take out the gold? Or did the government rely completely on the good will of the citizens to turn in their gold?

#96 Toronto C9 Renter on 02.11.09 at 3:15 pm

30 years to a RE market bottom? Interesting take from the LA times…

http://latimesblogs.latimes.com/laland/2009/02/things-should-b.html

#97 charliegosurf on 02.11.09 at 3:29 pm

great unfoolished post, Apocalypse now, tomorow and for a freakinnn
long
time.

reposted it just to bug them.

The Dust Bowl cruelly appeared at a most inopportune time in the 30’s and exponentially expanded the crisis that was already underway due to a well planned and deliberate contraction of credit by banksters (not because of the stock market crash.)

In this greater depression that has now begun look for 4 dustbowls:

1. Famine due to (man made) natural causes as in HAARP and other secret technologies. Fossil fuels which are erroneously identified as such have little or nothing to do with global warming. Global warming or ‘climate change’ as is now politically correct way of identifying it is caused as much by automobiles as the 2004 tsunami was caused by a kid throwing rocks into the Indian ocean.

2. Disease as in Pandemic disease, bird flu being the most likely candidate to help cleanse the Earth of billions of ‘useless eaters’ or goyim as they have been termed by useful eaters such as Henry Kissinger. This pandemic will also be just about as natural as a man’s death with a bullet to the head is death by natural causes. This is why there is no doubt that the pandemic is coming because someone somewhere has the little glass vial that will one day soon be broken open, and you won’t have a Level 4 Hazmat suit.

3. Mad Max Anarchy as the worldwide economic collapse accelerates. A preview of this has been seen this past winter in Greece, Iceland and some former Soviet bloc countries. The answer to anarchy is martial law and it is coming to North America, yes even to Canada! Iron fist in a velvet glove as Garth recently mentioned in one of his blogs. Again the economic problems can and should already have been fixed with the trillions that have been thrown at the ‘crisis’. However, the fixers have no intention of fixing anything; therefore anarchy, rioting, looting, bloodshed, death by natural causes such as a baseball to the head are all headed our way and there is no possible way to stop it. Head for the hills, a lot safer than Yorkville or Yaletown.

4. The War that will truly end (almost) all wars. All those shiny bombs and weapons straight out of Star Wars movies, there’s gotta be some general somewhere who is itching to use those babies! When did man ever create a weapon he did not use? When did man ever learn from history? 3/4 of the planet’s population is slated for slaughter and you are worried about the future of real estate. Wake up buddy!

Real estate is going to ZERO, as in 0, nada, nothing. No matter what price it will be offered at there will be no no fool great enough to buy it. These are strange times we are living in!

r0ck n r0ll, long live the 0!

#98 Marc on 02.11.09 at 3:46 pm

For all this doom and gloom, a saying from the 70’s sticks out in my mind. “weed will get you through times with no money, better then money will get you through times with no weed.”

#99 Glenn on 02.11.09 at 4:03 pm

Canada will no doubt suffer in the coming years but unlike the US and England ( where i live ) you are totally self sufficient in all your energy needs, food and many commodities and i believe because of this you have a massive advantage over most other countries which is one of the reasons i am in the process of emigrating with my young family to your wonderful country.

Also, i love the fact that peoples personality and attitude in Canada seem to me to be something like 80% American and 20% European ( dare i say British) with a really friendly way…..see you soon.

#100 grandeprairiegirl on 02.11.09 at 4:14 pm

#47 patriotz
Slightly incorrect.
The BoC was opened as a private institution in 1935 with shares sold to the public. The government made an amendment and in 1938 the BoC was nationalized. It’s been a crown corporation since that time.

http://www.bankofcanada.ca/en/about/are.html

The ‘Federal’ Reserve has indeed always been privately held. Nothing federal about it.

#101 Jimster on 02.11.09 at 4:18 pm

Maybe Canada is full of pirate treasure?

#102 Herb on 02.11.09 at 4:28 pm

Michael Moore has put out a call for information:

“… if you work for a bank, a brokerage firm or an insurance company — or if you have seen things or heard things that you believe the American people have a right to know — please contact me at [email protected].”
http://www.michaelmoore.com/words/message/index.php?id=245

“Bailout – the Movie”! I can hardly wait.

#103 nonplused on 02.11.09 at 4:59 pm

Maybe since the “Depression” word isn’t so popular because we “know” how to avoid them now and “it’s different this time”, we can call it “The Great Recession”?

