On ethics


Weeks ago an invitation materialized from a prestigious Toronto-based organization asking me to speak at a breakfast event one day next month. I accepted. The topic: what’s next for our battered economy.

Two days ago the organizer emailed me. “We are receiving questions regarding the speech content,” he said, “some brokers and business people have expressed concern that it may be ‘negative’ and would like to know the key points before committing to buying tickets and inviting clients.”

Hmmm. Interesting times indeed, when business leaders and Bay Streeters will only listen to comments they agree with. “That,” I responded, “is the dumbest comment I’ve heard in my professional career. I withdraw.”

In fact, all around us now is a conspiracy of misinformation, unintentional or not. The finance minister can say with a straight face nobody saw this mess coming a year ago. People making financial decisions on behalf of others shun a forecaster they think may not be positive. And the Canadian media rush “good news” items into print, even when they’re clearly fabricated.

Hey, here’s one now!

“A report released today confirms that entry-level purchasers are now the engine driving home-buying activity in almost every major centre in Canada,” says Re/Max Canada.

This story, of course, made it into virtually every major daily in the country, not to mention TV news read by people with nice hair. And what is the data supporting this “confirmation” property virgins are losing it?

“The 2009 RE/MAX First-Time Buyers Report, highlighting first-time buying activity in 32 residential housing markets across Canada, found that improved affordability is prompting many first-time buyers to get off the fence, out of the rental, and into the market.   While a sense of caution still prevails, more and more first-timers are finding it hard to pass up the chance to become homeowners in today’s buyer-centric real estate climate. Increased inventory and longer days on market coupled with the lowest lending rates ever are presenting opportunities that have not been seen in almost a decade. “

Blah, blah, blah. So, where’s the data?

“While the current economic crisis has caused some first-time buyers to either take it slowly or apply the brakes, home ownership remains a top priority for those who are able to take advantage of reduced carrying costs, rock bottom interest rates and lower house prices,” explains Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada.  “Affordability has greatly improved and buyers are firmly in the drivers’ seat in just about every market we surveyed. The new reality is that homeownership remains well within reach for most first-time buyers.”

And there you have it. There is no data. No numbers. No proof. No confirmation. Just another real estate marketing gimmick – a “report” which “confirms new buyers are driving real estate “in almost every major centre in Canada.”

As a result of this: “Drop in house prices driving first-time buyers to take the plunge,” said the Canadian Press. “First-time homebuyers are being lured into the real-estate market by falling prices, lower interest rates, more selection and new government incentives, a new report shows.”

Added the Calgary Herald, “Entry-level buyers now driving Calgary’s home sales, report says.”  Said the Sudbury Star. “Sudbury becomes buyer’s market.” In Vancouver, the Sun’s headline was, “First-time buyers driving market,” and in Guelph, the Mercury told its readers, “Housing market holding up well.”

Strikes me this economic mess will be deeper, longer and wider, the more that financial leaders, real estate CEOs and elected officials lie about it. People watching houses devalue, RRSPs wither and jobs vanish know what’s happening in their own lives and are looking for context and understanding. Surely opinion-leaders and those people making it into the media as experts have a duty not to self-deal when it comes to telling citizens the real story.

Only when we all understand what’s happening in the economy and how to respond – protecting our family’s financial security – can we act in the best long-term interests of our common community. Goosing house or mutual fund sales by suckering in the trusting and the unsuspecting is more than unethical.

It’s a Madoff Moment.


#1 Jon B on 03.13.09 at 12:37 am

It’s all rooted in greed. Madoff to the Canadian banks that loaned out money to those who will surely default. Greedy people simply don’t operate ethically.

#2 Real Estate Deal or No Deal on 03.13.09 at 12:51 am

On Madoff, I hope he never sees his condo/apartment again.

I despise liars, cheats and bsers … I was asked the other day but a lovely client “Aren’t you going to buy in this downturn?”

“Oh yes,” I replied. “But not until, there is a good 30% depreciation and by then I’ll will have a sizable deposit and a small mortgage.

Oh, by the way Garth I am planning to call you for a Solar system to get off grid too so that all I will have is some mortgage and land tax … it will definitely be cheaper than renting.

I figured out it would be cheaper for me to tack on $25K to the mortgage with a solar system and get off grid than have to pay heat/hydro … and when electric cars are into their 3rd generation I will get rid of the Arabs as well.

Nothing like the sun, powering my home and the car.

#3 Third Chimp on 03.13.09 at 12:56 am

Due to recent budget cuts and the rising cost of electricity, gas, and oil, The Light at the End of the Tunnel has been turned off. We apologize for any inconvenience.

#4 JM Vancouver Island on 03.13.09 at 12:57 am

Couldn’t we ALL use a stimulus package? http://www.doritosguru.ca/hucifer/The%20Doctor%27s%20Office

#5 Gord In Vancouver on 03.13.09 at 1:06 am

Another day, another excellent post by Garth.

#6 Jay Currie on 03.13.09 at 1:08 am

You have to start with the truth. Which you will not get from newspapers with “Real Estate” sections.

You have to look for the numbers and the source of the numbers and the way the numbers are being spun.

Most of all you have to trust what you are hearing your family, friends and acquaintances are telling you.

Finally, you have to realize how badly the mainstream media are hurting. Canwest – owning the National Post, Global television, the old Southam papers like the Vancouver Sun and the Province, the Ottawa Citizen and many others, could be toast as early as next week. If you want to make a colour laser print at Canwest papers you have to get “publisher level” approval. The CBC has the begging cap out. CTV is cutting hard. Can they really tell the story or are they looking for add dollars and “good news”?

Luckily we have the internet.

#7 View on 03.13.09 at 1:16 am

It’s a Madoff Moment! I like that. When will the newspapers realize people don’t want to read these lies anymore? It’s just more spin…

#8 rory on 03.13.09 at 1:25 am

I wonder what Lord Black would have to say?

#9 Another Albertan on 03.13.09 at 1:26 am

“Without data, you are just another person with an opinion.” – some t-shirt

“In God we trust. Everyone else bring data.” – Dr. Piggington

“Please show your work. 0/10” – nearly every teacher or prof in math or a hard science where the student puts down an answer (obviously copied) but with no derivation or method.

‘Nuff sed.

#10 BAD on 03.13.09 at 1:27 am

It pointed out that Canada’s gross domestic income – which is a broader measure of the economy because it encompasses the income generated by GDP as well as the balance of foreign earnings or losses in traded goods and investments – plummeted by 15.3% in the fourth quarter, 10 times more than the 1.5% decline in the United States in the same period. Based on year-ago levels Canadian GDI was down 2.1%, a significantly larger decline than the 0.7% drop in the United States. By that measure, the recession has hit Canada far harder than it has the United States.

The revelation was a reality check for the federal government and the Bank of Canada, which have held overly favorable outlooks for the economy. Eric Lascelles, the chief economist and rates strategist at TD Securities said the worsening conditions would likely cause the Finance Department to downgrade its projections, resulting in larger than projected budget deficits.

Reality check on Canada’s economy

It would appear that ones mood – optimistic, pessimistic, happy, sad, confident, or not – is of no consequence when falling off the cliff.

While most economists predict the bleeding will end sometime in 2010, it could take years before the job market is back to where it was before the economy started tanking.

More job losses on the way

It does not look like this coming “prophecy” (depression) is “self-fulfilling”. It’s just coming. Wanna bet a house?

#11 Glenn on 03.13.09 at 1:32 am

Looks like Calgary is really taking the brunt of this mayhem.

#12 re-aligned on 03.13.09 at 1:50 am

It would be a Madoff moment if we saw the pumpers in handcuffs with flashbulbs going off:-)

#13 Future Expatriate on 03.13.09 at 1:58 am

That’s just it. In a world where these guys exist, and can exist for decades without getting caught, the entire system needs to be nuked and rebuilt from the ground up. Sure it’s harsh medicine for the rest of us (or so they keep telling us to extort more and more bailout trillions), but it’s the only way to prevent the same thing from occurring for at least several decades.

We get back to business as usual, and NOTHING, and I mean, NOTHING, will change.

That’s why I’m working toward a new paradigm and putting my money where my mouth is, and damn the risk.


#14 Rob on 03.13.09 at 2:10 am

The Canadian media in general and the Vancouver media in particular are no different than Jim Cramer- paid shills for market hypesters. John Stewart’s dressing down of Cramer for his skewed representation of data, and unquestioning acceptance of dubious statements made by industry salesman- misrepresented as unbiased industry experts- could be, just as easily, applied to a Bill Good interview of local real estate experts Ozzie Jurock or Bob Rennie. Now’s the time to buy- right Bill!!! Vancouver’s different alright???

#15 dont like to be brokered on 03.13.09 at 4:13 am

I am looking for investment property in Toronto and i came by a legal triplex for 800K on a website. I inquired about it and the lady was kind enough to give me details
and than she went on to say “someone is coming over tonight with an offer”, 2 days later she wrote me an email saying “i am still entertaining offers”… 2days more pass and she sends me a spec sheet which she she says she is using at an open house and the price of the property has been raised to 850K…
I live abroad and really dont know what its like back home in Toronto, how bad is it getting or is it still bubble land?
Can people on the blog give me more life stories about whats goin on! what experiences have you come by?

#16 dd on 03.13.09 at 4:40 am

Added the Calgary Herald, “Entry-level buyers now driving Calgary’s home sales, ”

Funny, I saw that headline and just ingored it and I am still renting. Now the unemployment, decreased car sales, and US housing price index I read.

#17 dd on 03.13.09 at 4:46 am

squidly77 on 03.12.09 at 10:30 pm Stock Market Rallies to 1997 Prices.

Squidly, looking at the graph from yesterdays post one has to think that this will land us half way down the 1929-1933 graph. Full recovery is at least a couple years away … earning will be crushed.

#18 dd on 03.13.09 at 4:47 am

Garth and all,

Any news on commerical real estate in the US? Is there a shiller-case index for commerical?

