Have a nice day

horsey1

Hey, do I scare you? Apparently I scare Rick Anderson, former Reform Party chief strategy whiz and now a Stephen Harper closet advisor. Oh yeah, and CBC-TV talking head. He wrote the words below for his Globe and Mail online column Wednesday.

This actually is an interesting point. Will economic times improve if we don’t talk about them? Are we better not to have guys like me writing books explaining the mess and travelling around the country getting people stirred up and mulling their options? I mean, is Canada but a willow in the global winds, helpless to protect its citizens and mitigate the bad times. Do we just take this crap and play the victim?

Or does Rick Anderson have a really big sucker of a house in suburban Calgary?

ra

Beware the merchants of fear

Turns out there are good ways to profit from hard times. One way is to publish books and hold seminars about how grim it is, as Garth Turner is doing.

To be fair, Garth is hardly alone in scaremongering. The head of the IMF inexplicably pronounced a “depression,” even though his own organization forecasts global growth this year and next. Lessened growth, to be sure. But last time I checked, a weaker year was not the definition of depression. Get a grip.

GM, Chrysler, and the UAW are terrific at the scaremongering game, and may be earning more at it than by making cars. Yesterday the two companies and their union allies told the U.S. government to ante up another $21-billion. This is on top of the $17-billion they got, way back in… December.

In one of the strangest lines in the auto tragicomedy, GM reportedly “said it might need as much as $100-billion in financing from the government if it were to go through the traditional bankruptcy process.”

Huh? Companies in bankruptcy now just get to tell governments how much they “need”?  And that works, governments will just pay up? That’ll sure be a lot easier to settle debts.

Let’s get back to business.

Comments

Dan Baril from Oakville, Canada writes: I think of the term “scaremongering” as something someone does by way of exaggeration or deceitfulness in order to misrepresent the facts for some desired purpose of gain.

I have read both of Garth Turner’s recent books GREATER FOOL and AFTER THE CRASH. Based on the facts presented in those two books versus the way things have actually turned out, Garth Turner in fact underestimated the negative impact on US and Canadian Economies. How is that scaremongering? Would we be better to hear nothing at all, or the rosy picture painted by Harper/Flaherty.

If scaremongering is deliberately painting a worse picture than reality, which Turner did not do, then what do you call painting a better picture than reality, which Harper and Flaherty did? Lest we forget the answer, an election campaign!

93 comments ↓

#1 sage_mom on 02.18.09 at 5:08 pm

I’d rather be prepared and be proven wrong, than to be unprepared and proven to be a fool for not paying attention.

#2 Foreign Investor on 02.18.09 at 5:28 pm

It is not you that scare me Garth….

The picture of the four horsemen and what they represent;

1.) Disease
2.) Famine
3.) Violence
4.) Conquest

….that scares me…..

but…

…what also scares me are those that buy into and say….

“But THEY (symbolized by the one crowned rider of the white horse) are saying that the economy will rebound later this year”

I say …”HOW”?

Information is Preferred to Misinformation – Thanks!

#3 PKS on 02.18.09 at 5:38 pm

Well, let’s face it, if Harper and Co (not like Harper actually lets any of his caucus go to the bathroom without permission from the PMO, but anyway…) were to admit that the economy isn’t doing fine, then maybe the next logical step might be for us to wonder our current government ought to shoulder any of the blame.

Look, I remember seeing a documentary about the US mortgage industry in late 2004 or early 2005, that mentioned, amongst other things, that consumer advocacy groups were trying to prepare for “a deluge” of bankruptcies. I remember thinking “Holy crap! That’s going to take down the whole US economy!”

And that wasn’t even taking into account credit-default swaps or selling a basket of crappy mortgages to wall street.

Just on the fundamentals (Large trade deficit, large fiscal deficit, no manufacturing or other value-add to speak of, economy based on paper profits) I’ve thought that the US was heading for some very serious economic problems since around 2005.

I guess my point is, I’m not a professional economist (like our PM is). I’d like to hope that our Prime Minister has at least a couple of people working for him who are at least smarter than me.

Somebody, since the 2006 election, should’ve been able to forsee the US heading for a major economic crisis and the resultant problems that that would cause for the Canadian economy.

#4 Van on 02.18.09 at 5:39 pm

He has a point, Garth. Your comments in the last three years have been mostly very negative and all about Doom and Gloom. Comments like it being worse then the great depression sure doesn’t help anybody. The fact is that the circumstances and times are very different today then in the 30s. This recession IMHO will not last beyond 2010.

#5 squidly77 on 02.18.09 at 5:42 pm

i hope that the four horsemen of the apocalypse dont apear anytime soon

but you just never know !

#6 Bill-Muskoka (NAM) on 02.18.09 at 5:49 pm

Here come the 10%’ers again I bet? LOL

Have a good night Garth!

#7 Keith in Calgary on 02.18.09 at 6:14 pm

“Denial” seems to be a bigger river than I though…….apparently, it stretches all the way from Vancouver to Toronto…….heh.

Can’t the politicians just ask the drug companies to make a happy pill (at taxpayer expense of course) and then we can all feel better about the mess we are in ?

#8 Jeff Smith on 02.18.09 at 6:50 pm

Wow! Now they are saying the GM bailout could cost $130 billion. That’s like blackmail in disguise.

#9 K on 02.18.09 at 6:56 pm

Please remember fear does not kill but denial sure does. Mentally, Physically,& FINANCIALLY.

#10 kitchener1 on 02.18.09 at 6:59 pm

All of these idiots, you can not “TALK” your way out off or into a recession.
A person who has lost a job is only going to spend on the bare essentials no matter how “jive” you through his way. Same goes for a guy whose neighbour,brother, cousin etc.. has been laid off, he will start spending less.

#11 Da HK Kid on 02.18.09 at 7:06 pm

Hey Garth, more fuel for the book I see. Get used to it!

Speaking of the auto companies, my father-in-law is now reading your blog daily. He’s out of West Van and sent me thing link.

It shows all the unsold cars piling up everywhere.

My solution is to move all these US based cars to either Fort Myers or Suburban Cali foreclosed neighborhoods to complete the movie set of Armageddon 2.

http://www.silverbearcafe.com/private/01.09/unsoldcars.html

#12 timbo on 02.18.09 at 7:10 pm

possible solution
blow every foreclosure up with a public dance afterward. then a tree planting on the lot with neighbors obliged to take weekly shifts to keep it looking up to standards.

increases moral, cuts inventory, keeps rental market level which will stabilize inventory, and jobs created in taking it apart and planting. Just like the VCR or rotary phone, no use selling it so throw it out…..

:)

#13 Future Expatriate on 02.18.09 at 7:12 pm

OK Garth… time to really start “scaremongering” and climb on the gold bandwagon and really show the cretins… no need to cover their inept and highly corrupt asses anymore.

Speaking of scaremongering, how can currency “creation” like this NOT lead to hyperinflation?

The Crash of 2009 is Coming To YOU

#14 jess on 02.18.09 at 7:17 pm

truth hides behind confidentiality

up to $100 billion per year is being lost to offshore tax abuses.

Offshore tax haven countries have, in effect, declared economic war on honest U.S. taxpayers by giving tax dodgers a way to avoid their tax bills and leave them for others to pay. Offshore tax havens attract these tax dodgers not only by charging them low or no taxes, but also by shrouding their financial transactions in a “black box” of secrecy that is extremely difficult to penetrate. They sell secrecy to attract customers.
This legal black box allows tax dodgers to hide assets, mask who controls them, and obscure how their assets are used. An army of “offshore service providers” – lawyers, bankers, brokers, and others – then joins forces to exploit the black box secrecy and help clients skirt U.S. tax, securities, and anti-money laundering laws. Many of the firms concocting or facilitating these schemes are respected names here in the United States.

http://hsgac.senate.gov/public/_files/Levin.pdf
http://finance.yahoo.com/news/UBS-to-pay-780M-open-secret-apf-14406310.html

#15 Alberta Ed on 02.18.09 at 7:18 pm

I’d bet on the big suburban McMansion.

#16 Rhino on 02.18.09 at 7:19 pm

Hey Bill & Contractor

Happy to see you picked up the thread…

Right on about feeling almost better off than the Corporate crowd. One thing about being a contractor/consultant/coach is you need to develop self-sufficiency just to survive. There is an excellent book entitled Job Shift:

Job Shift: How to Prosper in a Workplace Without Jobs
By William Bridges
Addison-Wesley, Reading, Massachusetts, 1995, 227 p.

that is almost prescient. It really helped me understand the changing workplace, and total loss of “traditional job security”. It gives some interesting self evaluation tricks, and while a depressing read at times, gave good advice overall (like Garth??). I recommend it to anyone considering a non traditional approach to making a living.

