Enough already

Rambo

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us…

…which brings us to now.

Is it wisdom or foolishness that sales of single-family homes in Calgary last month climbed by 50%? Or that residential housing sales in Vancouver were 94% above January levels? That Canadians shoved almost $2 billion into mutual funds last month, instead of their Posturepedics? Or is this simply the triumph of hope over despair?

This blog has turned into a cosmic force field lately. On one side are those who come here to get the skinny on falling real estate prices so they can go buy a house. On the other are the depression Rambos who secretly cheer for social collapse, monetary ruin and a soupcon of anarchy so their gold will appreciate. Completely ignoring us are most normal people either avoiding the news (and buying houses in Calgary and Vancouver) or totally freaked out by current events.

Admit, it is confusing. The best of times? The lowest interest rates in history, mortgages today at 3%,  lines of credit at 2.5%, plunging prices and zooming affordability for everything from Mercedes to bungalows. The worst of times? The crashing stock market, plunging car sales, steel mills closing, TV anchors getting laid off, Japanese equities in a 26-year crater and Britain announcing it’s printing new money because the old stuff isn’t working.

This is confusing the hell out of most people, which is why consumer spending will remain frozen in the blinding headlights of job loss. As I have said here repeatedly, no story will be more significant than that of unemployment, as workers at Stelco and CTV learned on Tuesday afternoon.

Financial markets, and a good chunk of the world, now doubt Barack Obama. Oh, he’s still a deity, but one whose powers are apparently limited. His rolling bailout package has created financial fatigue, and so far it ain’t working. Stocks have lost a third of their value since the guy was elected. And disasters like AIG show even omnipotent politicians will squander any amount of money to avoid even worse disasters.

This will not end well in 2009. In fact, it won’t end at all this year. Obama’s first 12 months will bring tens of millions of jobless, trillions in investment losses, nationalization and the kind of spending Stalin only dreamed of.

Yes, financial markets will be higher at Christmas than they are now, but the economy won’t be. Jobs that are lost in the hundreds and thousands will come back in the tens and twenties. House values could be a decade reclaiming 2007 levels. Buyers today are gamblers indeed.

Oh, it will suck. But it’s not a depression.

howestreet250

To listen to Garth’s podcast, click above.

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151 comments ↓

#1 RG on 03.03.09 at 10:10 pm

It may not be a depression but it sure is depressing.

#2 Smith on 03.03.09 at 10:12 pm

I’ll roll the dice. This spring be the time to shuffle what money you have and prepare for where you will end up.

This roller-coaster is just picking up speed, the knocks are gonna come hard and fast.

#3 Increasing that 1% on 03.03.09 at 10:25 pm

As one who is in position of ‘need to sell’ that is (maybe selfishly?) great news of the increase in residential sales in Calgary and Vancouver, and by so much.

And glad to hear that this is all confusing for many, as per last blog, was starting to wonder..

#4 kitchener1 on 03.03.09 at 10:32 pm

Wow, Garth, that is a bold statement. Only time will truly tell. I am hoping along with you that this will only be a deep rescession. Im still betting on a real estate crash and some major strain on the RE markets by fall.

Gold is a good hedge but people have got to remeber that if it hits $2000 or more, then it won’t matter anymore as we will be in a whole new world economically speaking by then.

#5 Bill-Muskoka (NAM) on 03.03.09 at 10:34 pm

Garth,

Might I suggest you stop blaming President Obama for the sluggish response? What do think it is a Fast Food Drive Thru where instant gratification happens?

The Congress, and especially the moronic conswervative Redumblicans caused this mess. They are still fighting change like a dinosaur in a tar pit. Their CPAC meeting was like watching a KKK gathering! If you missed it go watch ‘The Daily Show’ from Monday night online!

Have a good night mon ami!

Speaking of them, when will the HoC file a copyright lawsuit against the RNC for using CPAC? We OWN that right, now Stand Up Canada!

BTW, how are all those lawsuits we talked about going nowadays? I saw last week the Good Old Boys like Karl Heinz-Schrieber is headed back to the hotseat. Ly’in Brian with him as I recall. How about the Chuck Cadman affair? That is a very long list of NO ACTION situations.

#6 LS on 03.03.09 at 10:34 pm

Unfortunately it seems to be a widespread thing.. Housing sales are also up dramatically in Victoria, and average prices have gained a bit as well.

We’re hoping for some more declines until we can buy something in the fall. Lets hope this is just an anomaly and the market will continue to fall a bit more. I’m not expecting much, but after so many years of insane rises, we gotta get more than 9 months of decline right?

Damnit people, it’s an economic disaster out there, get with the times and stop buying houses! :)

#7 WesternGrit on 03.03.09 at 10:44 pm

Hmmm… I’m thinking that some jurisdictions are slightly less impacted than others – although EVERYONE is impacted. Job losses are coming in BC and Alberta. I run a business in Greater Van., and I’m getting the best resumes ever – and that’s a bad sign, because I run a restaurant. Mostly construction workers who are laid off, young guys who just began their trades, etc.

I have friends in Calgary who are having trouble selling new homes. They are also mentioning some job losses in their companies. It’s not a “waterfall”… more a steady stream.

I think the large projects here in the Lower Mainland: Gateway Project (road/rail/bridge, etc.); Olympic construction, etc.; are keeping a few folks in work who would not be able to find work otherwise… Many of these projects are nearing completion. Then what?

Since our economy is less tied to one particular thing (apart from speculation on expensive housing), we may be better off than, say, Southern Ontario… but, by how much? There will be hurt. A lot of it. The aforementioned real estate is one I can see being an issue (as you have mentioned so many times in your books Garth). The RE economy will be depressed. How far? One can only guess. Since we’re still a “destination” for retiring Canadians, new Canadians, and “good-weather-seekers”, we will probably still be better off than some other metros.

I’m preparing for “worse” (maybe not “the worst”). Always good to be ready. Should be an interesting couple of years…

#8 Dan on 03.03.09 at 10:45 pm

Sales are up big here in Edmonton as well. Must be the ridiculously low interest rates right now. Who knows. We will see what March and April brings us.

#9 poorguy on 03.03.09 at 10:46 pm

LS,
“Unfortunately it seems to be a widespread thing.. Housing sales are also up dramatically in Victoria, and average prices have gained a bit as well.

We’re hoping for some more declines until we can buy something in the fall. Lets hope this is just an anomaly and the market will continue to fall a bit more. I’m not expecting much, but after so many years of insane rises, we gotta get more than 9 months of decline right?

Damnit people, it’s an economic disaster out there, get with the times and stop buying houses! ”
———————————————————-

They are publishing misleading stats.Those figures show
sales are up in comparioson to January,howeever,
they are still substantially down from a year ago.
The trick is publish whichever makes less gloomy

#10 Ted on 03.03.09 at 10:50 pm

Come on Garth, the % increase you mention are month over month! Compare the numbers for January and February 2005, 2006, 2007, 2008 & 2009. Real estate is in the tank regardless of the spin the RE Boards put on the monthly numbers. I’m surprised to see such little dissection of the headline numbers from you!

#11 POL-CAN on 03.03.09 at 10:58 pm

Let’s change gears a bit…. Tin-foil hat time….

Michel Chossudovsky has an interesting take on what will be done with all that bailout money… A further concentration of wealth and power…

http://www.globalresearch.ca/index.php?context=va&aid=12517

#12 CanadianSoapbox on 03.03.09 at 10:59 pm

Long time reader, first time commenter (is that a word?)…

Regardless of how sage your prognostications prove, the advice you’re giving is solid. I’d be interested in reading any thoughts you might have about Canada’s demographics and how our aging boomer population will affect the economy. Should I go long on makers of adult diapers and denture manufacturers?

#13 Rog on 03.03.09 at 11:02 pm

Didn’t in january we had lots of snow in vancouver , sales are up in feb and the real estate agents are putting a spin on this as sales increased . Yea suckers are born every day !!!

#14 ThumbsUp on 03.03.09 at 11:04 pm

“40% of adult Canadian are functionally illiterate” – Indigo CEO Heather Reisman on ‘the Hour’ today.

Here is a chart of the US monthly home sales over the past 4 years.

http://2.bp.blogspot.com/_pMscxxELHEg/SaVnFzcXWqI/AAAAAAAAEnw/53tdwJD5cFQ/s1600-h/EHSJan09NSA.jpg

Number of units sold seems to have strong correlation with temperature, however, it does not stop the price from crashing.

#15 North Vancouver Citizens Analyst on 03.03.09 at 11:14 pm

“There are terrific opportunities out there right now, but with property listings continuing to decrease, those opportunities may be available only for a brief window of time,” said Dave Watt, president of the Real Estate Board of Greater Vancouver (REBGV).

Thanks Dave for your insipid and tedious observations.
Fact is, this was still the slowest February in 15 years.
The opportunities available only for a brief window of time are for sellers.
Act now and act fast!

Did I mention that Vancouver has been tapped as the future drugs/gangsters/homeless capital of the world?

#16 Hazzard on 03.03.09 at 11:27 pm

It’s hardly in Obama’s best interest to be successful now. He needs to be successful 3.5 years from now. One might even suggest that the worse things get early into his administration all the better…..he can still shuffle blame to previous administrations. A sniff of recovery in late 2010 that builds steam through 2011 and into 2012 will be perfect for him.

#17 Bill-Muskoka (NAM) on 03.03.09 at 11:27 pm

How about we all start an RV Commune? I missed out on that era due to a little Clusterf**k I attended across the Pond. Sounded like a lot of fun, eh? LOL

#18 Alex on 03.03.09 at 11:35 pm

First of all, the uptick in housing is a dead cat bounce. A knee jerk reaction, because people have been programmed to believe that housing prices always go up, so the past year’s declines must be an anomaly to take advantage of. Secondly, Garth why were you saying it would likely be a depression and now you’re backing down? And why are you so sure that this epic stock market rally you’re predicting is going to materialize? Stocks are only back to where they were in the late nineties. Japanese stocks are back to where they were in the late seventies. That’s where stocks are headed, and they won’t be going up any time soon. Maybe in a few decades. Same for housing prices.

#19 Cendrine on 03.03.09 at 11:53 pm

News from the trenches:

We had two offers on the table for our house this evening. One was very close to list price and was offered by a couple who had just received an offer on their house yesterday which was listed just last weekend! I was quite flabbergasted to see two offers after having the house on the market for so many months. Listening to the RE agent, it seems there is a great deal of activity, people moving quickly to get deals in place.