#19 TS on 03.13.09 at 4:59 am

Hi Garth, great post as usual. The fact that the MSM reports on these unfounded pronouncements coming from special interest groups speaks volumes about their credibility.

Hmmm…. is there a reason why they would do this? Let us think…. the MSM companies in Canada just happen to own lots of newspapers… and one of the major categories of advertising in newspapers just happens to be real estate… and that category just happens to be in the ditch lately… and that just happens to be one of the reasons so many newspapers are bleeding red ink. So the reporting of unfounded garble coming from ReMax just happens to be a coincidence? LOL

#20 Cora on 03.13.09 at 5:02 am

“Hah-Ha!” —>

Points at Madoff and runs like Nelson from The Simpsons

#21 WesternGrit on 03.13.09 at 5:05 am

Just watched Jon Stewart rip into another classic “financial whiz”/liar tonight.

The bottom line is that in “corporate-speak” you never talk negative. You never speak of failure. I was taught to lead my team of 250 with words like, “there are no problems, just opportunities”. The mega-corps will continue to talk about “opportunities” in the sad glimmer of a hope that they turn things around before they go under…

More “Corp-speak” (hell, I had COURSES in this stuff):
– “We” – used, even if just referring to oneself
– We sell “solutions”, not products
– Etc., etc., etc.

The cult of consumerism has led to all this pain – and much more to come.

#22 Go Green on 03.13.09 at 5:08 am

Bruce MacKinnons’s cartoon. A good one.


#23 unbalanced on 03.13.09 at 6:24 am

The markets up 3 days in a row. Everything is better !!!Just wait and see. I feel sorry for the blind. Lest we forget. Just a thought.

#24 Adam on 03.13.09 at 6:26 am

G20 could be interesting given what the Swiss did yesterday- don’t think they ‘acted alone’…

#25 Murray on 03.13.09 at 6:50 am

Let us face it. Virtually ever one of us looks no further than protecting their own well being. Be that, running a media outlet that depends on advertising, or selling books that depend on fear to boost sales. Houses do appear to be selling well in Owen Sound. At least a lot better than last year. There are far more listings as well.

#26 cj on 03.13.09 at 7:05 am

Hi Garth, I’m just reading your book and have a question that also relates to todays post. When you talk about afford ability in the book you use 7.5% as an interest rate to show that the average home is not affordable for the average family. Today however, you can get a rate of 3.5% which actually makes the average home in Calgary ($400K) very affordable for the average family. Also, to your point on proof in todays entry; in Calgary homes under $400K are actually in a “balanced market” in terms of sales to inventory. I think that the reason prices arent coming off is because first timers ARE coming into this market and buying $400K “starter” homes (insane as that is!!). SO…I assume that you still feel that the negative effect of increasing unemployment will outstrip the positive effect of low interest rates?

#27 George Popovic on 03.13.09 at 7:40 am

I have also witnessed this type of ‘positive’ behaviour and in one case it was described to me as being a ‘good corporate citizen’

The same applies to the stock market. This includes such trash as Bank of America and Citi both reporting profits when we all know they are bankrupt. There are so many examples of corporations with ‘good balance sheets’ hitting the dirt’ weeks or months later.

Then there is broker talk of how the market is oversold ad there is good value out there. The stock market and the real estate market are being promoted by the same engine.

#28 David Bakody on 03.13.09 at 7:40 am

On behave of all who have the ability to keep an open mind thanks for telling it just how it is …… and may I say well done for turning down Big Business’s plan once again to snowball we the consumers . As mentioned when I questioned my banker on their banks stocks and overall investments, She said pay down debt and save and money wisely was and always has been the best
plan. There are homes selling here but most are in the city near schools, on bus routes and close to required facilities ….. remember that lovely large home on the lake I posted …. it is now reduced! and all those new expensive homes, long list of signs and little or construction activity. But wait the Senate just gave Flaherty/Harper all the cash and more he asked for, so the flood gates are about to open….. perhaps even with rush bigger than their quest for a majority government…. and we all know they went through billions in heartbeat for that.

Think? If Mr. Harper said (and he did) “we were the last in” and our “Banks are better off” that means he had more time to react and prepare and it would be an easier fix for Flaherty ….. hello all should be well with very little cost and effects to Canadians?

#29 katerina on 03.13.09 at 8:00 am

Reputable Columbia U. professor, Nouriel Roubini, says “Bernie Madoff is the Mirror of a Made-Off Ponzi Economy”.

The professor seems to have had it telling the American administration that the only way to escape Japan’s fate of lost decade(s) is for America to take it on the chin now & save the next generation from the prison of debt.

Although Mr. Roubini has recently been featured on Bloomberg, CNBC, the Financial Times (of London) etc…, I always find him at rgemonitor.com where he is very generous of his knowledge.


#30 Peter Coupland on 03.13.09 at 8:06 am

@#2- get rid of the Arabs,just cuz you have an electric car?what do you think makes plastics and rubber and solar panels and batteries and fertilizer and almost everything you touch in your daily life.??

A whole lot of oil!!!!(cheap oil)

#31 WillsDad on 03.13.09 at 8:13 am

The problem with this whole mess is people dont look at money as “real” when they are buying a house.

For example. Ask someone to pay a $20 tip on a $100 meal for 2 people. Cringe. That tangible $20 is hard to part with.

Now, ask someone to part with $400,000 (well $800,000 including interest) on a 25 year mortgage, and they barely bat an eyelash. They see it as inevitable, like paying taxes.

We have totally lost track of reality, of the tangible, in this economy. Its all cyberspace. Reality is really going to byte.

#32 POL-CAN on 03.13.09 at 8:17 am

Spin like this is no different the the introduction of the 0/40 mortgage…. They are desperate to find just a few more greater fools and postpone the inevitable price crash…. The sad thing is that it just might work for a few weeks and pity to those that fall for it….

#33 Danno on 03.13.09 at 8:38 am

#3 “Due to recent budget cuts and the rising cost of electricity, gas, and oil, The Light at the End of the Tunnel has been turned off. We apologize for any inconvenience.”

Thanks, I am now cleaning up my computer due to snorting coffee out my nose because of this. Unfortunatly, this is how I have been feeling about the market for the past 6 months. I work in the Tech sector and have seen a major downturn in what my clients are willing to commit to. Guess you can’t spend what you don’t have (Unless your Government of course!).

#34 Jonathan on 03.13.09 at 8:52 am

More evidence that interest rates could rise rapidly:

“The premier said Beijing expected to see results from President Barack Obama’s economic recovery plan but expressed concern that massive U.S. deficit spending and near-zero interest rates would erode the value of China’s huge U.S. bond holdings.

China is the biggest holder of U.S. government debt and has invested an estimated 70 per cent of its $2-trillion (U.S.) stockpile of foreign exchange reserves, the world’s largest, in dollar assets.

“We have lent a massive amount of capital to the United States, and of course we are concerned about the security of our assets. To speak truthfully, I do indeed have some worries.

“I would like, through you, to once again request America to maintain their creditworthiness, keep their promise and guarantee the safety of Chinese assets,” Mr. Wen said.

U.S. Secretary of State Hillary Clinton encouraged China to keep investing in U.S. assets during a visit to Beijing last month, and said any big switch by Beijing out of U.S. Treasury bonds would drive prices lower, inflicting the very losses Mr. Wen fears.

Still, his remarks, along with the lure of surging share prices, helped depress U.S. Treasuries in Asia.

Mr. Wen was speaking at the end of a week in which China has reported a record decline in exports in February and record-low industrial production growth in the first two months of the year.”


Interest rates will not rise rapidly. That is a bizarre belief. — Garth

#35 Jonathan on 03.13.09 at 9:00 am

I can’t believe RE/MAX would write this.

Oh wait yes I can. It sounds like every report they write.

I guess there theory is first-time buyers were driven out of the market which is why is why prices seized and started collapsing. So it must be first-time buyers that will drive our way out of this mess. Good call RE/MAX, you guys are so insightful. Good thing you didn’t mention that this will start occurring once prices hit rock bottom.

#36 Rhino on 03.13.09 at 9:03 am

A suitable Aislin for the Friday File….


#37 RS on 03.13.09 at 9:11 am

Why do you think they are pumping first time buyers? Because without them the market falls flat – nobody can move up! Those dirty bastards! Sorry am I not suppost to say that!?

#38 Herb on 03.13.09 at 9:25 am

“That,” I responded, “is the dumbest comment I’ve heard in my professional career. I withdraw.”

That’s why we loves ya, Garth. And we don’t even have to buy tickets to hear you every day!

#39 pbrasseur on 03.13.09 at 9:30 am

“Interest rates will not rise rapidly. – Garth”

I agree, for that you would need very strong growth and I just don’t see it without a boomind real estate and auto market.

And that could be very good news for stocks, the valuation of stock is very low considering the next to zero current interest rates! If valuations rise as well as profits you could see a flaming market.

#40 Bill-Muskoka (NAM) on 03.13.09 at 9:38 am

Glad to see Madoff got sent directly to JAIL! Now, they need to confiscate all his assets, and esopecially his multi-million dollar penthouse. I say send in the Sheriff, toss his wife (who obviously was in on the scheme and benefitted from the illegal profits) onto the street and get the auction running. If any of us ever did such a thing you can bet that would be our reality.

I want to see all his lawyer friends disbarred, disgraced, and HUNG! After all they hung everyone else out to dry why should they be treated any different?

Oh, has anyone heard if Bre-X is starting up again with a ‘find’ in the bowels of the WTC where all that bullion is buried?

#41 Finanzkrise on 03.13.09 at 9:39 am

“Blah, blah, blah. So, where’s the data?”

Data: 111,000 full-time jobs lost in Canada in February

Knowledge: People who lose their jobs or are worried about losing their jobs will probably not buy a house.

Insight: Greaterfool.ca

#42 Bill-Muskoka (NAM) on 03.13.09 at 9:42 am


Good for you! Nothing is worse for a broadcaster than DEAD AIR! Their putrified emissions have long been overdue for isolation. Tune them out! Turn them OFF!
Let’ see how long they SURVIVE?