I, too, have kept my finances current even when times were good. I learned to keep a little aside, and can probably survive a year without income and without hitting my small RRSP parachute. My only debt is 2 years left on my mortgage…

There is a hassle about not feeling free to spend when times are good, but that falls into the same category as the advice given to me by my parents – who went through the Great Depression. Advice too many Boomers forgot, and did not pass on when teaching their offspring.

Has our society forgotten how to get along without personal bailouts and over reliance on EI? Might that be why pouring billions saving arseholes who should never have been managing major corporations has become acceptable?

Funny… but sitting here with my troubles, losing my forecast income flow for the next 3-4 months, I actually think those being laid off from “secure” jobs, who are leveraged to the hilt, deserve my sympathy. They will have many more problems learning what freelance folks had to learn long ago.

Independent contractors have no choice but be optimistic. Referring to the above posting on “scaremongering”, stating the FACTS about the situation like Garth does is almost the exact opposite. The more you know, the better prepared you are.

The GARBAGE spouted out by the CPC Harperites against a green economy, fear mongering about exploring new avenues, preying on the fears of seniors is TRUE SCAREMONGERING. That Anderson chap is so transparent, as he sits there, obviously overfed with jowls that would put a bloodhound (or Dief the Chief?)to shame is one of the perpetrators of the deception. It would be interesting to see how he would fare walking a mile in MY shoes!

To you both… as Spock would say…
“Live long and prosper”…

#17 paul ferrari on 02.18.09 at 7:40 pm

I think its the big house in Calgary!Ya they dont like Garth because people will see that our politicians and anybody connected to them are really liars and thieves and the system they created is an illusion of freedom. People like them dont want us to know the truth! Keep up the scary work Garth,we need more of ya.

#18 David on 02.18.09 at 7:42 pm

A whiz? What galaxy has Rick Anderson been inhabiting since October 2008? Reading his weak comments makes it sound like the man has no investments whatsoever or is poorly informed and reads absolutely nothing at all. In either case, the remarks by Mr. Anderson display an appalling level of ignorance and complacency about what is happening to real middle class Canadians. Some guru.
Canadians have lost billions of dollars in net worth since the bubble started to burst and face diminished job prospects or loss of employment. For those people, the sky has already fallen and they do not need to read any best selling books written by Garth Turner or anyone else to understand how bad things really are.
Instead of writing insipid tripe on some Globe blog, Mr. Anderson should make his arguments about how great the future looks and how wrong Garth Turner and the rest of the real world inhabitants are about the future.

#19 North Vancouver Citizen Jr. on 02.18.09 at 7:44 pm

These “myth buster’s brought to you by Las Vegas Foreclosure savvy REALTORS who know the Las Vegas Real Estate Market!

Please visit http://www.lasvegasrelocation.com/contact-4.html for foreclosure information

-There are many misconceptions about what is really occurring in the Las Vegas Real Estate Market and beyond our fair city across the country. Today’s focus is on myth debunking. The following are 6 myths that are questions we are hearing from home buyers everyday:
1) “Banks are desperate to get their bank owned homes sold”. So, can you get a good deal in this market? The Banks are not desperate but they are very motivated to sell these assets. So, you will get a good deal. But, eventually their inventory will start to decrease and the pricing on the good deals with start to slowly inch upward. However, we will not see drastic up swings in pricing again.
2) “The longer a Las Vegas home is on the market the more motivated the seller is to sell for less”. Not necessarily especially if the home is priced right. The market is moving and homes are selling. We are selling as many homes as we did in 2004. In 2008 our inventory was enough for 13 months. Now we have only 4.8 months supply of inventory. That says it all.
3) “Las Vegas Home Sellers are desperate to sell”. This myth may apply to homeowners who are upside down and trying to sell short. But as stated in #2, the market is moving and homes are selling. The % of short sales has almost doubled in the past several months.
4) “You can’t buy a home in today’s market with less than 20% down”. The FHA down payment is 3.5%. Home Sellers are contributing to closing costs. The State of Nevada Housing Division has programs for home buyers to assist them with the down payment.
5) “Bad credit is a deal killer”. FHA is willing to work with people who may have less than sterling credit. There are excellent companies now that help future home buyers repair their credit.
6) “All foreclosure are wrecked homes with major damage”. In most cases this is not accurate, some homes have damage but many just need cosmetic repairs.
-“I don’t want to buy until Las Vegas Real Estate Market bottoms out”. Some experts are saying that we are at the bottom. The inventory is decreasing and the price to build a home today is more than the price to buy an existing home. Affordable housing contributed to the growth of this great city. The pricing today is what the pricing was in 2003. I think that the prices of the fixer uppers and the really old homes may continue to fall, but they are not the majority of homes for sale today. I firmly believe that it is time to buy.

#20 mikef on 02.18.09 at 7:57 pm

Keep up the good work Garth.
Let the other idiots listen to Oprah and their ilk
try to make the bad news go away by not thinking about it.
Time to face reality.
One example
Just look at the “fun and games” department to tell you
this is far from a regular downturn.
Hollywood is slashing production,many pro sports teams will fold or relocate,whole leagues have suspended or disappeared(WNBA,Arena Football)
TV, magazine,and newspaper ad revenue is collapsing,
The PM of Latvia called his economy “clinically dead”,
US states are having emergency sessions just to
muddle through till next year(CA,KS).
Here in Montreal they are spending 244M to reconfigure
the circle next to the airport.
We’ll see in 10 years if there is an airline business
after Peak Oil bites and chews up every coddled behind.

Good Luck Rick

#21 JO on 02.18.09 at 7:59 pm

The critics are always outthere..as always, the facts prove who is on the right side..the markets are giving us sign after sign that we are in a historic crisis..a market whisper if you like..

The Obama mortgage plan is a complete joke. His socialist ideas will hurt the very people he claims to help, and even more ominous, punishes the prudent and frugal citizens who refused to get into the high consumption, debt-fueled, craze that was 2001-2007. The mortgage plan essentially pays the banks taxpayer money in order to reduce the monthly payments on the weakest borrowers and will make these very homeowners mortgage debt slaves, not to mention the more outrageous punishment of those who have made larger down payments and struggled to keep paying on time.

If anyone scans the article comments on these mortgage plan articles on one of the mainstream websites (CBSMarketwatch, one example), it is clear that there is an increasing level of rage among the portion of the population that was frugal and avoided the bullshit lifestyle made available by easy money from our governments (and central banks) and the banks. A revolution is brewing.

The other major issue is that now, many are claiming free markets have failed. What nonsense. Markets are always working, but they have not been free since at least 1971 when we were taken off the qusi gold standard we were on. Make no mistake, 0 % loans, buying houses at cheap rates with less than 20 % down, buy now, pay 2 years later with no fees or interest is not a free market world. The socialist Western European nations are in fact mostly in worse shape than North America, and now, many are calling for bigger government and more regulation. All you need to do is eliminate the Fed/BofC, move to a sound/hard money system, and eliminate government programs that attempt to fix/manipulate prices such as CMHC.

What a sad state of affairs. A total debacle. For anyone who has been living within your means and staying away from the debt nonsense that many have engaged in, protect your self and life savings. Most of what the government is doing is aimed at hurting those who have been prudent. Bastards. We need a Libertarian political alternative. Garth, you could fit the bill !

JO

#22 POL-CAN on 02.18.09 at 8:02 pm

Ilargi (TAE) nails the true purpose of the 275 B housing bailout down south….

The banks are already insolvent and we have yet to see the Alt-A and prime resets. Add to that the commercial and credit card future disasters and you can see why they need to feed the banks a steady supply of cash. They need to stem the tide of defaults and they are using the taxpayer’s money to do it. The banksters will take their personal cut along the way as well…..

http://theautomaticearth.blogspot.com/

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The president’s $275 billion plans to halt foreclosures are even more twisted. If you can afford your mortgage, or if you rent, you are now a sucker all of a sudden. The real suckers who are presently underwater or close to eviction are elevated to worthy of saving status. There is, however, not a word about what happens to the worthy former suckers when home values keep going down. And they will. What are we going to do, renegotiate every year?

The fact of the matter, of course, is that the $275 billion will not, and are not meant to, benefit the homeowners. They are provided for the benefit of the lenders, the banks. They are meant to guarantee an ongoing flow of funds towards the vaults replete with toxic debts based on the very homes the government now showers with cash. They are meant to artificially continue to prop up US real estate values, which, if they were allowed to simply follow the course of the markets, would bankrupt not only the owners, for which Washington cares preciously little, but also the banks, for which Washington will bend over backwards any time of day. The main problem is that it’s way too late. The banks will drown, and everybody knows it. So the only real purpose served by these measures is to transfer ever more of the public’s funds to the banking sector. It’ll go on until the nation itself is completely broke and broken.
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#23 Juststarting on 02.18.09 at 8:10 pm

It is getting scary. News from today.