We overheard conversation (easy to do since patronage was rather thin) in a restaurant and the gist was that it’s a good time to buy a house due to low interest/mortgage rates.

I suspect that this market does not seem very expensive and I was surprised by the number of out of town buyers going through here.

Deal is not closed yet, crossing my fingers…..

#20 nonplused on 03.04.09 at 12:00 am

Housing sales are still dreadful when compared to the norms. Monthly rises and falls can be very misleading. The annual change is a better indication.

Also, in the US a foreclosure is counted as a “sale”. Don’t know if that’s true up north as well but the rise in foreclosures caused an increase in “sales” activity all over the US just before the stuffing got kicked out of the market. Anybody know if foreclosures work their way into the Canadian statistics?

It’s not a depression, and probably won’t be. We aren’t going to make the same mistakes again. No, this time we will make brand new mistakes. But I think it might be a good plan to wait and see how those mistakes pan out before climbing out of the bunker.

#21 Observer on 03.04.09 at 12:16 am

Seriously Garth, help me (us) understand how on earth could housing sales rise so much with all the negativity in the economy. I’m at a complete loss to understand this.

#22 Apocalypse Now on 03.04.09 at 12:22 am

Ain’t no such orgy of buying happening in my GTA hood. Homes have been on the market for months, a couple of them even for a year now. Prices have been reduced by as much as 20% and still no takers. I guess there’s just a greater supply of greater fools in Calgary and Vancouver.

The same fools or wise ones (depending on the viewpoint) that brought us the recession / Depression are the ones now pretending to fix it. Everything they are doing tells me that the only thing they don’t intend to do is to fix this problem, rather it will be exacerbated on a weekly and monthly basis. Looks for an open declaration of Depression by the pundits this coming fall. Then the politicians will declare a war on depression and like all wars that they have declared since WWII this one too will be gloriously lost. What to do, what to do? A deep underground well stocked bunker is beginning to look more and more like a good idea.

#23 nonplused on 03.04.09 at 12:30 am

http://www.globalresearch.ca/index.php?context=va&aid=12339

These guys might not be right but they haven’t missed much else.

Or:

http://www.nytimes.com/2008/10/01/business/worldbusiness/01global.html

Or this one:

http://seekingalpha.com/article/115830-eastern-european-currency-devaluations-certainly-not-helping-export-business

#24 VCR Guy on 03.04.09 at 12:33 am

With all doe respect to Ont and QC, out west is a different place with different dynamics.
True, our economy is in decline and condo speculators are getting killed but it is not as painfull as Central Canada where real jobs are being lost and real pain is being felt.
We have very little land and the place is filling up with people from other places-overseas people come here because if you were making a fresh start why not go where the climate is milder, and people from other parts of Canada coming to retire and still access Canada’s healthcare system.
The Port, the border and the fact that the only people that will get laid off are construction workers as we have no head offices to speak of will also help. Our #1 industry (forestry)has been in decline for 10 years and prices went up!
We also have a huge underground economy that, although we are not proud of, brings wealth to the area.
As a former Ontarian I feel your pain but autoworkers being laid off but out here may as well be on Mars.
Yes our RE is overvalued but it always has been and it has gone down and it will probably go lower but there are external forces that are continuing to put buying pressure on the VCR RE marketplace. Not saying it is right but it the way it is.

#25 Simon on 03.04.09 at 12:44 am

Keep in mind that real estate prices are “crashing” back to the point where typical incomes can actually afford them, sorta the way it was meant to be.

#26 TheComingDepression on 03.04.09 at 12:44 am

Garth gimme a break. NO DEPRESSION? Dow is below 1997 levels and this was created in about a month and going perhaps to 3000. 7000 people applied for 500 jobs in LA for the Dodgers just today. Ireland, Iceland, Ukraine, Britain, Bulgaria and the list goes on..all insolvent. The US banks are collapsing, all the car dealers/manufacturers are just about done, businesses are closing all over the place, pensions are just about done all over the world, housing is in the BEGINNINGS of its collapse in CANADA, with 100’s of thousands losing their jobs in Canada MONTHLY, how will they be paying their mortgages in the future? With jelly beans? The scandals are constant and almost daily, will this help the economy? Crime is going up every day. People will need to eat this will create violence/more scams etc.. I knew of a company that put an ad on Craigslist ( In Vancouver) and within 30 seconds min had ten applicants! Thats 30 seconds..folks..UNHEARD OF!

#27 Tony on 03.04.09 at 12:48 am

Anyone stupid enough to buy a house in Canada deserves to lose all their money. Any sane person would wait for the US real estate market to bottom out first since their markets starting falling two years before ours.

#28 Apocalypse Now on 03.04.09 at 1:10 am

Looking into the crystal ball for what’s in store for Canada in 2009 and beyond as bankers boldly go where no banker has gone before; their 5 year mission to explore every possible way to wreck the economy that it may never recover, no not for a thousand generations!!!

http://www.bloomberg.com/apps/news?pid=20601103&sid=atAM8ptyWEU8&refer=us
Pending U.S. Home Resales Slump More Than Forecast
By Shobhana Chandra /
March 3 (Bloomberg) — Fewer Americans than forecast signed contracts to buy previously owned homes in January as the housing slump deepened at the start of its fourth year. The index of pending home resales fell 7.7 percent after a 4.8 percent gain in December, the National Association of Realtors said today in Washington. A lack of credit and record foreclosures that are pushing property values even lower may keep prospective buyers out of the market for much of 2009. President Barack Obama has pledged to keep more Americans in their homes and create jobs, and Federal Reserve Chairman Ben S. Bernanke today said policy makers may need to expand aid to the banking system.

Hot off the press: The trillions handed out to banks is not
enough. Is it just me or is this dream turning out to be a horror nightmare? Was it not just a year ago that 30 billion from the Fed to JP Morgan to buy Bear Stearns was going to fix the problem and the Dow was gonna head to 20,000? How do you go from 30 billion to trillions and then say, it ain’t enough?

And why is the BOC considering quantitative easing (Newspeak for printing money)? If our banks are as healthy as they claim to be why this sudden need for more monopoly money? Another first and Garth claims this ain’t a depression! How much more toxic radioactive losses are hidden on the balance sheets of our banks that the BOC would even consider such a move? Methinks that the fat lady has not even arrived at the opera house yet let alone started her rehearsal to signal an end to this Faustian drama.

http://www.financialpost.com/news-sectors/story.html?id=1348136

OTTAWA — With the economy in deeper trouble than it expected and its benchmark-lending rate approaching zero, the Bank of Canada signaled Tuesday it was prepared to enter unchartered territory and flood the financial system with additional cash by buying up securities in the market. The signal toward “quantitative” easing was included in its statement explaining the latest interest rate decision — another 50-basis-point reduction in the benchmark rate, to a record low 0.50%, or four percentage points below its December, 2007, level.

Hey Canada get ready to party – the BOC is ready to FLOOD THE MARKET WITH CASH! Garth, how do I go about getting a small amount of this cash? All I need is a mil, heck I’d even settle for half a mil!

#29 barb the proofreader on 03.04.09 at 1:15 am

Garth,
Calgary’s market began to flatten Aug. 06 but did not fall for nearly 2 yrs. There was pressure building up for 2 years with SO many people NOT buying. This is just buyers letting off a little steam. People were reluctant at those 2006 – 2008 prices. But now, they’ve been waiting and waiting, but still need to move into their right neighbourhood, with schools, etc. And when the buyers see a price drop of $100,000 the purse strings do begin to loosen a bit.


Linda and Bill, note from the other day — I agree. Interesting coverage of Rush, a fool full of hate.

#30 Keep Saigon Beautiful on 03.04.09 at 1:23 am

If people don’t give a damn about their finances when times are good, they’ll screw up when times are bad too, given a chance. With 0.5% and bailouts up the yin-yang, they’re getting their chance.

Keep in mind that the whole RE thing was based primarily on family-oriented nincompoops trying to maintain domestic squalor. It’s a ‘hula-hoop’ fad thing to squeeze out a heap of kids and to wallow in drunken consumerism. The rest of this whole catastrophe, from house-flippers to greedy real estate agents and twisted financial institutions, was built on that.

Until the core diseases of sick self-interested nuclear-family suburbanism, and irresponsible cavalier corporate behaviour of the GWBushes, Bernie Ebbers, Skillings, and Maddoffs of the world is eradicated like smallpox, you’ll continue with the catastrophic, shameless guzzling of real estate and other resources.

#31 Popeye the sailer man on 03.04.09 at 1:38 am

Having just had the conditions taken off our home, hearing some good news on the Victoria front on sales even if it turns into a dead cat bounce (likly) is good, because I don’t consider it sold until the tail lights leave the parking lot, and with only a $5,000 deposit, massive bad news could spook someone to walk. Its rare but these are rare times.

PS I just got quoted $6,700 to move my stuff from Victoria to Edmonton (4BR 1,300 SF of stuff) we have sold most big items, no appliances. My stuff is not even worth that much. WTF/ Uhaul is looking better!

#32 Jack the Lad on 03.04.09 at 1:39 am

Garth wrote: “Yes, financial markets will be higher at Christmas than they are now, but the economy won’t be.”

So, Garth, in your view has the stock market reached the bottom?

Where did I say that? — Garth

#33 glw on 03.04.09 at 1:54 am

Lies ,Damned Lies & Statistics.

I have forgotten the numbers exactly that I heard on the news earlier tonight but , yes, Van February sales up 94% from January sales BUT still down 44% 08 February to 09 February.

#34 dmr on 03.04.09 at 1:57 am

Any RE rally out there now will be a bull-trap. People don’t seem to understand that prices will be going down for a long time.

The speed at which the global economy is contracting is as frightening as the deceleration of global trade.

We are living through a moment of history, and it is only just starting here in Canada. Buckle-up, and reduce your liabilities if you can.

Deflation is here to make your debts expensive, and your cash increase in domestic purchasing-power..

#35 gold bug on 03.04.09 at 3:07 am

Now just hold on a minute.

There were 403 properties sold in February through the Victoria Real Estate Board’s MLS.

Yes, that’s up 63% from January. But every February sees a large jump from every January. Good times AND bad.

But there were 619 sales in February of 2008. Y-O-Y Feb. sales are down 35%. Listings are up 16%.

