Beaver talk



Enough letters from losers and whiners. Let’s hear from some of the industrious little beavers among us:

“Garth: My wife are I are in our mid-thirties and have been fortunate over the last 10 years.  We purchased our home in 1998 and have now paid off the mortgage.  We secured a significant LOC (300k @ 3%) just over a year ago that we haven’t touched.  While paying for our house, we managed our cash flow carefully and now have a combined $250k in RRSPs and $70k in Cash/Cashables spread across 3 financial institutions and a basement fire safe.  We’ve also got a total of $600K in life insurance.  My wife’s job is secure; I work for a small business that is having some cash flow problems but my own business skills, experience, and contacts will leave me in good standing even if the company fails (maybe even better than if I keep my job).”

Rick continues: “I don’t want to sound smug or arrogant; we’ve had our share of good and bad luck over the years.  Our careful management of both has placed us in a fairly strong position, we want to take advantage of our position and make some good money.  Here’s basically what we’ve considered so far:
1)  Use the LOC to purchase an income-paying investment (Dividend Index Fund?).  Even at yields of 25% of last year’s yield we’ll be able to cover the LOC interest easily.  We can afford to wait for prices to rise.
2)  Use our cash/LOC to purchase a rental property, maybe in a year or so.
3)  Thank our lucky stars and just keep the cash (earning about 2.5% for now).  This is a conservative option, given our age is this too safe? What is your advice?”

No mortgage. A quarter mil in RRSPs. Seventy grand in cash. And 300 big ones burning a hole in a line of credit. We should all be so lucky, Rick. But of course luck has nothing to do with it. This is what Canadian beavers do (distantly related to squirrels, I hear).

Should you be conservative, sit on your cash, take no risks and eschew any new debt, even if it’s tax-deductible? Or, is a recession/depression with deflating prices and endless news-that-sucks the perfect environment to buy things that will only rise in value later?

Well, let’s review where we’re at: On one hand Thursday was a microcosm of our times. Dell profit crashed 48%, GM lost $10 billion in three months, new housing starts in the US dropped the most ever, American banks lost money for the first time in 18 years, Washington unveiled a $1.7 trillion budget deficit, Wal-Mart bailed out of Ontario stores, JP Morgan laid off 12,000 people and Canadian media companies were popped off in a Surrey drive-by.

But at the same time, results from Bay Street showed Canadian banks are almost unscathed from the global crapstorm, the stock market soared more than 200 points as a result, pointy-headed economists at BMO said the worst of the awful will soon be behind us, and oil jumped 6% on expectation demand is going to soon pick up.

On balance, Rick (pay attention, and stop chucking that birch), the negatives still overpower the positives, but isn’t this exactly what we could expect at this point in the financial drama?

In fact, it’s what I’ve been writing about here for the past year – decline and loss, wealth destruction, housing Armageddon, political upheaval, rampant job loss, corporate collapse and the end of the days of unbridled credit. All that was obviously coming, and none should be surprised at its arrival.

But I have broken ranks with many of the crazed rodents on this blog who say it is prelude to the Big One, a neo-Depression of biblical proportions. As I’ve said consistently, there’s wisdom in having a cash reserve, but none in hoarding gold coins. It’s smart to hedge against downturns and reversals, but lunacy to think they will constitute the new normal. It’s completely sensible to prepare for the long-term threats we know are coming – climate change and the age crisis – but folly to crawl into a bunker with your gun and your dawg.

Every crisis like this will bring opportunity. And while none of us know when the bottom will be, how deep, how far, how unfathomable, how dark and how desolate, there will be one. And when most people see that it has passed, recovery will be evident in days. Not years. Days.

Of course, the world will be different, Rick, with no more easy credit, no kids in $60K trucks or cashless young couples buying houses. But you can expect two things: The mother of a stock market rally and a swing back to $100 oil. Houses and jobs will take a long, long time to crawl back, but at the end of this tunnel we will have a lot of wealthy investors and a world full of indebted governments.

So, what to do? Hey, you’re a beav, not a squirrel.

Let’s dam this torrent while others search for their nuts.


#1 Iain on 02.26.09 at 10:14 pm

Check this out, very interesting:

#2 squidly77 on 02.26.09 at 10:15 pm

keeping in mind that its -31 with the windchill tonight in edmonton according to the weather network

EDMONTON — Tenants of a downtown Edmonton apartment building are shivering in heavy sweaters and coats tonight after their gas was shut off in the dead of winter.

The pink warning slip found tucked into the intercom system Thursday afternoon says the landlord didn’t pay the bill, said Scott Ennis, president of the tenants’ association

shell be froze by morning

#3 Taxpayer like you on 02.26.09 at 10:38 pm

Wow. Tuff choices at 30 something…….????

Is it possible to have too much in an RRSP? It might be. If your RRSP is “too” large, your minimum withdrawals may put you into the same tax bracket you were in when you contributed. If they retire early (fifty something) they may be able to draw it down some before their govt pensions kick in. I’ll assume they have no private pension
otherwise why the large (huge?) RRSP.

No mortgage? Keep it that way!

LOC at 3%? Sounds too good to be true. Dont use it just yet.

Maybe build some more cash over next year or two and puchase rental property when prices bottom. Use LOC then, or lock in low rate mortgage. And always keep some cash anyways.

Good luck

#4 Mike B on 02.26.09 at 10:40 pm

Stock market rally in T. O. ? The banks barely make their goals and everyone goes ape shit. If there is a rally it is a classic suckers rally. Earnings are lower tha last year and no losses… Hurray for the banks but the heart and soul of our economy is being ravaged both in manufacturing and retail . Band wagon boneheads .. Time to buy some ETFs . Half baked or what!!!

#5 squidly77 on 02.26.09 at 10:44 pm

my 10:15 post was meant to have this headline att
i couldnt find a beaver but i did find a rat

i bailed on the TSX about 1,500 from the top in 2007 and remain in mostly cash with a small investment (gambling ?) account jumping in and out of the large tar pit companies..NXY COS.UN SU CNQ ECA

#6 Sail1 on 02.26.09 at 10:48 pm

Garth wrote:

But I have broken ranks with many of the crazed rodents on this blog who say it is prelude to the Big One, a neo-Depression of biblical proportions.

Amen to that, but I’m afraid your statement will not be enough to stop the crap.

#7 Another Albertan on 02.26.09 at 10:58 pm

Comments from one of my (to date, highly accurate) energy trader buddies:

“Either Crude, Heat and RBOB are leading EVERYTHING higher – and MASSIVELY higher… or they are the laggards that are suckering buyers in big-time, before they fall apart… I can’t see Crude being the lynch-pin that sets all the world’s markets on fire…

And if you have Crude go down after everyone and their dog got in the last two/three days… man, how quickly will short-selling help out those who have to liquidate? Crude could be at $20 by the end of next week…”

One thing is certain: crude has to keep going or it will send another bearish signal. It will have to close consistently around or above $45 for the next few weeks. Everyone else’s mileage may vary…

#8 Da HK Kid on 02.26.09 at 11:01 pm

Hey here’s a crazy thought, sell the house, sit on the LOC (if you can after selling the house), Take a real good look at those RRSP’s and make sure they are in the right vehicles for investment, if not move them!

Realestate will be a major drain the next two years as layoffs will continue to drag them down.

Use every ounce of your leverage to move, sell, re-negotiate your mortgage if you dont want to sell it etc.

I cashed my RRSP’s in at the top and when the CAD was pretty much par with the USD so the withheld portion was flush plus.

Have got about $400K USD in cash, sit on the sidelines with me my friend and get ready to eat the “not rich” anymore!

I took a kickin’ in high tech so the BEAVER is ready to bite!!!!

#9 Jon B on 02.26.09 at 11:05 pm

If in the future we have heavily indebted governments and wealthy investors, could it be also said that we’ll have a widening social gap between those wealthy busy beavers like Rick and everyone else that indulged heavily in consumer credit?

#10 Zoronqueen on 02.26.09 at 11:21 pm

People listing now are listing too late. I issued the sale recommendation seven weeks ago. — Garth

Garth, thanks for the advise. We finally have an offer that went through and closing date is March 12.

Cedrine and others wanting to sell, here is my 0.02
Relist and lower your asking price to at least 5K below the lowest listing. Even with more features doesn’t necessary mean you will get a buyer. For instance in Edmonton our inventory rate is 9 months, in Vancouver 18 months.

We listed in Sept at 349K, cause that’s was the common asking price at that time, a starter home 5 yrs old, basement done. In Nov relisted at 335K as a few had dropped their asking price also. Lots of showings even though we had better features, but no offer. In Dec, a similar house with an detached garage but no finished basement lowered it to 299K, sold at 290K after 2 weeks. We since had 2 offers at 285K and 295K, both fell through due to financing even though they were pre approved.

The last offer at 280K finally went through today. Took us 5 months and 70K in price reduction. The house is assesed by the city for 335K, most houses are listed at 335K with less features are still sitting.

#11 westcanguy on 02.26.09 at 11:26 pm

Garth Wrote:

Wal-Mart bailed out of Ontario stores…

Actually Garth, they didn’t bail out of Ontario stores. They are closing down the six Sam’s Club stores in the province. The regular Wal Mart stores are still in business in Ontario and they are expanding the number of superstores they already have.

Although I got the point you were trying to make, let’s try and keep the credibility up and the fearmongering to a mild roar, hmmm? Things are bad enough without those who have a following like you make it worse than it really is.

#12 Zoronqueen on 02.26.09 at 11:28 pm

Rick probably has it better than most. We are in the red even with though our portfolio may look good by appearances. I don’t know anyone in our Gen X category who does not have liquidity problems.

If I were not a greater fool, and had 70K savings and 250K in RRSP’s I would just sit and wait it out….

#13 Jack the Lad on 02.26.09 at 11:35 pm

That was one of Garth’s better posts, although in terms of a recovery, how can you have a strong recovery if a good portion of the jobs have left the country?

That’s what makes this one different from previous downturns.

Garth also wrote: “Every crisis like this will bring opportunity. And while none of us know when the bottom will be, how deep, how far, how unfathomable, how dark and how desolate, there will be one. And when most people see that it has passed, recovery will be evident in days. Not years. Days.”

So the recovery will be evident in ‘days’?

As someone waiting to pounce, how exactly will we ‘know’. You don’t want to get hit in a sucker’s rally.

#14 wallstreetbailout on 02.26.09 at 11:45 pm

Garth, your prudent beavers sound a little too good to be true. Being this well off and yet only in their mid thirties.

Iduno I guess it’s possible.

#15 kitchener1 on 02.27.09 at 12:26 am

Garth, I must disagree, the turn around will take years and not days. People that lost their life savings will be very much risk averse in the future.

There will be one more big suckers rally in the DOW before summer, possibly up to 10K range before it nose dives to 4000K. One more opportunity to seperate the “weak” from the strong. One more chance for so the big money can profit and the fools can be left holding the losses.

Every rescession follows the same cycle, the biggest worry with this one is that there is not going to be a next “big: thing to get us out. No property bubble or dot com boom to absorb all of those newely unemployed.

The shift to enviromental friendly products will happen but it will not be the same as with the dot com or property bubbles.

After this fiasco, people will be wary when lending from banks.

#16 Ghost of Tom Joad on 02.27.09 at 12:39 am

“As I’ve said consistently, there’s wisdom in having a cash reserve, but none in hoarding gold coins. ”

Sorry Garth, but I disagree. I trust in:
1. gold & silver coins
2. guns and ammo
3. food stocks
And by the way, the climate change issue is bogus, but if you get comfort in believing in this big threat, go for it. When you get a chance, read up on the New World Order and check out Alex Jones (

#17 Secret Agent - The goose is TOASTED on 02.27.09 at 12:46 am

received annual shareholder package from the bank. one of the big 5 reporting profit on Q1. I could not look again after 1st ime, total disaster, tens of billion of $ difference between book value and fair market value, split between derivaties and other asset classes. You won’t see that in the media, is suicide. Kanatian banks are experts at lying, soft and confident, no wonder thye are tained well giving the secretive and corrupt business climate here. I think the % loss is way bigger that on US banks balance sheets. Sell your stock, buy nee banks stock, I a sure new banks will appear once these crack open.

#18 98745638 on 02.27.09 at 1:05 am

Garth it seems you have changed you tune. So are you saying you see this as the turning point? No more doom/gloom? You wont sell many solar panels and generators with that attitude

#19 gold bug on 02.27.09 at 1:34 am

So, global warming is more of a dead certainty than a prolonged Depression?

Man, you’ve got religion. And it’s the wrong one, brother Garth.