NEW YORK (CNNMoney.com) — Initial construction of U.S. homes fell to the lowest level on record in January, according to a government report released Wednesday.

Starts fell to a seasonally adjusted annual rate of 466,000 in January, according to the Commerce Department. That’s the lowest level since the government started keeping records in 1959.

The rate was down 16.8% from December’s revised reading of 547,000, and 56.2% lower than January 2008

January marked the fourth consecutive month in which housing starts fell to a new record low. Starts have fallen nearly 80% from their peak of 2.3 million in January 2006

80% thats a lot of jobless people.

#24 Waiting for a Deal on 02.18.09 at 8:10 pm

At the end of the day, after I have worked a long … 12 to 14 hour day, I end up seeing if Uncle Garth has written something enlightening, brilliant or just plain scary!

I am never scared, just reassured as I am a happy go lucky renter.

You see I was in debt so deeply (and just recently paid it 100% of it off) while the last party was going on. I felt like crap because all of my friends got wonderful homes for less than renting and I couldn’t get approved unless I took a “liar loan”.

Well, what a blessing it was not to have been part of the party.

I will be at the next party …. the one at the after hours club when the housing hangover gets really rough.

I will own a nice house and have a modest mortgage payment due to the large deposit living well within my means.

So does Uncle Garth, scare me?

Nope.

But Rick Anderson and Stephen Harper and Flaherty sure do!

#25 Rob Jensen on 02.18.09 at 8:35 pm

Anderson’s wife must be a realtor……it’s all good, happy thoughts all around.

The sad thing is, that’s all he and the rest of the sheep may have to cling to….happy thoughts.

#26 Reg on 02.18.09 at 8:42 pm

Well, Rick Anderson is a PMSH closet adviser. Looks like he just came out of the closet then. His statements are very telling of our current PM.

I expect that PMSH will go down in history as the most partisan, most thin skinned and most untruthful PM Canada has ever had.

Regardless, if there are those that would do not wish to hear some facts, and would rather continue to view things through their rose coloured glasses, then they only have to pass by Garth’s books in the bookstores, and stay away from his blogs.

#27 john on 02.18.09 at 8:50 pm

Great comment by Mr Baril. I wonder how many million or billions the government’s dishonesty cost the believers? Well Garth no matter how they try to twist it…you are right!

#28 dodgedabullit in Alberta on 02.18.09 at 9:12 pm

Greetings: Amazing, just today my local newspaper ran an editorial titled: Reality: this is not the Great Depression II. Here is a line from the article: “And politicans and media need to steer clear of using language that widens the gulf between perception and reality even furthur”. I wish I could post the whole article, but I don’t know how, don’t beleive they are online newspaper. I fired off a lengthy rebuttal, have no idea if it will be printed. A huge amount of denial out there.

#29 North Vancouver Citizen Jr. on 02.18.09 at 9:56 pm

Is America a Failed Economy?
U.S./Post-Soviet Convergence?
The Oligarchs’ Escape Plan?

…Very cool outside the box thinking…

http://counterpunch.org/hudson02172009.html

#30 Reg on 02.18.09 at 10:04 pm

Just to add a bit of levity…see how many of these words match someone who is supposedly addressing our current economic crisis.

Here is the Washington Post’s Mensa Invitational which
once again asked readers to take any word from the
dictionary, alter it by adding, subtracting, or changing one letter, and supply a new definition.

Here are the winners:
1. Cashtration (n.): The act of buying a house, which
renders the subject financially impotent for an indefinite period of time.

2. Ignoranus: A person who’s both stupid and an
asshole.

3. Intaxicaton: Euphoria at getting a tax refund, which
lasts until you realize it was your money to start with.

4. Reintarnation: Coming back to life as a hillbilly.

5. Bozone (n): The substance surrounding stupid people that stops bright ideas from penetrating. The bozone layer, un fortunately, shows little sign of breaking down in the near future.

6. Foreploy: Any misrepresentation about yourself for the purpose of getting laid.

7. Giraffiti: Vandalism spray-painted very, very high

8. Sarchasm: The gulf between the author of sarcastic wit and the person who doesn’t get it.

9. Inoculatte: To take coffee intravenously when you are running late.

10. Osteopornosis: A degenerate disease. (This one got
extra credit.)

11. Karmageddon: It’s like, when everybody is sending
off all these really bad vibes, right? And then, like,
the Earth explodes and it’s like, a serious bummer.

12. Decafalon (n): The gruelling event of getting through the day consuming only things that are good for you.

13. Glibido: All talk and no action.

14. Dopeler Effect: The tendency of stupid ideas to seem smarter when they come at you rapidly.

15. Arachnoleptic Fit (n.): The frantic dance performed
just after you’ve accidentally walked through a
spider web.

16. Beelzebug (n): Satan in the form of a mosquito, that gets into your bedroom at three in the morning and cannot be cast out.

17. Caterpallor (n): The color you turn after finding
half a worm in the fruit you’re eating.

The Washington Post has also published the winning
submissions to its yearly contest, in which readers are asked to supply alternate meanings for common words.

And the winners are:
1. coffee, n. — the person upon whom one coughs.

2. flabbergasted, adj. — appalled by discovering how
much weight one has gained.

3. abdicate, v. — to give up all hope of ever having a
flat stomach.

4. esplanade, v. — to attempt an explanation while drunk.

5. willy-nilly, adj. — impotent.

6. negligent, adj. — absentmindedly answering the door
when wearing only a nightgown.

7. lymph, v. — to walk with a lisp.

8. gargoyle, n. — garlic-flavored mouthwash.

9. flatulence, n. — emergency vehicle that picks up
someone who has been run over by a steamroller.

10. balderdash, n. — a rapidly receding hairline..

11. testicle, n. — a humorous question on an exam.

12. rectitude, n. — the formal, dignified bearing adopted by proctologists.

13. pokemon, n. — a Rastafarian proctologist.

14. oyster, n. — a person who sprinkles his conversation with Yiddishisms.

15. Frisbeetarianism, n. — the belief that, after
death, the soul flies up onto the roof and gets stuck there.

16. circumvent, n. — an opening in the front of boxer
shorts worn by Jewish men.

#31 Michael on 02.18.09 at 10:10 pm

Garth,

I really hope to read your reaction on Obama’s home owners resque package. It was strange to hear all hype that it will help 3-4 millions of home owners and about 10 millions that require help in the same sentence. Would it accomplish anything or it is just lone sand bag in the way of spring mountain river?

#32 Conan on 02.18.09 at 10:17 pm

hmmm …. coincidence…. when are you next between book tours Garth?

#33 Investx on 02.18.09 at 10:46 pm

Rick Anderson: “But last time I checked, a weaker year was not the definition of depression. Get a grip.”

A weaker year?

Is this guy for real?

Yeah, a weaker year that’s been described as one of the worst economic crisis since the Great Depression.

#34 vicguy on 02.18.09 at 10:49 pm

We probably could have a nice day, had it not been for people like Bush, Cheney, Rumsfeld, Greenspan, Madoff etc., who managed to mess up the Planet for years to come.

#35 squidly77 on 02.18.09 at 10:54 pm

The Obama mortgage plan is a complete joke. His socialist ideas will hurt the very people he claims to help
couldnt agree more
never tamper with pandoras box

#36 TUT on 02.18.09 at 10:56 pm

Every person is entitled to believe whatever fits his/her expectations and to express those beliefs in public. Whether we want to attach a qualifying label to others’ ideas or simply draw our own conclusions is irrelevant to the truth.

Reality is not going to change to fit anyone’s wishes but some people may chose to confront it only when there is no other option left. Some others may try to be on top in advance. It does not matter, everyone will have to face whatever comes and there is no magic potion to be sure which way will work better for them.

Based on our own behavior it appears to be less than clear that we always want the best for ourselves. Rationality is not the only game in town.

#37 dd on 02.18.09 at 11:23 pm

It is hard to face facts. People do not like to be told “I told you so!”

#38 Zoronqueen on 02.18.09 at 11:39 pm

thanks to the blogger who gave me this link: http://www.chrismartenson.com/crashcourse

In my whole life, I did not know that banks were leveraged so high….

Just wondering if I should continue to hold to sell my starter home, listing price of 299K. It is realistic priced. However been getting 3 offers that did not pan out, so I’m starting to panic…. Do realtors ever practice phantom offers to their clients??