Jeebus, it’s tough enough for people to make financial decisions without allowing apples and oranges to creep into the discussion.

#36 Future Expatriate on 03.04.09 at 3:59 am

It not a depression… yet.

But given time, and government… there isn’t a surer bet in the universe.

#37 Future Expatriate on 03.04.09 at 4:03 am

Re: Visitors to the site: Don’t forget the paper pushers and majority paper holders praying for a rally…

#38 Mike (authentic) on 03.04.09 at 4:39 am

I really hope the people buying a house right now intend to LIVE in it for a long time and not for an investment only. Both groups will lose money on their purchases (think of housing right now like buying a new car, it losses it’s value as soon as you bought it!).

People have such short memories, it took 21 YEARS to recoup the losses in RE in the last RE bubble of the 80’s. So if you are going to buy a house to live in it for more than 20 years, you’ll do ok. But wait and you’ll do MUCH better.

I know of a friend in GVRD who bought last summer a SFH, stretched to the max, now the husband’s job is in question and she doesn’t work, new kid and a massive mortgage in a new suburb that only 1/3 done. I wish got to him before he bought… damn

Mike

#39 Kyle on 03.04.09 at 5:36 am

If you look at historical house prices for the US, Canada, and UK, there is usually a peak to trough period of about 5-10 years. I don’t understand why buyers in BC and Alberta would think the market would break this precedent. There can only be a bottom to this market once buyers and sellars both give up on real estate, and this clearly hasn’t happened yet. That is the real message in this latest data. I do know that people – when confronted with falling asset values (be it equities, real estate, etc) – tend to double down on the bet as they lose more and more chips. Here in the UK, where we are a year ahead of Canada into the real estate crash, we had a similar uptick in certain housing markets late last year, but then the downward trend continued thereafter. Garth is right, equities will lead the ‘recovery’ (not going to be a straight line), the real economy will still lag with further bad news (esp job losses). Real estate will drift lower for some time. All this wealth of historical wisdom, and yet how little we apply those lessons…

#40 Munch on 03.04.09 at 6:49 am

You Canadians are FUNNY, man! Obedient little Canada-bots!

You’ve lived sheltered lives and now, faced with a dose of reality, you try and blame everything but yourselves?

Take accountability, take some pain, then you might get somewhere!

Join the rest of the Planet in the Real World!

#41 Grantmi on 03.04.09 at 7:02 am

Reading the NP yesterday… I couldn’t help notice the pic of Nortel CEO – Zafirovski!

http://i40.tinypic.com/14o38gn.jpg

This is about how I feel right now with the markets.

I’ve given up! Thrown in the towel. What little stocks I have left in my trading account, I have converted to cash yesterday. Sold the works. Potash, Gold stocks, Gold ETFs.

This is NOT done… and I agree with Garth… that it’s going to go a lot lower before we see any resemblance of a turn around. It will come back… but this is not it. 5,000+/- here we come!

:-(

#42 Jack the Lad on 03.04.09 at 7:23 am

Garth wrote: “Yes, financial markets will be higher at Christmas than they are now, but the economy won’t be.”

So, Garth, in your view has the stock market reached the bottom?

Where did I say that? — Garth”

You didn’t say it, but you implied it. To say financial markets will by higher by Xmas suggest that we’re at or near the bottom.

Since as you say the stock market is a leading indicator, it would not be unreasonable to say the stock market itself is near its bottom (assuming you thing there will be a recovery in the general economy in a few years time).

My words are chosen with care. Suggest you follow suit. — Garth

#43 ca on 03.04.09 at 7:25 am

Garth —

I was wondering what is your definition of a depression and what aspect of it will this downturn not meet?

The general definition is a 10% economic contraction that lasts at least a year. That seems to be the mildest measure. — Garth

#44 David on 03.04.09 at 7:40 am

I believe your blog proves that no one has all the answers to the problems we face. With all your experience in this field it appears that even you can be surprized at times.

It is nice to see that you do have a bit of positive news mixed in with the bad. It will get better as we move forward as you seem to indicate.

#45 Grantmi on 03.04.09 at 7:51 am

I love it!!!

NOW GREENBERG is suing AIG to cover his options!

lol…. does anyone see the irony in this??

http://tinyurl.com/bgssb4

#46 buy gold on 03.04.09 at 7:53 am

Celente: U.S. Has Entered “The Greatest Depression”

Deadly accurate trends forecaster urges people to hoard cash reserves, buy gold

Paul Joseph Watson
Prison Planet.com
Tuesday, March 3, 2009

Trends research analyst GeraldCelente, who has risen in prominence on the back of his deadly accurate economic predictions, says that the collapse of financial markets heralds the start of “The Greatest Depression”.

In his latest Trend Alert bulletin,Celente attacks main stream pundits who falsely predicted a market bottom and the start of a recovery, noting that conventional analysts have been proven “dead wrong” again and that, “There will be no turn around in the second quarter of 2009 or 2010 or 2011.”

end..

You can see the whole article at Lemetropolecafe.com

#47 vtj on 03.04.09 at 8:00 am

Given the complexity of global markets, it’s impossible to predict what the future holds as evidenced by this unexpected increase in home sales.

The speed with which information can travel today and the extent to which it can be leveraged is phenomenal. Some sort of event, be it positive or negative, may have a huge impact, both real and perceived, which may produce totally unforeseen results.

For my family’s sake, I’ve taken control and gotten prepared to the best of my abilities. I’ve now decided that living in a bunker while waiting for impending doom is a complete waste of my time and my abilities.

Enough said – time to get back to work to do something constructive for my employer which may hopefully have a significant positive impact on society one day.

Best wishes

#48 Jonathan on 03.04.09 at 8:05 am

January is always the worst sales month for everything including housing.

Every month until June or July will show an increase in home sales in comparison to January’s. This is true around the world, even in a housing crash. I love how the real estate boards are touting this as a recovery.

#49 Jonathan on 03.04.09 at 8:06 am

Munch,

where are you from.. your post doesn’t make any sense?

#50 Foreign Investor on 03.04.09 at 8:07 am

Garth Turner – No Depression

Gerald Celente – Depression Era, Violence, Crime, Scams to Stay Alive, Pyramid Schemes, Higher Taxes, Riots,

Who is right?

Pray I am. — Garth

#51 Mike (authentic) on 03.04.09 at 8:07 am

This just in:

697,000 employed people in the USA lost their jobs in February. January job loss revised up to 617,000 jobs lost.

Also 20% of US home owners with a mortgage are now underwater in Feb. (8.4 million home owners, up from 7.1 million in Jan)

Mike

#52 Bill-Muskoka (NAM) on 03.04.09 at 8:21 am

#40 Munch on 03.04.09 at 6:49 am

Oh Canadians are not alone in loving to be pretend Egyptians, which is living in Denial. It is a trait of the human race, but too many Canucks do have a rather ‘superior’ attitude about many things.

The reality is we are all on this planet together, and together we will succeed or fail. The Planet will go right on being itself. We are a surface nusciance most of the time.

I still believe the Victor will be the cockroaches in the end!

#53 Avalon Shawn on 03.04.09 at 8:32 am

Just a tip for CanadianSoapbox

Search Google for Harry Dent he specializes research and reports on Demographic aging and the economy (“Next Great Bubble Boom” , addresses most of this theory ) …really good stuff, plus there are free downloads of his newsletters too. I see him as the US version of Garth.

Also Garth a third type of reader profile of yer blog is not so polarized like myself …just interested in current opinion for the sake of it, not biased by depression doomsday fears or false optimism just enjoying the banter…like a daily meeting with friends at Tim Hortons…lol

#54 Grantmi on 03.04.09 at 8:33 am

I still believe the Victor will be the cockroaches in the end!

and living on Christmas fruitcake! (that stuff never decomposes) ;-)

#55 Grantmi on 03.04.09 at 8:41 am

January job loss revised up to 617,000 jobs lost!

Holy Crap!

http://www.bloomberg.com/markets/ecalendar/index.html

How can this idiots be so far off on their estimates for January! They’re REVISING the figures by almost 100,000 jobs down from the first report!

What! The revised report in March for February is going to be 1,000,000 instead of today’s 700K!!

“Phasers on stun!!”

#56 Ron on 03.04.09 at 8:48 am

#40 Munch
It’s amazing how you’ve managed to be remarkably annoying while remaining completely moronic.
These traits must serve you well in the”Real World.”

#57 Got A Watch on 03.04.09 at 9:25 am

I am not pro-Depression, I just call ’em as I see ’em, let the chips fall where they may.

I have traded the stock and commodity markets, full-time since 2001, which involves spending up to 16 hours a day reading nothing but economics and trading websites.

I call this a Depression, because if it squawks and walks like a duck, call it a duck. Not what I wanted or wished for, it just is. I am sure we will easily exceed the classical definitions of a “Depression” that I posted here yesterday.

If you study the Kondratiev Wave Theory, the original long-wave theory, we should have entered the ‘Winter’ Season in 2001 (72 years or 4 generations from 1929) with the collapse of the dot.bomb mania. ‘Easy Al Greenspan’ unleashed a flood of easy credit, which blew the biggest speculative bubbles in history, but only served to postpone the inevitable for a few years, and made the contraction we are in now much worse than it needed to be.

Classical K-Wave would suggest this part of the economic cycle should last about 18 years, with the first 12 being the worst for economic decline. Japan has been in and out of deflation in their recession which has lasted almost 20 years now and is turning down again, so that could be a worst case for duration.

When economic events of this magnitude occur, there is nothing individuals can do to change it, it’s a global event. Don’t try to run counter to the trend, no matter how confident you are that you can avoid negative consequences. These are historic times, a New Age of Turbulence. You just have to follow advice like Garth’s, and the Boy Scouts “Be Prepared”. Hope for the best, plan for the worst.

Maybe we will skate through along the edges of this crisis in Canada, compared to other nations, but that is of little comfort to individuals caught in the maelstrom. You can only do what you can for your family and maybe a few close friends. People who freely chose to buy real estate since ’06 are probably beyond help, financially at least. How many will be underwater as prices return to 1997 levels?

We will recover one day, but to a lower level than the irrational exuberance of the past. It’s surviving to that point that is the challenge.

#58 Indicator on 03.04.09 at 9:26 am

Today I heard on 680 news (toronto’s radio new’s station) that 2/3rds of Canadians feel that its a great time to buy a house. This was a report/survey from one of the banks (i believe RBC).