But I’ll be generous and say you’re just covering bets. Hedging that maybe the squirrel days you predicted aren’t coming true (I still say they are); and trying to subtly shift everybody’s panic from a real problem (governments racing each other to ruin the world economy) to a fake one (global warming, errrrr, climate change).

#20 squidly77 on 02.27.09 at 2:01 am

there is no bottom

#21 squidly77 on 02.27.09 at 2:03 am

none whats so ever

#22 looking on 02.27.09 at 2:07 am

The bank results are not surprising considering that the wave of loan losses have not really hit yet. There was enough momentum to carry that quarter through. Next quarter is when the capital that the banks are raising will be required.

#23 kc on 02.27.09 at 2:26 am

“”But at the same time, results from Bay Street showed Canadian banks are almost unscathed from the global crapstorm,””

This is hard to fathom – REALITY CHECK TIME !!!!! Correct me if I am wrong, Didn’t the Government (I mean tax payer) give the big bankers a bailout not that long ago?? if so… they really didn’t earn a PENNY and still owe US the tax payer what they claim to earn…. corrupt to the core…..

#24 Vancouver_Renter on 02.27.09 at 2:38 am

I have several friends who have listed their homes for sale here in Vancouver – many for over half a year now. Nobody has been able to sell. What I’ve heard from all these frustrated sellers is that, when an offer does come in, it is always subject to the sale of the purchaser’s own home. In turn, the purchaser’s home is subject to the sale of their purchaser’s home, and so on. As a result, the whole real-estate market appears to be grid-locked.

New buyers are absent from the market. And the market needs new buyers to step up to the plate to break this grid-lock and get the market moving again.

But do people really believe that new buyers will start flooding into the Vancouver market just because a “starter-dump” that once sold for $800K at its peak is now selling for $749K or $699K?

In the last few years, the renters that I know endured tremendous social pier-pressure to buy houses. There were warnings that “If you don’t buy, you’ll be priced out forever!” and plenty of easy credit being tossed around by the banks.

If you held out and didn’t buy in that crazy environment, you’re certainly not going to buy just because prices are down 15% for their tops. I predict that it is going to take a meaningful plunge in prices to entice enough new buyers into the market to remove this gridlock.

I, for one, am willing to pay $500K tops for a house that is currently listed at $1 million. You laugh? Oh well. Then I’m not buying. And nor are my other friends who are renting and have the means to purchase.

In the mean time, the market will remain grid-locked and we’ll continue to rent our nice house with it’s long-term lease for 1/2 of what is would cost in taxes, mortgage interest, and other expenses to own it (and that’s not taking into account the capital loss of ownership).

#25 Da HK Kid on 02.27.09 at 3:02 am

See link below. It is like you hear Bernanke, Greenspan, Paulson, Geithner, Wall Street analysts, and Jim Cramer talking, only this was 80 years ago.

1927-1933 Chart of Pompous Prognosticators

#26 Future Expatriate on 02.27.09 at 4:07 am

#6: Preparing for the worst is not stupid; it’s prudent.

Thinking that business and government will be able to keep this particular sinking ship sailing is foolish at best. What part of global financial collapse are you sunshine optimists not getting?

A couple more suckers’ rallies, and you’ll get it; but too late.

I do realize it’s far easier to have a broker and/or a bank deal with the ease of soon to be worthless paper, and avoid the messiness based on fear of holding real money.

It will be your loss, not mine.

#27 Glenn on 02.27.09 at 5:52 am

So, let me get this right.

Gold goes from $400 in 2004 to $1000 in 2009…but I am a crazed rodent for investing in it?


You are crazed if you don’t sell and take your gains. BTW, what was oil in 2004, and the summer of 2008? — Garth

#28 vancouver guy on 02.27.09 at 6:11 am

Hi Garth
I love you man. I have a high income here in Vancouver. I bought a presale condo foolishly and I hope to get out. Wish I would have started reading your blog earlier. A decent house costs 800k here, it,s crazy. Do you foresee 500k for a decent house here.

#29 Mike (authentic) on 02.27.09 at 6:23 am


One of the points I brought up last year to our ATB investment advisor was RRSP’s and the idea that taxes COULD BE HIGHER in the future than they are today. The main advantage (I think) of an RRSP is you don’t pay tax today on your money but when you “take it out, taxes will be lower”.

I’ve always been suspecious of this as if taxes in the future are higher than today’s then…

Now with billions in bailouts given out, taxes will have to be raised in the future for the next generation…

I don’t know if I’m right with my suspecion or not, but it’s something to think about…


#30 MaxDeus on 02.27.09 at 6:34 am

My take is as follows:

With the exception of gold related equities, the TSX is in good shape. Here’s why:

1. Financials: The banks and those insurance companies that had US exposure have taken their hits. Some losses due to the Canadian consumers credit defaults (credit cards, LOC, etc) can be expected, but for the most part, monies have already been set aside for such losses. And finally, those mortgages likely to default are covered by the taxpayers.

2. Oil and Gas: As Garth pointed out, $100 per barrel will come again.

3. Gold: On its way down.

In the US, with Obama printing monies like it was going out of style and bailing out everyone and everything, the financials there have reached their bottom and are very unlikely to fail. He is already on the campaign trail for re-election. So a turn around has to happen within two years. Then he can raise taxes for those he put back to work to pay for all the monies he printed. The effects of his stimulus will eventually bear fruit.

Housing is deceased. RIP. Canadian housing will decline a further 30% or so in most regions – particularly Vancouver, and the GTA. US will take a long time to recover.

With oil set to rise again, so will the Canadian dollar.

The last two points (housing decline, CAD$ rise) will mean Ontario will do very poorly in the next 2 years.

The DOW has bottomed, or is near bottom. Perhaps the NASDAQ as well.

There is A LOT OF MONIES WAITING ON THE SIDELINES. And most of this money belongs to the big guys – the institutional investors.

So I too expect “the mother of a stock market rally”. Eventually.

#31 David Bakody on 02.27.09 at 7:14 am

#12 Zoronqueen on 02.26.09 at 11:28 pm

#14 wallstreetbailout on 02.26.09 at 11:45 pm


With all do respect to those who think Rich is even real or your average kind of guy …. wake up and smell the coffee ….. Hello if this 30 something has managed to do this and now thinking of making more money he is ethier setting himself up for a cheep ride over Niagara Falls in a barrow come spring or he should be running for Flarherty’s job. Think ? how did he do it, what kind of cash flow did he have, I raised two children lived in three homes sent two lovely girls to local universities and never made 70K a year in my life. Sorry Garth …. not your average home owner. How does that line go “If you want to make two million dollars, start with one million in the bank” Seriously if Rich has indeed done what he said ….. my question is? why does he need anymore help …. follow your road Rich …. it appears to be paved with gold. Off to Tim’s for a roll upper! and the real world.

#32 Mel Eager on 02.27.09 at 7:29 am

Hi Rick,

I’d love to know what you and your wife specifically do for a living?

That is quite the accomplishment by your mid-thirties.

Especially the part about accumulating $250 in RSP’s at the SAME TIME as paying off your mortgage fully.

How’d ya do it!? :)


#33 pbrasseur on 02.27.09 at 7:52 am

Agreeing with you on an eventual stock market rally.


Because it’s the only place left to go for zillions of boomers who need income because they are about to retire (or would like to). In fact it’s a big part in what caused the current crisis, people would not have bought so much house if they didn’t think it was also a great investment. People thought of their house as their retirement. Unfortunately it turned ou to be a bad call. Normal, after all a house (as gold) is not a productive asset, over the long run it shows by making only 1% a year.

Quite different for equities which are basically shares in businesses which are productive entities. That’s why over the long run they bring 10%. You really can’t lose with equities as long as you buy them at reasonable prices. Event if new lows are found current prices are way better than reasonable.

In fact what we have now is the best stocks buying opportunity in decades.

#34 Bay Street Lawyer on 02.27.09 at 8:10 am

What’s happening to gold is not unlike what is happening to real estate. People want safety for their money. In the early 2000’s, they put it in real estate… In 2009, it’s going into gold. But now everyone is jumping in the pool. Looks a bit too crowded for me… and I think it is poised for a fall back to reality once the turn-around Garth speaks of begins its climb from whisper to shout.

#35 pbrasseur on 02.27.09 at 8:14 am

More on the stock market.

A worse case scenario For the scared sheep….

If someone bought the Dow index in 1929 and lived through the crash it took until 1954, that’s 25 years, for the Dow to come back to 1929 level.

Yet people who bought dividend paying blue ships and re-invested them made 340% during that period.

That’s what happens when you invest in human productivity, even at the top of a bubble…

Right now no-one can argue that the stock market is at the top of a bubble, unless you’re talking fear bubble….

Think about it between two CNN “end of the world” reports…

Investing in human productivity is the safest bet you will ever make, period.

#36 CJ on 02.27.09 at 8:20 am

MaxDeus, with all due respect, your comments have a lot of holes….if housing is dead then defaults are going to rise dramatically….the banking sector has not forecast this and will be dramatically hit. Yes oil is going to $100 but not for a LONG time….energy can’t preceed an economic turnaround…its a lagging indicator. At some point there is no question we will have much much higher inflation (ie $100 crude and huge deficits), tell me how thats bad for gold??

#37 Non-beliver on 02.27.09 at 8:20 am

The “Rick” story certainly smells fishy – paid off mortgage, $70,000 in cash reserves, and all the while have amassed $250,000 in RRSP’s – all by their mid thirties – come on Garth. Just the RRSP’s alone are cause for some questioning – $250,000 today means they had pre Sept/08 $400,000 – $500,000 tucked away…highly improbable. Garth = FAIL

#38 Coho on 02.27.09 at 8:22 am

This is a strange posting for you, Garth. It reveals your lack of concern or perhaps understanding of the exploitative pseudo capitalist system in the west. As long as things bounce back, regardless of the greed and corruption in the system…hey you’re happy.

You do a good service to alert people as to what is happening or what is going to happen and how to prepare for it, but you don’t talk about the evilness of the system itself. You talk about the “what” but not so much the “why” of things.

In every generation the ruling elite crashes the markets (so called ‘cycles’) and thus separates the working man from his money. It is a corrupt ‘free market’ system. This time the fix is in to fleece the public of their wealth for generations.

Discussion about it has been much too one dimensional. It’s been all about numbers and nuts and bolts without a spiritual component. We play into the ruling elite’s hand when we continue with the derby style mind set –that being how the few can achieve personal fincancial gain on the backs of the many when the bottom of the market arrives.

The reality is that the already ultra wealthy are the ones who are going to pick up the good deals. The average person will be the one left holding the bag. For every one winner, there are 50 losers. That’s how the pseudo capitalist system works.

It’s the ‘every man for himself’ attitude that is promoted on this blog that the ruling elite like to see and hear. Perhaps that is why you get air time on national TV. You may mean well, but your message serves the purposes of The Powers That Be.

Go find a country to organize.This one’a taken. — Garth

#39 Herb on 02.27.09 at 8:23 am

And our “beavers” on the Hill?

You can see in cabinet’s half-hearted defence of an unfocused budget the true strategy: tread water until the Americans pull us to shore.

This would be less depressing if there was an alternative. But instead of offering a coherent, thoughtful and future-oriented plan — any plan, actually — Liberal Leader Michael Ignatieff is praising the Alberta oilsands with the ardour of a convert (again!) and waiting for the Conservatives to trip into an infrastructure-version of the sponsorship scandal. It may work; it isn’t inspiring. …

It is becoming increasingly hard to watch them — any of them — with their secure jobs and big salaries, trading self-satisfied smirks across the Commons aisle, playing their shrill and irrelevant games.

Susan Riley,

#40 JamesT on 02.27.09 at 8:33 am

“One of the points I brought up last year to our ATB investment advisor was RRSP’s and the idea that taxes COULD BE HIGHER in the future than they are today. The main advantage (I think) of an RRSP is you don’t pay tax today on your money but when you “take it out, taxes will be lower”.”

I think your missing the point of compound interest on what is effectively “free” money — money that would have just ended up being given to the government today as tax.

Over 30 years your invested money could theoretically double twice (there are no guarantees as with anything in life). This should more than offset any raise in the tax rates down the road.

#41 Herb on 02.27.09 at 8:39 am

Assuming that our big banks each make $1B in the quarter (which not all of them will), what was the point of the $75B that was quietly slipped to them to clean up their books?

Would it be immodest to demand that future bank dividends be paid directly to the Receiver General for Canada instead of bank shareholders who paid their money and took their chances? What profits can taxpayers expect from their investment in the banking sector?

Are we into “privatize profits and socialize losses”?

#42 JM on 02.27.09 at 8:45 am

re post #27,

You all read it. Garth is bearish on gold. Gold is about $940. Lets see where it is in 3 months.