#43 Jeff Smith on 03.13.09 at 9:43 am

It seems that this sense of false optimism is reflected not only by re/max (realtwhore), but by Tories (supposedly people in responsible positions). The IMF is predicting dire situations for Canada. I bet those re/max people themselves will probably not touch a house purchase with a 10 foot pole.


#44 Peter @ Canadian Banks on 03.13.09 at 9:44 am

I smell desperation in this report. I smell cheap propaganda. I smell real estate agents’ fear of losing their easy income. This report stinks all over!

#45 Mcfly on 03.13.09 at 9:58 am

Like all the big real estate franchises, they must rally the troops to keep those balloon fees coming in from their agents. You will never hear a negative undertone from any of them. But common sense should tell all of us that the first time buyer or the “little guy” as I like to call them is the force that drives the real estate market. They were priced out of the market in most areas starting as far back as 2004. In my area an old war time starter house got as high as $200,000. For young families earning less than $40,000 a year and with barely closing costs for down payment, quickly drove the first time buyer away. Just like taking a spoke out of a wheel… it soon falls apart. Now that same war time house is droping in price and combined with lower mortgage rates there is hope yet for the driving force of the real estate market. Just gotta keep the little guy in housing and everybody wins. No stats necessary!

#46 kc on 03.13.09 at 9:59 am

29 katerina

“Although Mr. Roubini has recently been featured on Bloomberg, CNBC, the Financial Times (of London) etc…”

you might want to read this… it explains how cnbc is just a factory for the sheep who don’t do the homework… this is part 2 easy to find part 1 if you search for it

Watch TV Make Money” Who is Really Making Money? Part II


#47 Bill-Muskoka (NAM) on 03.13.09 at 10:01 am

There may well be a lot of first time buyers because the speculators are having to liquidate their debt by selling so many rental properties and evicting the tenants wholesale to get rent increase by the new owners?

There is also the GST exemption factor for First Time Buyers. We used that ourselves. If you have not owned a home ever or in the past ten years you are elgible.

People are going to take back control of their lives because it has been completely proven they can not trust ‘others’ to have control.

The days of true Home OWNERSHIP are returning, and the days of the speculative, absentee-landlord investor is dwindling. Game’s UP! Hasn’t it been fun? NOT!

Thank all the lawyers who got elected and wrote laws to enhance their, and their friend’s wealth.

If you want lawmakers who make laws for we the common people stop electing lawyers and car and RE salespeople to office.

#48 kc on 03.13.09 at 10:09 am

here is part 1 of that article

Watch CNBC and Make Money, Who is Really Making Money? Part1


#49 Jonathan on 03.13.09 at 10:12 am

“Interest rates will not rise rapidly. That is a bizarre belief. — Garth”

I’m a regular here. I know you disagree.

The good news is that if interest rates rise, then the cost of existing corporate and government debt will drop. To some extent this will increase the liquidity of businesses and government. Higher returns will also increase the desire to lend. The falling interest rates have been a characteristic of the past decade have made it easier to add on to new debt, but as interest rates fall, the real cost of paying back existing debt rises.

The bad news is that most US treasuries are short term – 3 months. They rely on an increasing number of new buyers to pay back the sellers when they mature.

On top of that, Obama’s laid out his budgets based on GDP growth of -1.5% 2009, and 4% growth for the next three years. That type of economic growth is unlikely. The deficit will likely total $6+ trillion over the next four years. Deficits will climb thereafter as the population ages. With world wealth down by about 40-45% in the past year and a half, then they are asking for a sizable chunk of remaining savings.

To get that much money they have to look to Asia and the Middle East. Asia is tempted to grow its domestic economy and spend its money internally. Asia is losing a strong current-account surplus (Japan is already in a deficit) reducing the amount of cash it has to lend. They have expressed concern over the safeness of US bonds. Furthermore the US dollar is overvalued due to a heightened sense of uncertainty and could fall dramatically if the world economy improved.

Warren Buffet thinks inflation will skyrocket upon a rebound. Japanese premier thinks his bonds are not safe. I think these guys are well in the loop.

I know you think that the government would be nuts to increase interest rates when we are contending with deflation. Deflation is in fact propping up the bond market right now. But deflation won’t be here forever.

#50 jess on 03.13.09 at 10:17 am

The world’s central stage is being set for acceptance stage. Which countries haven’t eased, zirped or nationalized? The secret havens have been warned as they continue to argue over the rules of fair accounting.
Newly amended accounting nightmares?
Theft Loss,Phantom Income Deduction,
Claim of Rights Credit geez..a siv -madeoff unit?

So did the IRS make money on this madeoff scheme – (the master of running good/ bad data banks)
or did the profiteers off set with off shore loops.

#51 eddy on 03.13.09 at 10:21 am

here we have more proof that lazy journalists are easy to ‘set up’ – they took the re max bait!

i guess this is supposed to be a ‘feel good’ story for depressed homeowners, but buyers should refrain from taking this second hand bait- buyers should boycott real estate for a few months.

#52 KenDaBanker on 03.13.09 at 10:24 am

Indeed there are no data to substantiate what REMAX is claiming.
few questions for all of you:
1. In the GTA, there are still many house sales taking place and the prices are >96% of listing price. Are the buyers dumb or are we expecting too much price decreases?
2. Heard that banks are discounting market prices and not lending more than 80% of the peak housing prices. Is that true? If so, how come so many houses are still being sold at prices close to listing?
3. Dismal figures being reported every day/week, yet reporters (newspapers and tv) are reporting those Re-Max marketing news without any data as proof? where is their credibility?
4. Any views on how much down we are going to go before everything picks up?

#53 Flounder Digest on 03.13.09 at 10:26 am

I made a resolution on February 27 to abstain from this blog so that I could develop a little critical distance. What cued me to make this decision was Garth’s final statement in “Beaver Talk (0226)”: “Let’s dam this torrent while others search for their nuts.” “Fools rush in where wise men fear to tread,” I thought.
The reigning argument throughout February on this blog has been recession or depression.
Gerald Celente of Trends Research considers that one of the crucial factors contributing to his success in predicting all sorts of trends for the past 20 plus years is his political atheism: “As Political Atheists — independent thinkers, unencumbered by rigid ideology, political persuasions, fixed agendas or conventional wisdom — The Trends Research Institute observes and analyzes the current events forming future trends for what they are – and not for the way they want them to be (http://trendsresearch.com/institut.htm).” In other words, what do the facts of current events suggest about future trends if we can escape, elude or trash our political biases? Another who seems to have reached that point through living on both sides of the Iron Curtain is Dmitri Orlov. Of course, my conclusion as to the value of these two observers could be merely a reflection of the narrowness of my own world-view.
When I returned to this blog a week later, not surprisingly, I found the reigning recession/depression argument continued to rage on. While taking the week’s break from the debates, I frequently had flashes of words describing the predicament the Russian revolutionaries of all stripes faced in 1917 after the Mensheviks took over, and before the October 25th revolution. Isaac Deutscher describes the revolution as burning its way through various political coalitions of Mensheviks, Cadets (Constitutional Democrats), Social Revolutionaries and Bolsheviks. Each of these parties had a sufficient grasp of the truth of the situation to confer on them temporary leadership of the situation but insufficient grasp of the practical givens to incorporate sufficient elements to both predict what was coming down the pike and command a following to make their vision stick. After about 7 months, as we know, the Bolsheviks, by the skin of their teeth, managed to cobble together a somewhat stable hegemony of the political left. In this process of burning through the various configurations Deutscher writes the following of Trotsky:
“All efforts to put an end to . . . class warfare will lead to nothing. The philistine thinks that it is the revolutionaries who make a revolution and who can call it off at any point as they wish.
“Thus . . . through the haze of confused and contradictory reports, he [Trotsky] firmly grasped the direction in which things were moving, formulated the problems of the revolution, and unhesitatingly pointed to those whom he now considered to be its enemies, even if only yesterday they had been his friends. The question he still had to answer was: Which was the real party of the revolution, his party? (The Prophet Armed, Trotsky: 1879-1921, Vol. I. Isaac Deutscher, p. 245)”
The question here on this blog is how deep will the present economic mayhem go?
Garth, thankfully, has been prophetic. But, as we see from the Russian collapse, getting some of the story right is no guarantee that you get all of the story right. Kerensky got it right to topple absolute Tsarist control; but, events overtook him within six months. Trotsky lasted considerably longer at the top. But the revolution burned its way through even his idealist coalition when Stalin’s goon squads began, by 1924, systematically intimidating Trotsky’s followers. By 1928, Trotsky was out of power and on the run. (If you are interested in this process but don’t wish to get into the details of the Russian revolution, read G. Orwell’s “Animal Farm.”)
This is not about political revolution here. But, the point I wish to make is this: in the uncharted territory we find ourselves, those who can expect to stay ahead of events and, consequently, successfully prognosticate in the long run, must figure out where their biases are, and, tune them out.
In other words, all of us, including Garth, must be prepared to be vigilantly self-critical in this crucial depression/recession decision. Readiness to be tentative rather than categorical should be conducive to the requisite political atheism.
How many layers of socio-political transformation could this economic meltdown potentially burn through before finding stability? On one end of the spectrum of stabilization recipes is a recession which shakes out bad capitalist lending practices. The other end of the stabilization recipe spectrum . . . ? ? ? is too subversive to contemplate on this blog!
“I hope that agreeing with me is just a developmental stage of sorts, a resting point on the way from being in agreement with the country [USA] at large to grasping the sad truth about it and being in agreement with just a few close soul mates, if that (Dmitri Orlov, ‘Reinventing Collapse,’ 159).”

#54 jess on 03.13.09 at 10:27 am

sorry i forgot to mention the charity writeoffs so who really paid tax is my question?

#55 Greg W., Oakville on 03.13.09 at 10:28 am

Hi Garth, FYI

Heard this author on CBC radio this morning.