In the old days they had Panics until they had a really big one. After that slowdowns were described as Depressions until they had a really big one. We’ve been having recessions ever since, so it follows.

“The Great Recession of 2008-201?”

#104 Loki on 02.11.09 at 5:02 pm

Has the RE market decided to monetize off Garth’s ideas?

http://www.bclocalnews.com/vancouver_island_south/victorianews/news/39417049.html

Developers now talking about selling ‘homesteader’ acreages, etc.

#105 kitchener1 on 02.11.09 at 5:38 pm

Had lunch today with a friend of mine who works in HR for a large agency. One thing she mentioned is her suprise at the age and qualifications of candidates applying for lower wage jobs.

They have a few open rec’s that are very junior posistions in computer programing and various anaylsts roles. These jobs usually go to new grads with 1-3 years experience. They are getting applications from people with 15-25 years experience, meaning their age is 45-55. And this is for jobs that pay 45-55K.

Its going to be tough for new university grads competing against people their parents age. The other thing that she said is that over the last 6-12 months she is seeing companies hire older workers as opposed to new grads as they see the older workers as more stable. They will not leave as soon as a better opportunity comes along.

Guess Garth was right when he said that those of us who are in our 20-30’s are screwed.

#106 Bill-Muskoka (NAM) on 02.11.09 at 5:45 pm

So, does this news NOT appearing in OUR MSM mean they are living in DENIAL or collusion?

GM to cut 10,000 jobs

General Motors, the US auto giant, has announced it will be cutting 10,000 jobs or about 14 per cent of its salaried work force this year.

The Detroit-based firm said the cuts – part of their restructuring plan – are unavoidable with sales falling to historic lows as consumers rein in spending in the wake of the global slowdown.

The firm’s US employees, not laid off, will also have their pay cut.

The restructuring was a central condition of a $14.4bn bailout extended by the US government.

GM faces a deadline of February 17 to present a cost-cutting and restructuring plan to the US treasury.

Also! Some DON’T like it HOT (Seat that is!)

Top US bankers face grilling

The heads of several leading US banks are appearing before congress to defend their use of money from last year’s $700bn financial bailout.

Eight chief executive officers from banks such as Merrill Lynch and Goldman Sachs are testifying to the House Financial Services Committee on Wednesday over their handling of more than $160bn of US taxpayers’ money.

Contrite U.S. bankers promise reform

WASHINGTON – Facing a disgusted public and Congress, U.S. bank chief executives agreed with demands for greater accountability today in the first testimony on how they’re spending money from the taxpayer-funded US$700-billion bailout.

“Both our firm and our industry have far to go to regain the trust of taxpayers, investors and public officials,” John J. Mack, head of Morgan Stanley, told the House Financial Institutions Committee.

Added JP Morgan Chase & Co.’s Jamie Dimon: “We stand ready to do our part going forward.”

The eight top bankers appearing before the panel were generally contrite and conceded they have work to do to win over a bitter public and an exasperated Congress. They had little choice but to acknowledge as much, given intense anger and anxiety as the troubled financial system continues to spiral downward in an ever-worsening recession.

Poor Rich Boys and now they have to be in the People’s (Principle’s) Office! What a SHOCK that must be to their over inflated EGOS? I bet they would much rather be a Stockholders’ meeting where they can Flash and Twirl their BS on the BIG SCREEN and be BELIEVED? You know the tune from ‘Chicago’ ‘Razzle Dazzle Them’?

#107 islander on 02.11.09 at 6:34 pm

The mush-headed lefties amuse me: Canada’s problems are attributable to the Conservatives/Carney the CPC Stooge but America’s problems are because the “bad guys” won’t co-operate with St. Barry of Obama.

Pull your heads out of your Pollyanna skirts, girls. This is a problem that cannot be solved by “more,” “better,” or “different” politics.

It will only be solved when politicians and bankers are put in dungeons and guillotines are sharpened. And then citizens can go back to re-making the world.

#108 Rob5 on 02.11.09 at 6:35 pm

#6 happy renter

I’m in the same boat – having jumped out of the game [a little too early as it turns out – 2003, who knew?] .

This will take a lot out of the sails of the middle class but we’ve got a reasonable chance for inflation to be problematic for years to come so as soon things get cheaper [another 15% – fall this year, I hope] my fiance and I will take a chance on real estate, build our lives together and hope it doesn’t grind down for too many years after that and recovers inside 5 yrs after that.