Have trouble reading? I have said gold is not a currency and never will be in Canada. As an investment commodity, I would hold 10% to 15% of my portfolio in it, about the same weighting as energy. — Garth

#43 Kettle...Pot Calling on 02.27.09 at 8:50 am

So, if someone says they’re not in debt up to their eyeballs, they must be lying?

#44 Soylent Green is People on 02.27.09 at 9:04 am

Sometimes it makes my brain hurt trying to read between the lines. I understand GT doesn’t like to give direct advice re financials, who wants that headache. I think he’s trying to tell the dude to sit on his money and buy nothing. Is that what he’s saying?

p.s. My son was just studying last night how beavers are related to squirrels. He also told me beavers sometimes use their flat tails as dinner plates. How resourceful.

p.s.s. I vote Rick “Husband of the Year”! I’m in love.

#45 MikeB on 02.27.09 at 9:07 am

Agree with other posters “Rick” is an imaginary friend .
Most 40 somethings, as I am , cannot achieve what he has alleged to have done. Besides, why would he be here seeking advice… unless to gloat??

On to more important matters. THE BIG DOG down south of us. Gotta love Americans… if they cannot win the game then change the rules. When Japan was bailing their banks and dropping interest rates the US said they were morons. The US does it and well.. it ok.
NOW they bail out CITGROUP a third time. No real money but swapping Pref shares for common… WHY
… in order to give the illusion of liquidity and solvency.
Talk about sheisters. When will this charade be over?

Even with two days of good run ups on TSX… it is inconceivable that anyone could see sunny days ahead in the weeks to come. Just because our banks didn’t loose money and are solvent is no call for celebration.
They made less money than last year. Spin Spin Spin
Higher oil prices??? Why??/ Demand?? NOPE…just greed and speculation. What else do you expect from Bay Street and Wall Street.

Predicting a stock market rally after an enormous crash is hardly clairvoyant .. Yes a rally but if in the next few months.. that’s a suckers rally or a traders rally. Just don’t get your toes caught in the door on the way in or out.

#46 eddy on 02.27.09 at 9:08 am

glen beck’s video and graph is an eye opener. ALL of obama’s talk of recovery is premature, it’s like taking someone to the hospital Before the the car crashes.

mcguinty’s energy efficiency plan for houses is a complete joke, it’s like ‘drive clean II’ so is david miller’s new and improved property tax grab, their spiritual guru must be Bob Rae (remember him? white males to the back of the job line, and for those too young to remember- it actually happened in Ontario!) miller wants to take extra tax dollars form homeowners and use it help minorities get more access to city hall. can you believe it? people, I’m not making this up!

#47 Martin on 02.27.09 at 9:13 am

This story about our friend the industrious beaver stretches the bounds of credibility. By the time this couple was in their mid thirties they paid of their house in ten years, all the while saving $70,000 in cash and $250,000.00 in RRSP contributions. For a guy who works for a small business and wife with a stable job, they sound like your average middle class couple (no kids perhaps) this is quite the feat. Add on top of it, that RRSP by all rights was worth $400,000 + prior to the demise of Wall Street et al. Do you really buy this, seems quite unlikely. Reminds me of the letters to the editor in a certain un-named “gentlemens” magazine…what a fantasy!

#48 Soylent Green is People on 02.27.09 at 9:16 am

#14 wallstreetbailout on 02.26.09 at 11:45 pm Garth, your prudent beavers sound a little too good to be true. Being this well off and yet only in their mid thirties.


I was thinking mommy and daddy helped out. Makes me jealous, but if my parents gave me any money, you know what, I would have taken it.

I got a p/t job when I was 15 and my mother immediately stopped buying me anything I needed and I just started paying for all my own stuff, including school tuition, not really knowing any better, and then she would chastise me for not saving any of my money, oh, my own Livia Soprano, good times, good times…

#49 MikeB on 02.27.09 at 9:22 am

BIG DOG number.. our largest trading partner..
GDP 4th quarter DOWN over 6%…steepest decline since 1982 and readjusted from their estimate of JUST 3.9%.

Now to itsy bitsy dog, Canada. Our current account balance which has been in the black since 1999. We exported more than imported. NOW in deficit 7.5 plus billion dollars!!!! Just not selling to the US.

Stock market rally.. no legs!!!

#50 PensionGuy on 02.27.09 at 9:32 am

Wow people, stop looking through the world with ash-coloured glasses. Some of you have less credibility than the real estate shills – you are so emotionally and financially invested in a global collapse of epic proportions that you cannot even acknowledge any events to the contrary, but simply right them off as some sort of conspiracy to misdirect the populace.

Fact: Canadian banks are doing relatively well. While mortgage losses in Canada are likely to spike in the future that is mostly the CHMC’s problem not the banks. And the Canadian banks were not truly “bailed out” – what the government did is take mortgage debt from banks (that the govt is ultimately responsible for anyway) to free up bank capital and put them in a competitive position globally.

My job requires that I meet with professional investment managers regularly. These people have dedicated 25+ years to the markets, talk to the big corporations regularly, and have an army of analyts (buy side analyts – not the conflicted investment banking types) – and virtually all them believe the banks will be fine, and the market is generally oversold due to a dislocation – people need to sell to raise cash. They haven’t seen this much value and opportunity in their lifetimes. These are not the type of people that will be pulled into a “sucker’s rally.”

That is not to say the market will rocket up in the near future. The market may still go down in the short-term and a return to 15,000 on the TSX could take years. But some of you are pulling 4,000 valuations out of your a** as if it were plain fact to all but the ignorant. Sorry but I will take experience and analysis over the perverse wet dreams of you doomers.

Economically we are in for some very tough times – high unempoyment, fiscal deficits, deflation/hyperinflation etc… but the 50% drop in the market has priced in most of these negatives and is thinking 6 months to 1 year ahead. Big losses don’t mean much since in most cases they were anticipated. If we start to see losses smaller then predicted, that could be the start of a new bull.

I have little $$ in the market right now and I’m deliberately renting and waiting for housing to drop. So I will likely gain more than lose from some of the economic carnage. Nonetheless, I’m still hoping things get better (except maybe in housing!) . Peace out.

#51 smwhite on 02.27.09 at 9:44 am


Vegas baby!

Actually, in all, your in a position that the majority of Canadians don’t find themselves in.

I would be ultra conservative over the next year, be patient, don’t invest in anything that locks up your cash for too long, because there have been reported Paul Volcker sightings and if the pendulum swings in interest rates, you want to be able to plunk that cash into the potential higher rates.(Unless they stall as per Japan in the 90’s)

If you had been in your same position in the early 80’s with rates at 20%, well, do the math.

#52 Another Albertan on 02.27.09 at 9:47 am

While the couple’s numbers sound suspect, it is very much possible for it to be true, although heavily improbable when viewed by others not in the same loop.

When I look at my cohort here in Calgary, I’d hazard that one-third to one-half of my 30-something social group has combined gross household earnings in the 200k to 300k range… and has had this level for at least 5 years.

I have friends who have worked for junior oil and gas firms and whose rewards for 3 years of efforts have been a sale to a larger company and a cash-out of anywhere between 300k and 1M. During the peak of ridiculous-ness, one colleague’s employers were bought out 3 times in succession in less than 12 months. Retention bonuses for that year alone totalled 300k.

During the run-up of oil and at the peak, there were a lot of people milling out a lot of cash. Don’t underestimate this. If you were in the right place at the right time, the payouts were potentially massive.

Don’t get me wrong. These stories are clustered in small areas and in compressed demographics. The rules don’t apply to everyone. And don’t underestimate what a strategic “investment” of dollars from family can do to help. I know plenty of kids from well-to-do families whose parents gave them 50k to buy houses a decade ago. That would have constituted close to a 25% downpayment back in those days.

As long as the couple was frugal and very conservative with their money and had a series of high-earning years and a possible outside injection of cash, the scenario is quite plausible in my view. Again, it is the exception to the general rule, not the norm. As to the question of why they are asking for advice, trust me, there are plenty of frugals and misers who are financially-retarded and who have amassed their numbers through sheer hoarding.

#53 Rick on 02.27.09 at 9:53 am

Hi Mel (#32),

How’d we do it? I’ve worked as an engineer for 12 years. My wife works in business services. We have worked very hard, are good at what we do, and have been generous with our experience. This has led to a steady increase in responsibility and income. Our combined gross income when we bought the house was about 70k (1998). Now it’s about 160k. Yes, probably above average, but less than some of the sadder stories I’ve heard here and elsewhere.

We drive used cars that we buy for cash and fix or switch as necessary. They aren’t fancy, have some rusty spots, and rattle sometimes, but they get us where we need to be. We haven’t deluded ourselves into BMWs or Lexus’ like many have. We kept our cars small until the last 2 years; 2 kids and an aging grandma required a mini van. We bought it used for 1/3 of the new price (it only had 30,000 km on it, c’mon that’s new).

Most of our vacations (pre-kids) were taken at home taking care of things people were paying too much for, like landscaping, decorating, and basement finishing, etc. The work we’ve done ourselves has cost many of our neighbors $100k or more.

We rented a small apartment for 2 years, saving everything for a down payment. We bought the biggest house we could afford and still put 25% down. The bank encouraged us to borrow a lot more and buy a bigger place (wonder why?). Our mortgage was paid weekly from the start, locked at a low rate for the first 5 years. After that, we went variable saving a point or so in interest. The mortgage had nice repayment terms, whenever our income went up we increased our payments proportionally. When we had extra cash, it went directly against the principle.

When it comes to RSPs, we were the only 25 year olds in a free retirement planning session, the rest of the room was 50+. We have always “paid ourselves first” by maxing our RRSPs through regular monthy contributions. To help, we make sure we submit a tax reduction form every year (Form T1213 The RRSPs have been built from the bottom up. First some cash, then good bond funds, now we’re moving into equity markets in a stronger way. We had lots of advice along the way to put a lot more into stocks, I think our choice was right. Yes, if we’d timed things right we could have made a lot more by holding stocks and dumping them last summer. We also could have lost a lot more. 18% of our income and an average 4% return made $250k in 10 years.

Along the way, we’ve had a small inheritance from a parent’s death. I’d rather have my parents than clear title on my house. Instead of buying something exciting we put all of the money directly against the mortgage when it renewed. If we hadn’t had that money, we’d have about 30k on the mortgage now and maybe 30k in cash.

I think, in general, we’ve done it buy sticking to reality. There have been lots of temptations along the way. Bigger, fancier houses; faster cars; better vacations. Some will say we’ve achieved our situation by not “living” much, I disagree. We appreciate things around us that cost very little like working in a garden, walking in the woods, playing with the kids, reading a book, and even just watching TV (ugh). Life doesn’t have to be crazy, costly, or constantly scheduled. Vacations don’t have to be at fancy 5-star resorts. Our cars are transportation, not a statement of wealth and power. Our house keeps us dry when it rains and warm when it snows; it’s big enough to live in for a long time but small enough to keep clean ourselves (if a house with 2 little kids can ever be clean). It’s located in the suburbs, but within easy walking distance of 3 grocery stores, every major bank, a nice rec center, and public transportation.

I guess that’s my story in a bit more detail. It’s a real story and quite achievable by many, I think.

#54 Bill-Muskoka (NAM) on 02.27.09 at 10:03 am

So, what to do? Hey, you’re a beav, not a squirrel.

Let’s dam this torrent while others search for their nuts.


#55 Bill-Muskoka (NAM) on 02.27.09 at 10:05 am

Garth, I meant to add…Watch out for the Squirrel from ‘Over The Hedge’ on the Energy Drink! LMAO!

#56 poorguy on 02.27.09 at 10:06 am

If this guy is really as successfull as he claims,
I dont think he will need anyone advice.
Very hard to believe.

#57 Bill-Muskoka (NAM) on 02.27.09 at 10:11 am

I guess this means you are presenting the ‘Tooth, the whole Tooth, and nothing but the Tooth’, eh? Well, it ‘dam’ time you did! LOL

Does this mean the market will be flooding or inundated soon?

Is there going to be a Trickle Down factor?

So many possibilities and so much time!

#58 Bill-Muskoka (NAM) on 02.27.09 at 10:24 am

For those wanting more humour watch Jon Stewart’s ‘A Daily Show’ from Tuesday night. It was the most hilarious one in years. Governor Bobby Jidal of Lousiana proves beyond a doubt that the Redumblican Party has been taken over by the patients of a drug rehab house.

He criticized the Spending Bill for including $140 Million for volcano monitoring. Imagine, that from the Gov of the State that had New Orleans wiped out by flood waters over Federally built levees that were insufficient in design to ‘save’ money! Some savings, eh?. Talk about NIMBY? Ask the people of the Pacific Rim, Mount St. Helens area, if they think there is no need to monitor volcanos? Hey, how about Hawaii?