Free Market Madness: Why Human Nature Is at Odds with Economics–and Why It Matters
Author: Peter A. Ubel

Sounded like he might have some insight into how we humans can be manipulated, and act. Not always in our own best interests.

#56 bc girl on 03.13.09 at 10:30 am

Jon Stewart had Jim Cramer from Mad Money on the Daily Show for March 12…it’s the best on the topic of irresponsible reporting by MSM and the financial sector lying to people.

#57 Lisa on 03.13.09 at 10:41 am

I bank with ScotiaBank and they just increased the lending rate on my LOC from Prime (Scotia Prime rate is 2.5%) +1% to Prime +2%. Aren’t banks supposed to be decreasing lending rates to spur the economy? I’m pissed! Does anyone have any advice on how I can get them to lower the rate again?

#58 POL-CAN on 03.13.09 at 10:49 am

@Bill (NAM)

Madoff = patsy

Within the next few months we will find out that he has some kind of terminal illness or such….

We will never find out where all that money went and that is the real shame….

#59 pbrasseur on 03.13.09 at 10:54 am

“I smell desperation in this report. I smell cheap propaganda. I smell real estate agents’ fear of losing their easy income. This report stinks all over!”

A hell of a nose ;)

#60 PTDBD on 03.13.09 at 10:59 am

Ethics – blackbailing debt with even more debt

It is reported that Harper spoke out against those who believed in borrowing without consequences. He is reported as having blamed U.S. consumers for getting into debt above their heads.

I agree with him 100%. But he should take that ethical thought just one step further….Why doesn’t this also apply to governments? Why wouldn’t it apply to his own deficit budget and to Obama’s even more bloated 11 Trillion dollar debt? Why wouldn’t it apply to the failed auto companies?

The greatest ethical sin is the devaluation of money which happens when uncontrolled paper printing drives out good money.

Flaherty says that nobody saw this coming. Wrong! For example, this guy has been questioning the false money policy of American Central Bankers for years.

“Governments and central banks with unfettered power to manipulate currency also have the ability to cheat their creditors. One way they do this is to simply create enough currency to pay off debts. This devalues the currency and “cheats” the recipient out of what they are owed” by Ron Paul from
In Government We Trust?

#61 Mike B formerly just Mike on 03.13.09 at 11:01 am

Funny thing is people think Madoff has been caught and will be punished. WRONG.. Sure he will go to jail but will implicate no one else but himself leaving his wife, brother and children and whoever else he loves with many millions of his client’s cash. White collar crimes like the ones with Enron and Hollinger or the Bre-X fiasco rarely result in harsh enough penalties to compensate for what damage was done. So if Madoff dies in 5-10 years we really don’t fix the problem. Clearly the U.S. has to get off it’s cowboy approach to banks and investment banks and create some solid regulations and checks and balances that would catch these ponzis and other evil money schemes . Until that happens we will see this happen time and again .

#62 Diabolo on 03.13.09 at 11:08 am

Talking about greedy … here’s snake oil salesman

John Stewart vs Jim Cramer(CNBC)

Part 1

Part 2

Its very funny … but it makes me angry.
Lesson learnt is never trust these guys.

#63 Irene on 03.13.09 at 11:09 am

It’s a Madoff Moment! I like that. When will the newspapers realize people don’t want to read these lies anymore? It’s just more spin… I like that statement and totally agree. As for Re-max, they are very good at bull$$$. They have to be to pay for their TV ads.

If I were in the market for a buying a home, Re=max would be the last place I would consider to buy from.

As for Canwest and their papers and TV, Yippee go bust for all I care. It couldn’t happen to a better company. All they do is spread the lies with their partisan views, their Opinion section is enough to make one barf so why would we even want to read to buy a paper and read their views. And not only that, we can’t even find a recycle outlet to get rid of the paper so they have no useful purpose in this age of computers and Internet do they?


#64 MaggieMay on 03.13.09 at 11:18 am

“That,” I responded, “is the dumbest comment I’ve heard in my professional career. I withdraw.”

Good for you Garth…maybe they wanted to write your speech too…imagine being asked to speak at a meeting of minds…then asked just what you were going to say…signs of the times …if you don’t agree with them…they don’t want to hear it…


#65 TUT on 03.13.09 at 11:25 am

#6 Jay Currie on 03.13.09 at 1:08 am
… Luckily we have the internet.

I will recommend a second thought before dismissing the printed press.

Sure it is corrupted and sold to the advertising sponsors, politicians and other power agents.

Sure that most of so called “information” is only spin or plain lies.

Sure that the real news are incomplete and do not help the readers to build a clear image of the reality around them.

Even worse the papers are printed in, well, in paper thus contributing to the destruction of forests with the main purpose of hiding the truth they’re supposed to be committed to.

Sad as it is though, the printed press has some physical properties that prevent them to be silenced all at once by any political or economical
force in this planet, even if someone would like to do it. That’s because it’s printed in paper!

Not the same for the internet.

By its own nature, the web can be shut down (or disrupted enough to obtain the same effect) by the flip of a switch. It’s been the wet dream of every government since the beginning of civilization: Total control of the information. Only that it took thousands of years to achieve the required technological level to be able to do it.

But don’t worry, I’m only a crackpot.

and .. luckily we have the internet.

#66 Bro Manziere on 03.13.09 at 11:43 am

One thing I noticed is that a lot of the financial pundits feel like they have some “social responsibility” to spin things in a positive way even if it means that they end up talking out of both sides of their mouths.
Take that Michael Campbell (brother of BC’s premier)… If you see him in short news segments, he’s generally positive, but if you listen to his weekend radio show, he’s apparently been telling his clients for years to be virtually out of the market. Funny that you didn’t see him telling people on the evening news to be out of the market. What happened when Cramer told everyone to get out of the market? He came back and sheepishly apologized for it.
As Jon Stewart’s suggesting: they’re telling the masses to stay the course and be long-term-buy-and-holders, while they exit the market before TSHTF. So the mantra is to not create panic among the great unwashed, which is fine in the sense that panic is not a positive thing. But at the same time, it’d be pretty freaking nice if we (unlike the steerage-class passengers on the Titanic) had enough information to know the true urgency of the situation.

#67 Foreign Investor on 03.13.09 at 11:49 am

Buying an Automobile on the Net

Why has a corporation not seized the opportunity to build a low cost automobile, sell it on the internet and have a retailer such as Wal-Mart supply parts and service as is necessary?

It seems to me that with the exorbitant wages that the “Big Three” have locked themselves into that surely an upstart could make inroads in this marketplace.

• I don’t want to have to pay for Taj Mahal dealerships
• I don’t want to pay for annoying unethical salesman
• I don’t want to pad the wallet of some third generation dealership where the owner simply collects the cash and plays the role
• I don’t want to open my newspaper and have to look at the latest auto sales gimmick of the week – surely there is a better use for paper

When is an entrepreneur going to seize this opportunity?

#68 Two-thirds on 03.13.09 at 11:49 am

#3 Third Chimp:

LOL. That comment is brilliant. If only we had made the switch to solar energy already…


I like the subtle humor of the title, reminds me of the witty headlines found in “The Economist.” Your journalistic pedigree is really showing today.

#69 Bob Bagina on 03.13.09 at 11:58 am

#3 “Due to recent budget cuts and the rising cost of electricity, gas, and oil, The Light at the End of the Tunnel has been turned off. We apologize for any inconvenience.”

I was at a conference/forum last weekend called Remaking the Economy, and a presenter used that quote to start things off. Were you at the forum?

Interesting ideas arose from that day regarding the social economy, cooperatives, and social enterprise, which, in downturns seem to outperform and even buy up mismanaged profit seeking organizations. Anyone have insight or knowledge in this area?

As for #26 cj and affordability by my accounts things aren’t that way in Victoria. As mentioned before even in affluent Victoria the median family income is 56K, and with current low rates that qualifies for a 300K mortgage. Most shacks around here still sell for 400K plus.

I’ve been watching RE for the last year and apartments seem to have taken the greatest fall thus far. Condo/apartment inventories keep growing while houses in the 400K – 500K are selling, for less than asking and closer to assessed value, but still selling.

My wife had a good point that excess condo inventory and price decrease could be the result of speculators dumping assets before further reduction. Some condo owners may be upgrading to SFD, but there doesn’t seem to be any great push from first time buyers.

Government here is in shut-down and has started to lay off high level and mid-level management, and extended a hiring freeze for vacant positions. I understand UVic is going to follow suit. Two of the biggest regional employers cutting back doesn’t bode well, as tourism, a major economic driver continues to stifle, partly due to global conditions and partly due to a burgeoning of unsightly drug-dependent homeless castaways evicted from Vancouver in preparation for the ‘special’ Olympics.

I’m curious how the Nordic countries are fairing during these times. Anyone follow that area of the world?

#70 Basil Fawlty on 03.13.09 at 12:03 pm

“That,” I responded, “is the dumbest comment I’ve heard in my professional career. I withdraw.”
Congratulations Garth, integrity is a virtue!
The media has recently been trumpeting how much Canada has to offer at the upcoming G-20 meetings, since our regulated banking is system is recognized as the most solid in the world. The funny thing is that Canada’s foremost representaitive at these meetings was still in favour of financial deregulation even after the US banking crisis became public. Flaherty was interviewed on BNN in November and was asked if he still favoured deregulation in light of the ongoing US financial crisis, he said he was still in favour of such.
We may as well send Homer Simpson to the G-20.

#71 eddy on 03.13.09 at 12:07 pm

mcguinty wants sellers to pay for an energy audit, david miller crams down a second land transfer tax, followed by user fees and higher property tax,
then they wonder what happened to he market.


#72 Marc on 03.13.09 at 12:07 pm

The RRSP increase for first time home buyers is of no use to myself. I have lost 25% so far in my RRSP, and if I pulled out 25K to put down on a house, I will lose my ability for my RRSP to rebound, and buy a dropping asset. This first time homebuyer is not jumping in at this time. Since my rent is cheap, and can only have my rent increased 4% per year, I intend to keep saving, and keep a lower level of stress then if I was to buy right now. Prices are still unaffordable at the moment, as I do not intend to purchase a propert worth more then 4.5X my income.