While there is a lot of salient advice posted here by smart and/or sensible people [on both sides of the argument], there is so much more partisan crap thrown around on the blog by those in love with their own pumper or doomer voice and viewpoints – you just have to read between the lines and have BS filters the size of the US debt.

good luck to you whichever direction you choose.
after the dust settles, you’ve got to live your life.

#109 CalgaryRocks on 02.11.09 at 6:42 pm

Just wondering if Alberta and those in Ontario still believe Harper/Flaherty words of Canada’s Economy it as strong as the Canadian Shield …. and our banks are the best in the world.

Don’t know, name a couple of countries and/or banks that are in better shape.

#110 Bonnie N BC on 02.11.09 at 7:09 pm

Cheer Up and Act Up!

When things get worse nothing will feed people or house them or keep them from the cold. While I understand that Garth is giving people a wakeup call and a way to see through the fog I am a bit disturbed by the blame game here without hope.

If you think about it – while all the Ponzi schemes from bankers and greedy investors is frustrating there is no solution – just a hardship that we cannot change.

But my own Regional District is suggesting we need a 25% increase in 2009 property taxes – yadda yadda yadda. Now I could whine and sit at home but I know I will act up! Let’s take a proactive place in our communities.

Come one and all – the only hope we have is to take back our communities and get involved.

#111 Toronto C9 Renter on 02.11.09 at 7:23 pm

to #6 Happy Renter

Don’t worry 38 is young! I only wish I was 38!

On the banks — I went through this last summer and found they all have multiple legal entities so you can easilly park several hundred k with each and be covered

Can’t recall for sure but I belive BMO, Scotia and CIBC least 2 entities, think TD has four, not sure about RBC. So you can park >1M

#112 Dave on 02.11.09 at 7:30 pm

Stock market is a fraud, it will be completely devastated this year. Get out of virtual money and buy gold and silver.

—————————————-

can you please explain how gold and silver will be extracted if the “fraud”, the stock market, is avoided?

do gold and silver magically appear at pawn shops?

don’t overwork that little brain of yours thinking about this one

#113 eddy on 02.11.09 at 7:50 pm

Last year, brain dead David Miller’s budget solution was a second land transfer tax. Now he’s back looking for more money from homeowners (sitting ducks). Because he is in the pocket of big developers , Toronto’s waterfront is an absolute eyesore of over building. McGuinty is even worse for giving him more power to tax. People, please help run these two out of office. Miller repeats and repeats : “The people of Toronto will not stand for a cut in services”- especially the ones who don’t pay for them. and now he has a captive audience of people who can’t even sell their houses, but he’ll still be first in line on closing day for any unpaid tax on the selling end And land transfer tax on the buying end. Surely, he is the biggest waste of space in Toronto’s history.

#114 CalgaryRocks on 02.11.09 at 8:03 pm

Moe, Larry & Curly want ‘alleged’ child soldier, terrorist, and traitor brought back to Canada so that we can ‘rehabilitate’ him into society. Yes, I did say, rehabilitate, as in released and walking among us, not shot for treason.

http://www.cbc.ca/canada/story/2009/02/11/khadr-appeal.html

#115 Jeannie on 02.11.09 at 8:37 pm

If anything positive comes of all this, and speaking for myself, it has shaken me from my complacency.

I’m starting to question our established way of life,
how society works.
That so much power in the hands of a few blinkered ‘leaders’ could affect the lives of hard-working people is a call for change.
One of the mantra’s of the 60’s comes mind…”Question authority”
There’s a lot of anger, as well as fear and sadness
being expressed here, perhaps tomorrows leaders will arise from this very website, motivated by other than greed and self-interest.

#116 Rhino on 02.11.09 at 8:49 pm

#106 kitchener1 on 02.11.09 at 5:38 pm

A thoughful post, but there is another aspect to that.

You see, I am one of those with lots of experience, university degree, great resume, and have been applying to those $40k jobs. Funny thing, I get the distinct impression I scare the hell out of the people hiring! In many cases, my experience exceeds theirs, so they are not too happy about that as it could be considered “a threat”. I have even been told “we would love to have someone with your experience, but we do not think you would be happy.”

They also think I would jump ship at the first opportunity of making more, when typically someone at my level only wants to make a living until retirement. Someone at 50 is probably much more “stable” than a newbie who is still “ambitious”.