If this guy is the Redumblican’s Rising Star then Sarah Palin is Einstein! ROFLMAO!

Hey, maybe we can send some Canadian Beavers down there and show them how a real dam is built? And at a far cheaper cost!

#59 Just a Girl on 02.27.09 at 10:27 am

#32 Mel Eager …. I have a suggestion … i-n-h-e-r-i-t-a-n-c-e? ;)

#60 Just a Girl on 02.27.09 at 10:32 am

I think there are a lot of envious birds circling the Vancouver, Victoria, Kelowna markets, waiting for their opportunity to land. Prices may crash 30% more, but there are a lot of people who have been priced out for a long time, who wouldn’t mind their piece of Lotus Land. And the country’s not getting any younger. The fundamentals are there in these locations for a molecule of buoyancy, no?

#61 rory on 02.27.09 at 10:36 am

#32 Mel Eager

Mel, hi …my guess is that Rick and wife both each make from 60to 90K …bought a home before the market zoomed (read inexpensive). Also, their RRSP were probaly maxed out and startined contributingearly but the real money came form being super aggressive and riding the oil and commodity sector up and getting out before the large downturn (lucky or the right friends).

What they did right was probably go to University (parents had money or were themselves U grads), got good jobs (right location, right place), bought at the right time (age, parents helping?, before the bubble), invested in RRSP’s (had leftover because of previous reasons, smart, prudent) …the only flaw is the aggressive nature in RRSP’s but they had time on their side if it did not work out (so really not a flaw)…so all in all not impossible …one just needs the planets to align correctly, marry right, have kids, and be prudent …of course this is all just a big fat guess – maybe they inherited everything or the parents are stinking rich or maybe, just maybe they did it the old fashioned way…let us hope.

#62 rory on 02.27.09 at 10:37 am

Meant NO kids

#63 rory on 02.27.09 at 10:38 am

I meant NO KIDS

#64 98745638 on 02.27.09 at 10:45 am

Hey everyone, Garth needs someone to buy his stocks. Might as well be you, his “captive” audience.

Way too late for that. My porfolio is perfect. — Garth

#65 kc on 02.27.09 at 10:51 am

At the rate CITI is going, it is poised to hit 1 Billion trades today, gives bailout a whole new meaning….

I found this comment by MR. Mike interesting if not down right truthful. He blasts MR.”O” for the next wave of deficit spendings…. Time for the world to buy into the USA debt factory….

Obama’s $3.6 Trillion Budget Continues Bush Doctrine of Bankrupting America

#66 WestCoast Girl on 02.27.09 at 11:03 am

GArth, share whatever kind of coffee you drunk this morning, this post sounds….almost, dare I say….positive?

/shakes head to clear cobwebs

Sheesh, nah, couldn’t be. Must be the remnant of last night’s vodka still with me…


#67 Kestral on 02.27.09 at 11:04 am

Great post. I’m in my mid 30’s and also have 6 figures worth of cash and RRSPs, only difference is I am single and do not have a house, and assuming Rich makes $70K, I earn quite a bit more than him.

I’ve been all cash since July 2008, even my RRSP is in a money market fund, as it’s mandatory to be in a fund with my company RRSP and I want to get the 100% match of my contributions.

My first real job was a stock analyst and my specialty was technical analysis. When I got stopped out of all my stocks in July 2008, my intent was to wait for the technicals to firm up before going back in. I’ve been waiting since then not because I necessarily want to be in cash but because the technicals simply haven’t firmed up. When they do, I’ll go in, but until that happens, at least for me, cash is king.

#68 Dawn in Calgary on 02.27.09 at 11:16 am

I don’t have trouble believing that Rick’s situation is real. $250k in RRSP’s over 10 years is $25k/year saved. If both spouses work, and they didn’t say they have kids, they could be living on one income (maximizing payments on the mortgage) and saving the other.

He also doesn’t say what he bought his house for, only that the line of credit is $300k — so that makes me think that it’s only valued at that now. In 1998 he could have bought it for $150k or less.

I believe the story.

Ours was just the opposite, and we’re just turning it around now.

In 2000 we bought a house for $120k. We had student loans, two kids, one car and my husband was working PT. I was making $45k as the major breadwinner.

In short, we bought a money pit — the ‘flipper’ had taken shortcuts on everything from the roof shingles to the plumbing. After a year it started to fall apart. We went to the bank as we had no credit to pay for repairs. Only a year into the mortgage (at 8.5%), we had no equity so they wouldn’t lend us the money to fix.

Bank wouldn’t help, couldn’t sell as is…. we walked and took the bankruptcy hit. That was in 2002. This year is the first year we’ll have it off our credit record. In the interim, we’ve received car loans and credit cards and built our credit back up.

We now are fortunate to both work and live off my higher-than-average income. We bank $500/week. If we keep that up for 10 years, we’ll have caught up on our RRSP contributions significantly.

I believe Rick’s story. I wish it was ours. It’s not, so we make the best of it.

#69 Republic_of_Western_Canada on 02.27.09 at 11:23 am

Never try to catch a falling knife.

Further, as I’ve stated before, and as everyone knows (except possibly for some greenies with too much biomass on the brain), the price of oil will come back with a vengeance, along with the stock market, etc.

Traders have their eyes glued to inventory levels at Cushing and in Garth’s swimming pool, the count of tankers used for storage, miles driven by the US public, and a host of other indicators indicating oil’s future demand and supply. The fundamental price of oil, whether in USD, Euros, or gold, will adjust in real time to any present or forecast ‘most probable’ scenario. Only the noise of various geopolitical events or raw speculation by the masses (a la gold) will make pricing a bit fuzzy from time to time.

If you’re trying to time the market, futures crude prices might be the best indicator of an economic turnaround. Forget whatever role widget manufacturing may have had as an indicator – Detroit North is permanently toast.

#70 BCing You on 02.27.09 at 11:30 am

To #14 wallstreetbailout,

Of course it is possible to save this much my mid-thirties. If you have two people with reasonable incomes and you save instead of spend. You’d be surprised at how fast it can grow. I bought a house with my wife at age 26 and had it paid off by age 31. I didn’t have living room furniture or a big screen TV until after I paid off the mortgage. By the time I was in my mid-thirties (I’m 44 now) we were in a similar situation. My investments have taken a big hit in the last 18 months but I’m still hoping that I can retire by 55. I was recently laid off but have just landed a new job.

#71 WestCoast Girl on 02.27.09 at 11:32 am

7 Signs of Economic Bottom?

Interesting article; curious to hear thoughts on those on this blog…

#72 Jonathan on 02.27.09 at 11:33 am

CNR stock is an excellent company. Railroads average 38% return in the year after the last 7 recessions.

With the EJ&E line approved and the stock trading at $40ish, a return of 38-55% would yield a target price of $55-65 which is certainly possible.

Petro-Canada is trading in the mid twenties. It was in the $60 range at the July 2008 peak which was still a very conservative PE ratio. With the teachers pensions getting involved and trying to overhaul PCA management, it may be a great time to buy this stock. 100% return in 1 year is completely possible if oil rebounds and teachers shake up management.

I still think that this crisis is just starting. Asia and Europe are fairing much worse then North America.

In my eyes I see a savings bubble that gave rise to the credit bubble. The savings bubble is stronger then ever. What happens when it pops and interest rates rise to more realistic levels?

#73 Vermont on 02.27.09 at 11:34 am

Jack the Lad,

“And when most people see that it has passed, recovery will be evident in days. Not years. Days.”

I had to re-read this several times. I think what Garth could have implied was that, “when most people see”, meaning to say the general population, then it would take days; as an example, taking the current situation, by the time most media and the general populace said a recession/bad times are coming, the roller coaster was already in full steam. My guess is that Garth was implying that when everyone thinks we’ve hit the bottom, recovery is already taking shape and should be evident. The eager beaver needs to be a few steps ahead.

#74 Jonathan on 02.27.09 at 11:41 am

Either this guy is bs..or he had a lot of help from mom and pop, had an inheritance, sold a website in the tech bubble, or has a family income in excess of 250K per year for the last five years.

#75 Alex on 02.27.09 at 11:57 am

“You have to choose [as a voter] between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the Government. And, with due respect for these gentlemen, I advise you, as long as the Capitalist system lasts, to vote for gold.” George Bernard Shaw

#76 doubtful on 02.27.09 at 12:01 pm

Despite some of the far reaching things that get said and discussed on this site, I find today’s example just too much to swallow.

Rick is in his mid thirties, has a house paid for in under 10 years, accumulates $250k in retirement savings (assume that he is putting aside $20k/yr. + the accrued interest), and has $70k in cash… really?

#77 Alex on 02.27.09 at 12:08 pm

Since 1997, real inflation, as opposed to ridiculously understated official inflation, has raged at a minimum of 8% annually, and has soared as high as 14-16%. This means that you have lost a minimum of two thirds of your 1997 purchasing power. So, if you invested $10,000 in the Dow components in 1997, not only would you have no gain whatsoever, you would have losses on the stocks which were dropped from the index due to poor performance and, in addition, to add insult to injury, your purchasing power has been reduced from $10,000 to approximately $3,000 in terms of 1997 dollars. In other words, that $10,000 you invested in 1997 will today only buy what $3,000 would have bought in 1997.

Effectively, anyone playing the general stock markets has been wiped out by this combination of lost capital gains and reduced purchasing power. Those who began investing after 1997 have done even worse because they have suffered major capital losses in addition to having suffered reduced purchasing power. So much for the much touted 10% average annual gains for stocks.

By contrast, you could have bought gold in 1997 for about $300 per ounce and more than tripled your money at today’s prices. Your $10,000 would have become $30,000+, however, due to inflation caused by the Fed’s profligate increase in the money supply, which the Fed intentionally orchestrated in order to impoverish you and bring you to your knees so you will accept world government, your purchasing power would only be about $10,000 in 1997 dollars. So you would at least be even in terms of purchasing power. Certainly, $10,000 in purchasing power is a whole lot better than $3,000.

This example is a classic illustration of how gold preserves your wealth. As you can see, failure to invest in gold, silver and their related shares is tantamount to committing financial suicide. The bankruptcy courts will soon be full of the tens of millions of US citizens who ultimately will ignore gold and silver as a safe haven, or who will simply lack the capital to invest in gold and silver in any case because they are in hock up to their ears, or because they have become unemployed, or both.

#78 Bob Bagina on 02.27.09 at 12:11 pm

#32 Mel Eager on 02.27.09 at 7:29 am
“Hi Rick, I’d love to know what you and your wife specifically do for a living? That is quite the accomplishment by your mid-thirties.
How’d ya do it!? ”

Probably with a trust fund, maybe had to sell the ferrari long ago to max out the down payment.

Real folks (majority) in this area, Victoria, make 55k median pre-tax. That gets you a 300K condo maxed at a 35 year amortization with a generous 4% rate.

#79 Sail1 on 02.27.09 at 12:15 pm

New homes sales in Toronto dropped 69% in January to a 17-year low, an industry group said Friday.

#80 Jonathan on 02.27.09 at 12:16 pm

*Savings and Bonds Bubble:*

Asian Financial Crisis 1997. In response to crisis, Asian countries build massive reserves in US currency and treasuries. Furthermore communist nations via state run banks force Asian savings in to the west to the tune of over 2 trillion per year.

Result: Cheap debt with interest rates far below free market rates. This has resulted in:

Tech bubble (1997-2001)
Real Estate bubble (2001-2006)
Commodity bubble (2007-2008)
Credit bubble (2001-2008 – household debt doubles)
Bond bubble (2001- 2009)

So why is Obama so worried about lending? Why does everyone need to lend? I imagine it is because these massive savings need to find a home or the whole puzzle collapses. The only solution: 2+ trillion in government deficits for 2009 to absorb the cash.

What is to fear? The savings bubble produced a massive current account surplus in Asia that cyclically fueled the savings bubble. The unwinding of the bubble would shrink current accounts in the same cyclical fashion, reducing the amount of money available to sent to the west. Less money means less spending, and the result is a massive economic shakeup.

So what happens when this bubble blows and Asia wakes up to the fact that it wants real returns for its savings that compensate it for the real risks its money is taking.

What happens if the US prints too much money and US currency falls in value (effectively cutting the value of Asian savings in half?).

What if Asia slows its savings rate or starts to invest it internally as is planned by China?

What if Asia’s bloated coffers can’t handle any more unecessary US cash. They have way to much as it is.