#73 jess on 03.13.09 at 12:10 pm

according to the national post
mr. harper is against keynesian economics -then why all the easing and new facilities like the tarp and why is is blaming americans for spending too much doesn’t he know how much americans paid for the war in iraq ? He should really watch the cramer /jon show or has he been watching cnbc too much.

#74 SSS on 03.13.09 at 12:30 pm

this report is struggle of a desperate dinsaur, going into extenction.

#75 Another Albertan on 03.13.09 at 12:59 pm

From the Calgary section of skyscraperpage.com (and essentially corroborated by my commercial contacts):

December vacancy rate was 4.1% but has increased 7% as of end of February to 11%

There were 2.3 million sq ft of sublease space that came onto the market during that period of time.

1.1 million in class aa,
500k in class a,
500k in class b,
and 250k in class c.

Total sq ft in downtown space is about 35 million sq ft.

#76 morfeus on 03.13.09 at 1:20 pm

anyone notice that the post from Jeff Smith is located in the G&M’s sports section?

Maybe there’s a new sports league in the making? Perhaps gladiator days are not far off if the dire financial news is included where our games of fancy reside?

#77 David Bakody on 03.13.09 at 1:26 pm

Speaking of Madoff ….. did anyone notice that Forbes list showed 355 less billionaires this year ….. makes me wonder if the real live top cats just downsized the herd living more pickings to themselves so they become even more powerful.

Let the Real Estate people say and do as they will because it is seller who knows all … first time buyers for most part are issued blinders while sellers for the most part wait and now they are waiting like people in the Emergency line.

February unemployment number have beat January’s so what will March bring ….April showers?

I have a feeling Harper made a big error picking on you to save Flaherty in H of C Garth …… for the pen is indeed mightier than the sword. Has anyone noticed that the so called pundits are starting to get the message when asked about he who can not stand the heat in the kitchen?

#78 David Bakody on 03.13.09 at 1:32 pm

#3 “Due to recent budget cuts and the rising cost of electricity, gas, and oil, The Light at the End of the Tunnel has been turned off. We apologize for any inconvenience.”

In my day we use to say be careful for that light at the end of the tunnel, it just might be a train!

#79 TheComingDepression on 03.13.09 at 1:35 pm

Just received the minutes for our Condo complex here in Yaletown (Waterfront) 25 units are in arrears of levy dues. Incidentally Michael Levy lives across the hall from me. I doubt if he’s in arrears though..

#80 Basil Fawlty on 03.13.09 at 1:41 pm

Is this ethical?
“The government began keeping official track of inflation in 1913, the year the Federal Reserve was created. The CPI on January 1, 1914 was 10.0. The CPI on January 1, 2009 was 211.1. This means that a man’s suit that cost $10 in 1913 would cost $211 today, a 2,111% increase in 96 years. This is a 95% loss in purchasing power of the dollar. For some further perspective here are the prices of some other common items in 1913 per the Morristown Daily Record:

Boy’s shoes for school, .98/pair Women’s shoes, 2.00-8.00/pair
Bread, .10/3 loaves Butter, fancy, .30/lb
Cereal, Kellogg’s Corn Flakes, .09/box Eggs, Fresh Western, .27/dozen
Peanut butter, .09/jar Toilet paper, .26/6 rolls
Daily Record [Morristown NJ], .01/daily paper “

#81 PTDBD on 03.13.09 at 2:18 pm

Dear PM Harper:

Can we the people haz our multi-billion stimulus back please, before it gets squirreled away behind corporate doors?

Haven’t you heard? President Obama said yesterday that the national crisis is “not as bad as we think”. His assistant Summers “sees signs” That crisis is easing. the market is up !4daysinarow! and Garth just bought a house. Booooooya!


It’s all been overblown by the drumbeat News and bearded bards bandying bloated books. Crisis is over. I smells the bottom of the undertoad. There is no need for fear. There is no monster under the bed. All is good.
No need to take future taxpayer money from the kiddies & their kiddies. That China chief says he is worried about the loans…just send him some more of those $ to show how plentiful they are.

(brought to you by the Summer’s “No monster left behind, negation of all fears Foundation”)

#82 David on 03.13.09 at 2:20 pm

Is there a possibility that Bernie Madoff could plea bargain a 150 year sentence in a US Federal Pen in exchange for a contract in perpetuity with Re/Max in Canada? The possibility of having a toilet that can flush and eating something tastier than Velveeta sandwiches and not showering with heavily tattooed men with large muscles might sound appealing to this genteel near octogenarian might be appealing to Bernie. Other than watching the escrow accounts like a hawk Madoff would be a pretty safe bet.
I can not blame Garth for refusing acts of self censorship in exchange for offering up positive inspiring messages to the breakfast crowd.

#83 jess on 03.13.09 at 2:48 pm

forbes also had the drug lord on the list who seems to like to employ dropouts as sleepers cells give them fancy cars and a weekly income while waiting for their orders.

funny that gdp measurement doesn’t care about HOW the money was made. “greed” coloured eyes have different lenses than mine.

#84 . . . fried eggs and spam . . . on 03.13.09 at 3:20 pm

The probability exists that dubya / harpo – dim jim / madoff are one and the same person, but a shape-shifter of the highest order; e.g., dubya was first, declared war on those who got in his way and thus, sent us all into a tizzy of a free-fall.

His job well and truly done, along comes harpo – dim jim to screw up Cdns.’ lives, via increased taxation, incompetent and meaningless double-speak and then breaking Canada up ( link: http://tinyurl.com/bpcce8 ).

Also runs with the link I posted last night on http://progressivecomrades.blogspot.com/ , and is taking shape very quickly while our attention is focused on the economy and elsewhere.

In other words, the feds. are working behind our backs, starting right here under the guise of “domestic security”. We are Canadians; there is no need for this. — http://tinyurl.com/chr4e8

This was followed by madoff, who roasted investors worldwide for a few bucks (give or take). Never mind. It’s only monopoly money, after all. Besides, there’s always this — http://tinyurl.com/cpnjpa.

If we take up a small collection here, put together $1.99 then we should be able to buy CanWest and all their assets, have our own TV stations (dump the print media — it’s outta style now anyway) and give Garth free air time to re-invigorate our economy.

That’s my pipedream, and I’m sticking to it! Out-takes from DailyReckoning.com this morning . . .

“Few things are as costly as free money…Congress is spending away $1 billion an hour…Stocks rally — but based upon what?…Even the U.S.’s biggest, strongest companies are reporting problems…Berkshire no longer Triple A…”

Etc., etc. I’ve never had the experience of spending a billion an hour; wot’s it like?!

Has anyone seen the millions of brand-new, unsold cars – trucks – minivans worldwide? Toyota rents a cargo ship to store some of theirs, ‘coz there’s no room to put them on land.

GE credit rating was cut by S&P; Japan’s economy is the worst it has been since WWII; China has told the US to not ‘spook’ the greenback, otherwise China will take a major hit in the finance markets.

Curious: If China has been diversifying assets away from the greenback and putting them elsewhere — which is what Japan said a few months ago; dump the dollar and move somewhere else — then what happens if China moves mountains and finishes with the dollar?

I guess all hell breaks loose!

#85 Bill-Muskoka (NAM) on 03.13.09 at 3:22 pm

BTW, talked with our FA this afternoon regarding our portfolio and we actually have seen an increase since March 4.

We also discussed GM and he made a great and very important point about companies in such imminent financial failure. ”DON’T even think of buying GM stock because it will be worth exactly ZERO if they go bankrupt. Only the stockholders of the ‘new’ company will have any value in whatever GM might become. That will be the government, and a few well to do investors hedging their bets.

Likewise, I pointed out that the U.S. Government can not really let GM fail completely because of all the companies they control that supply the Defense Industry. The auto manufacturering part could go, but not the rest like Hughes Aerospace, Hummer, etc.

He also said ‘No one knows if we have hit the bottom as yet or when things will actually recover.’ He also agreed with me that it is the gamblers and their own insecurities based on emotions that are causing the real havoc in the markets. Sure nice to have an honest FA!

He thinks interest rates will be very steady through 2009 with very small 0.25 point increases at most by the BoC.

#86 Bill-Muskoka (NAM) on 03.13.09 at 3:25 pm

#77 David Bakody on 03.13.09 at 1:26 pm

Rumour has it that the list is now written on Flash Paper…just like the so-called ‘wealth’ the billionaires claim they have! POOF!

#87 Happy Renter in North Van on 03.13.09 at 3:39 pm

On the Vancouver Sun’s site, I called them out on Ash’s numbers… It’s one thing to massage data… like comparing February’s “improved” sales number to January’s (They always go up in February), but it’s another thing to fabricate numbers… Re/Max’s flack said sales for Jan and Feb of this year were up 17% YOY. I went to Real Estate Board of Greater Vancouver’s own stats page and it showed a 50%+ drop over the same YOY period… RE/Max should be ashamed of itself…

#88 Smith on 03.13.09 at 3:46 pm

As a first time home buyer I see the truth behind the articles. This is real, not some made up bull as some would believe. Sure there is spin, but look at who is slinging it.

The housing market is falling, generally. The first time buyers are hitting the market in droves. The average house price is falling because high priced homes aren’t selling, days on the market is growing because crappy homes that nobody wants won’t sell, no matter what price.

Nice homes, in nice neighborhoods, at attractive prices are selling like hot cakes. A good agent who understands the tough market will price accordingly, and the buyers will buy. The last 3 homes I tried to put offers on sold within days of being listed.

There are too many extremists on this board, we need to realize the world will not end, but there will be despair and suffering for many. Those with cash can come out of this sitting very pretty.

Who knows where the bottom is….but I’m calling it!

#89 Katheran Milne on 03.13.09 at 3:47 pm

Right on Garth! I saw that on the news yesterday and thought to myself “those bloody, lying bastards!”