My husband does not “trust” our realtor and really wants to rent it out. But using http://www.forbes.com/fdc/rentorsell.shtml

although it is american, it tells me to sell even though I can get about 1550 per month for rent and property taxes at 1900.

Garth,
I’m not suprised you did not make a trip to oil county. It seems everyone is drinking cool aid.

Rick Anderson is even worse than this guy…
http://www.edmontonjournal.com/news/Garth+Turner+lists+surviving+financial+times/1187742/story.html

#39 Bailing in B.C. on 02.18.09 at 11:50 pm

#14 Reg

Most excellent!

Woe betide the next stupid jerk I come across. I’m just itching to use the word “Ingnoranus” in everyday conversation.

#40 nonplused on 02.18.09 at 11:53 pm

It doesn’t surprise me. The MSM & Government Propaganda machines have been trying to keep the plebes placated as for several years now. If and when the public in general gets wind of what’s probably unavoidable at this point, the “100 things to disappear first” will be gone by noon tomorrow and then the riots begin. So they have to say those things, as long as they can. They don’t know what else to do.

I think that’s the whole idea behind the “weekly rolling bailout plan”. Buy more time before the public panics and the real crisis begins. At that point, sure we will still have deflation in assets, but try and get a can of soup let alone a solar panel. Prices for those sorts of things will soar. IMHO that is why gold stubbornly refuses to deflate with everything else. Some people are buying insurance, and it’s one of the few places where you can go and be mostly safe.

It’s an interesting thing, buying gold coins. Sure a few as collectables one can easily understand. But now that the mints can’t keep up with demand something else is happening. I think that thing is that some people would rather take their chances with thieves than with the banking system. And the number of those people is increasing, or at least their allocation to thief exposure is increasing compared to their bankster exposure.

#41 Happy Renter in North Van on 02.19.09 at 12:19 am

Garth, the one good thing I can say about you is this: you haven’t changed your outlook over the past year… Whereas Mark Carney, Jim Flaherty, most of the Bank’s “Economists” and the Prime Minister have had to constantly revise their estimates downwards…

Just remember a year ago… “Canada was different”, we were going to “decouple” from the United States, “Canada’s economy was going to “slow down, but not go into recession” and my favourite… “The Conservative Government will never go into deficit again”… They have been shown to be Polyannas… fools…

#42 David on 02.19.09 at 12:28 am

Rick Anderson should write his own best seller about flipping negative equity 40 year mortgages. Families that bought into peak bubble home prices of only have 37 years left to pay off that already crumbling McMansion. Not much of a problem for folks experiencing peak earnings in their early 80’s.

#43 Got A Watch on 02.19.09 at 12:32 am

Garth, keep talking the plain truth to the delusional.

You can tell you are getting to them. If you keep this up, you might breach their high walled fortress of denial.

If Harper is a trained economist, may god help us all. I know he went to school for it. The same kinds of schools where they teach Keynesian and Friedmanite clap trap and call it “economics”.

I am losing patience with the delusional. I have been reading about this crisis for years on Blogs who managed to call just about every twist and turn correctly years in advance.

There is no mystery here about what has happened or why, except to those who have a vested interest in denying there is any problem at all.

#44 Got A Watch on 02.19.09 at 12:57 am

Gold, silver and platinum are not rising in value.

The value of the paper money they are priced in is falling in value.

Record highs recently in almost every currency lately but the US $ and JAP Yen, the globes two strongest currencies of late. But still well up in price against those 2.

Right now the big rush to gold is being driven by pure fear that the value of paper money may decline severely.

This run up will likely correct in the Spring as usual, if you study the seasonal patterns. The best time to buy precious metals in most years is around the 3rd week of August, before the usual Fall run up, then sell in April or May.

If you want to buy physical gold & silver in Canada, go to ScotiaBank, they own a metals dealer, Scotia Mocatta, they will ship coins/bars to any local bank branch for you to pick up.

I trade in the silver and gold certificates at Royal Bank Direct Investing, no fees or charges of any kind except low buy/sell commission. To buy/sell 10K oz silver costs me $225 total. To buy/sell 100 oz gold costs me $85 total. Minimum order is 100 0z silver or 10 oz gold I think.

The only drawback there is it is priced based on the spot NYMEX NY Price, they have to contact the trading desk in NY to buy/sell, so it can only be done between 8:30 AM – 1:30 PM EST (NY closes at 2:30 PM, but they make you get your order in by 1:30 PM EST). Because of this, you have to phone in the order, and you can’t use the internet trading platform to trade these particular assets. They do give you the option at time of buy/sell of free currency conversion, the certificates are supposed to be denominated in US $, as it is a NY US $ trade, but they will let you hold them valued in the equivalent amount of CDN $ if you want.

Yes, I know it’s paper metal, but you will only not get paid if the Royal Bank folds, which I think is unlikely, the Federal Government would step in to back them. Employees there have told me the precious metals certificates are “Federally Guaranteed” anyway, but I think they just mean standard investor insurance of $1M for all Canadian Investment accounts. Royal Bank agents have given me various stories, they say they have no prospectus as such for the certificates.

If you call the entire financial system collapsing a risk, I guess it is. If I was that worried I guess I would have to bury the physical in my backyard. But for trading at spot prices, it is cost effective, if cumbersome, and the best deal I could find all around. Also easy to transfer money in/out to any Royal Bank account if you need to.

#45 Jeff Smith on 02.19.09 at 1:05 am

Oh my god! That is one scary video. If the US devalues their currency then we are screwed here in Canada too because so much of our money are invested in the US indirectly (i.e. RRSP mutual funds etc). And we will get our returns in worthless value (i.e. dividends). Looks scarier by the day.

#13 Future Expatriate on 02.18.09 at 7:12 pm

OK Garth… time to really start “scaremongering” and climb on the gold bandwagon and really show the cretins… no need to cover their inept and highly corrupt asses anymore.

Speaking of scaremongering, how can currency “creation” like this NOT lead to hyperinflation?

The Crash of 2009 is Coming To YOU

#46 Another Albertan on 02.19.09 at 1:15 am

People never want to live in the present; People live in the rearview mirror because it’s safer, they’ve been there before, they feel comfortable. Anyone who looks at the present is a threat, a nuisance in the extremist degree. The present is an area that people have always avoided throughout human history – the utopias of mankind are all rearview-mirror images of the preceding age.

–Marshall McLuhan, 1967

#47 Mike (authentic) on 02.19.09 at 2:06 am

I’m sure many share the same opinion here, but I’ll put my 2 cents in for supporting information and education; it is what I do everyday to help millions of riders and in turn they make their own decisions based on that and become better riders in the end. :)

The vast majority of people put information out there because it benefits them or their business; few put information out there just to help others. It’s good to see Garth in the latter group.

Mike

#48 Mike (authentic) on 02.19.09 at 2:12 am

GOLD

CNBC said it best this morning.

To believe in gold and to purchase it is a Defensive position because you believe the dollar will be worthless and collapse.

But you sell gold in dollars to dispose of it. The same dollars the gold bug believes are worthless.

Gold holds no Intrinsic value* at all.

*http://en.wikipedia.org/wiki/Intrinsic_value_(finance)

Mike

#49 mikef on 02.19.09 at 5:18 am

Everyone is dumping on Rick.

I ask you though, would he be still on the mainstream
media if he wasn’t optimistic?

Listen to Glenn Beck on the latter part of this great video

[url]www.youtube.com/watch?v=sFtePsHsUkA[/url]

#50 David Bakody on 02.19.09 at 6:20 am

From this morning Washing Post:

Central bank projects “unusually gradual and prolonged” recovery, reflecting a sense of gloom.

Neil Irwin and Annys Shin

From the New York Times …. ( Hello the rich!)

UBS, Switzerland’s largest bank, has agreed to divulge the names of well-heeled Americans suspected of using offshore accounts at the bank to evade taxes.

From our Globe and Mail …. (Taxpayer money to pay their back taxes) …. hello, hello

Bailout talks hit bump as taxman seeks $500-million from Chrysler

Now as far as the doom and gloom CNN had a person on yesterday afternoon stating ….. Food Shortages and Power Outages are more of a threat to American than Terrorism …. with many supports from “Twitter” Love to see a picture of Rick Anderson’s down town Calgary Ranch ….. could he have read After the Crash ? Hello any person who publicly speaks out would don’t you think? I remember the wonderful Barbara Walters once interviewed Margaret Thatcher …. about her book … and she failed to read it first ( only glanced ) Ms Thatcher said to her , “You didn’t read it did you or you would have know that! Live on National TV …… The Iron Lady Indeed! so I would suggest most educated people understand there are two sides of a coin. Now to go a National Newspaper and have your words printed without a full understanding of the subject would not be wise ….. then again what understanding does any past or present Reformer have of Global Warming and Climate Change all couched in to-days Economic Crisis.