It looks like the government has accepted its fate of being the greatest fool. When it blows interest rates will rise rapidly and your bonds will be worth a fraction of what they are today, along with all assets that depended upon low interest rates.

#81 Derrin on 02.27.09 at 12:31 pm

The gold bugs are upset that the world will continue. If your smart you will take your gains because as soon as the market bounces your going to lose your shirt or at best your gains. It always happens. The ones that bought gold on the fact it was a commodity have kept their eye on the ball and know it was taken for a ride on the commodity rally. The ones that are hanging on to it to protect themselves from the next phase of us living in caves will lose big. That goes for silver as well but not so much.

To the next economic wave in new energy, old energy and technological advances.
We live in a great country ………I love it!

#82 Bro Manziere on 02.27.09 at 12:32 pm

@ Mike (authentic)

I’m with you on the RRSP future-taxation issue. It may not be the boon it is cracked up to be (especially for people who aren’t in the top tax brackets). The TFSA, despite its modest levels right now, may be a better bet for lots of people. At least you know the up-front tax implications.

#83 Toronto C9 Renter on 02.27.09 at 12:34 pm

Garth said “Every crisis like this will bring opportunity”

Personally, I couldn’t agree more! Personally I’m thrilled about the opportunity to eventually pick up our banks at PE ratios of about 6 or 7, with huge yields. Too risky today of course but at some point…

Also oil stocks and other commodities. While I doubt we’ll see another big bubble until the last one is a distant memory, there is still enough upside for an extrodinary return….but again not just yet

Finally Real estate – perhaps it won’t be an “investment” for many years, but it will nevertheless be a great opportunity to buy a house that is truely affordable.

Personally, I’m very bullish on the future. Having said that, not sure I’d be feeling so good if I hadn’t cashed in the house last Feb

#84 Happy Slacker in T.O. on 02.27.09 at 12:41 pm

I’ve been reading the blog and comments here for a while. I have to say its all interesting and informative.
Garth your work here has saved me money and made me look at my finances (and the financial world) in a different way. I appreciate the advice I’ve found and distilled from here.
I am a little surprised though how many people continue on about how bad it is (and will be) without more real discussion of where real opportunities might lie in “interesting” times like these (“Xurbia” is good example of a genius idea).
I’m someone who isn’t so surprised to hear about Rick’s situation (through hard work I was similarly “getting there” at his age – self-made).
Thanks to the wake-up call I received when I began reading this and then other similar sites, and some hasty rethinking/restructuring of my finances, I’m (humbly) sitting on a hefty sum of cash .
I am really conflicted about where to go from here.
I’ve never been one to hide in a hole til the storm blows over, regardless of how bad it gets there must money to be made (somewhere?).
Anyone have any advice/ideas on where to (conservatively) invest for a half-decent return ( I know that’s a relative term these days) while we await this economic return in a year or two (or three)?

#85 Harold #3 on 02.27.09 at 12:43 pm

“You are crazed if you don’t sell and take your gains. BTW, what was oil in 2004, and the summer of 2008? — Garth”

And put it in what Garth, under the bed, buy a house or into those Canadian banks that have such lovely numbers? (Gee I wonder where all their asset backed toilet paper went? Down the Mark Carney government flusher to us maybe? Or maybe to caisse de depot?)

#86 Bill-Muskoka (NAM) on 02.27.09 at 12:46 pm

Should have been Jindal! No matter, he looks more like Alfred E. Newman than anyone else!

Some think he will be McCain’s running mate in the next election? Well, will McCain be alive come the next election? Anyone want to place bets?

Now Alaska is all in a tizzy over the volcano monitoring quip. Imagine Jindal and Palin running the U.S.! OMG, That is like having the Crypt Keeper and Alfred E. Newman. Now that is SCAREY!!!!!

#87 Curious on 02.27.09 at 12:55 pm

Re: Rick,

That’s a consistent 3K/month in savings each for 10 years.

#88 Basil Fawlty on 02.27.09 at 1:08 pm

“As I’ve said consistently, there’s wisdom in having a cash reserve, but none in hoarding gold coins”
Why is it that one can have a cash reserve, but can only “hoard” gold coins?
Why is it that when many people talk about saving gold they view thisas a negative, when gold has been recognized by many (other then governments) as a currency for the last 6000 years. Weird!

#89 Bill-Muskoka (NAM) on 02.27.09 at 1:11 pm

To Grasp the ‘ENERGY’ Hammy has on the Energy Drink look HERE!!!

or HERE to see what Vancouverites will be feeling when they face reality after passing ‘Over The Hedge! LOL

#90 Bill-Muskoka (NAM) on 02.27.09 at 1:15 pm

Sorry, the second link is a false one. My Bad!

#91 Bill-Muskoka (NAM) on 02.27.09 at 1:18 pm

Try this one instead

#92 David on 02.27.09 at 1:22 pm

Having free and clear title to a home means that one is renting from oneself. A fully paid off home does not provide a quarterly dividend like a quality equity would. One has to look at how large the net gain is annually from home ownership (renting from oneself) versus the potential yields from renting from someone else and investing in equities that provide regular dividends or have the potential for capital asset appreciation. The best a fully paid home can offer is only capital appreciation and in the foreseeable future, that option is a diminishing possibility. One has to consider that the housing bubble mentality was based entirely on maximum leverage and unsustainable levels of capital asset appreciation. The consequences of that way of thinking are becoming all too apparent today.
The second issue would be capital preservation versus risk/reward returns. There are a large number of Canadians who are having to defer retirement due to having their pension funds vaporised by the market melt down. Many over leveraged private equity hedge funds are having to engage in forced sell offs of assets to cover debts. It all depends on one’s stomach for risk. It boils down to the old investment cliché; don’t risk anymore than you are prepared to lose.

#93 Simon on 02.27.09 at 1:25 pm

#1 Iain on 02.26.09 at 10:14 pm
Excellent clip thanks for posting… definitely not reasonable!

#94 Simon on 02.27.09 at 1:32 pm

Public service notice…. If you are in the process of using a Mortgage Brokerage or Broker please make sure they are not one of the 79 suspended on the list below.

I knew this was going to happen. I’ll bet there are more to come….

#95 Reg on 02.27.09 at 1:38 pm

Does anyone have a feel, or know if our property assessments will be reduced if the average price of homes stays down for any length of time?

#96 BC Guy on 02.27.09 at 2:00 pm


What sources would you recommend to keep track of the numbers for real estate and the economy.

Regards to all

#97 Carole AB on 02.27.09 at 2:02 pm

I recently bit the bullet and subscribed to these guys through our small business…hmmm. Here’s their advice Rick, I hope they are wrong though:

“If firearms are openly circulating in your country/region (among big countries US only), then the best way to react to such dislocation is to leave your region if you can . Indeed the process of strategic dislocation will entail service disruptions (food, water, health) likely to kindle lethal riots if people are armed. Leap 2020 has indeed been directly aware of US citizens who left states populated by big supporters of the right to carry arms, to settle in states where this right is less entrenched. Wealthy US citizesn are beginning to simply leave the US and settle in the Eurozone . These trends are new, less than 2 months old according to Leaps observations, but they suggest a reasonable reation. If there are no weapons in mass circulation direct physical danger related to the dislocation will remain marginal.

Financially speaking the beginning of phase 5 of the global systemic crises will be characterized, not only by a collapse of the US dollar and its affiliated currencies, but also by a fear of paper money in general. This lack of confidence is extremely contagious. Therefore if you live in a Euro, Yen or Yuan zone you should keep at least 30% of your assets in Precious metals. We are talking here of material assets, not in the form of certificates. Very important: Do not leave those assets in a bank, as it is precisely the kind of establishment likely to close down indefinitely in a process of strategic dislocation.

Companies should keep a large amount of money outside their banks, sufficient at least to pay salaries in case the banking system closes down.

Finally, you should avoid as much as possible all the finacial instruments your bank is offering you. Not only could they be frozen in the even of a geopolitical dislocation , but the continuous central bank interst rate reductions take place at the savers’ expense. Stay liquid as much as possible to be ready to move quickly if need be.”

Comment? I think I like Niall Ferguson’s more posititve views better as well as your post today Garth.!-4th-quarter-2009-Beginning-of-Phase-5-of-the-global-systemic-crisis-phase-of-global-geopolitical_a2805.html

#98 Senior Citizen on 02.27.09 at 2:17 pm

I didn’t get a response yesterday regarding rental rates in the GTA if everybody is selling and start renting. Could they go sky high, could there be a shortage. What do you think? All responses appreciated which includes you Garth!

#99 Investor on 02.27.09 at 2:20 pm


How much was Gold in 1980-82? I would say seeing gold advertisements on TV are a pretty good contrarian indicator. Gold Bubble will pop like any other asset. The belief that Gold stores value probably was coined by the Middle Ages bankers.

#100 Darryl on 02.27.09 at 2:21 pm

Mid Thirties could be 36 or 37 . Rick could have started working young . He bought his home in 98 so it was not inflated. He did not say what size the home he has is or if it is detached, or even where it is. If Rick does not have children and he and his spouse make mid to high double figures. I see no reason why he would not be in this financial position. Hard work and fiscal responsibility can easily get you there.

#101 Mike (authentic) on 02.27.09 at 2:21 pm

27 Glenn “Gold goes from $400 in 2004 to $1000 in 2009…but I am a crazed rodent for investing in it?”
“You are crazed if you don’t sell and take your gains. BTW, what was oil in 2004, and the summer of 2008? — Garth”

Garth you bring up an interesting point (as always), oil had a huge run up to $147bbl, then fell to $33bbl. Gold from 400 to 1000 and like $147 oil you hear cries of it “never going down again”…

Well, if things go from bad to worse, I BET that anyone with 40l of gas in the garage to trade will get them more than 1 ounce of gold will.

Did Mad Max really give a flying rat’s ass about gold? Want did he want in the post-apocalypse? PETROL!


#102 HJD on 02.27.09 at 2:23 pm

“It’s completely sensible to prepare for the long-term threats we know are coming – climate change and the age crisis – but folly to crawl into a bunker with your gun and your dawg.” Garth

I think we’ll painfully muddle through the current economic mess. However, the consequences of climate change will be far more serious. If we ignore the warnings (as we did in the case of our economic collapse) and an irreversible downward tilt in atmospheric conditions is allowed to occur, the equivalent of taking prudent defensive positions in preparation for economic downturns will be unavailable. Gold bars, money under the bed, and living in a sensible house with no mortgage won’t count for much in the absence of cool, fresh air. It’s time to get serious about the damage we’re causing to our physical world. In fact, I suspect we’re almost out of time.

#103 james on 02.27.09 at 2:35 pm

Good post. More positive than what I personally think will occur. That’s not an indictment. I give you credit for posting your views. Canada has simply yet to see the tsunami. We will. The system we all benefited from has unraveled because it is not sustainable. It does not work long term. Once people wrap their minds around this fact, we can move on to more localized economies and lifestyles. The Simple Life. Not romantic – hard work, indeed. But more time for reflection, something most on this planet desperately need.

#104 Troubletimes on 02.27.09 at 2:41 pm

fast recovery?
ever heard of a baby boom?

Today, for every person who is retired, there are four people working, providing income to the government. By 2025, there will be only 2 people working for every retiree. What’s more, the Boomers, as they start to retire, will live longer than any group before them, well into their 70’s and 80’s on average.

Harry S. Dent, Jr.

. His most well-known book, The Roaring 2000s, appeared on the New York Times Bestseller List.

He popularized the
age-wave theory. According to him, as a result of baby-boomers retiring, the stock-market should peak around until 2007 to 2009. It is based on his observation that the spending peaks around age 50 for individuals

Even if he is wrong.
It will make a recovery way harder then just paying off some bad house debt.

#105 Downwardly Mobile on 02.27.09 at 3:01 pm

“During the recent boom,” Mr. Soper said, “first-timers accounted for seven out of 10 buyers.” Currently, only four of 10 buyers are first-timers. Those who stepped away, he said, effectively “put sand in the gears of the real estate market.”

The depths to which these shills will stoop is simply breathtaking. How do they sleep at night? Imagine that—blaming potential first-time buyers for the downturn in the market. Why not blame the real culprits — the specuvestors who bid prices into the stratosphere…

Mr. Soper: first-time buyers will return to the market when it makes financial sense for them to do so, and not a moment sooner. By that time, you will be long gone–Google “David Lereah” for more information.

#106 nonplused on 02.27.09 at 3:09 pm

This chart shows how to tell when the worst is over:

Clearly, the first support is at the 5500 range but it’s much more likely to test the trend channel bottom at 4000. It may not get all the way down there, so if you are playing the recovery trade “layer in” or dollar cost average starting any time but no rush. If we do see 4000 it’s probably time to go all in.