It’s kind of funny this should survey should be announced in unison to the lending rate dropping another half basis point.

But even more “funnily” is the 2/3rds number. On what basis. There is none.

Imagine if they asked this question first to each individual, “Given the current economic state, do you believe your job is safe” and then ask “Given the current economic state, do you believe its time to buy a house?”

My thinking is the number would drop dramatically.

Consumer’s confidence numbers need to change in an upward trend for one whole year and if this happens then we will be getting out of a recession (let alone a pending depression). This correlation is a helpful and “mild measure” of our economic state.

#59 questioning on 03.04.09 at 9:33 am

Don’t under-estimate how much money the Albertans made in the past 10 years booming…it is already a good time for them to invest….compared to the what they have seen in the past 10 years..

Who knows if they are right?

#60 Gord In Vancouver on 03.04.09 at 9:36 am

#24 VCR Guy

and the fact that the only people that will get laid off are construction workers as we have no head offices to speak of will also help.

___________________________________________

Did it occur to you that construction employment impacts other industries/jobs? For the sake of our economy, I hope that a decline in the construction sector won’t hammer everything else.

Overall, lack of head offices is a NEGATIVE, not a positive.

#61 dd on 03.04.09 at 9:37 am

#6 LS

“We’re hoping for some more declines until we can buy something in the fall.”

“I’m not expecting much, but after so many years of insane rises, we gotta get more than 9 months of decline right?”

Why don’t you listen to your own advise. This downturn in prices could last for 4 more years. What is the rush?

#62 Dead Cat Bounce on 03.04.09 at 9:38 am

Just wondering if the US experience an ‘uptick’ in sales of real estate before the collapse that followed.

I think this is human nature, a lot of people were telling me it was a great time to buy stocks a year ago when the S&P had lost 20% of its value.

I think this is just how the human brain works, fundementals win over emotions in the end though.

#63 VooDoo on 03.04.09 at 9:46 am

http://www.ottawacitizen.com/News/cuts+take+toll+news/1350514/story.html
——————————-
This is gonna hit Ottawans in the face–a familiar news anchor losing her job.

Garth, glad you’re drawing the line in the sand at ‘No Depression’.

#64 TheComingDepression on 03.04.09 at 9:55 am

The general definition is a 10% economic contraction that lasts at least a year. That seems to be the mildest measure. — Garth Keep listening to your government stats..LOL

Consider the people stating “Depression”. Gerald Celente, Ron Paul, Peter Schiff, a Professor at University of California at Berkeley ( forgot his name but quite famous),Zbigniew Brzezinski, a former national security advisor, Jim Rogers, Jeff Rubin ( in so many words)….
No Depression-GARTH TURNER

#65 Alex on 03.04.09 at 10:06 am

Paper holders beware!

We have given away our engine, tens of millions of manufacturing jobs to Asia and now are completely deindustrialized – how can you expect our economy and stocks to rebound? By spending more printed paper on Chinese toys?
Only industrial growth will help us get out of this collapse and only savings (not new debts!!!) will fuel it.

Please stop denial and look at this reality:

http://www.chartsrus.com/chart.php?image=http://www.sharelynx.com/chartstemp/free/chartind1CRU.php?ticker=^N225

The only way to protect wealth from rapidly devaluing printed paper is this:

http://www.rapidtrends.com/blog/gold-price-charts-from-1971-to-2008-in-various-currencies/

#66 PTDBD on 03.04.09 at 10:07 am

A moment of reflection for the three Canadian soldiers killed and for those wounded. Thoughts go out for their families and friends and especially the children.

3 soldiers killed on patrol in Arghandab District

#67 bye tunder'n lightnin, seal'n flipper pie on 03.04.09 at 10:20 am

Me cuzin, North Vancouver Cititzen jr, who buy the way wuz born’n St John’s, the same hospital I wuz born’n, sayz to me over the phone last evenin that despite the obveous beauty of Newfoundland & Labrador, Vancouver Proper iz gonna be the next Financial/Trade/Leisure capitul of North America.

So i open a bottle of skreech and asks, Vancouver Proper? The citee where men are men but the sheeps are nervous?

#68 RS on 03.04.09 at 10:28 am

Why the surge in the housing market? Could it be recent articles like the one in Toronto Life saying now it a good time to buy? How can that be when so many are losing their jobs!?!? I’m confused!!! Garth enlighten me!

#69 Blacksheep on 03.04.09 at 10:36 am

98% of the sheep buying R.E. now, are clueless.

In my opinion, lately Garth seems to be attempting to cover all the bases, just in case.

I like the style of Peter Schiff or Nouriel Roubini, taking a stand, right or wrong, at least they are consistant.

take care
BS

#70 Matt Stiles on 03.04.09 at 10:43 am

Garth,

It is not a depression. Not yet anyway. But if they continue to foolishly prop up prices in every way imaginable, that is what will result. Asset prices will fall to where people can purchase them. Attempts to prevent that will result in prolonging the agony.

In my opinion, the difference between a recession and depression is TIME.

Anyway, I wrote my MP (Saxton) a letter today in disgust at the BoC’s inflationist policies. Anyone interested in copying it to their MP can feel free to do so. You can find it on my blog: futronomics.blogspot.com

#71 rory on 03.04.09 at 10:47 am

Hi all …a little perspective for our ‘blog’ world bitching and complaining …3 more of our Canadian soldiers were killed in Afghanistan …we need to remember that we Canadians are some of the most privileged people in the world …we really do have so much compared to so many others …yes things will get tough but tough is a relative thing and this self-induced humility may be a good thing in the long run …short term pain for long term gain.

#72 David Bakody on 03.04.09 at 11:00 am

It appears most people I chat with have gotten the message and are waiting for some one, any one to say we have hit bottom. Of course there are many who feel secure in their jobs and have waited to buy a home. I suspect many of these people have there ducks lined up and can afford to …. good. As mentioned people will look at debt and along with all these debunked homes and bankruptcies comes bargains and that in itself will kill the furniture business, fancy cars and toys. We can only hope a new real conservative mind set is about to hit town ….. unfortunately greed may have just be under the surface waiting to recoup all over night.

#73 Nathan in Edmonton on 03.04.09 at 11:08 am

There is a huge amount of money waiting on the sidelines to reinvest – all the gray-hairs now having sleepless nights that their retirements will not be that of sipping wine and multi vacations. Unfortunately, the fundamentals are still a mess and the only “solution” so far is massive government spending that’s resulting in vast amounts of money being sucked into a black hole.

The economies of the world are in a state of contraction; in this state only the really smart money wins, the majority losses — all this wealth waiting to reinvest will slow the contraction, may even reverse it briefly, and people will think the worst is behind us, but it’s just the start of the cyclic nature of collapse and semi-recovery that will be repeated many times in the next decade, with each cycle resulting in a lower standard of living. Vast amounts of private money will be lost following all the public money already lost. James Kunstler writes a lot about this and his resent posts have been more worrisome.

#74 POL-CAN on 03.04.09 at 11:08 am

The Greatest Depression Under Way
Gerald Celente
3-3-9

KINGSTON, NY, 2, March 2009 – “The Greatest Depression” that The Trends Research Institute forecast, well before Wall Street or Washington would acknowledge recession, is upon us.

The global financial markets are collapsing.

All the pundit’s cautious predictions and business media’s hopeful expectations at the New Year for an economic turn around and imminent market bottom were dead wrong. There will be no turn around in the second quarter of 2009 or 2010 or 2011 America and much of the world has entered “The Greatest Depression.”

The global financial system, built on endless supplies of cheap money, rampant speculation, fraud, greed, and delusion is terminally ill and will not be coaxed into remission by stimulus packages nor restored to health by government buyouts and bailouts.

Today, the MSCI World Index of stocks in 23 developed nations fell 4.9 percent to 713.75, the lowest closing level since March 2003, and its Emerging Markets Index slid 5 percent. The Dow followed, plunging 300 points, closing below 7,000 for the first time since 1997.

There is no stock market bottom in sight. The only figure that can be forecast with confidence is that the Dow won’t reach zero!

As the crisis worsens, governments will take draconian measures to prevent total economic collapse and public panic. We have cautioned the likelihood of such measures before. But the rapidity and severity of the economic unraveling now demands immediate attention.

Expect massive bank failures, runs on banks, and bank holidays. Even if deposits are FDIC insured, quick access to money is by no means assured. At minimum, have reserves on hand for emergencies.

Trendpost: When the ship is sinking there are very few options: Life boats, life rafts, life preservers and for the late to act, possibly a few pieces of floating debris to cling to.

We are trend forecasters, not certified financial advisors legally empowered to provide such advice. Although gold prices declined today some $15 to $925 per ounce, we forecast that gold will be one of the few life saving investments that will continue to increase in value, reaching $2,000 per ounce and beyond.

The Trends Research Institute
[email protected]
http://www.trendsresearch.com
845.331.3500 Ext. 1

http://www.rense.com/general85/gdep.htm

#75 Kash is King on 03.04.09 at 11:14 am

The 10% contraction number is assuming honest, unfudged numbers being presented.

Does anyone honestly think that if we were contracting at 11.25%, for example, that stats wouldn’t be moved forward or back to get the number down to 7.8% ,for example, simply to avoid the shock value?

Not that I’ve grown cynical or anything…

#76 Bill-Muskoka (NAM) on 03.04.09 at 11:15 am

#54 Grantmi on 03.04.09 at 8:33 am

Not to mention Hot Dogs. Dr. Garbology in Arizona determined decades ago that a Hot Dog does not decompose even after 15 years in a Landfill.

Imagine the food the roaches will find in all those Baby Diapers? LOL

The movie ‘Wall E’ may be the real future Earth has after the ‘Buy & Large’ mega-corps get done screwing up the planet?

It is for darn sure the people are already well on their way to needing anti-grav couches to haul their pathetic arses around as thei feast on chemicl concoctions through straws! Just KEEP BUYING stuff. That’s the Ticket says Buy & Large!

As to the economy…Well, it’s value was based solely on perception, i.e., delusion. That is the real Bubble That BURST! People no longer believe the BS. There was no actual tangible value to all the inflation to begin with.

#77 Greg W., Oakville on 03.04.09 at 11:16 am

Hi Garth, FYI (just received a e-mail with, see link)

‘We send nothing back on most of these ships. What does that tell you about the current Financial State of this country?’