Once you have made the decision to look at jobs “below your level”, things get really depressing. I have often thought about dumbing-down my resume.

I have been looking since 2003. I started my own consultant company just to make a living, and believe me, that is a tough ride. Just getting by – without EI.

Besides, most engineering & manufacturing jobs that would exercise my talents just do not exist anymore in quantity.

“Freedom 55”? Nope…

#117 Jeannie on 02.11.09 at 9:08 pm

Rhino #117. Have you thought of looking further afield?
I have several family members happily working in the middle east with qualifications similar to yours.
Just a suggestion, but you might try contacting some of the ‘Head Hunters’.. if you’re adventurous and willing to travel. Good luck.

#118 rick in Surrey on 02.11.09 at 9:30 pm

Hi Garth,

I must say that I go to bed wondering what crazy news I will hear about the economy when I wake up. It seems that we are on a roller coaster ride that just will not end!

The part I find most frustrating is the lying and misinformation that is told to the general public by our elected officials. To hear Bank Of Canada top dog Mark Carney sound off about a financial recovery for Canada in 2010 is not just absurd, it is irresponsible in my opinion. I mean seriously, 3.8% increase next year? Is this man for real? All that information amounts to in my mind is an attempt to blur the current crisis from peoples minds. The CREA announcing as well that good buying opportunities are currently available and the RE market will be seeing noticeable increases in sales and prices next year. I do not see any possible way we can turn around our economic woes in under a year, when each day seems to present newer and bigger problems. Furthermore, it was announced today that Canada has a trade defecit, the first in over 3 decades! But don’t worry everyone, it will all be okay in 2010 Superman is on the job south of the border. Besides, we live in CANADA-the country everyone wants to be like, right?…no problems in Canada, just a momentary glitch for our finances. So go out and spend, spend, spend. Apparently, next year all will be well so no need to worry about money, job losses, bankruptcy!

I don’t want to sound so synical, but I am sick of the rhetoric. Why can’t they just come out and say the reality of the situation. “We are a drift in a sea of fraud, lies and crap and don’t know how to get to shore.” Let people know the facts and then they can prepare themselves accordingly.

“The Truth Is Out There”…you just need a set of chest waders to get to it through all the manure!

#119 Paul Martin Jr. - HONEST RE AGENT on 02.11.09 at 9:41 pm

Honesty is rare these days, when delirious sales types abound and character is a dream in history books.

Still, some sparks of concience light here and there.

http://www.paulzammit.com/marketwatch.htm

Paul’s Short Term and Long Term Predictions:

Prices have been ascending consistently since 1997 up until April of 2008.
The drop in price represents a very similar kind of market to the 85-89 boom.
We could be looking at a 6 year period of recovery to get back to April 2008 pricing.

#120 ohyeahrightsorry on 02.11.09 at 9:47 pm

My view of these bailouts, stimulus packages, BoC forecasts…..etc, leaves me with a disturbing image .It is a suicidal man with global economy written on his shirt holding a gun to his head and fifty large cops pointing large cannon size guns at him yelling “Drop it or we’ll shoot!”. Either way his immediate future is bleak at best.

#121 TheFirstRick on 02.11.09 at 9:53 pm

http://paul-northvancouverhomes.blogspot.com/

When the going gets tough, time to abandon ship. Maybe his blog should be renamed, “In Search of another Bubble.”

#122 North Vancouver Citizen Jr. on 02.11.09 at 9:58 pm

“”The U.S. problem is that 50% of the country can no longer consume because they consumed ahead three, four or eight years already and are unwilling/uncomfortable/unable to continue at the pace they used to.

We can talk all we want about innovation and effective allocation of capital but the reality is that even the VCs can’t find enough places to put the little capital they are allocated, and the PE world blew itself up to the point that they look like banks: No one wants to sell because prices are depressed. The result is that the whole system is slowly, but surely coming to a standstill and the only solution is to reset the banks and forgive some debt.

It will be painful for many, including our foreign enablers, but at the end of the day, they want 95% employment. The only, possible way for this to happen is for those who wish to continue to manipulate their currency (China) and subsidize building of cheap manufacturing capacity to take a principal reduction in an outside of bankruptcy setting with an agreement to continue to do business.