I’ve been a Realtor for 33 years and I can tell you that when it comes to the real estate industry, for the most part very few of them have no shame whatsoever! When I talk about the industry, the REALTORS themselves, while not untarred by muchoverall system. Realtors are but the “slaves” of the system.

I came into the industry during the 70’s recession and this is now my 6th crash or recession. Throughout my career, I have been troubled, at the length the real estate industry will go, to disguise the truth, plead ignorance, manipulate stats and flat out lie, to keep money flowing through the system and into their pockets. Always, at the expense of innocent people who are driven by the desire to own a home as well as the greedy everywhere. (Which is why I wouldn’t support bailouts for real estate like we are seeing in the U.S.) The industry always acts indignant and holier than thou if anyone ever attempts to portray them in a poor light.

Personally, I have seen this current crash coming for years and began advising my client’s years ago to sell and rent. It is difficult to be so far ahead of the curve or even trust someone who is ahead of the curve, when everyone else around you is claiming the opposite and there is no “hard evidence.” By hard evidence, it’s my experience that people won’t believe you until it’s headlines in the mainstream media. When the truth is impossible to keep under the bulging rug! Of course, by the time that happens, it’s over and far too late to take action.

I left B.C.’s Lower Mainland 2 years ago in preparation for this disaster and moved back to a small town on the West Coast where I had previously moved to (1993-2002) in preparation for the late 80’s early 90’s downturn. B.C. small towns follow the cycle about a year after the Vancouver area. In my career, the real estate food chain, always and predictably, collapses as follows: the U.S. goes first, then Ontario and the East about 2 years later, then spreading west to B.C. and Alberta a year to 18 months later, and finally, small towns a year after that.

Always, there is denial by all the real estate players and fudging of “numbers” to make them read well to the public. The numbers are also always behind the curve anyway so the industry is able to keep a pretty good control over the bad news for a very long time. Until even the most ill informed observer notices more and more real estate signs popping up and those signs sitting longer and longer in their neighborhoods does suspicion begin to creep out. At that point, only the “best” stats are used to find some way to keep the party going and those numbers are usually out of context. Those of us who can, or want to, read between the lines are few and far between, but we are also the people who don’t need the stats to tell us that the phone isn’t ringing and offers aren’t being written in our real estate offices! It’s like the Dylan song: “you don’t need a weatherman to tell you which way the wind is blowing!” If I attempt to drag the truth out into the light I am mocked and deemed a scare mongers by the public and my peers. People do not want to face the truth. After 6 recessions, I know it is hopeless to warn 94% of the people so now I just mind my own business, leave well enough alone and only engage with like minded individuals who exhibit intelligent awareness of the situation.

I was reading a book the other day, maybe it was even Garth’s “The Greater Fool” (I read so many) and the author was trying to understand why people won’t believe warnings and can’t see the writing on the wall while there is still time to prepare. The theory was, that human brains have evolved from reptilian brains, so they only respond to fight or flight situations. Since people are notoriously short sighted about everything in the world from real estate to global warming, they cannot perceive any need for fight or flight in this real estate situation. Therefore they will continue to deny, do nothing or believe there is no problem. Sadly, only when the streets are littered with foreclosure signs, when they or their neighbours are filing for bankrupcy and people are committing suicide, shooting their families or both, will they believe something is amiss. By then though, it is always far too late and it’s all over but the burial! This follishness is stunning and I’ve experienced it every downturn. No one believes the warnings, although interestingly after the fact, everyone claims that they all saw it first! Anyway, I like this reptilian brain explanation for human ignorance and denial.

Upon the emergence of each downturn, I personally, step back and wait. There’s little sense actively pursuing listings, as they will be overpriced, will not sell, they become stale dated, they are a waste of money advertising and an aggravation to deal with as the sellers refuse to accept the truth and ultimately blame me for their homes not selling. At the same time, the rest of my industry is actively (and they really are up here where I live doing it right now!) claiming that “there is no problem,” “it’s not that bad,” “we’ve turned the corner,” “our area will be immune,” “we won’t be affected because we will attract baby boomers “(those broke ones I wonder?) “and retirees” (at the same time as in reality more retirees leave than come from our area and the population hasn’t changed since 1970!) and blah, blah, blah, ad nauseum. The seller will then change Realtors and by a Realtor or two later and another 18 months down the road, only then he may begin to see they light. By this time however, he likely owes more than his house is worth, so he is either stuck with the house or needs to go bankrupt. In my previous market of Surrey and White Rock, B.C., between 2004-2007, 80% of buyers I worked with were 95% – 105% financed.

Perhaps Garth should do an article on how much money these buyers are into their homes for and how much they would owe if they had to sell their house the day after they bought it. If you take say a $300,000 townhome, including CMHC fees tacked on the end, borrowed downpayments if they bought 105% financed, legal fees, B.C. property purchase taxes, real estate commissions, moving costs, utility hook-ups, new appliances, paint, floor covers if reno’d, the buyer would have to sell for roughly $335,000 or more, the very next day to break even on their investment! And all this in a falling market! It will shed some light to Canadians about our own “sub-prime” markets and the depth of the problem that homeonwners, taxpayers and CMHC will face as prices continue downward. Our governments (through CMHC most significantly) have enabled and encouraged the impending tragedy that is about to hit so many Canadians, especially, that last unsuspecting round of first time buyers. Then the rest of us taxpayers will have to payout the banks through CMHC and pick up all the tabs for the mess. The banks by the way, lose little if any money themselves for their part in the debacle.

Getting back to the topic of the real estate industry serving their own better interests, this “deception” runs deeply through every level of the system. I’ll use B.C. as the example but each province has its similar pile of bureaucracies. It starts with the salespeople, office manages, owners of most companies, up through the local real estate boards to BCREA (British Columbia Real Estate Association,) CREA (Canadian Real Estate Association) and up through all the multi-levels involved in the ultimate pyramid schemes of franchises. The bigger they are, the more they need the “slights of hand,” in order to keep their sales people (the bottom of the real estate food chain) asauged, oblivious and diligently trying to pretend that reality isn’t happening. At every level, media releases are “massaged” to keep up the smiley faced optimism while “misrepresenting” the reality and in so doing, draw in the last of Garth’s “great fools.”

It is annoying at best to be associated with the so called “profession.” The problem is that I’m extremely competent, knowledgeable and good at what I do and have a specialized “truth service” to offer, so I continue to work with a small, well advised group of people who already know the truth or are prepared to learn. Fortunately, I saw this coming, years earlier so was able to prepare my finances and real estate portfolio’s accordingly (sold everything.) I’m renting very affordably in a very sweet home in a gorgeous location and waiting comfortably, just as I advised my clients to do, for when the time is right and the property is right. Then, I’ll be buying something that will suit me for the rest of my life, just as Garth has.

There are still buyers out there but I’m seeing older and middle aged “wise” people who sold their homes in the good times, rented and are now redirecting their cash to their “final” homes. Small acreages or large lots, very small, downscaled homes, efficient to heat and many prepared to get by without electricity or gas for extended periods, food cellars, south facing sunlit yards for food production and big covered porches to sit and rock their days away in peace and security. They are waiting for realistically priced properties and motivated sellers. There is still more room for prices to fall as the denial is still in bloom and B.C. hasn’t hit it’s full downward stride yet so hence neither has this small town. Fortunately, most of us older and wiser people know quite a bit about being patient.

The buyers I work with not only agree with my outlook for the future of real estate but many have been here before and remember. These are buyers who lived through the other recessions and don’t need convincing that this time will be worse. These are people who paid attention to the signs and learned from the past crashes.

That’s what makes me believe that all the rest of the people out there who are still denying that there is any problem or that they and no one else could have ever seen this coming, are either incompetent, liars, fools or all of the above. Throughout every layer of our bureaucracies – every last one of them with virtually no exceptions, parrot that they couldn’t see it coming. They should all be fired. If they were Realtors they could also be sued, jailed or both for misleading the public!

I thought the MacLean’s article was dead on. You should have seen the emails sent to our local real estate board and to BCREA Board of Directors, BC Presidents (all local Boards,) BC Executive Officers and BC Communications Group from CREA as they madly scrambled to find someway to regroup or do damage control about the imminent release of “Subject: MacLean’s magazine MLS(r) attack.”

All of this could be one of just many stories that I watch relentlessly play out – crash after crash, recession after recession ad nauseum. It’s always the same and “they” all, always say “they” couldn’t see it coming. “They” are always wrong in their predictions and it’s all about “show us your money you poor, innocent, trusting “greater fool” buyers!”

The real estate industry keeps the great shell game going for this country. No one wants it to end and everyone who benefits will milk it until the cow is dead! Personally, I think we should go back to the good old days where you couldn’t buy a house unless you could afford it. Banks needed 25% down or you were a bad risk. The government should get out of the lending business (CMHC) and get back to taking care of the basics.

Another topic that would be good to explain to the Canadian people is who CMHC is and how they work. 95% of the population has no idea who this branch is (even though most people are directly affected by it when they take out a mortgage,) what they do, how it works and how the tax payer picks up the tab every time the market collapses. CMHC is Canada’s own personal sub-prime lender. We just haven’t started our long downward journey with them yet. I anticipate it will be another 10-18 months before we see that fiasco begin to play out.

One final note: all real estate collapses since the 70’s have been a direct result of shortages and/or lack of oil supplies. If you want to know what real estate is going to do next, watch the diminishing oil reserves and resource wars.

Katheran Milne

#90 wjp on 03.13.09 at 4:03 pm


#91 Bill-Muskoka (NAM) on 03.13.09 at 4:19 pm

#53 Flounder Digest on 03.13.09 at 10:26 am

WOW! Now that was a truly intelligent comment. Please contribute more. Perhaps some will ‘Get a Clue’ about history and reality. There is, as Solomon wisely said ‘Nothing new under the Sun!’