SHIP FROM CHINA – The Emma Maersk (see link with pics and comments)
http://www.1dreamgetaway.com/ship_from_china.htm

(near the end of link above)
Editorial Comment! A recent documentary in late March on the History Channel, noted that most all of these containers are shipped back to China , EMPTY yep you heard it right. We send nothing back on most of these ships. What does that tell you about the current Financial State of this country?

#78 Dawn in Calgary on 03.04.09 at 11:21 am

Damn, the Calgary Herald is pulling out all the stops today.

One of the articles they don’t even allow comments so the peons can refute their claims.

http://www.calgaryherald.com/business/real-estate/Alberta+homebuyers+sentiments+rebound+levels+survey+says/1352218/story.html

http://www.calgaryherald.com/business/real-estate/Airdrie+development+lures+homebuyers/1351676/story.html

#79 paulb on 03.04.09 at 11:24 am

the 94% increase in Vancouver is MOM.

The proper comparision is YOY and YOY Vancouver is down 45% which is the worst Feb since the mid 80’s.

#80 Keith in Calgary on 03.04.09 at 11:38 am

Dawn…..

I posted on Mario’s article that 65% fewer people today are buying homes than were buying in 2007…..despite these intentions he posted.

And I’d buy as well in the next two years, if prices dropped by another 30% +.

Let’s see if they have the guts to post that.

#81 Jasson on 03.04.09 at 11:43 am

Garth or anyone, any words of advice in regards to if a leveraged loan for investing now is a good idea or not? An investment advisor I know keeps bugging me to get one. He says if the market goes up to 10,000 or so in the next three years you will double your investment.

#82 Bobby G on 03.04.09 at 11:43 am

Time to get back into stocks?
Purchase that dream home?
Get a grip people
World will NEVER go back to way it was
LOOK AT THE NUMBER
The U.S. alone owes over 60,000,000,000,000.00

#83 Greg W., Oakville on 03.04.09 at 11:49 am

Hi Garth, FYI (re: ‘Pray I am. — Garth’)

Some of you might enjoy this movie that’s now in the local movie rental store: “ReLIGULOUS, by Bill Maher”.

I think it says alot about how the human minds works, or does not work, as it were.

I’m sure one might find some simalarities to our current money/economic system that we were born into.
I’m think of our ‘belive’ in paper money and the FED. for starters.

ReLIGULOUS, by Bill Maher
http://www.lionsgate.com/religulous/
or http://www.religulousmovie.net/

Just my two cents.

#84 M I K E in Ajax on 03.04.09 at 12:26 pm

News week article

Maybe these buyers are reading articles like this vs. this blog :)

Worthwhile Canadian Initiative
http://www.newsweek.com/id/183670/output/print

#85 Investor on 03.04.09 at 12:30 pm

I think it’s hysterical that everyone who taunts gold as good investment trashes the economy to the core and pounds the market to the curb. From behavioral economics point of view it would make sense “Fear sells Gold”. They argue that big worth clients are not invested in gold hence there is more appreciation left. In my opinion they are not invested, because there is not enough liquidity in the gold market to get out when the flood gates open up.

Let’s not forget the gold bubble will pop just like any other asset has done before.

This recession/depression is “mental” :)

#86 Kat on 03.04.09 at 12:34 pm

#78 Dawn in Calgary:

I posted a comment on the Airdrie article in the Herald about 20 minutes ago – a very polite point about these buyers having a bit of cognitive dissonance regarding what’s going on around them. Not only was my comments not posted, I see they have removed the other 3 comments that were already there (not abrasive, and again very polite) and closed off the ability to leave any further comments.

Nice censorship by the Herald – hmmm, I wonder who contributes some major ad revenue to their coffers – oh would that be the developers. Laughable, if it wasn’t so despicable.

#87 Jasson on 03.04.09 at 12:40 pm

Another question for Garth or anyone,
is it possible the USA will go into a depression, but not Canada?

#88 613 Happy where I am on 03.04.09 at 12:43 pm

Garth:

Like usual, you are bang on ! But trying to figure out when we will get out of this mess will be like trying to find a needle in a haystack… This is so huge and has been building for years, decades even that the trillions being thrown at it by government will not do much but raise hopes (temporarily).

I am paying down my line of credit quicker because interest rates are at the rock bottom… but the whole economy is not going to get better until we get consumer credit under control and we all start living within our means. The party is over, folks!!!!

Until we accept our collective role in all this mess, the economy will continue to sputter and backfire… and any feeble attempts by governments to fix it, well, is like the little Dutch boy with his thumb in the dyke….

#89 Sondra on 03.04.09 at 12:45 pm

#19 Cedrine

Congrats on your accepted offer. Keep your fingers crossed until the Lawyer actually puts the money in your account.

Most Buyers do complete on deals. But we are in such confusing times one never really knows.

In the 80’s there were many deals that were supposed to complete but didn’t. Anyone as old as me remember Nelson Scalbania?

In the last 6 months there have been some deals that I am aware of that did not close. There are consequences to not closing, but it only costs time and money to deal with it.

Mortgages that have been approved are usually good, but there are a few strings attached, like still being employed on your closing date.

If the Buyers are local you have a better chance. If the Buyers are from overseas,… it’s like being engaged.

#90 Dawn in Calgary on 03.04.09 at 12:51 pm

Keith & Kat;

Both your comments were posted, along with the other readers who believe we’re all doom and gloom and not helping anybody.

There’s another article on women & homebuying and security. Both of those surveys they are trumpeting are from RBC and TD. Hm, wonder if the banks have a vested interest in pumping the market? They didn’t post my comments on that one.

The Herald is pulling out all the stops today. It’s the spring rush — resist it people, RESIST!

Sorry Garth, for talking about forums on your blog. It’s interesting to note what others are posting in the MSM.

#91 Investor on 03.04.09 at 12:54 pm

Jasson,

Another question for Garth or anyone,
is it possible the USA will go into a depression, but not Canada?”

I highly doubt it that scenario is possible. The two biggest trading partners with Canada are US and European Union and they are having major issues. Wealth Destruciton in those two places will lead to destrucition of wealth in Canada.

#92 Go Green on 03.04.09 at 12:58 pm

H E L P

I’m at my f’n wits end trying to understand the whole tax situation. When we first started to invest in the late 90’s I didn’t realize how just how complicated it would be to complete our tax returns. We’re with Manulife, but receive statements from Manulife, MacKenzie, MRS, Keystone & now Fidelity. We also took out a $30K loan with MRS years ago (use OP’s money). Been paying it off at $1K/mo since last year as just want to get rid of it. Got another yr. to pay – no problem as we owe $0. & have cash etc.

I guess my point is, I just don’t understand how to complete our damn taxes returns. Receive some T3’s & T5’s & have rec’d some T4Rif statements over the years, but not every year since our guy started transferring (converting) money from one account to my RIF acct?. (Just rec’d 2 RIF statements today – Mar 4 – so much for end of Feb. deadline).

I did not always receive statements from MRS over the years re our loan for investment purposes so am having CRA adjust our returns dating back to 2002. I heard yesterday that it’ll take another 6+ weeks. That makes it almost 6 mos. now. We also got dinged last year because we hadn’t declared some gains which were somewhere in their statements but for which we never rec’d T3’s.

Now I’m told by our FA’s assistant that we have capital losses but they don’t seem to appear on our T3’s. Is this normal????????????????? Shouldn’t a T3 also state your capital loss or is it hidden in one of those boxes?

I’m just so utterly frustrated & don’t know where to turn. I really don’t like spending big bucks to a tax preparer, but what choice do I have?

Would really like to hear from others. Do you go to an H&R block type of co. or an accounting firm, or do you do your taxes on your own. Maybe I need to take one of those H&R tax courses?

BTW, we’ve (should say I) been using Quicktax for the last several years and don’t find it that intuitive for other than a straight return.

Just call me frustrated & naive as hell.

But, I’d really like to hear from you.

#93 Kettle...Pot Calling on 03.04.09 at 12:58 pm

Jasson – another thing to consider: If the TSX/Dow/Whatever you invest in falls a further 25%, you would lose half of what you have invested. And still owe the broker the same amount. (technically you’d have to keep putting more margin in to avoid getting liquidated – so unless you have lots of extra cash on the sidelines that you don’t mind parting with….be very careful).

Note that a lot of advisors get paid for assets under management – so by leveraging up he gets twice as much compensation and you get far more risk with a lot of potential downside. It’s rather one-sided.

#94 everthing is a con on 03.04.09 at 1:01 pm

garth, please comment on this article. no depression? how about a complete collapse of our entire system? this coming from think-tank LEAP20/20 who warned of a global systemic crisis unfolding in 4 stages back in feb.07.
they have now added a 5th stage. curious?http://www.leap2020.eu/GEAB-N-32-is-available!-4th-quarter-2009-Beginning-of-Phase-5-of-the-global-systemic-crisis-phase-of-global-geopolitical_a2805.html

Maybe I should be selling ammo. — Garth

#95 grey on 03.04.09 at 1:01 pm

I wonder where everyone is living to see these market and price drops, because here in Toronto, it seems that despite listing upon listing on MLS, no one is lowering their asking price. And this is on homes that have been listed on there since last summer. I guess no one is in a rush to sell.

#96 R Alton on 03.04.09 at 1:03 pm

All lot of the opinions expressed about where the economy is heading are rather myoptic. Events beyond our own border will in large part determine our economic future. There are still at least two enormous dominos on the verge of falling.
Many easter european governments, citizens and companies borrowed money from western banks in Euros. This happened in Ukraine, Hungary, Romania etc. Taxes collected, money earned by citizens and companies are mostly n local currencies – which have crashed. They can not pay back the euros owed. Companies and individuals are defaulting at an alarming rate, and the governmets are also on the verge of default. The dollar amounts involved absolutely drawf the quantity of bad debt banks have currently booked. This will further destabilize the entire banking system because it is so interconnected.
The other intractable problem is with the derivative market. It is estimated to be equal to about 600 trilion dollars. The entire world GDP is only about 60 trillion. The derivative market includes credit default swaps – AIG is a major player, and this is the reason that the US government has injected almost a quarter of a trillion dollars into that company to try to stabilize it. If the derivative market unravels, what has happened so far will seem to be trivial.
Worse yet – the unstable banking system in Europe is destabilizing the derivative market and vice versa.
It is far too soon to make certain statements about where the stock and real estate market will be at Xmas, but anybody buying should be receiving an enormous risk premium – and prices in both markets do not yet reflect the risk involved.