#51 Lana on 02.19.09 at 7:13 am

#8 Jeff Smith on 02.18.09 at 6:50 pm

Wow! Now they are saying the GM bailout could cost $130 billion. That’s like blackmail in disguise.
————————-
#30 Reg on 02.18.09 at 10:04 pm

Add to the list: blackbail – definition anyone?

#52 Al on 02.19.09 at 7:44 am

“All of these idiots, you can not “TALK” your way out off or into a recession.”

Kitchener1, I have to disagree. You can talk your way into a recession very easily. Here’s some lines:

“Housing always goes up.”

“Profits don’t matter.”

“It’s different this time.”

“These mortgage backed securities aren’t risky because we repackaged them.”

“Leverage is your friend.”

etc, etc, etc.

#53 john on 02.19.09 at 7:50 am

“Beware the merchants of fear”
“Turns out there are good ways to profit from hard times. One way is to publish books and hold seminars about how grim it is, as Garth Turner is doing.”
——— Honesty and reality certainly take a front seat to lies and deception…our biggest fear is a leadership lacking the basic courage to be honest and the ability to govern without deception—beware the merchants of deception!

#54 George Popovic on 02.19.09 at 7:58 am

How to create employment in the US……

Hire 10,000 unemployed Wall Street office staff who made less than 50k per year, to investigate all those who made in excess of one million a year for the past 3 years.

This would be a typical IRS type of audit looking for tax evasion as well as sleazy tactics of mortgage brokers, investement dealers and the rest of the folks responsible for this financial tragedy.

Claw back all gains obtained from these illegal activites and use this money to pay for the bailouts.

Oh, and by the way, set up a TV series showing live prosecution of these rascals as they are convicted and sentenced to work in various minimum wage jobs assuming any can be found.

#55 Mike (authentic) on 02.19.09 at 8:08 am

Got A Watch : Gold, silver and platinum are not rising in value. The value of the paper money they are priced in is falling in value.”

This would be why Gold in a normal situation increases in value. But this is not the case at this time. The USD is actually getting stronger and is the world currency everyone is buying right now for safety.

For gold to go UP durring a time when the USD is growing stronger it MUST be a bubble (of fear) and gold will fall because it’s being artificially inflated at this time. OR the other side of the coin is the USD is a bubble and gold is priced right.

Hedge your bet and get out of BOTH.

Paper gold is next to useless (barter or investment) because people hold physical gold incase a currency crashes and they can use the physical stuff to barter with. You can’t barter with paper gold.

Mike

#56 Mike (authentic) on 02.19.09 at 8:23 am

US Job Claims out:

5,000,000 workers now on EI

627,000 new EI claims in past 4 weeks.

A moving average of 619,000 new EI claims per 4 weeks.

These numbers do not take into account those whose EI has run out, who do not qualify for EI (eg, self-employed) or those who have not claimed yet.

Tough times.

Mike

#57 Sail1 on 02.19.09 at 8:58 am

Al Demings, a Re/Max agent who used to be spokesman for the provincial real estate association, said Turner has never been especially fond of real estate as an investment, so he urges people to take his comments with a grain of salt. He agreed December and even the first part of January was terrible as homebuyers stood on the sidelines.

But in the last three weeks, the phone has started to ring again, he said, and people are looking at houses again. They’re cautious, but they are buying.

“When it is all said and done, the sales drop in December won’t be statistically relevant,” Demings predicted.

On the plus side, Turner suggested rising oil prices are inevitable and should provide investment opportunities. As Canada will never ever let one of its banks go under, he said there are opportunities in underpriced bank stocks too.

( [email protected])

Proctor’s Piece is an occasional column by Business Editor Steve Proctor

This joker has only got a wind of this now! Its been clear to me for a while that Garth is not crazy about real estate. Any individual who has half a brain will absorb the information he or she needs from the books or the blog and use to your advantage. Even if Garth’s predictions are 50% correct any real estate investor will be far better off.

#58 Marie on 02.19.09 at 9:03 am

#22 POL-CAN
Right on!

What Garth is doing is the job that our government and our financial institutions should do if there was any honesty and concern for the public left in them. Its not when the buidling is ablazed that its time to tell people to make to the exits, its when you smell the smoke. Its no great fun to head outside if the weather is miserable but its better than the alternative.

North Vancouver,
I like Micheal Hudson a lot, I’ve been reading his stuff for a while and found him very enlightening for folks like me without a background in economy. He makes sense. He has in on website where you can access more of his articles.

#59 North Vancouver Citizen Jr. on 02.19.09 at 9:07 am

So what is safe in this environment?

The day is fast approaching when gold will be exposed for what it is i.e. an antiquated metal from ancient times that has little relevance or use in the 21st century other than for the vain among us who feel emboldened with a gold chain about one’s neck or wrist. When this day of reckoning happens gold will plunge 50% in short order before falling 75%+ as it settles in to what it is actually worth.

Three things are safe, imo….

1/

Life saving or life extending/enhancing products that can only be found in the health care sector often of which start out as small unknowns in the biotech sector. Finding the few winners is the hard part and why diversity in the sector is required as ‘all eggs in one basket’ can lead to disaster should one’s company be tripped up along the way as all to often happens. As the old saying goes ‘if you have your health you have everything’.

2/

The U.S. Dollar

3/

Real Estate ownership in “Vancouver Proper”, the next Financial/Trade/Leisure Capital of North America.

What you skeptics don’t take into consideration are the views of Non resident Canadians…..from Europe to the U.S. to Asia…they see Vancouver proper in a completely different light than you.

#60 Happy Renter in North Van on 02.19.09 at 9:29 am

North Vancouver Citizen Jr…

Vancouver MAY become the Financial/Trade/Leisure Capital of North America someday…

but it is NOW the murder/gang capital of Canada… bar none…

#61 Cendrine on 02.19.09 at 10:10 am

I submit the following link for your consideration:

http://www.leap2020.eu/GEAB-N-32-is-available!-4th-quarter-2009-Beginning-of-Phase-5-of-the-global-systemic-crisis-phase-of-global-geopolitical_a2805.html

This has me shaking in my boots….

BTW Garth, I attended the seminar in Listowel last night with reluctant husband in tow. Your level headed presentation won over my DH who appreciated your humour and self-deprecation. (Great photo of the gas prices showing LOL, OMG and WTF for the different grades of gas!). As other poster/ attendees noted, you came across with less doom and gloom than on this blog. I came away more encouraged regarding opportunites for investing and for change. Thanks for your explanation that hyperinflation mainly occurs as a result of political decision. It was an excellent presentation – thank you for coming out on such an awful evening!

What is your opinion regarding the GEAB statements that the USD will devalue this summer and other political dislocations?
Regarding my own situation, if I sell my house now and purchase a smaller home for cash, is this still a mistake in a market with falling house prices? It seems to me that having a home mortgage-free is still better than renting.

#62 Drew on 02.19.09 at 10:26 am

It’s people like Rick Anderson, who would prefer that we not speak of reality and talk our way back into prosperous times that scare me. These people are real, as is King Stephen The Follower. That picture is not.

#63 Contractor on 02.19.09 at 10:31 am

Hey Rhino,

Thanks for the tip on the book. I put it on my chapters wish list so I wouldn’t forget it. I’ll buy it eventually (sadly, my local library doesn’t have that one). In the meantime, my library does have one of Bridges’ other books, Transitions, which I just put on hold and look forward to reading.

Cheers!

#64 Kestral on 02.19.09 at 10:40 am

Don’t sweat it Garth, history will look back and judge Rick Anderson a fool, just like in the fall of 1929, when economist Irving Fisher announced that “stock prices have reached what looks like a permanent plateau.”

The only difference is, Rick Anderson is a nobody and no one will care.

#65 Got A Watch on 02.19.09 at 10:56 am

Mike(authentic) – Please. I have made a living trading precious metals and stocks and stock options full-time for the last 8 years.

The key word is “trade”, I go in and out whenever it seems profitable, and go short for down trends. My total portfolio value is up a large multiple from where I started, and this year has been very good so far. I trade, and do not hold any long-term investments.

This is deflation, so paper money is actually rising against the price of most other assets, except precious metals right now. Cash is king in deflation. Precious metals are rising on huge investment demand, from people who are concerned the value of their local currencies will plummet. It is a flight to quality, and will continue until the global economic system stabilizes, which may be several years yet. At that point inflation will loom, and precious metals will soar even higher, as they are a traditional inflation hedge.