#92 Go Green on 03.13.09 at 4:38 pm

#27 George Popovic on 03.13.09 at 7:40 am

I have also witnessed this type of ‘positive’ behaviour and in one case it was described to me as being a ‘good corporate citizen’

George – My experience may not relate to the same industry as yours. Many yrs ago our org. purchased a ‘Systems Development Methodology’ pgm. from a leading corp. I was one of the team involved in using it to develop a multimillion $ IT mainframe project (already a bad idea). The co. brought out the big guns to convince us to push their product to the rest of the org. Same applied to a sytems engineering product. After 4-5 yrs. & many millions of $ spent, neither products, AFAIN are used now. There have been other major IT corps who literally would demolish the career of someone who questioned them.

#93 Puzzled on 03.13.09 at 5:06 pm



#94 Two-thirds on 03.13.09 at 5:06 pm

Speaking of useless , sorry, “fabricated” news, here’s this precious gem of “wisdom”:

5 signs of the recession’s end

An excerpt from the article:

“Other people said they’d know a recovery was coming when they:
-Upgraded to a bigger flat-screen television.
-Saw lawyers working until 2 a.m. again.
-Replaced generic dog food with organic brands.
-Bought Starbucks lattes again.
-Rejoined a gym and purchased sessions with a personal trainer.
-Had more trouble catching a cab in New York City.”

So I guess once we get back to the excessive, frivolous lifestyle of the past 10 years, we will be out of trouble and back to…more excessive and frivolous times. Again.

How the heck does one track pets’ diet trends, anyway? Should I quit my job and start a new index?


#95 Bill-Muskoka (NAM) on 03.13.09 at 5:15 pm

#58 POL-CAN on 03.13.09 at 10:49 am

You are so right it hurts. As to the money…Well, it was all Flash paper anyway, but the people who were bilked are out for BLOOD and Madoff is facing many more trials.

The U.S. Government is likely to be sued as well for failure to protect the people. That will a very tough lawsuit because Congress has written so much boiler plate to protect themselves from litigation. They love writing laws to control the people, but even more to protect their own incompentent arses.

One thing they will be forced to face is ‘The Sleeping Giant Has AWOKEN!’ Americans differ from Canadians in that they WILL take action when things get too out of whack. Canucks go ‘Ho Hum!’ Yanks go ‘Ho! Gun!’ Things are starting to show up on the public pages now, and you can bet they are only a smidgen of what is happening.

Here are a few insightful news articles:

Madoff probe turns to possible accomplices

Among other things, prosecutors must determine what role, if any, Madoff’s wife, brother, two sons and employees played in perhaps the largest Ponzi scheme in history.

“A lot of resources and effort are being expended, both to find assets and to find anyone else who may be responsible for this fraud,” federal prosecutor Marc Litt said at a hearing Thursday where Madoff pleaded guilty to 11 felony counts and was ordered to jail immediately.

Authorities also will have to reconcile Madoff’s statement to the judge that “to the best of my recollection, my fraud began in the early 1990s.” Prosecutors have alleged that the swindle began in the 1980s.

Oh yeah, this is no Witch Hunt, this is a mission to hunt down and kill the Werewolves of Wall Street. Great time to be a Prosecutor I think!

NAACP sues mortgage lenders, alleging racism

The NAACP filed lawsuits Friday against two of the nation’s largest mortgage lenders — HSBC and Wells Fargo — alleging “systematic, institutionalized racism” in their subprime lending.

China’s premier worried for U.S. investments

“We have loaned a huge amount of money to the United States,” Wen said at a news conference in Beijing. “Of course, we are concerned about the safety of our assets. To be honest, I’m a little bit worried. I would like for you [a Western reporter] to call on the United States to honor its word and stay a credible nation and ensure the safety of Chinese assets.”

He noted that Obama “has introduced a host of steps to tackle the international financial crisis” and said he has “high expectations” for those steps.

The ‘other’ Sleeping Giant has Awakened as well!

Cuomo: BoA may have influenced Merrill bonuses

Merrill Lynch may have misled Congress in November about its employee bonuses, New York Attorney General Andrew Cuomo said in a filing on Wednesday.

(World Bank chief sees ‘dangerous year’

World Bank president Robert Zoellick warned on Friday that 2009 could be a “very dangerous year” and urged quick action to fix troubled economies ahead of a meeting of international finance officials expected to wrestle over whether to spend or regulate the way out of the global downturn.

He said fiscal stimulus without appropriate reform, such as cleaning up banks’ the trouble assets weighing on bank balance sheets, would be “just a sugar high.”

Oh yeah, it is going to be dangerous allright. Dangerous for the Con Artists who have cheated honest, hard working people! Get a ROPE and Hang ‘Em High!

GM workers protest at European plants

And one I saw today but cannot find now. Yes, things are going to get very DANGEROUS for the Elite who have screwed people and their families. wait for Law enforcement to run on the rulers as well. I see a sequel to ‘V’ is for Vendetta’ only this one will not be a Hollywood movie, it will be DAMN REAL!

#96 TheComingDepression on 03.13.09 at 5:33 pm

A recession occurs when a nation’s living standards drop and prices increase. This downturn in economic activity is widely defined as a decline in a country’s gross domestic product for at least 2 quarters.

An economic condition caused by a massive decrease in business activity, falling prices, reduced purchasing power, excess of supply over demand, rising unemployment, and other negative economic factors.
– Bloomberg financial definitions

#97 gold bug on 03.13.09 at 6:18 pm

Katheran Milne, that was a stellar post. I could echo every single one of your points.

This is counter-intuitive for most people, but the best thing that could happen for consumers of real estate would be for the industry to be entirely DE-regulated.

Regulations are enacted at the behest of consumer advocates, lawyers or the vested interests. Politicians sell the new regulations to the masses as “protecting consumers.” Unfortunately, the only thing regulations actually protect are the vested interests.

Some examples:

You can only sell real estate under a brokerage. A brokerage charges realtors a monthly fee. Often a very high fee. Those costs get taken out of consumers in the form of commissions.

Brokerages are forced by submit an accountant’s review of their books every year. The massive overhead this represents for smaller brokerages results in one thing: defunct smaller brokerages. Which means the Red/White/Blue Balloon company gets more market share. Which it uses to support a floor on commissions.

The Competion Bureau is a massive, expensive bureaucracy that has virtually no successful cases to show for its multi-decade efforts. The Bureau has invested heavily in trying to open up the books or organized real estate. It has failed miserably. Taxpayers lose again.

Consumers lobby for “more qualified” realtors. Vested interests express agreement. So instead of being just salesman (of whom consumers are rightly wary), now realtors are “agents.” Agents owe a fiduciary duty to their clients. Therefore, it is not feasible to allow prospective clients to access board-controlled MLS systems for a nominal fee. And then leave sellers to their own devices. If something goes wrong, the realtor is legally liable as the “agent.” Nobody smart takes on liability without a corresponding potential reward. Hence higher commissions (i.e., rewards).

Real estate boards and brokerages issue press releases claiming one thing, such as “it’s all sunshine and lollypops out there.” Street-level realtors then have to deal with unrealistic sellers, which prevents an orderly decline in prices, which continues to shut out prospective buyers, which prevents recovery in the sector.

The new money laundering legislation turns realtors into tax compliance nazis. This adds to an already burdensome paperwork trail. This gets taken out on consumers in commissions.

Consumers always have the choice to sell or buy real esate without the aid of a realtor. But why shouldn’t they have access to someone who can provide or interpret MLS data. For a reasonable fee?


Kill it. And liberate consumers.

#98 gold bug on 03.13.09 at 6:24 pm

And just in case someone is thinking: “We need regulation to keep naughty realtors in line” give your head a shake. All the laws and codes of ethics in the world won’t prevent an unethical person from acting unethicallly.

That’s true for realtors. It’s true for lawyers, doctors, accountants, engineers, teachers, plumbers, car salesman, whatever.

The concept of Buyer Beware served society well for millenia. It’s an ancient concept. We should get back to it.

Then, every consumer knows he has to satisfy himself as to the appropriateness of his purchase. In cases where negligence or fraud is involved, there is well-established criminal and tort law.

#99 Investx on 03.13.09 at 6:47 pm

So let’s define housing affordability here.

Is a house affordable, like is said, if it is no more than 3x a household’s yearly income? But this does not take into consideration the downpayment. Is it more accurate to say the a house is affordable if the MORTGAGE is 3x a household’s yearly income?

Is it better to just go by the monthly cost? That a monthly mortgage and related expenses (property tax, etc) shoudl be no more than 32% of monthly household gross income? This takes into account interest rates as well.

#100 ThumbsUp on 03.13.09 at 7:09 pm

Only when we all understand what’s happening in the economy and how to respond – protecting our family’s financial security – can we act in the best long-term interests of our common community. Goosing house or mutual fund sales by suckering in the trusting and the unsuspecting is more than unethical. – Garth

Thanks Garth for mentioning mutual fund.

I have a RESP account with one of our big 5 banks. I had the ‘dollar cost average’ contribution setup with one of the fund the bank provides. The portion matched by the government grant was allocated to an equity fund monthly – here is how the transactions went(illustration only, not actual data):

Date Unit Price amount
July 1, 2008 9.3 40
Aug 1, 2008 9.4 45
Sept 1, 2008 12 145
Oct 1, 2008 11 45

Every time the fund price is at a peak, I get the most amount allocated.

I know I was Madoffed.

Buyers/Consumers beware, Madoff is everywhere! The government only bailout their friends.

#101 JM on 03.13.09 at 7:27 pm

Re post #89

Perhaps real estate agent Katheran Milne has offered the greatest evidence yet of a crashing market. The fact that she had both the time and inclination to post her lenghty autobiography means she likely has neither listings nor prospects. Better start the cold calls.

#102 David on 03.13.09 at 7:37 pm

Katheran, you are indeed a rarity. The industry that helped drive the economy over the cliff continues to see nothing wrong with its behavior. Realtors who can not demonstrate the advantages of ownership over renting based on ALL the fundamental metrics are little more than hucksters and snake oil salesmen.
Home ownership might be a desirable goal, but not at the expense of wrecking the economy and leading families to financial ruin.
Kudos to you for choosing rental until fundamentals are aligned with financial sustainability. Historically low interest rates are meaningless if the principal is grossly over priced relative to family incomes.