#97 Jeff Smith on 03.04.09 at 1:07 pm

I would prefer to call these people wannabe’s. The types who wanted to buy but were kept out during previous years due to various circumstances (price too high, interest too high, or whatever). They were the ones who will wait a little to get in at the right time. So now they found the right time, prices have fallen a whooping 15%, woohoo! Can’t ever fall more than that, if you don’t get in now (realtwhore[tm] insert), you will never get in because prices are going to go back waaaay up really soon!

*********************************************
#69 Blacksheep on 03.04.09 at 10:36 am

98% of the sheep buying R.E. now, are clueless.

In my opinion, lately Garth seems to be attempting to cover all the bases, just in case.

I like the style of Peter Schiff or Nouriel Roubini, taking a stand, right or wrong, at least they are consistant.

take care
BS

I was right about Y2K, too. — Garth

#98 VCR Guy on 03.04.09 at 1:16 pm

Re: Gord in Vancouver
Regarding construction workers getting laid off-yes it will affect other industries but those jobs will return when the boom comes those jobs will return- unlike a closed autoplant where those jobs are gone forever to China, Mexico etc.
As for no head offices being a negative but in this decline, VCR will not have to face head office closures and layoffs-very few anyway as we have few head offices.

#99 barb the proofreader on 03.04.09 at 1:17 pm

#38 “I wish got to him before he bought… damn”
— Mike

Mike,

It would not have done any good. Nearly 2 year ago we tried to warn our next door neighbour. They now live in what HE calls a million-dollar-ghetto”. Their 1.5m home is now well under 1m.

This Oct. friends who had moved back and cautiously renting for a year, suddenly found a house near us. They claimed to be in NO hurry. I gave them my opinion that they should wait, I gave them the reasons why and where to find those reasons. I suggested wait till June at the earliest. So what did they do? In Nov. they bought the duplex anyway.
Why? Because the builder’s first sale of $1.1 had fallen through, and so it was just under $1m – and – to entice them, the builder improved the basement to their needs. They had some discomfort that prices were to fall more, but they were ecstatic to have that place in that location, and swear this is the place they will stay in for the rest of their lives.

Mike, you can’t talk people out of buying if they want that house, that’s my experience, so don’t bother kicking yourself. As Garth said the other day, something along the line: you can’t make people take advice if they don’t want it.

#100 jeff on 03.04.09 at 1:21 pm

re #78,

Thank you Dawn for attaching the article about the new home sales in Alberta. Everyone should take the time to read it, especially generation x bloggers. The anecdote about the expecting couple buying a new home, firm, without selling their own epitomizes the way the “entitled generation” functions. Their wants are their needs and their needs must be instantly satisfied. It’s a view of life no doubt born from the endless coddling of their baby boomer parents.

I am sure the couples’ research into Mattamy amounted to a fervent reading of the company’s additorials.

Scary stuff.

#101 pbrasseur on 03.04.09 at 1:31 pm

For the gold greater fools….

“Had your great-grandfather anticipated you and invested his life savings of $1,000 in gold in 1900 to give to you in 2007, you’d be getting a check for: $38,472 (ignoring taxes). However, if he’d invested in a (then non-existent) index mutual fund containing the DJIA stocks, that $1,000 would be worth an astounding $269,600 (again ignoring taxes), or almost 10x the gold investment.
Lesson learned? While gold may be sexy, it is, when all is said and done, just an inanimate metal with no ambitions.

More details here:

http://historical.whatitcosts.com/facts-gold-1900.htm

Gold has tripled its value in the past 10 years and you fools think it’s about to explode? Doesn’t that remind you of some of those condo speculators?

If that’s the case you’re no better than the greater fools Garth talks about, in fact you’re worse, at least people get to live in their houses.

#102 POL-CAN on 03.04.09 at 1:41 pm

….

ADP said on Wednesday that private employers cut 697,000 (+ 13.5 %) jobs in February versus a revised 614,000 (+ 17.6 %) jobs lost in January. The January job cuts were originally reported at 522,000

….

http://www.reuters.com/article/newsOne/idUSTRE5232V420090304

Looking at the pattern the Feb numbers will be revised higher next month… say approx 20 % will put them at 835,000….

Which means that if the trend continues the number will be 1,000,000 for April…. ouch

The Canadian numbers should be out soon as well…. They will not be pretty…..

#103 Sondra on 03.04.09 at 2:04 pm

http://www.ted.com/index.php/talks/juan_enriquez_shares_mindboggling_new_science.html

“Even as mega-banks topple, Juan Enriquez says the big reboot is yet to come. But don’t look for it on your ballot — or in the stock exchange. It’ll come from science labs, and it promises keener bodies and minds. Our kids are going to be … different.”

#104 Increasing that 1% on 03.04.09 at 2:09 pm

# 19. Cendrine
“News from the trenches:”

Love it.
Hope all works out

# 30. Keep Saigon Beautiful
“It’s a ‘hula-hoop’ fad thing to squeeze out a heap of kids and to wallow in drunken consumerism.”

Omg. Lol

#31. Popeye The Sailor Man
“PS I just got quoted $6,700 to move my stuff from Victoria to Edmonton (4BR 1,300 SF of stuff) we have sold most big items, no appliances. My stuff is not even worth that much. WTF/ Uhaul is looking better!”

Interesting to hear your progress as I’m, hopefully, a few steps behind you.

Employer is going to get a few quotes about cost of me being moved, a few provinces over…and by estimate you got makes me anticipate need for exploring alternatives to keep price down.

Though employer will pay relocation fees, if job doesn’t turn out as planned…or whatever… I’ll be on hook for large amount of cost if I’m not there long.

Still very hard to find people who’ll do work for reasonable prices, in variety of areas…ie: to get help with getting house ready to list (wouldn’t know so many have lost their jobs)

Also, while ranting… why is it so hard to just give good stuff away?! I know there’s people that need/could use stuff…but I have to pay to get it to whoever…special delivery…even Salvation Army or Goodwill doesn’t pick up, but they often aren’t too cheap in their prices when they sell stuff…what’s left after best stuff has been skimmed through by ? staff?…

The stuff is being DONATED to get to people who need it….They cannot afford those prices!
Hope some is being separated for some sort of programs to get it to truly needy

#105 Roger in Victoria on 03.04.09 at 2:11 pm

Things are not rosy by any means in Victoria. Sure sales picked up in February from January but they do this every year. But they are way down from 2008 and that was not the best of years . House prices moved up slightly but townhouses dropped. One month does not make a trend.

If you want the facts, without all the spin, just click my name and watch a detailed slideshow that is up-to-date with February stats. Use the Pause and controls to single step the slides.

#106 rjag2034 on 03.04.09 at 2:16 pm

#81 Jasson
Let me ask you, would you be willing to take all your worldy possessions and pawn them and then go to Vegas to put it all on one spin of the roullete wheel? Choose red.

This is how so many people got into trouble in the first place. overleveraged debt that they could not carry for the long term.

Sounds like your investment advisor needs you to make another payment on his Porsche!

#107 TheComingDepression on 03.04.09 at 2:20 pm

Get ready for DOUBLE DIGIT HYPERINFLATION>>>>
http://thecomingdepression.blogspot.com/2009/03/get-ready-double-digit-hyperinflation.html

Do this again and I charge you for ad space. Two golden ducats. — Garth

#108 smwhite on 03.04.09 at 2:23 pm

Just witnessed some more smoke and mirrors in the neighborhood. Apparently the home behind me, that eventually sold last fall after sitting for the summer, is back on the market, for an extra $100K. Guess they figure it will be a quick sale, because its listed in the MLS but yet, they decided to not bother with the RE sign on the front lawn.

Well it was a beautiful home to begin with, but I question the increase in price after being repainted entirely neutral colors, and staged with a few leather chairs.

Mark Carney is going to smoke out the last of the greater fools amongst us with free money…

$100K for paint six months later, in a stalled market?

Nobody in government will be happy until we fall into the same hole the Americans and Europeans have, will they?

#109 smwhite on 03.04.09 at 2:36 pm

#28 Apocalypse Now

Hey Canada get ready to party – the BOC is ready to FLOOD THE MARKET WITH CASH! Garth, how do I go about getting a small amount of this cash? All I need is a mil, heck I’d even settle for half a mil!

Smells like inflation. I think “Carney”(Which is what his job title SHOULD be, not Bank Governor) has turned the tap to far in the wrong direction, again.

These ass holes have no interest in fixing the underlying problems, just keep pushing checks out to the public to buy their next term in office.

We’re taking and following economic advice and policy from Gordon Brown as well as the same group of nit wits at the Fed(and in Obama’s dream team) that helped cause this orgy of credit.

Dumb & dumber, here we go again.

#110 smwhite on 03.04.09 at 2:54 pm

#85 Investor

This recession/depression is “mental”

You mean mental like, when I go to the bank to borrow more money to consume, I go mental because they won’t give me more credit until I’m no longer upside down on my mortgage?

Its mental all right, the world has a migraine after witnessing a powerful lesson in basic economic fundamentals.

This headache is around for a while, sorry, your shitty overvalued condo is going to continue to ride the wave, down.

#111 Chris in England on 03.04.09 at 2:55 pm

Bill-Muskoka (NAM) #17:

How about we all start an RV Commune?

That sounds nice (and if we have an argument we can drive away from each other). Where is the commune going to be? Suggestions …?

#112 North Vancouver Citizen Jr. on 03.04.09 at 3:05 pm

China, Japan see dollar signs

Wednesday, March 04, 2009

One popular theory behind the recent strength of the U.S. dollar goes like this: In uncertain times, the greenback is still the world’s currency of choice, given that the alternatives (including the euro) look even less appealing when frightened investors are looking for a place to park their money.

Here’s another interesting theory, courtesy of the economists at National Bank Financial: A strong dollar is in the best interests of China and Japan because they hold more than 40 per cent of the U.S. government’s debt securities, making them – in the words of the economists – “the true banks of the U.S. government.”

“China and Japan can no longer afford to allow their exchange rates to appreciate from the point of view of the real economy,” they said. “Moreover, by financing the U.S. budget deficit, the authorities of these two economies stand to gain considerably from the greenback’s continued appreciation against their own currencies, as this would enhance the return on their capital investments in the United States.”