With all due respect, I think you have no idea of what you are talking about. My trading account balances strongly disagree with you.

If the situation changes, I will alter my trading plan. Will you be able to alter your pre-conceived notions?

#66 Got A Watch on 02.19.09 at 11:03 am

I really get a good laugh from North Vancouver Citizen Jr.’s comments.

On the one hand, he links to Blog entries from Karl Denninger at Market Ticker, a deflationist uber-bear, or the UK’s Ambrose Evans Pritchard, who predicts the global economy will collapse soon.

Then he proceeds to tell us how Vancouver is immune to all this.

Bi-polar and delusional, to the extreme.

Why don’t you e-mail Karl and ask him what he thinks of Vancouver, the B.C. economy and the real estate markets there.

I have been a regular reader over at Market Ticker Blog and Forums since their inception in the early summer of ‘07, and I am fairly certain what he would tell you, having had numerous e-mail exchanges with him, and participated in numerous debates on the Forum there.

He would say, with his usual bluntness, something along the lines of that “You are a delusional bubble-head. Vancouver is going to crater into a smoking hole, and real estate there will probably bottom at -70% from the peak, just like your muse, California. About 3X average income = average house, so if average income is $60K, average house = $180K”

Or he might just shorten it to “The kool-aid is strong with that one”.

The idea that somehow Vancouver will escape a global depression is laughable. In fact, Vancouver is in for more hurting than many other areas, due to the “irrational exuberance” and the fact that it is now 2 years behind the leading edge of this contraction. The higher you get, the farther you fall. The later you are to the party, the worse it will be.

Almost every argument you have attempted to make on this issue could be summarised as “Vancouver is Different!”, which is absurd.

Oh well, at least I can get a good laugh now and then here.

#67 dodgedabullit in Alberta on 02.19.09 at 11:03 am

Greetings: Garth, will you be doing a story on President Obamas’ visit to Ottawa today??

#68 smwhite on 02.19.09 at 11:04 am

#54 Mike (authentic)

Is this Gordon Brown, seriously? Gold holds no value? More of the same neo-keynesian argument… CNBC is the same network in 2006 telling people to buy up financials and no housing bubble in the USA? In fact, CNBC stopped asking Peter Schiff to come on the network until late last year, because they didn’t like his message, about housing, financials or gold.

So if gold is useless(except for holding the value of money/currency) why use granite and marble when you can use gold and silver. I mean, if a granite counter top will bring in the RE buyers, why not use gold then Mike?

(1.) Because the intrinsic value lies with supply and demand. And although the industrial uses will diminish as it will for silver, PGMs and base metals for industry, gold is becoming harder and harder to pull out of the ground.

(2.) Futures contracts? Ask Barrick what they’re selling their futures for? They ain’t anymore, they are selling at spot. To quote Barrick’s chairman Peter Munk:

“My personal feeling is that with the rescue packages calling for trillions, not billions … the value of the [US]
currency has to go down, if they(China) decide to diversify, we assume into gold, then we start to talk about a trebling or quadrupling of the gold price,” he said. “It could be followed by Russia or Kuwait.

“I don’t think it’s likely, but it’s more likely. I would not have said it two years ago — I’m not a gold bug — but
it’s more likely than it was two years ago.”

He added that his company did not now hedge its output — meaning use derivatives to insure against a fall in price — and relied on the price climbing.

“It would be dumb to hedge,” Mr Munk said.

(3.) Gold stock P/Es are a leading indicator, the majority of non gold companies have been bashed and have attractive P/Es in the 7 – 10 range, but yet gold miners are holding P/Es at levels between 20 – 60? Is the market a leading indicator or is this the top of a bubble?

(4.) Historic prices:

1930 to 1970 – $35 an ounce
1980 peak – $700

20 x increase in ten years

2000 low – $265 (*Or to server your opinion more, $275 in 2002)
2009 peak – $980

3.5 increase in 9 years
*3.5 increase in 7 years

(5.) Finally, gold is accumulated, not consumed

I believe that there will be a bubble in gold, but it isn’t close at this point. Many baby boomers got burnt badly during the last run and I understand the skepticism. But gold is a more valuable “world currency” today then the US dollar.

Read Jonathon’s post yesterday, #106 at 02.19.09 at 8:45 am. Its a great debate,

BTW, the purest silver and gold coins, minted by our very own Canadian mint.

http://en.wikipedia.org/wiki/File:Maple_Leaf_99999_Gold_2008_Limited_ReverseSide.jpg

As bad as things are, and will yet become, the economy will recover, yielding a lot of people with golden doorstops. Will they never learn? — Garth

#69 Mike (authentic) on 02.19.09 at 11:16 am

Got A Watch “With all due respect, I think you have no idea of what you are talking about. My trading account balances strongly disagree with you.” I have made a living trading precious metals and stocks and stock options full-time for the last 8 years. My trading account balances strongly disagree with you.”

You can’t say “with all due respect” as a lead in and then critise someone you “think” is wrong; where did you learn to communicate?

As to you being a trader for the last 8 years, what does it matter. Unless you have a time machine, you maybe wrong as well. In fact, the majority of traders, economists and analysis WERE wrong thus far, that puts you at a disadvantage due to your occupational experiences. Don’t they call day-traders the bottom feeders in your business?

As for “My trading account balances strongly disagree with you”, do you know how the comes across? It sounds like you are trying to say you have a bigger prick than us all.

You may have some intelligence, but not much wisdom.

Mike

#70 smwhite on 02.19.09 at 11:18 am

Don’t know if anyone has seen this:

PBS – Inside the Meltdown

http://www.pbs.org/wgbh/pages/frontline/meltdown/view/

Garth, that target on your back is getting bigger and bigger…

#71 TS on 02.19.09 at 11:28 am

Here is a web link from another author who is predicting a significant economic downturn. He does not see stock markets recovering until 2013.

http://news.sympatico.msn.ctv.ca/abc/home/contentposting.aspx?isfa=1&feedname=CTV-TOPSTORIES_V3&showbyline=True&date=true&newsitemid=CTVNews%2f20090219%2fgreat_depression

The biggest issue I see in all of this is that no one really knows what is going to happen. No one. Period.

We have never faced this kind of crisis before, nor have we had so many people in the demographic bubble of the baby boomers. The impacts that the boomer generation have eclipsed those of any other previous generation.

My wife and I have certainly tempered our expectations in terms of growth in our RSP investments. Over the next 2 years 4% to 5% would seem to be a good goal. Our previous ability to average over 7% annual growth is not realistic given the overall economic climate.

Lower growth in our RSPs also means more planned years of working….70 or 71 now looks probable. Not too bad actually since I love what I do.

#72 RJAG2034 on 02.19.09 at 11:29 am

Gotta chuckle at guys like that. He should counter your doom and gloom with a book and speaking tour letting everyone know how good things are right now. Lets see how many folks turn up for more than the comedic value!!!!

Perhaps he needs to hear…..”THE TRUTH SHALL SET YOU FREE”

#73 smwhite on 02.19.09 at 11:29 am

Gold, silver and platinum are not rising in value. The value of the paper money they are priced in is falling in value.”

Commodites are valued/traded in US dollars, the US dollar has gone up 20% since the start of the market crash. This makes no sense. Or are you being “Mr. Opposite” today?

#59 Happy Renter in North Van

Whats more relaxing then dodging bullets or being coerced by crackheads and pan handlers?

#74 Rhino on 02.19.09 at 11:31 am

As previously said relating to precious metals, my investment into Sterling is a very good investment!

All antique cutlery and dinner service – beautiful on the table next to our antique china.

Appreciating in value as the pattern becomes scarce, and at worst it can be melted down into base metal if that market collapses.

Almost the perfect hedge!

Can’t afford gold plates or goblets… yet. Besides, the two would clash on the table, and I find metal goblets taint the taste of fine wine!

#75 Mike (authentic) on 02.19.09 at 11:34 am

smwhite: (4.) Historic prices:

1930 to 1970 – $35 an ounce
1980 peak – $700

20 x increase in ten years”

Do you know WHY it was $35 an ounce from 1930-1970? Do you know WHY it wasn’t $35 after 1970?

Study some history and learn.

The more I read on here and other blogs, the more it’s in the news, the more people talk about it, it concludes

“Now is a great time to buy ____”
“Don’t be priced out, buy ____ now!”
“____ is going up so fast, better buy more!”

___ = oil, houses, gold, tulips….

Can anyone see history repeating itself here? Anyone?