I also notice that the only precedent for a relatively speedy bounce off a low occurred after the collapse of 1929. The current bear market started in 1999 or 2000 with the collapse of the tech bubble. In inflation adjusted terms, the stock market has fallen back to 1995 levels and the line is pointing ominously down. But there is no precedent for it going to zero either.

With both major lows, the one around 1000 in the 30’s and the one around 2000 in the 80’s, the market gave a year or more to buy.

Also interesting to note that if you draw a down trend on the original 1999-2003 decline and extrapolate it, we are now back in the trend. The author of the chart makes the case that the rise after 2003 was inspired by the credit bubble and not indicative of the actual value of the stock market. That may be true since the bursting of the credit bubble put us so quickly back into the original trend.

If the market stays in that trend going forward, the downtrend should collide with the overall uptrend somewhere around 5000 in 2 – 5 years time.

But it’s just a chart.

Bank talk around #20-#24

I believe Canadian banks are allowed to carry “assets” at the greater of cost or market value. So they have not been writing off any of their “troubled assets” like other banks. The won’t post a loss until they actually have a cash flow problem, but it’s all smoke and mirrors. That is the real secret of the “strength” of Canadian banks. Bad accounting.

#30 MaxDeus

If there is so much money on the sideline, how come nobody can find it? Between housing and market declines the world has burned 10’s of trillions of notional wealth. I can’t see how that can equal all this “money on the sidelines”.

You can get good (well, as good as it gets) corporate debt right now for north of 10%, but nobody is buying. It’s because they don’t have any money!

#31 David Bakody
These days, if you want to make 2 million, it’s much easier to start with 4 million in the bank.

#32 Mel Eager

It’s easy to guestimate once someone gives you their RRSP number. Assuming they haven’t taken large losses like everyone else, (maybe they had bonds or something) and that they “topped up” (most people fall into one of 2 groups, the “top up” crew and the “start later” crew), it goes like this:

$250,000/0.14=$1,785,714 combined income over say 12 years (assuming they graduated university at 23 and are 35 now), which is $148,809 per year. That is a lot for an average but achievable for a professional couple so no point being jealous.

We can double check using the annual cap of $14,000 per year:

$14,000 x 2 (assuming both work) x 12 = $336,000 so apparently they have taken a haircut with the rest of us! More likely they didn’t have enough income to get to $14,000 in their early careers.

ROB is taking about a “Bear market” in real estate openly today. Better late than never I guess.

#107 confused and a little crazed on 02.27.09 at 3:29 pm

ya Rick,

i mean RRSp
is maxed out / year @18 % of net net income . how you do that?

#108 Ted on 02.27.09 at 3:36 pm

The only way possible, a big grow room in the basement!

“Hi Rick,

I’d love to know what you and your wife specifically do for a living?

That is quite the accomplishment by your mid-thirties.

Especially the part about accumulating $250 in RSP’s at the SAME TIME as paying off your mortgage fully.

How’d ya do it!?


#109 Kettle...Pot Calling on 02.27.09 at 3:38 pm

#38 – non plussed
Here’s a thought. Open the annual or quarterly reports of any bank, Canadian included, and you can easily see how much they have written down their troubled assets. Try not to make such ignorant or libelous statements. Saying that “believe they carry their assets at higher of cost or market” demonstrates how much you actually know.

#110 smwhite on 02.27.09 at 3:52 pm

#72 Jonathan

PCA has great looking numbers, especially considering what you previously mentioned.

#106 nonplused

Bravo! I’m not the only one that’s been seeing the downward “triangle” shape heading to 5K.

#111 squidly77 on 02.27.09 at 4:20 pm

#50 pension guy said

But some of you are pulling 4,000 valuations out of your a** as if it were plain fact to all but the ignorant. Sorry but I will take experience and analysis over the perverse wet dreams of you doomers.

pension guy i am glad to hear your type return
those were the sort of comments i used to recieve when back in the spring of 07 i suggested that the TSX would crash to 7,000 by spring 09

your hoping and that is all..

#112 Nathan in Edmonton on 02.27.09 at 4:27 pm

Rick – go with the conservative option, but then I’m biased because I just received my annual mortgage statement showing how little principal I paid compared to interest.

Excellent post this week by John Michael Greer on The Investment Delusion.
“We are thus entering a period of prolonged economic contraction – not a recession, or even a depression, but a change in the fundamental dynamic of the economy.”

#113 Another Albertan on 02.27.09 at 4:51 pm

Lunchtime anecdotes:

Western Canadian oilfield service rates will need to drop on the order of 25% to allow drilling and subsequent production to be cost-effective.

Many home builders are demanding a 20 to 25% drop in wages from the sub-trades if those trades want to be considered for the minimal work that is going to occur in 2009.

A major oil company has circulated an internal memo indicating that, whenever possible, the employees should be attempting to renegotiate all supply contracts (everything…across the board). When possible, acceptable pricing should be 25 to 50% off of current levels.

#114 vtj on 02.27.09 at 5:03 pm

#53 Rick:

Congratulations! I’m very impressed with the fact that you were successful in blocking out all the noise and doing your own thing over the past few years. I suspect that you must have received a lot of flack in the process for not going with the flow.

Your current situation is totally believable to me. I too could have found myself in a situation similar to yours had I not been totally reckless with my RRSP investment selections over the past 12 years. What can I say, day trading was a national sport for anyone working at Nortel when I worked there as an EEng a number of years ago. Getting measly 3% returns via fixed investments was for the wimps – us “big boys” invested in the Worldcoms, Quests and Genuity’s of this world, now all defunct. Live, learn and don’t make the same damn mistakes again … I’ve turned the page.

Your reality should be a kick in the butt to the whiners on this forum who complain constantly (you know who you are) rather than making meaningful contributions towards our collective future via hard work and productivity.

Thank you for taking the time to post even though you no doubt knew you were going to get crapped on by a few whiners and doomers.

All the best!

#115 JM on 02.27.09 at 5:35 pm


I’ve read this blog a fair amount. I have to say I think you’re increasing arrogance is leading to more inconsistency in your logic. The other day, you implied Toronto housing was going to drop 18% more than the already recorded 13.9% decline. Some guy asked you why then he should not sell. Your response was that, “It’s too late- should have sold 7 weeks ago”. You put the blogger in his place for sure, but imagine that reasoning applied in another context. Take the decision to hold or sell stock, “Don’t sell Nortel, It’s too late. It’s going to fall 18%”- and you get my point.

With gold, you have often ridiculed people who tout it as a great hedge against future inflation. I (and perhaps other mortals) have always taken that to mean that gold is not, in fact, a good place to put money. But when I wrote you were bearish on gold, you mocked my illiteracy. You then went on to say gold should be 15% of a portfolio. I don’t get the reasoning. If gold is just a dumb shiny metal, and if people who see it as a new currency are dumb too, then why own gold at all. Please Explain.

No problem. Read more carefully. I did not tell anyone to sell seven weeks ago, but rather to list. Homeowners not already listed, and who do so now, will understand my comment perfectly as they contemplate an unsold home in a hotly competitive market. As for gold I have never said it is not a hedge against inflation. Of course it is. All commodities are, and none better than oil. This is why a modest 10-15% gold position (or other precious metals) is fine, if you subscribe to this view. But it is not an alternative currency. I think the arrogance is yours for supposing what I said. But I still love you. — Garth

#116 Cendrine on 02.27.09 at 5:39 pm

#93 Carole AB

Your link!-4th-quarter-2009-Beginning-of-Phase-5-of-the-global-systemic-crisis-phase-of-global-geopolitical_a2805.html

does not work, I’m afraid.

A previous link a while back to the GEAB site also did not work and likely will not work for those of us without a subscription. Thanks for sharing that intriguing tidbit. The rest of us plebs may have to organize group subscriptions.

#117 electrician boy on 02.27.09 at 5:42 pm


Why you don’t trust investing in gold?Metal not paper.Please your opinion.
Thank you,

How many times do I have to say this? Gold is a commodity and should be treated as such, same as oil. It is not a currency. It is not alternative money. That is a fiction. Buy it for capital appreciation (if you believe there will be any), not for some myth that it will survive when paper currency fails. Ain’t gonna happen. If you want to hoard something, get stuff you can use. — Garth

#118 jeff on 02.27.09 at 5:54 pm

Rental rates in Toronto, especially in high end markets,are going up very fast. People who are waiting for prices to fall significantly before buying are all competing for good rental units. You would not believe how crazy rents have become in Bloor West Village/ High park area (a very popular place to rent in Toronto). With rising rents, I expect more and more desperate sellers will fall into the “lease trap” . They will let their property at what is initially a high cap rate only to watch their home values plummet throughout the term of the lease. Locked in and frozen out, they will daily regret their decision not to sell at “a low price”. By summer thousands of condo speculators will become unwitting landlords as they find it impossible to sell without a substantial capital losses in a market flooded with new units. A nightmare for sellers, but completely predictable.

Renters should sign short term leases and wait for rents to dive. Renters will be in the driver’s seat by August.

#119 kitchener1 on 02.27.09 at 5:58 pm

#50 pension guy said

But some of you are pulling 4,000 valuations out of your a** as if it were plain fact to all but the ignorant. Sorry but I will take experience and analysis over the perverse wet dreams of you doomers.

Pension guy, one question for you, how many if any of these genius anaylst you know forcasted the DOW or the TSX to be in the 7000 range?? Did even one of them?
The 4000 floor is based on elliot wave theory as well as generational theory anaylsis.

There is always opportunity in the markets, one thing I notice is that if there are so many great bargains, why are’nt the soverign wealth funds or the Soros’s of the world going out into the market and buying up these companies at bargain prices??

Yes, Canadian banks are solid but remeber that all of their diviends will now have to be spread out due to share diluation when they all dumped shares on the market at their lows

#120 ncoffee on 02.27.09 at 6:46 pm

With all sincere respect to Garth, someone help me out here; I’m honestly still not clear on why the following bit from #116 doesn’t make sense —

“The other day, you implied Toronto housing was going to drop 18% more than the already recorded 13.9% decline. Some guy asked you why then he should not sell. Your response was that, “It’s too late- should have sold 7 weeks ago”. You put the blogger in his place for sure, but imagine that reasoning applied in another context. Take the decision to hold or sell stock, “Don’t sell Nortel, It’s too late. It’s going to fall 18%”- and you get my point.”

Okay, so the market is extremely brutal if you’re trying to sell, sure. But to hold onto an investment (maybe your only investment) knowing it’s going to drop significantly further, without even attempting to get rid of it? I’m not meaning to be ignorant here, but I still don’t get it — one way, there’s a chance you might sell, regardless of how small; the other way, well, you’re ensuring that you’ll be screwed by doing nothing.

Someone take a moment to enlighten me, please. Thanks!

Sheesh. My point was simple. If you list now you will face a barrage of competition and be forced to sell for less than if you followed my advice and listed seven weeks ago. List any time you want, but just understand you missed the moment. — Garth

#121 Alberta Ed on 02.27.09 at 6:48 pm

I knew a couple of beavers a few years ago. They worked 50 weeks a year, 12-16 hours a day minimum, no kids/pets (DINKS), took their annual two week holiday in Hawaii at Christmas. Made tons of money. He got transferred to TO in a big promotion, she got cancer. Money in the bank, but no life. Take time to smell the roses while you can (or ride the Harley :)).

#122 blacksheep on 02.27.09 at 7:14 pm

Garth writes:

“there’s wisdom in having a cash reserve, but NONE in hoarding gold coins”

I purchased some Canadian gold coins about one year ago.

Paid then………….$900 can.
Todays value…….$1200 can. [after pull back]
+$300 /per coin/ounce/tax free

My only regret, i didn’t buy more.

take care

Are you a hoarder or an investor? The latter knows when to take profits. — Garth

#123 Sun Yat-sen suit on 02.27.09 at 7:24 pm


“You have to choose [as a voter] between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the Government. And, with due respect for these gentlemen, I advise you, as long as the Capitalist system lasts, to vote for gold.” George Bernard Shaw

your GBS thought the sun shone out of Stalin’s ass.

#124 Rural Rick on 02.27.09 at 7:30 pm

Ever one of you guys who is looking for an investment must know somebody, friend, associate, neighbour who is good at doing something marketable. Why don’t you invest in them.
Hell you have most of the MBA questions answered already about this operation. Get on it.
As an investment you could not have more fun or be better rewarded than by investing in people.
It’s all profit and hey you might even make some money doing it.