Otherwise, sooner or later, this thing ends in ultimate collapse or war.””

http://www.businessinsider.com/how-to-fix-housing-savings-banks-and-the-economy-2009-2

#123 Gord In Vancouver on 02.11.09 at 10:10 pm

Garth, you’ll love this one:

http://www.vancouversun.com/Homes/story.html?id=1279274

#124 Jelly on 02.11.09 at 10:24 pm

Glenn,

Thanks for liking Canadians even though you think we act like we are “80%” American, 20% European.
ha, ha…
Seriously though, welcome to you for when you move to Canada, I do hope that you like it. There are a lot of positives to living here.
As far as friendliness goes, I am glad you think so but please keep in mind big cities may not be as friendly as you think, places like Victoria and most of Nova Scotia are supposed to be one of the most friendliest places on Earth!
All the best,
I hope you get a really cheap house.
A neighbour of mine bought a house in Calgary at the peak and then had to sell as his wife wanted to return to England and he took such a bath, a real shame!
Hold out and rent for a bit so you can save even more…

#125 Stephen Smith on 02.11.09 at 10:40 pm

This financial rescue package is like a meteor coming at earth at 50,000 miles an hour and we shoot nuclear warheads at it at 5,000 miles and hour. The net effect of stopping it is zero, the thing just has too much velocity and we cannot with all our technology get ahead of it in terms of speed to have any effect. The size of the losses simply cannot be overcome with a stimulus package, there just isn’t enough money to spread around.

To me the real worry is countries like China that have to create 20 million new jobs a year just to keep pace with the entering workforce. What are they going to do and how long are people going to stand for it. Anarchy is not a good thing sometimes.

#126 Jake on 02.11.09 at 10:43 pm

I still don’t get how so many people are convinced that the new leader south of the border is working for different powers than the previous leader. He is articulate and inspiring. I really have enjoyed listening to his some of his speeches. He speaks of peace and change etc. He has been embraced by the world in the process (what’s with the world speaking tour devoted to “breaking down boundaries” before the election anyway?). Take Berlin for example, I haven’t seen Germans so taken in by a leader since…….I mean seriously, as if he hasn’t been groomed for a purpose. Invited to speak at the democratic convention by Bushes secret brother John Kerry back in 2004. It is all too perfect isn’t it? We’ll go down the same path Bush would have taken us but now we will have smiles on our faces. I wish he really was different, but with all of the fear mongering to pass yet another banker bailout, I am convinced he works for the same people. Stop claiming he is such a step up from Harper and Flaherty until he actually does something besides make you feel warm and fuzzy at night. The Iraq war served a purpose and the Americans will not be leaving. Have you seen the bomb proof complexes they have been building there. Google the United States Embassy in Baghdad. It will house 5500 people in ultra secure apartments. It has been one of the few projects actually completed on time. As if the Americans do not have future plans for that region of the world. That country is messed up to the core. Business as usual.

#127 Natasha on 02.11.09 at 10:48 pm

Okay Garth, got it. Got your daily diatribe of doom and gloom. Meanwhile, unemployment is 4.5% on the prairies, and I can’t find enough workers for our firm.

You are long on the problem and dreadfully silent on solutions, whether of a personal or public policy nature.

What SHOULD the government be doing? I won’t ask you what individuals should be doing because this ‘blog’ is purely a sales pitch using fear as leverage. I await with bated breath your no doubt uplifting reply!!!

Did you read my book? Two hundred suggestions in there. Click on the right and I’ll send you an autographed, uplifting copy. — Garth

#128 Da HK Kid on 02.11.09 at 11:04 pm

#83 Wakeup

Give yourself a big hand for being such a star for your insight. NOT! A 50% gain in this market is an absolutely crucial gain for the future.

Selling right now and avoiding worse RE declines to come is prudent advise.

Remember all…DEBTS ARE FIXED AND ASSETS ARE VARIABLE!!!!

Renting is in fact a roof over your head at the cost to another who in fact during a deflationary period going to do whatever he/she can to manage their debt.

If the carrying costs of rent (and it’s continuing lowering) are even the same as your current outgoing costs of your owned home, quite simply the asset is depreciating so your net worth is eroding.

Note: The cost of carrying an owned home moving forward could be less by 10% just on the action of paying taxes on accessed values that keep increasing while REAL prices are coming down at an alarming rate!

For those who have gone from being a typical two income family to one, any savings of renting of owning is non taxed income wouldn’t you say?