Mike

For you, here is 200 years of gold prices… Do you SEE the bubble? Do you see the REAL price of gold ovr 200 years? And do you think in 200 years we haven’t had 4 depressions? We have, 1837, 1873, 1929 and today.

2000 $272
1995 $386
1990 $424
1985 $354
1980 $641
1975 $151
1970 $38
1965 $36
1960 $37
1955 $35
1950 $40
1945 $37
1940 $35
1935 $35
1930 $21
1925 $21
1920 $21
1915 $21
1910 $21
1905 $21
1900 $21
1895 $21
1890 $21
1885 $21
1880 $21
1875 $23
1870 $23
1865 $30
1860 $21
1855 $21
1850 $21
1845 $21
1840 $21
1835 $19
1830 $19
1825 $19
1820 $22
1815 $22
1810 $19
1805 $19
1800 $19

Buy gold if you want, buy sea-shells or tulips from Holland (I hear they are going up in value fast!), just make an educated decision and not a mod-mentality rush to own it.

Mike

#76 David Bakody on 02.19.09 at 11:41 am

60 Cendrine on 02.19.09 at 10:10 am

Having a home mortgage free is good any time and always has been ….. renting is fine for the new check out generation (retiree’s) unless they live too long and then again not shoveling snow and falling off ladders doing all that house stuff might just add to long life … Everyone is different, my wife of 40 yrs is a wonderful well spoken mother and grandmother but she has never cut the grass or hung a painting …… so I have told my children should I pass on “Sell the house quick” get her a nice apartment with underground parking, a new small car, and set up her finances …… Far too many people hold on to real estate ( even bigger than they need) and pay through the nose for repairs and forget to live. More and more newer apartments are being built for senior boomers with both the phyisical and social needs in mind …… so I would say sell the big one …. get a smaller one and keep an open mind for yet another move to nice clean safe apartment.

#77 TS on 02.19.09 at 11:41 am

Rick Anderson seems to be just another shill for Harper. Garth is merely using logic and experience to put together his analysis of what may transpire in the future. I value Garth’s insights and have found them very useful over the past couple of years….and taking action on these insights has saved our RSPs well over $100,000 in capital losses since the summer of 2007.

If I would have listened to our economist-wanna-be Prime Minister and our Pollyanna finance minister Dim Jim, I would have invested in the stock market last fall in the midst of the election campaign and lost 11% to 14% of my money, depending on when I got into the market.

Ultimately each of us is fully responsible to what happens to our investments. It pays to be informed and when it comes to investing…emotions are best left on the doorstep.

#78 AM on 02.19.09 at 11:53 am

Author predicts second Great Depression on the way

“The global economy is going to get worse before it gets better, according to the author of a new book that predicts we’re on the cusp of a second Great Depression.”

Something for Rick Anderson to think about…and it didn’t come from Garth.

http://tinyurl.com/czkqkc

#79 Jeannette on 02.19.09 at 12:18 pm

I hope Canada doesn’t come up with a mortgage “bailout” plan. From what we see in the media any plan Obama has the left wing loonies want us to copy it.

#80 kc on 02.19.09 at 12:33 pm

I have to laugh everytime I see a comment then a link to “WIKI” It is a comparison that if it is written on WIKI it has to be 100% true. When in fact the owners of wiki were caught from a guy claiming to have 3 PHD’s was submitting false information and was caught in the fruad.

It is funny when real libraries across canada are pleading with governments for funding to be able to keep the doors open so that people “old fashioned” readers can get signout books.

#81 Future Expatriate on 02.19.09 at 12:35 pm

#19 – The Vegas market is in a very slight uptick, but it will probably turn out to be a dead cat bounce once the commercial real estate crash hits. It’s going to be impossible to lure even the greatest of fools in to purchase a home at any price once all the malls and mini-malls and industrial complexes are sitting empty by the end of this year.

And rich vultures do not buy homes to live in either, and fewer and fewer renters can be found every day, so vast stretches of Vegas suburbia are still sitting vacant and abandoned and will remain so for the foreseeable future.

I think the US market is only about half way to the bottom. Depending on how long the Depression lasts, it could only be a third of the way down.

#82 Harold #3 on 02.19.09 at 12:45 pm

I scare Rick Anderson, former Reform Party chief strategy whiz and now a Stephen Harper closet advisor.

Well Garth, it looks like the Harper ‘worry barometer’ is rising, you getting ‘mentioned in dispatches . Good for you, I hope!
;)

(When the Afghanistan thing first got serious Harper attention, I sent every MP a Poster about that USA petroleum induced event, showing wild pigs devouring a man. The response was surprisingly immediate (12 hours) from Harpers office, curt and testy, indicated some worry I think.)

#83 Got A Watch on 02.19.09 at 1:12 pm

Mike (authentic) – I say ‘with all due respect’ when I in fact think you aren’t due any. It is sarcasm.

Your comments have convinced me that this is true.

“As for “My trading account balances strongly disagree with you”,” – I really don’t care what your opinion of my statement is. It is a fact, regardless of your opinion. The “tone” has little to do with the facts, just your perceptions. Maybe you are focused on your sexual organs, I have no idea.

You seem to read only every second line of my comments, or just the parts you want to.

I will be making some money regardless of market bull or bear, inf or de flation, all that is required is volatility. I can change my trading plan in a minute, if the landscape changes. When the economy stabilizes, I will go back to longer-term investing, after the stock markets find a real bottom, which is not close yet IMHO.

The longest I hold anything right now(except a core position of physical precious metals I bought in 2004) is a few days, or as long as the trend I am riding lasts. Then I sell and do something else. Most of the time, I am in cash, waiting for a suitable setup.

As a trader, you are only “wrong” when you lose money. By using strict money management I try to limit the losses and let the winners run. If I was “wrong”, I would have failed at it 7 1/2 years ago. There are many different ways to trade, and many different markets. Each to his own, I do what works for me.

You sound like a guy who has never traded, but has many strong opinions about it never the less. Good luck with that.

#84 Got A Watch on 02.19.09 at 1:36 pm

smwhite – another guy who only reads part of the comment, apparently.

IF you read the paragraph directly below the one you quoted, it says “Record highs recently in almost every currency lately but the US $ and JAP Yen, the globes two strongest currencies of late. But still well up in price against those 2.”

Gold has just set a record high in CDN $ and many other currencies. If the Yen and US $ were not so high against other currencies (in demand as safe havens and for position unwinding), gold would most likely be at record highs there too. It is close, and may reach a new US $ high soon.

In a time of deflation, cash is king. Right now precious metals are in demand as safe havens and a store of value in a time of crisis against falling fiat paper currencies. Since we have not reached the inflationary part of this crisis yet, the prospects look pretty good to me that precious metals will continue to hold value very well for a while yet. They will perform even better in an inflationary environment, one day.

I am not sure what is so objectionable here. If you don’t want to own precious metals, don’t buy them.

I am not sure what you have against market traders either, they should name a new office Block in Ottawa after me for all the taxes I have paid this decade. I got into trading myself because during the dot.bomb debacle I had a “broker” who did his best to make me broke. I was busy earning money to give it to him to lose, and he did, about -60%. I was not financially sophisticated, I let him talk me into “hold on, it will come back”. Fool me once. I was forced to take over my own investing.

btw, I am not even a goldbug. I just trade it to make money, the same way I do stocks or stock options. I currently hold positions in gold and silver that are up roughly 40% since I bought in, as priced in US $, even more if you convert it back to CDN $. I will sell them before June at the latest, and book the profit. I usually take the Summer off, and with Christmas holidays, and not trading much during OpEx weeks, I am in cash/T-bills about 75% of the days of the year. Even when I am trading, I am mostly waiting for a setup to come to me.

Real goldbugs only buy and almost never sell it.

#85 Kestral on 02.19.09 at 2:10 pm

To #64 Got A Watch

Great post about cash being king, and congratulations on your well-deserved success on your trading. I have been all cash since getting stopped out in July 2008. I’m a technical position trader and when I got stopped out, I waited for the technicals to firm up again to enter back in, and they never did. The fact that I’ve been all cash (and therefore up on my accounts earning interest) also says that Mike (Authentic) is wrong.

The only two “stocks” I looked at were HOD.TO (double short ETF on oil) and the double long/short on the TSX. I did make a small profit trading HXU.TO on a short lived bounce, but I would have been better off being a little less cheap in entering my bid for HOD at sub-$10 prices (I missed the bid by a few cents as the ETF ran away and never looked back).

For now I’m staying all cash, until either the market firms up, or I get a good entry point into one of the bear ETFs.

#86 smwhite on 02.19.09 at 2:44 pm

#83 Got A Watch

I read it all, quite enjoyed it actually but recently could be yesterday, last week or last year, so you’ll have to be a little more specific next time, for the likes of I, ask Mike (authentic), I’m slow.