#125 Carole AB on 02.27.09 at 7:40 pm

#118 Cedrine

Sorry about the link try:

Click on English
Geab 32
the press clippings on the left are good reading. Leap 2020 sends you about 30 pages each month they reference most everything to newsreports from around the world. They also rated their predictions for 2008, they were wrong on things not economic such as the election of McCain but have been warning of the crash since 2006 although it was more severe than they expected. Here is another excerpt:

“A very simple image illustrates the global insolvency characteristic of today’s global financial system: the financial base which banks, insurers and global financial institutuions were resting upon is collapsing in the same way as a city built on a huge fault would collapse, suddenly realizing that what was meant to be solid land intended to firmly support the city’s buildings is nothing but a thin crust of earth over a mixture of a void, toxic gas and unstable ballast. Of course the financial equivalent of this mixture is the highly volatile combination of US Dollars, USD denominated assets and debts, produced in particular by the US, the UK and a number of developed and developing economies” 8

The fact remains that the consequence of this situation is an acceleration of the process of dislocation of the base which supported our world for decades and for the last 20 yrs in particular….The more a country or a region depends on the US Dollar the more the fabric of its society will be dislocated starting in the 4th quarter of 2009…the symptoms are easy to identify: balance sheet less and less balanced, assets continuously losing value, public defecits exponentially growing, frozen public services, multiplication of corporate bankruptcies, loss of confidence in paper money…

8: Dubai is a perfect example of the image of a city built on soft ground (in this case sand); indeed the Emirate is now experiencing a general price collapse of all wonderful RE investments made in the past few yrs. Source: Khaleej Times, 02/02/2009

#126 Jeff Smith on 02.27.09 at 7:45 pm

Nah! Don’t worry, there will be a world war III to get us out of this mess. Uncle Obama just said he will pull US troops out of Iraq. As soon as he does! Bam! All the guerillas & jihadis will start to got at each others throats and everyone else in between. Then it will suck in Saudi Arabia & Iran & Syria & Israel. Then it will spread in all four directions (east,west,south,north). Then Canada & US will ship out the men to the war fronts, all the factories will be up and running. And we will get our manufacturing jobs back. Woohoo!

#15 kitchener1 on 02.27.09 at 12:26 am

Garth, I must disagree, the turn around will take years and not days. People that lost their life savings will be very much risk averse in the future.

There will be one more big suckers rally in the DOW before summer, possibly up to 10K range before it nose dives to 4000K. One more opportunity to seperate the “weak” from the strong. One more chance for so the big money can profit and the fools can be left holding the losses.

Every rescession follows the same cycle, the biggest worry with this one is that there is not going to be a next “big: thing to get us out. No property bubble or dot com boom to absorb all of those newely unemployed.

The shift to enviromental friendly products will happen but it will not be the same as with the dot com or property bubbles.

After this fiasco, people will be wary when lending from banks.

#127 nonplused on 02.27.09 at 7:56 pm

#108 Ted

That comment was pretty insulting. Engineers make good jack. Not as much as lawyers or doctors but easily enough for 2 penny pinchers to amass the goods suggested. And the last 10 years have been good to the profession. Not sure the next 10 will be though….

No point being jealous people the universities in Canada are open to anyone who wants to go to them.

See post #106 where I calculate how they could easily have done this with a combined income of $150,000 per year over 12 years. Since Rick himself has responded that they are at $160,000 now, I didn’t do too badly.


It’s your blog but I am not sure it was wise of Garth to post this letter with all the details even anonymously given the large amount of jealousy this couple’s success seems to have engendered. I would have thought this crowd would have been above that but maybe not.

#109 Kettle…Pot Calling

I didn’t say they didn’t write off anything. But I understand carrying assets at cost was the rule for banks many years. Don’t know if it’s been changed. In the US they brought in mark to market rules (which they now want to get rid of) but I don’t know if Canada followed suit. If you know what the current accounting rules for banks are, I would appreciate the information. And just because it’s a blog doesn’t mean you have to be rude.

Regarding Garth’s gold comments:

I don’t see why not hoard a little gold along with the whiskey and MRE’s. It’s nice and shiny. But I agree it is very likely never returning to the exchange system. The advantages of electronic money are just too numerous to give up. You will always have to sell the gold first before you can buy other things with the value tied up in it.

Silver coins on the other hand? Might be a little more practical as the value is much lower but I still think the number of people familiar with them is too low for it to work. Ebay and the coin dealer are still going to be the only way to liquidate them if necessary.

#128 North Vancouver Citizen Jr. on 02.27.09 at 8:02 pm

#98 Senior Citizen
“”I didn’t get a response yesterday regarding rental rates in the GTA if everybody is selling and start renting. Could they go sky high, could there be a shortage. What do you think? All responses appreciated which includes you Garth!””

…..You’ve hit on the subject of Garth’s next book, “”Renting Fool””.

Senior Citizen you’ve asked a very good question indeed.

…The premise of selling one’s home, then renting works very excellently in the Province east of Manitoba and west of Quebec, as that area is very badly hit due to “Overbuilding” combined with a Manufacturing Economy entering a deep Recession.

Many weeks ago on this blog I predicted cities like “Vancouver Proper” would stabilize sooner than expected because those homeowners who sell would raise demand/rents of those rental accomodations that were available…hence balancing the ownership vs renting syndrome.

Vancouver Proper has only 800,000 citizens while Toronto has bazillions of people.

Hope that helps

….Did I ever mention Vancouver Proper will become the next Financial/Trade/Leisure capital of North America?

#129 BCing You on 02.27.09 at 8:10 pm

Why are there so many posts here that are surprised by this couple’s net worth? It’s not that surprising. If a couple of people work in I.T. or just about any profession then they could easily start making $40K + per year out of university per person. That would increase significantly over 10 years to $70K or more per person. If they can keep their spending in-check say under $40K per year. Then even after income tax they could save one entire income and part of another or pay off their mortgage. If they are both making $70K then could be saving $60K year. Also, they bought a house in 1998 before prices ent through the roof. Even in Vancouver you could get something average for roughly $300K.

It not that surprising if you have two people both making decent incomes and are living well within their means.

#130 John Kulesza on 02.27.09 at 8:50 pm

I smell a bs story.

#131 Sail1 on 02.27.09 at 9:06 pm

122 ncoffee

Sheesh. My point was simple. If you list now you will face a barrage of competition and be forced to sell for less than if you followed my advice and listed seven weeks ago. List any time you want, but just understand you missed the moment. — Garth

Garth, I have never seen you exude so much effort.
Take out the stools and the dunce caps.

#132 Outlaw on 02.27.09 at 9:06 pm


There is always opportunity in the markets, one thing I notice is that if there are so many great bargains, why are’nt the soverign wealth funds or the Soros’s of the world going out into the market and buying up these companies at bargain prices??

Please do some research before you state your opinion. Soros actually tripled his (quantum fund) holdings of Petrobras (Nyse: PBR) and doubled his stake in Potash Corp (Nyse:POT). It would seem as the elites are slowly picking their way into petrol and agriculture. Hmm I wonder why? (severe inflation in couple years due to increase in food prices, not including localized shortages). As for oil, for folks who work in the oil sands, you understand that with massive investment cuts happening worldwide in the oil business come decreases in supply. (Please research suncors or encanas capital projects cuts). In a couple years when demand picks up and supply is still short, oil and oil producers will be trading significantly higher than today.
Is it time to buy though? Nobody in this world can provide you with a definite answer. Depends on your personal investment profile.

Good Luck All


#133 Mike B on 02.27.09 at 9:13 pm

Pension Guy… talking out of whose ass… Yours… My investment guy has been doing this for over 40 years. He was right about nortel months b4 it tanked from plus 100 levels. The last run ups two days ago are typical bear run ups.. There is more likelyhood of pullbacks LIKE TODAY than any stampede upwards. Seriously you do have some opinion of yourself. Most people here have been doing this for decades. Have a nap pension dude.

#134 blackout on 02.27.09 at 9:15 pm

hilarious how many doubters are on this site. congrats rick and keep on truck’n. these are the same people that will be attending rrsp info sessions in their 50’s.

#135 Investor on 02.27.09 at 9:23 pm

Check this out

#136 hmm.. on 02.27.09 at 10:12 pm

I just cant believe it this time. Man, where do you get this trailer trash you write about. None of them can be real. And this poor (rich) sucker has just no clue what is important in live other than counting and worrying about YOUR CASH. Garth, come on get more serious, you no longer write for The Toronto Sun ! And forget your generators and gold and “i don’t know what”. For emergency all you need is a simple and small wood-stove and couple of bags of rice and flour and if you are preparing for apocalypse , you will not enjoy your things longer than one night , unless you are prepared to kill everybody that comes to take them “the things”. And you can bet your life that you will run out of bullets rather quickly.
So get real and put out some useful stuff.

#137 Basil Fawlty on 02.27.09 at 10:26 pm

“How many times do I have to say this? Gold is a commodity and should be treated as such, same as oil. It is not a currency. It is not alternative money. That is a fiction. Buy it for capital appreciation (if you believe there will be any), not for some myth that it will survive when paper currency fails. Ain’t gonna happen. If you want to hoard something, get stuff you can use. — Garth”
You are entitled to your opinion Garth, but I respectfully disagree as do many financial analyst’s. While gold is a commodity, as you state, it is more importantly money. Most importantly, it is also the only financial asset that is not simultaneously someone else’s liability.
Gold has gone from $260US in 2001 to about $950US today, what is wrong with having say 10% of one’s portfolio in gold, and why take profits if one would just turnaround and repurchase the barbarous relic?
The reason gold is going up is because
paper currency’s are presently failing. Don’t wait, panic now!

Gold also went from $1,000 an ounce to $260. It is no more “money” than a barrel of oil, and less useful. — Garth

#138 vicguy on 02.27.09 at 10:36 pm

Hey Garth, I am a big fan of yours, but with all due respect, gold never went from $1000/oz to $260.

Is this close enough? — Garth

#139 Cendrine on 02.27.09 at 10:50 pm

#127 Carole AB

Thanks for the corrected link and that excerpt! I have been following the LEAP 2020 public announcements and they have been fairly accurate from what I have seen. Makes you want to subscribe so you can find out what the next big thing will be – the ultimate reality show! . How about that grim forecast for the end of the year?

I’ve been showing these to DH and discussed lowering our price but he does not agree. He thinks that lowering our price will cause us to lose profit but I feel we will lose it anyway the longer we wait. I just want the chance to restart my business (healthcare related) is a bigger, brighter market.

There are interested people but they have houses to sell, they are waiting for financing, or looking to compare a new build against buying our house…the list is endless. And we hear nothing. There are at least 60 houses in roughly the same price range within a 30 min radius…lots of competition.

All I’ve got left is prayer….and the knowledge that we will still be OK even if we don’t sell.

#140 Vancouver_Renter on 02.27.09 at 11:27 pm

As a contrary investor, it’s interesting to hear all the gold-bashing on this forum. I’d be worried if everyone agreed that gold was going up in value. The doubts and pessimism makes me think that gold is only going higher. Maybe I’m wrong? It would be interesting to know what percentage of people here actually own gold investments.

Several years ago, I remember hearing the endless “oil is going up so open a commodity trading account with us” ads on a major local radio station when oil just started on its way up. Just because there was hype didn’t mean we were at the top. I think a top occurs once everyone buys into the idea that a given asset class will never fall and is only going to the moon.

When oil hit its peak of $147 last year, it seemed like everyone accepted “peak-oil” and “oil to $200” and “my next car will be a Prius”. I saw almost nobody daring to predict that oil would crash to $30.

So I continue to believe in gold. As I’ve written before, in the 5 major deflationary contractions of the last 300 years, gold stocks were the best performing asset class in all of them. When gold appears on the front page of Time and McClains with headlines “Gold to $10,000?!!” and pictures of smiling gold stock holders that is when I’ll believe a top has been reached.

#141 Michael on 02.28.09 at 12:01 am

Look at me then. I came to Canada 6 years ago with 14K in my pocket and spend almost all of it in first 6 month here. We accumulated 400K+ since in cash and 40K in RRSPs and also 20K in company pension. I’m database analyst. My wife is head of developers department in software company. We rented for all of those years ($750) second floor 1br in duplex and recently moved to great 2br main floor in back split home (rent $1100 all in). 1 kid, 1 is on the way. We went on vacation to Vancouver and Victoria (I won a trip from my company, spent $600 for entertainment), to Europe (highly discounted tour, air tickets at $400 each, hotel 4*, overall $1400), to Montreal ($1 bus tickets last spring, hotel booked from internal company web site at double suite for 45$/night, $800 total). I signed for being insider for main Hollywood companies and we go to movies for free screenings and 2 weeks before films hit theaters. We take DVDs from library for free instead of BLOCKBASTER. We cook at home and good at it. We don’t have any cars, rent when needed and use TTC otherwise. We hardly spend anything as we got our 2 LCD monitors, 3 iPods, PDA and even 42” LCD TV (yes, you read it right) free from promos (we got 32” for free, returned for store credit unopened and bought 42” back on boxing day for the same price). We live pretty good quality life as far as I concern. Would I like Garth’s advice? YOU BET! I’m not that experienced in my middle thirties. :-) Only one thing I know for sure is that most homes on the market don’t worth 300K and many even 200K. I know how 300K cash look like and have pretty good understanding of what should be on the other side of scales to be worth that kind of money. It will be very hard to convince me to give it to previous fool who bought it.