#113 Sail1 on 03.04.09 at 3:11 pm

#18 Alex

Garth why were you saying it would likely be a depression and now you’re backing down? And why are you so sure that this epic stock market rally you’re predicting is going to materialize?

Didn’t your mother ever tell you, don’t believe everything you hear.

When did I say it would be a depression? Where did I call a stock market recover an ‘epic rally?’ Did you mother ever tell you about fluffing? — Garth

#114 Sail1 on 03.04.09 at 3:26 pm

#21 Observer

Seriously Garth, help me (us) understand how on earth could housing sales rise so much with all the negativity in the economy. I’m at a complete loss to understand this

I have come to the conclusion the only people purchasing homes are teachers, cops, fire personnel, and all type of government employees. They may be the only group with job security. I really don’t think recession or depression bothers them to much.
Must be nice, not having to deal with the stress of knowing, where your next mortgage payment is going to come from.

#115 Bill-Muskoka (NAM) on 03.04.09 at 3:29 pm

For those looking for total news coverage this is the place. Someone did a really great job on this site

Newseum

<Here is the NEW Berlin Wall

#116 Jake on 03.04.09 at 3:32 pm

The Daily Show hit the lack of change in US politics on the head lastnight. Watch the spot entitled “Messopotamia” from March 3rd’s show.
Same secretary of defense and, from the sounds of things, same speech writer. The daily show clip is not up on youtube yet, but you can find it on comedy central. Until then, enjoy this clip

http://www.youtube.com/watch?v=gZgIFCZyoJY

Expect more sad news out of the middle east as the war mongering continues. Same crap, but now with higher approval ratings. Watch out Pakistan….it looks like you are going to be the next country to be given freedom and liberty.

#117 Bill-Muskoka (NAM) on 03.04.09 at 3:33 pm

What was that about our economy again Dim Jim?

Sudbury layoffs

#118 Bill-Muskoka (NAM) on 03.04.09 at 3:38 pm

Oh, and here is the news from Nanaimo!

Housing market continues downward trend

#119 Bill-Muskoka (NAM) on 03.04.09 at 3:55 pm

is it possible the USA will go into a depression, but not Canada?

#87 Jasson on 03.04.09 at 12:40 pm

About the same chance as getting pregnant without sex or inplanting. Our banks are much better than the US’s, but we are not immune. This is a Global event!

#120 Jake on 03.04.09 at 4:10 pm

Here is the Link to the Daily Show clip from March 3rd. This is hilarious.

http://www.thecomedynetwork.ca/shows/showdetails.aspx?sid=3350

The Messopotamia clip starts at 7 minutes 30 seconds. The similarities of the Bush and Obama speeches are priceless. Nice work John Stewart. He must be a filthy redumblican….oh wait, he thinks they are morons too.

#121 Bill-Muskoka (NAM) on 03.04.09 at 4:35 pm

#96 Jake on 03.04.09 at 4:10 pm

That’s right Jake. The Washington, DC Groupies use the ‘Speech Writers Handbook.’ It lists the words and phrases the MSM have conditioned the American public to cognitively recognize. Same as our PM does!

The MSM, as you may have noted, use the ‘Universal Metaphorical BS Handbook of WMD’s’ (Words of Mass Deception) which is why they all sound the SAME! LOL

Now, what do you think about ‘The Daily Show’ coverage of the CPAC (no NOT the Canadian CPAC, the Redumblican CPAC)? ;-)

And there you thought the Matrix was only a Hollywood movie!

Be Virus in the Matrix and Make A Better World!

#122 CM on 03.04.09 at 4:45 pm

A little Dickens and the French Revolution to start things off, I see. There are a lot of parallels to that time and what’s going on now – the aristocrats who were blind to the plight of the people whose work they profited from but who didn’t see much for their labour, the bubble world the rich lived in, their blindness to the possibilities of their futures. It was said that a lot of the people who subsequently lost their heads seemed more surprised about the turn of events than anything else.

Orwell wasn’t too crazy about Dickens, but he did like “A Tale of Two Cities”. He said that Dickens singlehandedly
turned the world “tumbril” into something that filled the reader with dread, even though a tumbril was just a wooden hand-cart.

Madame Defarge is often remembered as a ghoulish old hag who sat at the base of the guillotine knitting furiously while the aristos completely lost their heads. One thing they don’t remember is that the women knitted to keep their minds off their hunger. There was starvation everywhere, and when the women had finished knitting, they ripped it all out and started again. Besides a shortage of food, there wasn’t much wool around either.
Anything to keep their minds off the pain.

Madame Defarge knitted the names of the people to be executed into her work, too, and ripped them out when the executions were successfully completed. – a kind of cosmic justice gesture.

The bankers, big insurance companies, and incompetent corporation heads might want to keep that in mind when the lay off thousands of workers before getting into the corporate jet for a vacation somewhere.

Today, the Grade 10 kids were sent home with forms to fill out for a job experience placement, sort of a “Take Your Kids to Work Day” extended to three days. I hope the various school boards had the presence of mind not to carry this program out in places where there have been massive layoffs. Just what a desperate parent would need.

As for the three dead Canadian soldiers, what can I say but “rest in peace” and wait for that Herc to go rumbling over here again. Meanwhile Harper can blather on CNN to Fareed Zakaria about the hopelessness of a military mission in Afghanistan and then leave them there for nearly three more years. I don’t know how he sleeps at night. But hey – his fundament is covered. What does he care?

#123 MikeB on 03.04.09 at 4:47 pm

The only reason now to invest in the stock market is because there is little else to invest in. With close to 0% interest savings and chequing and GIC are useless.
However I won’t be dipping my toe till I sense the upside is higher than the downside.
While T.O. real estate might be warming and god knows some crappy stuff is selling the US is slowly sinking into what cannot be called anything but the worst recession or the start of a new age depression.
Although unemployment is still below 10% you must remember that the way those numbers are calculated has changed and surely the number is much higher.
Not much to be happy about since the BIG DOG is still sick and getting sicker. A Rally by Christmas… a decent bet only because the next level down is a doozy.
Canada WILL NEVER BE immune from all the things that happen in the U.S. We are clearly too tied to their economy. As is the entire world to be sure.
So the stock market today is rallying because the Chinese are implementing another stimulus of some sort? False optimism. Their biggest buyer is still sick and getting sicker.

#124 Dave on 03.04.09 at 4:48 pm

i just heard an interview with Garth on Howestreet.com. People should give it a listen.

He also sounds a lot nicer in comparison to some of the responses he give to people on here!

#125 TheComingDepression on 03.04.09 at 4:52 pm

Garth even though Michael Pantzner sent me his book I have decided in giving you equal ad space for FREE..LOL
Bless my depressionary heart..
http://www.thecomingdepression.blogspot.com

#126 Glenn on 03.04.09 at 5:22 pm

May I comment on the situation in Argentina in the late 1990s? Where a once very prosperous nation was reduced to anarchy within a matter of weeks? You know, people rushing onto the highway to pirate a truckload of cows for food. Citizens that were a month ago very smug and self-absorbed (much like Canadians are now) hacking away at livestock like a pack of mindless peasants.

Maybe we should just blame some Americans for this whole mess. It absolves you of all guilt!

#127 kitchener1 on 03.04.09 at 5:34 pm

Regarding real estate. Look at the numbers before listening to the spin in the media. We are not at the “desperate” selling stage…..yet. People are still holding out for top dollar in the GTA and Kitchener.

For those looking in the GTA area, there will be better deals outside Toronto then in the city. I am waiting for some of the big builders to lower there prices for a free fall in prices.

#128 Future Expatriate on 03.04.09 at 5:37 pm

#50- “Pray I am”…

I have a feeling God is sitting this one out, BUT if She had a side, it sure as hell wouldn’t be paper markets.

It’s time to cast the moneychangers out of the Temple. Again. Try the gold whip this time.

#129 nonplused on 03.04.09 at 5:44 pm

Hey Skeptic, if you are still out there, rather than me talk out of my ass some more, I’ll let the Daily Reckoning refute you one more time, From today’s Reckoning:

“Europe is plagued by debt too – just like the United States. Individual households are generally in better shape than those in America, but governments tend to have more debt than the United States. And in the fringe countries of Europe – Ireland, Spain, Greece, Italy, Poland, and the Ukraine – consumers borrowed far too much money to buy houses. Unemployment is soaring to 15% of the workforce in Spain. Irish banks are going under. And in Eastern Europe, the problems are worse. Typically, a man who wanted to buy a house found that he got a better interest rate if he took out a mortgage in euros than in his home currency. In Poland, for example, many homeowners must now make their mortgage payments in euros, while they earn their money in zlotys. As the financial crisis developed, the zloty fell against the stronger euro, by half. This leaves the Polish householder paying twice as much on his mortgage.”

http://www.dailyreckoning.com/the-downfall-of-the-american-consumer/

Seems other people out there see it they way I reported it.

#130 Future Expatriate on 03.04.09 at 5:53 pm

Apparently the US Gov feels that there will absolutely be NO recovery for the conceivable future. To the extent that FOX NEWS is now reporting on the existence in every state of retrofitted military base “FEMA” camps. The hypocrisy of FOX “news” is hilarious, as these camps were in existence and commissioned by Bush and they said nary a word for eight years. Someone they don’t like in the White House (for all the WRONG reasons) and, omigod, lookatallthecamps!

What is not funny is their existence and plans for future use and the abject terror of the US public the Gov apparently feels.

Glenn Beck outs FEMA camps

Garth, I would start selling ammo on xurbia.ca, and remember; you can make bullets out of gold.

Stock certificates can only give you death by a thousand paper cuts.

#131 . . . fried eggs and spam . . . on 03.04.09 at 6:04 pm

In keeping with #125 TheComingDepression at 4:52 pm and #128 Future Expatriate at 5:37 pm who said — “. . . time to cast the moneychangers out of the Temple. Again. Try the gold whip this time.”, along with the last moniker on my handle (SPAM), see the headlines; that should be enough.

When America sneezes, Canada gets the plague.

http://tinyurl.com/bbj997 / http://www.moneymorning.com/ \ http://tinyurl.com/d9ybp7 / http://tinyurl.com/d9pear

#132 dd on 03.04.09 at 6:08 pm

#26 TheComingDepression

“Dow is below 1997 levels and this was created in about a month and going perhaps to 3000. ”

And you are basing this on ….?