“Gold, silver and platinum are not rising in value. The value of the paper money they are priced in is falling in value.”

Arguing over the same thing, inflation. Then again there is a very open ongoing debate on this blog about deflation versus inflation. Obvious where I pitch my tent.

#74 Mike (authentic)

Do you know WHY it was $35 an ounce from 1930-1970? Do you know WHY it wasn’t $35 after 1970?

Study some history and learn.

Study some history, sage advice from the self proclaimed wise man. What does the gold standard have to do with your bubble banter? All your demonstrating is that the gold price has been keep in check via the gold standard. Those that have been accumulating gold and PGM miners since 9/11 have nothing to worry about.

2009 $950 – DOW @ 7500 – 8 ounces of gold
2005 $400 – DOW @ 10500 – 25 ounces of gold
2000 $272 – DOW @ 11900 – 43 ounce of gold
1995 $386 – DOW @ 3850 – 10 ounces of gold
1990 $424 – DOW @ 2600 – 7 ounces of gold
1985 $354 – DOW @ 1290 – 3.5 ounces of gold
1980 $641 – DOW @ 875 – 1.5 ounces of gold
1975 $151 – DOW @ 700 – 5 ounces of gold
1970 $38 – DOW @ 750 – 20 ounce of gold

When it hits one to one, even two to one, shit, 5 to one, then start screaming bubble.

If you want to get creative compare the history of prices of gold to housing, cars, TVs, beer, bread, TULIPS prices, whatever, the point is, precious metals protect against inflation. And we haven’t hit full stride, yet.

http://goldnews.bullionvault.com/Goldbug/gold_price/gold_prices_could_go_above_2500_per_oz_19035364

#87 Got A Watch on 02.19.09 at 4:28 pm

guys, thx for responses. I am not making personal attacks here, I am just an aggressive sort. Which is probably why I do OK at trading, to me it is war on the electronic battlefield, and it is hand to hand in the trenches daily.

As I said, being “wrong” is when you lose money. I am right about 60% of the time, give or take. But I limit the losses and let the winning trades run. It is not rocket science, but it does take discipline.

I feel I have done OK over the years at it, and I am still here. I have more capital then when I started back then, and have withdrawn living expenses and paid taxes all those years too.

They say it takes 10 years and losing $100K to make a good trader, and I would say that is about right. It is by nature a solitary job, I spend 10+ hours a day on market days just reading economics and trading related web sites and following the markets., down from the 16+ hours I used to spend. I force myself to shut off the PC and walk away after 10 hours or so. My trading has improved quite a bit in the last 2 years, and I feel pretty confident that I can continue to make profit.

It is not as easy as it sounds. I have no pension or retirement plan, other than what I do myself. I get no paycheck, the only time I have money is when I take some from the trading accounts. I have no benefits like medical or dental plan etc. My accounts are marked-to-market every minute, and I can’t hide the losses if they occur. I will get no bailout plan from the Government, good thing I don’t need one. I pay a lot of taxes when I do make money.

Let’s move up to the next thread.

#88 Got A Watch on 02.19.09 at 4:43 pm

@Kestral – thx for reply. I only day-trade the 2 X and 3 X Ultra’s occasionally, as holding for longer than the current trend runs (a few days max) will kill you on the volatility.

If the market chops sideways for a while, you can lose money constantly, as the daily multiplier effect will erode your capital.

The only way to play them longer time frames with any hope of success, AFAIK, is to short (buy puts) on both sides of the Ultra ETF, i.e. short BOTH the Up and the Down Fund that reflect a particular market. Do not go long, and do not buy call options on these, as a general rule., unless your time frame is very short. There can be exceptions, but they are rare.

You can Google various key-words there like ‘Ultra ETF’ + ‘long term hold’ etc., and you can read many discussions of why holding these types of ETF for long is a bad idea.

I can give you links to many great trading sites for further reading, I have 3 MB of bookmarks, if you are interested.

Perhaps the best place to start for an independent Canadian trader is Bill Cara Trading Community where you can get a vast amount of useful free information and advice. The Blog there has some of the best traders around, and they will help you if you ask.

In general I have found it is better to specialize in a couple types of trades and markets, and follow them closely. I rarely have more than 4 positions open at any 1 time. Do what works for you

#89 gold bug on 02.19.09 at 5:32 pm

I’m with Dan Baril. If anything, Garth is under-estimating the carnage.

However, the rest of Rick Anderson’s piece is correct: why are we allowing private companies to raid the government’s coffers? If the Failed 3 can’t make money selling vehicles, they should disappear.

#90 Kestral on 02.19.09 at 10:54 pm

To #87 Got A Watch

Thanks for your advice on the ultra ETFs. My trading friends on on the “It Is What It Is” board The Motley Fool gave similar advice on that after someone got burned holding one of them. I pasted my email so if you click on my name, it should give you my email address, would love to learn some more about your trading.

#91 Mike (authentic) on 02.20.09 at 2:26 am

86 Got A Watch “…making personal attacks here, I am just an aggressive sort. I am right about 60% of the time, give or take.”

Got a Clue?

Your so closed minded (can’t be good for your “profession”) that having a discussion with you is like telling a home seller that prices are dropping, they will argue blue in the face that “Their house is different” because they own RE, the same as you owning stocks/gold. You tell people “it’s a great time to buy” because you hold that asset yourself.

Got a watch? Looks like you need one; as you can’t tell the time, and your missing your wake up call.

Mike

#92 Got A Watch on 02.20.09 at 10:29 am

Mike ( authentic) – You still have not made a coherent point that I can see that in any way refutes what I have been saying.

I started this argument with you because in one of your comments, you said:

“Hedge your bet and get out of BOTH.

Paper gold is next to useless (barter or investment) because people hold physical gold incase a currency crashes and they can use the physical stuff to barter with. You can’t barter with paper gold.”

I don’t know how I can explain it any better than I have above. If you don’t agree, fine. But the fundamental cluelessness of many of your statements prompted me to reply.

I am sorry if I was harsh, I could have put it more politely, but my patience is wearing thin these days. If I reworded all of my above comments to be more diplomatic, they would still be making the same points.

I repeat, I TRADE in and out of gold, silver, US $, stocks, stock options. This means in general, the old cliche’ ‘Buy Low, Sell High’. I really don’t get what part you don’t understand.

I am not fixed in my beliefs, nor “closed minded”. Part of being a trader is that you have to frequently re-think your trading plan every market day. I go with what works for me, and my strategies have led me to consistent gains year after year. If I posted the % gains, you would say I made them up. This year is already shaping up to be my most profitable year so far, and its only Feb 20.

Your arguments may be your firm beliefs, but as I see it, they have no basis in facts. The real world results do not agree with your thesis here.

Maybe that is why you seem so angry about it, I don’t know.

Why don’t we just agree to disagree and move on. I doubt either of us is going to change our point of view after this discussion.

And I never told anyone to buy, or sell, gold. I posted the comment about buying it, because I often see people asking “How can I buy gold?” etc., so I posted what I have found to be cost effective ways to participate in that market for Canadians. Buying or selling is up to the individual.

If you want to “debate” you could start by not stating I said things I did not say. If I was talking my book here, I would say something like “Buy Gold Now!”. Did you see that in any of my comments?

Everyone makes their own choices in life.

#93 Got A Watch on 02.20.09 at 10:43 am

@kestral – Thx for replying and for the kind words.If I have time, I will e-mail you later.

There are many ways to trade, and many markets to do it in. In general, I have found it is best to pick a couple markets or sectors and stick to them. You will have to decide what it is you are comfortable with, be that Bonds, Stocks, commodities, precious metals or whatever.

Also how much risk you can tolerate. Trading is inherently risky, there are many ways to try to minimize the risk, but it can’t be eliminated entirely. If you would like awake at night worrying about your trading positions, then trading is probably not for you, it will cause you too much stress.

Watch the market action every day, read as much as you can on financial sites and Blogs about that sector, read technical analysis, do your own too etc. After a while, you will find you will get a “feel” for the action. Experience counts here, and persistence.

I tend to avoid more mainstream financial/trading websites like “Motley Fool” because they have steered me wrong in the past when I was not able to distinguish between “pumpers” pumping their own trades and actual real world advice that was correct. They were really bad during the dot.bomb years.

Try ‘Bill Cara Community’ & ‘Market Ticker Forums’ for places where traders who think like me tend to gather, as a start. Much to read and ponder there if you have never looked at them. Motley Fool traders would probably class those sites as “contrarian”. I just call them accurate.

Good luck.