#103 bobs your uncle on 03.13.09 at 7:50 pm

#97……. since when can real estate only be sold through a brokerage? Anyone can buy or sell a house, there is no law saying you need a realtor.

#104 Dee on 03.13.09 at 8:06 pm

Confidence reigns. It disturbs me is that we’re gestating another generation of debt slaves.

Two articles I found interesting just in case no one has read them yet:

Note the last little paragraph, it’s telling.


Roubini’s comment on Madoff.


#105 Average guy on 03.13.09 at 8:24 pm

# 102- David.” Realtors who can not demonstrate the advantages of ownership over renting based on all the fundamental metrics are little more than hucksters and snake oil salesmen”. OH, Boo-Hoo. I’m tired of the whiners and crybabies complaining because they are now underwater on their mortgages or because they were tricked into buying houses that are now worth less than they paid for them. People were driven by GREED to buy more than they could afford. No realtor held a gun to their head and forced them to buy. 2 years ago they were bragging to their friends that they had spotted an opportunity and seized it and now they were up $100K. Now that they’re down 100K it’s all the fault of an unscrupulous Realtor. You want to rent, you go to a rental agent. You want to buy, you go to a sales agent. Simple story, what part about it confuses you?

#106 James Pike on 03.13.09 at 8:40 pm

Madoff won’t care what sentence he gets. He has enriched his family to the nth degree and likely isolated them enough (at least on paper) so that they won’t face prosecution. How many families did he rob to do it? I think they have to look at intent here and chase all money down and uncover its source. There should be some kind of exponential scale where the punishment increases and includes debts that have to be paid off by family members if they benefited from the crime.

#107 Dan in Victoria on 03.13.09 at 8:45 pm

Post #89 Katheran,Well said!I’ve been through all those things since the seventies also.I’ve got my feet up on the desk and i’m just waiting this one out.I told a few guys that I liked what was coming but they thought I was a crazed old man,oh well.Some of them are phoning and whinning now,”I wish I had listened.”Hey Garth you should of given those flakes Flahertys phone number if thats what they wanted to hear.

#108 Toronto Market Watcher on 03.13.09 at 8:55 pm

#52 KenDaBanker

Do not readily accept those % of listing price stats on any given listing as they are prone to manipulation. Here are 3 ways off the top of my head that they are skewed and do not reflect market reality:

1. An aged listing can be re-listed on mls as “New” with a reduced listing price and a brand new mls #so that it does not look stale to prospective buyers. I’ve seen this done two, three and four times on listings that have been on the market for several months. Of course, when the property sells the % of listing price is calculated on the latest often much reduced listing price which obviously makes things look much better. One property I was following in central TO early last fall listed at $1.679 million and was relisted three times at reduced price. The last listing price was $1.299 million and it finally sold just before Christmas for $1.224 million. The reported % of listing price on mls was 95% which looks pretty good. However, the true % of original list price was 73% (1.224/1.679). A much different picture. Statistics don’t lie, but liars will figure… Garth, on your topic of ethics today, the fact that the mls allows listings to be jigged and manipulated in this fashion really disturbs me. The practice clearly is carried out to muddy the waters and smacks of misrepresentation. Sure the listing history on the property is on mls but this information is only available to realtors who have access to mls. Again, where are the regulators here. Rant over…

2. Just as some realtors intentionally underpriced properties to stir up a bidding war in the hot market, I have heard of a handful of recent sales, which sold above asking, one for $113k over asking and some 108% of list. Given the gloomy market conditions, some realtors are grossly underpricing some listings by up to 15% or more of their estimated market value. Prospective purchasers often are led to believe that the vendors are very motivated to sell and are induced into making an offer. Again, the reported % of list on mls once the property sells will be inflated.

3. This last highly questionable and unethical trick is practiced by a very prominent, top producing central TO agent who works with his “team”. He not only practices the relisting as “new” thing detailed above with reckless abandon but he “adds a little icing to the cake”. Here’s an example. He listed a property a few months ago for $1.279 million. It was relisted as “new” a couple of times, the most recent list price being $1.099 million still with no bites after several weeks. A friend of mine called to book a viewing just a couple of weeks ago and learned that the property had been sold conditional on inspection within the next 24hrs. Low and behold, on the same day my agent e-mailed me the “new” listings and guess which property was among them? Yes, there it was now being relisted for $1.039 million. He knew what the property had sold for conditionally and reduces the list price the day the condition was to be waived. When the sale was finalized, it was reported on mls at the sold price of $972k and 94% of list and not surprisingly, in that agent’s national newspaper advertisement. Great work, #1 producer, even in a crappy market, you still can get top prices for your vendors, wow 94% of list. Of course, the true % of original list was actually 76%. And interestingly, that number reflects how much properties in blue chip areas in central TO are off from their peaks, about 25% for those priced around the $1million mark.

Anyone familiar with other tactics used out there to manipulate % of list selling prices?


#109 dd on 03.13.09 at 8:56 pm

#96 TheComingDepression

A recession occurs when your neighbour is unemployed.

Depression happens when you and your neighbour is unemployed.

#110 Taxpayer like you on 03.13.09 at 9:12 pm

In resonse to David B 77 Billionaires list

Most of todays Billionaires are valued on the large stock holdings they have in private, closely held, or public companies in which they have a very large stake. If the stock goes down, they “lose” money (ex Buffett). But
they still own what they own, as long as they dont have
some crazy amount of debt with the shares as collateral.
If there are any real “losers” its the ones who have slid
way down the list relative to the others.

And the same goes for you and me. If you have a house,
a rental, a business you still own it even if somebody
says its now only worth half as much. Just as long as you have any secured debt under control, it doesnt really matter, as long as the assets provide shelter, income etc.

#111 David on 03.13.09 at 10:26 pm

Average Guy, you do not get my argument. If Joe Schlepp can not get the realtor, to provide economic justification for buying, Joe Schlepp should walk away.

#112 Bill-Muskoka (NAM) on 03.13.09 at 11:06 pm

#92 Go Green on 03.13.09 at 4:38 pm

Sounds like my Brother-in-Law’s experience. He worked for a complete Tyrant of a boss and finally had enough. Now he is happy, but almost lost his family in the process.

Like a friend of mine says ‘So many assholes…So few butllets!’ LOL

#113 Bill-Muskoka (NAM) on 03.13.09 at 11:09 pm

#103 bobs your uncle on 03.13.09 at 7:50 pm

Shhhhhhhh! That will destroy the illusion of the RE firms!

Isn’t it odd how we still need to retain a lawyer for the closures?

#114 Seadoo-bear on 03.14.09 at 3:38 am

I think that no salesman or agent holds a gun or forces anyone to buy something. Greedy and dumb people that don’t do any research are the ones that get burned. Rich people get greedy too, forget to do their research and get caught up in the hype. I had an oppurtunity to get into RE a couple of years ago but after spending alot of time thinking (means working your brain) and talking to different people in the industry (mortgage brokers, contracters, bankers) I realized this was a bubble ready to burst. So I passed on it.
You are on your own on this earth and no one is going to hold your hand. Grow up and realize how stupid you were in investing in an overblown market. It was an expensive education. Maybe next time you will remember the mistakes you made this time.
It’s all your own fault, no one elses.

#115 Julie on 03.14.09 at 8:27 am

There has been always some kind of informational “fog” in word of finance and business, no matter if there is economic boom or recession. If the information was perfect, there would be no business.
But it doesn’t mean we should lie – I believe those who offer the ebst information to client survive for longer time. People are not so stupid – you can’t just tell them “from tomorrow everything will be fine” – they are asking a lot of questions!

#116 Bloodhound on 03.14.09 at 11:35 am


Who exactly are the owners/operators of that stinky ‘Mediacorp Canada Inc’? They seem to be a shill group pulling claims out of their ass to support any commercial interest needing a media plug.

Very limited info on-line, except for a single office location and electronic addresses in downtown Toronto.

#117 JoeCalgary on 03.14.09 at 2:02 pm

Canada’s Dirty Subprime Secret


#118 they're all hookers on 03.14.09 at 4:36 pm

You can’t believe anything coming out of Canada’s media. They have become worse than pravda.

#119 Flounder Digest on 03.14.09 at 8:35 pm

#89 Katheran Milne on 03.13.09 at 3:47 pm
You may finally have given me a story which, perhaps, will allow me to convince a loved one that the RE tsunami is indeed on its way even to small town eastern Canada.

#91 Bill-Muskoka (NAM) on 03.13.09 at 4:19 pm

#120 Rico on 03.15.09 at 12:49 pm

Great blog, Katheran. Maybe you could explain your ‘one final note’

“One final note: all real estate collapses since the 70’s have been a direct result of shortages and/or lack of oil supplies. If you want to know what real estate is going to do next, watch the diminishing oil reserves and resource wars.”

#121 Paul on 03.19.09 at 1:02 am


I recall several years ago reading one of your books, in which you encouraged readers to take advantage of the stock market. You encouraged people to borrow to invest, using home equity.

Convinced, I got a massive line of credit based on home equity. However, I was advised by my brother, a high level banker, never to borrow to invest and so I did not follow your advice. The 2001 crash followed not long afterwards.

Have you now become more cautious in your lectures to people on how to invest their money? Do you think that many people lost large amounts of money and went into debt because they followed your advice?


Let’s be accurate. I have advised people always to reduce real estate equity and diversify into other forms of wealth for their own protection. I never advised to buy stocks, but rather professionally-managed blue chip mutual funds. I encouraged use of a systematic withdrawal plan, to give both tax-deductible payments and full deb servicing. I stressed this was a long-term plan, and nobody should try to time the market. And, above all, I told people (and still do) that do-it-yourself investors motivated by greed wil always be wiped out. Especially those who can’t read. — Garth