#133 David on 03.04.09 at 6:58 pm

Recession or depression? No one will really know for sure until events have dragged on for far too long and governments have run out of quick fixes and stimuli gimmicks. Whatever is going on right now is a whole lot worse than a garden variety business cycle recession or bear market correction in the financials. Companies are cutting dividends and credit flows have dried up even with historically low interest rates.
Home buyers are indeed financial gamblers and like lottery ticket buyers face a near 100% probability of not winning. The risk of loss does not stop people from lining up at the lottery wicket and certainly will not stop housing market bulls who can not do arithmetic anymore than 6/49 odds stop people who can not calculate simple probabilities.

http://denseblogadvisory.wordpress.com/2009/02/18/the-money-pit-the-untold-secret-of-home-ownership/

#134 Sun Yat-sen suit on 03.04.09 at 7:13 pm

It seems they’re not interested in bailing GM in Europe.

http://news.bbc.co.uk/2/hi/business/7922186.stm

#135 Too Old Bob$ on 03.04.09 at 7:27 pm

“#40 Munch on 03.04.09 at 6:49 am
Take accountability, take some pain, then you might get somewhere!”

Your right dammit! I’ve had enough. It’s my wife, kids, dog, me and my neighbours fault. I’m taking the initiative. First thing tomorrow I’m selling the Cabin, RV lot, Boat, Star Trek Dvd’s and anything else that got me into this crappy high-risk expensive lifestyle. Then, I’m going get rid of electricity, cable, water, phones, diapers and all other useless items.
How am I going to live. Hmm! well being that my neighbours work all day with no one at home, I guess I could plug an extension cord into their GFI outside, then a double female end for a Garden Hose to tap into their outside valve. Now off to the alley to remove the box door ( which keeps falling off anyways ) and duplex the fitting for cable. Bath time will be in the neighbour’s new $15000.00 Hot Tub, cooking will be on their Natural Gas Barbecue and being that they trust me to take care of their house, I can watch TV on their 50″ screen and play pool while drinking their Beer. They will never know. They are so busy, that they don’t even know what their electrical bill cost them last month.
This is what I’m going to do, so I can get somewhere.

Now I know what your thinking, this is all dishonest, stealing, theft, you name it, but what the heck, Banker’s, Ceo’s, Politician’s, Realtor’s and Stock Broker’s do it. I’m taking accountability. I’m tired of being a Canada-Bot.

#136 David on 03.04.09 at 7:37 pm

On the subject of shovel ready projects.

http://blog.macleans.ca/2009/03/04/attack-of-the-condo-craters/

#137 Another Albertan on 03.04.09 at 7:42 pm

It will be interesting to see the follow-up with the other owner/operators in the next few months…

http://www.calgaryherald.com/Business/ConocoPhillips+slashes+jobs/1353448/story.html

ConocoPhillips laid off about 10 per cent of its Canadian workforce Wednesday, amounting to 190 positions, in response to lower activity levels from falling oil and natural gas prices.

The cuts were part of a four per cent reduction in the company’s global staff levels previously announced in January after Conoco posted a $31.8-billion fourth quarter loss. At the time the company said it may spend as much as $100 million on severance expenses to trim its global compliment of about 32,000.

Company spokesman Rob Evans agreed that Canadian operations were cut disproportionately harder than other areas. Cuts were spread evenly through field and administrative personnel, he said.

“Every area of the operation was impacted,” he said. “Canada took a bigger hit than others.”

Analysts have been warning of layoffs after oil and natural gas prices fell more than 75 per cent from record highs last summer. Wednesday’s cuts affected mostly Calgary while field offices will be notifying employees through the balance of this week and next, Evans said.

#138 Bottoms_Up on 03.04.09 at 7:47 pm

RE: tax returns

Go to H+R Block. They’ll do it quickly (less than 1 hour), and you can get your return money on the spot. Is having a day of your life worth $100? I think so!

#139 Jeff Smith on 03.04.09 at 8:24 pm

It must have been grade 11 that I had to read The Tales of Two Cities for English class. While I excelled at Math & science, I must admit, English and French was my worst subject. If it wasn’t for some interesting novels that we were forced to read and analyzed to death, I would probably have never graduated from high schools. I think the character I liked most from the book was that attorney who hit on Lucy (was that her name?). She spurned him and he basically concluded, oh well… that’s her lost. Wow! pragmatic. Can’t remember his name, nor his partner who later went up to the guillotine in place of the other guy whom Lucy married ? Ahhh the memories.

*********************************************
#122 CM on 03.04.09 at 4:45 pm

A little Dickens and the French Revolution to start things off, I see. There are a lot of parallels to that time and what’s going on now – the aristocrats who were blind to the plight of the people whose work they profited from but who didn’t see much for their labour, the bubble world the rich lived in, their blindness to the possibilities of their futures. It was said that a lot of the people who subsequently lost their heads seemed more surprised about the turn of events than anything else.

Orwell wasn’t too crazy about Dickens, but he did like “A Tale of Two Cities”. He said that Dickens singlehandedly
turned the world “tumbril” into something that filled the reader with dread, even though a tumbril was just a wooden hand-cart.

Madame Defarge is often remembered as a ghoulish old hag who sat at the base of the guillotine knitting furiously while the aristos completely lost their heads. One thing they don’t remember is that the women knitted to keep their minds off their hunger. There was starvation everywhere, and when the women had finished knitting, they ripped it all out and started again. Besides a shortage of food, there wasn’t much wool around either.
Anything to keep their minds off the pain.

Madame Defarge knitted the names of the people to be executed into her work, too, and ripped them out when the executions were successfully completed. – a kind of cosmic justice gesture.

#140 M I K E in Ajax on 03.04.09 at 8:51 pm

#85 “Let’s not forget the gold bubble will pop just like any other asset has done before. ”

You think Gold is in a bubble now. What are you gonna think when it hits 1500 an oz.
I agree it may pull back some in the short term, but long term(2-4 years) it’s the only protection I see.

For the record, Gold investors fear inflation and hyper-inflation, so they invest in what has withstood the test of time in storing their purchasing power and allowing them to come out un-harmed when things return to normal.

Cheers

#141 Rural Rick on 03.04.09 at 8:56 pm

We all agree finance is f**ked for the moment
So
Invest in people
That’s what will fix this

#142 View on 03.04.09 at 9:21 pm

“Gold is a good hedge but people have got to remeber that if it hits $2000 or more, then it won’t matter anymore as we will be in a whole new world economically speaking by then.”

The Economist magazine has an article in this weeks issue about just this. $2000 today would be real dollars what gold reached in 1980. Not such a “whole new world” to me?

#143 Chris in England on 03.04.09 at 9:43 pm

North Vancouver Citizen Jnr #112 writes:

A strong dollar is in the best interests of China and Japan because they hold more than 40 per cent of the U.S. government’s debt securities, making them – in the words of the economists – “the true banks of the U.S. government.”

Oh dear, that surely won’t go down too well in the next global financial centre of the world!

#144 Future Expatriate on 03.04.09 at 11:56 pm

#142… please, don’t confuse the paper peons with true facts about gold. It only makes them nervous and buy more paper.

#145 Lana on 03.05.09 at 6:50 am

I agree with Garth’s statement that “no story will be more significant than that of unemployment”. While governments brag about putting money into training, and programs like “Second Career”, or “rapid re-employment” people are on waiting lists for these programs. The literacy agencies, and the colleges and schoolboards that serve adult learners, are over capacity now. They need a bailout too. Second Career money goes to the learner, not the agency. While it makes sense to put more dollars in the pockets of the unemployed, especially since E.I. is below poverty level, where are the jobs for these newly-trained people? What jobs are they being trained for? There are no jobs, or very few. Hundreds of people will be applying for the same job. Something should be done about E.I. Something a lot more than the Conservatives have come up with.

#146 Lana on 03.05.09 at 7:10 am

#92 Go Green on 03.04.09 at 12:58 pm

Our financial advisor completes our income tax form for $30.00. He also figures out ahead of time how much RSPs to buy to make it worthwhile. We bought $5,000 in RSPs and put it in my husband’s name because he is out of work, and his severance pay ends next month. If we have to take it out, the penalty will be less. We will get $4,000 back which we will put back into savings as a buffer. Hard times ahead. Don’t know whether to sell our house, or lower the mortgage payments and stay. We are lucky–we have a very honest financial advisor, who really cares about us (a family friend).

#147 Lana on 03.05.09 at 7:27 am

#17 Bill-Muskoka (NAM) on 03.03.09 at 11:27 pm

How about we all start an RV Commune? I missed out on that era due to a little Clusterf**k I attended across the Pond. Sounded like a lot of fun, eh? LOL

I’m with you, Bill. I missed it too…too busy raising kids. Communes are making a lot of sense to me lately.

I would have protested the VN war if I had lived in the states. I am surprised no one is organizing a protest against our soldiers being in Afghanistan. I would march for that cause.

#148 M I K E in Ajax on 03.05.09 at 11:53 am

“Yes, financial markets will be higher at Christmas than they are now, but the economy won’t be”

Here’s an interesting article from the Finical Post.

S&P 500 is cheaper today than almost every month in past 137 years.
http://www.financialpost.com/story.html?id=1351327

Some other financial agents like Stephen Leeb are expecting the Mother of all rallies this year as well.

#149 dave99 on 03.05.09 at 1:13 pm

#148 Mike,

I don’t know what they article is based on. Hoever some review showed that they excluded a few years. Also, I think the figures they use are skewed upwards by the high level of the S&P in recent years.

I find that the following link provides some reliable, easy to understand, info about the trendlines and historical context of the various indices.

http://www.dshort.com/articles/2009/regression-to-trend.html

#150 Bill-Muskoka (NAM) on 03.05.09 at 5:30 pm

#147 Lana on 03.05.09 at 7:27 am

There were many protests, just not covered by the Bush loving MSM! I fought in ‘Nam and all the protests did nothing until things were so bad the politicians yelled ‘UNCLE! His name was Sam I think? LOL

Another American extravaganza into the Twilight Zone!

They sure had a hard time replacing ‘Communism’ as their ‘Evil Empire’, eh? I’m surprised they never invaded Canada what with it being such a ‘Pinko-Commie’ nation, as Canada was called back then!

#151 M I K E in Ajax on 03.06.09 at 8:42 pm

#149 Dave

Thnx Dave – well presented charts & analysis. Very useful.