#142 Future Expatriate on 02.28.09 at 12:11 am

Ah, the endless back and forth between people who believe in gold and the paper pushers.

In a better world, paper would disappear, because it is based on BS. Oh, there will be carnage for awhile, but just to people that believe BS.

I’m hoping this will end up being a better world, and putting my money where my mouth is.

If you’re not part of the solution, you’re the problem.

#143 Basil Fawlty on 02.28.09 at 12:28 am

“Gold also went from $1,000 an ounce to $260. It is no more “money” than a barrel of oil, and less useful. — Garth”
Just how many barrels of oil can you get in your pocket?

#144 nonplused on 02.28.09 at 1:16 am

#114 @Garth 2

There are over 20,000 engineers, geologists, and geophysicists registered with just APEGGA alone. They can’t be that weird. Add technologists, scientists, doctors, and people who apply the same sort of skills on the financial side like accountants, and I would make a strong case that there aren’t enough space ship sightings for them to be anything but human. It’s a side of humanity that any kid that ever expressed an interest in Lego blocks has. It’s in the genes, man. It’s just not cool.

#128 Jeff Smith

There can be no WWIII. War is a very unpredictable thing, and the professional warriors know this. But this time, the ultimate defense, nuclear weapons, are pervasive and lethal beyond conception. A world war at this point won’t save anything or anybody. And it’s questionable whether the other world wars did either. Dead people, destroyed economies and huge government debts were the results, everywhere but the US, and things didn’t start ticking up there either until the soldiers came home and started getting jobs.

Also if we are back in the 2000-2003 trend no more tests of 10,000 on the Dow can be made. The test of the top has already failed. All tests from here are of the bottom until one sticks.

#130 North Vancouver Citizen Jr.

I must disagree with what you seem to be getting at. I am currently renting from a specuvestor who has no choice but to wait this thing out or loose his life savings. He’s a decent guy, worked hard all his life, and a good landlord. He’s happy to have a tenant that takes care of the place and isn’t trashing it.

In fact I know several people who have become “Accidental landlords” just trying to move! I even saw a book called “the Accidental Landlord” in Coles the other day, and it was a Canadian book. If all the vacant houses in the market can’t be sold rental rates should remain attractive. But be a good tenant, pay your rent and don’t trash the place. Your landlord might only be a few payments away from foreclosure and then you are on the street too, but not with as much notice. Banks are nasty. They will come throw all you stuff in the driveway without confirming you are the owner, if the owner doesn’t respond to the eviction notice. At least that’s what they are doing in the US, again too much US media and I don’t know the Canadian laws.

And will you consider canning the “Financial/Trade/Leisure capital of North America” thing? We can all see the numbers. Vancouver is getting hit harder than Calgary, and for clear fundamental reasons.

#133 Sail1

What the heck was that?

#139 Basil Fawlty

I agree with Garth on gold and I disagree with him. Gold is a store of value, and hence can be considered “money”. But it is also a store of value subject to market demand and therefore volatile. In the same way currencies can fluctuate, so can gold. Garth is right to caution that it might not be different this time. I think it’s a good hedge, but don’t go all in.

Many writers lately have shown that an ounce of gold today buys about as many loaves of bread as it did 2500 years ago. But bread is also a commodity. If you want to lock in the number of loaves of bread you will have in the future, a good bet is to buy gold. But if you are trying to get rich, well, if it was that easy we’d all have a NYMEX contract of it under the bed.

Gold can’t make you rich. It can only preserve wealth in turbulent times. Use it for money you always want to have even 20 years from now only. But you’ll probably find that it has the same purchasing power then as it has now, and no return.

Garth’s comments to #140 vicguy

The 80’s spike was an over shoot to the times. It shouldn’t have been there any more than the tech overshoot. And it goes up and down. The over all long term trend is $20, $41, up through a crises, $400, $270, and now. What’s the real value? Well it isn’t going to the moon but it should be still be the reverse of the dollar. Unless the dollar goes to zero of course but that can’t happen without making the gold useless too.

#145 nonplused on 02.28.09 at 1:40 am

A further thought on gold.

I think a way to look at it is that if you have a sum of money that you always want available for the rest of your life in terms of purchasing power, and maybe leave to your kids, convert it to gold. Each individual will decide how much money they have that they can spare for non-productive but protective investment of this sort. But the return, in terms of purchasing power, will normally be zero. You won’t gain, you’ll only protect.

For most people, a return is desirable. For most people that means good stocks but it can also mean a good private business or maybe attractively priced bonds in stable entities.

For Adam Smith’s “The Wealth of Nations” thing to work, capital has to be deployed in productive assets. I read the book, and even he back then thought of gold as a means of exchange. But wealth comes from improving the overall productive capacity. That means buying stocks of good companies that produce tangible assets. But not necessarily Canadian banks that are issuing shares even though they supposedly don’t need the money.

How do you know it’s a good stock? Well, wait. The time is coming soon. Anybody left standing in 2 years is probably a buy but diversify.

#146 Blacksheep on 02.28.09 at 2:43 am

Garth writes:

“Are you a hoarder or an investor? The latter knows when to take profits”

Take profits in depreciating Canadian currency?

Got my preps, so……….

To buy what?

-Still tanking stocks?
-Crashing realestate?
-Zero return bubble bonds?

If gold is truly not money,

why can i walk into almost any national bank, in any country and take a one ounce Canadian, Australian or American, government minted gold coin, and trade it, based on the metal purity of the coin, not monetary value, for local funds?

Try that with a barrel of crude, pound of copper or a canadian dollar.

After reading your blog for months now i think i understand your opinion on metals.

1) You commented, that the U.S. dollar cannot fail,
that it would be the end of the world as we know it.
I was there in surrey, after the show, when you responded to said question.

2) Based on your above response, cannot fathom the idea that the U.S. dollar could become worthless, or
drop in real buying power through inflation.

So you see gold & silver as nothing but a quick flip, not a storage of wealth, for troubled times.

One of us is wrong, time will tell.

take care

#147 HalifaxFamily on 02.28.09 at 6:54 am

I love this blog. It gives you a great environmental scan of what is going on. Thanks Garth and all you posters!

#148 HalifaxFamily on 02.28.09 at 6:55 am

Does this couple have kids?

#149 Glenn on 02.28.09 at 9:24 am

I paid $400 an ounce for the gold I have, and the price is expected to go to $4000 an ounce before the end of 2010.

I wont even mention the gains silver has, and will continue, to have.

Any cash you have or can get your hands on, buy metals. Cash will only devalue or completely go away. Perhaps replaced with the Amero…at a 3 to 1 exchange rate of course.

Take your meds. — Garth

#150 Bill-Muskoka (NAM) on 02.28.09 at 10:14 am

#140 vicguy on 02.27.09 at 10:36 pm

I also suggest talking to the workers at Con Mine and Giant Mine in Yellowknife about the rise and fall of gold prices. They remember them very well because the mines had to lay people off back then.

#151 Bill-Muskoka (NAM) on 02.28.09 at 10:26 am

Last night’s ‘Flashpoint’ (a Canadian series filmed in Toronto and aired on American CBS network) depicted the coming reality some of these greedy arseholes will be facing from displaced people, while they still take huge personal profits.

#152 Glenn on 02.28.09 at 10:39 am

Fresh out of meds, Garth!

Can I borrow some of yours?

January 2003 Silver price per ounce = $5

January 2008 Silver price per ounce = $12

Remember, gold and silver are the mountain that all fiat currency is trying to climb.

The greatest storer of wealth since the beginning of time…the noble metals.

Ok Im off to see my shrink. He wants to buy 20 ounces of silver from my stock, you see. >:)

#153 Bill-Muskoka (NAM) on 02.28.09 at 12:53 pm

#154 Glenn on 02.28.09 at 10:39 am

Might I suggest you watch out for ‘Shrinking profits’? LOL

#154 Jeannie on 02.28.09 at 2:01 pm

There are some of us still alive(!) who remember the last big run up on gold, silver too.

Like the rest of the lemmings we spent most of our savings on these metals, and waited for the financial jackpot.
Imagine our surprise when the value of these ‘precious’ little coins dropped as quickly as they’d risen. We shoulda cashed out when the price of gold hit $1,000.. but no, we believed the hype, and lost a bundle.
Good luck to another generation of ‘Gold Miners’ hope you’re timing is better than ours.

#155 pbrasseur on 02.28.09 at 2:56 pm

@ Glenn

Speculating on gold may work as it has for homes, for a while, not so for the greater fools…

#156 Future Expatriate on 02.28.09 at 4:12 pm

#156: Jeannie, why this time is unlike all other times before:

The paper Ponzi scheme has never collapsed to the extent that it has; total collapse; financial annihilation. Weimar Germany, Zimbabwe, with a North American pretty lying face on the carnage. All the King’s horses and all the King’s men will not put Humpty back together again.

What you are witnessing is idiots trying to put out a fire in a building that is 98% lost with torches and firehoses filled with gasoline, not water.

Furthermore, the consortiums who manipulate gold prices by dumping tons of what they know is utterly worthless gold paper on the market to drive the price down so they can pick up the real bars at bargain-basement prices are just about out of worthless paper TO dump. Once that occurs, gold will never be artificially knocked down again.

Will there be fluctuations? Of course, but at a level far above today’s valuation. Once everyone recognizes that gold paper is worthless, it will be much harder to daytrade and virtually impossible to manipulate prices, and the lemming day surfer fluctuation factor will no longer apply.

It will be those who hold gold who will have real money for homes at the bottom of the market, not paper-pushers and paper-believers. Cash is in a bubble right now, while gold is still far below historical norms adjusted for inflation. A gold “bubble” hasn’t even started yet, as only the uber-riche are clued-in enough to hoard it.

Always do the DIRECT opposite of what the elite want you to do; always. Right now they want people to dump gold like lemmings so they can scoop it up at bargain rates.

#157 Pension Guy on 02.28.09 at 5:18 pm

Mike B – Just about every decent investment manager in Canada were massively underweight Nortel at that time – hardly a great achievement.

Some opinion of myself? Hardly. I’m just saying I’ll take their opinions over your half-baked ideas. “Most people here” may have followed the markets for a long time but they don’t do it full-time and they aren’t trusted with tens of billions of dollars. Alpha is a zero-sum game, the reason institutional managers can make money is b/c of people like you who think they know more than they do. You can boast about predicting this and predicting that – you predict enough things and chances are you’ll be right sometimes – as they say, even a blind squirrel finds a nut once in awhile.

I just think it is silly to speak with confidence about the market going to 4000 because of quant/technical systems. If so confident, I hope you are leveraging up on index puts…

#158 Grunt on 02.28.09 at 9:29 pm

I would like to go on the record as being the first (and only?) poster to predict $5000 an ounce gold before 2011.

Id also like to predict the collapse of the American and Canadian dollar and a merger into the Amero, but I cant say exactly when.

For more on this, check out and see its written by a guy that was “in the business” when Garth was chasing pimply fat chicks in high school.

I went to a private school for boys. — Garth

#159 R Alton on 03.02.09 at 1:49 pm

I really think that people should be careful about money they might invest in equities. Much of the commentary about real estate also applies to equities.
Boomers drove up the price of real estate and they, through pension funds and RRSPs, other investment vehicles also drove up the price of equities and commodities, and a great deal of this is also delevaraging. Just as they can’t eat their house, they can’t eat their equity investments. They will need to cash out. We are entering a phase where an increasing segment of the population will be spending down the assets they have accumulated so far.

#160 Soylent Green is People on 03.02.09 at 3:06 pm

Re #53 Rick on 02.27.09 at 9:53 am Hi Mel (#32),

I hope to God you didn’t achieve your well-off financial status on the backs of your children! But I’m afraid it sounds like you threw them into institutional day care orphanage so she could make all that extra money.

If you did, shame on you; extra shame on your wife for abandoning her children to strangers so she could bring in more cash. Shame shame shame. Don’t be surprised when your children throw you into a daycare when you’re 88 and abandon your ass in spite.

Day care is used by morons and total jerks.

Please tell me a grandmother looked after them for you at least?????