There will be a time when us renters will get back in but based on my calcs it could be 2011 earliest. For those who stay in their properties, and take the 50% bubble hit, it could take a decade to come back.

WHY WOULD YOU PUT YOURSELF INTO THAT GROUP???

If at some point the demand of rental housing is greater than the supply then purchasing a home may be an option however at least you would have waited for the bottom.

Those of us who see things as posted on Garth’s site the same would agree that having some foresight and not waiting to buy before the bottom is also prudent decision making.

However, if you see the very slow decade recovery then is your money not better used to find higher returns which again supports your comment, IT IS JUST A ROOF OVER MY HEAD! and continue to rent adjusting any increases in rent with returns in a multitude of higher yielding vehicles.

#129 Jeanette on 02.11.09 at 11:36 pm

# 53 Buying gold without paper trace? It’s easy, just go to any coin shop. You hand over your cash and they hand over the Krugerands or Maple Leafs or Eagles.

No one is interested in tracing gold purchases. It’s copper jacketed lead they worry about LOL!

#130 islander on 02.12.09 at 6:15 am

Natasha, if your firm can’t find enough workers, you’re not paying enough. That’s basic economics.

The government isn’t the solution. You are. I am. Citizens are.

Garth’s job is not to wipe your bum. He writes. You decide whether to follow his prescriptions.

#131 Bill-Muskoka (NAM) on 02.12.09 at 8:20 am

#129 Da HK Kid on 02.11.09 at 11:04 pm

Perhaps you should also mention that when renting you are at the mercy of the landlord who, if they decide to unload the property, when selling does not protect you, the renter, from massive rent increases or the destruction of the property.

The new owner can evict you at will (with notice of a minimum of 30 days) and charge whatever rent they like. You then are SOL and forced to either swallow the new rate or MOVE. Yeah, that is security and stabilty all rolled into one nice neat TRAP!

#132 Bill-Muskoka (NAM) on 02.12.09 at 8:27 am

#127 Jake on 02.11.09 at 10:43 pm

I suggest reading the new book on General Petreus ‘The Gamble’ and how he turned the Iraq situation around by listening to the Iraqis instead of killing them, handing out paltry sums, and showing them R-E-S-P-E-C-T! You can watch his interview on Jon Stewart’s ‘The Daily Show’ from Tuesday night.

Gee, what a concept in foreign affairs. Petreus did it without White House, i.e., Bush, approval, and it WORKED! Then Bush and the Cheney War Machine had to admit ‘Gee, he’s onto something there!’

Oh, and Obama is Light Years above Harper and his entourage of Power Perverts. My neighbor has more sense than Harper ever has or will because she is HONEST!

#133 Bill-Muskoka (NAM) on 02.12.09 at 8:41 am

#103 Herb on 02.11.09 at 4:28 pm

I think Moore should call the new flic ‘Fraudandhype 9-11’, eh?

#134 questioning on 02.12.09 at 3:26 pm

Natasha, this forum has give you more than enough valuable information and wisdom, you can not be too greedy which is the root of crisis…

#135 james on 02.12.09 at 3:56 pm

Obama is as guilty, as part of this sick system, as anyone. Please people; do not get intoxicated by Obama. Too many worship the personality. Like a cult. He, his party, and the other parties cast of characters.. are obsolete. And corrupt. The only solution is a return to Simple Living. Not this romantic return many prop up. But a return to the Family as the centre of civilization. Of local economies. Less vanity – look at television, billboards, the cars people drive, and so forth.

We need a kick in the head.

We also reap what we sow.

The answer; a move away from a Wage System… to a System of Ownership. Not Socialism, which is government controlled, and which is Capitalism in disguise… But local ownership by the people. This is the only solution. And it will come at a cost… but I find it all Hopeful. Very Hopeful, indeed. Mixed with hard work!

#136 CalgaryRocks on 02.12.09 at 5:30 pm

#136 James

The ownership system makes sense to me. Recently I refused a small contract worth about 12k.

Thevreason was that my ‘client’ wanted me to sign a paper saying that:

1. He owns everything I produced
2. I can’t compete with him or work for a competitor for 1 year
3. I need to take on 2mill$ liability insurance so that I can cover him against lawsuits dr the next 2 years.

All this so that he can throw a few peanuts my way then turn around and use my work to make millions.

No thanks, I prefer spending my free time on things that I own and will be able to benefit from.