Holy crap


Maybe it’s the robins. Maybe the 10% bounce on the TSX. Perhaps it’s mortgages at less than 4%. Or it could be but a giant dose of denial. Whatever. In the midst of continuous and devastating negative news there are, as we’re hearing, green shoots.

Yeah, I know family net worth collapsed by $252 billion in Canada in the last quarter – the worst destruction ever. I know we are losing three jobs for every two that disappear in the States. I understand the country will add more than $80 billion in new debt in just 24 months. Yeah, I heard about Madoff and Stanford and the slimy AIG bonus-sucking greed hogs. I know government tax revenues are collapsing and our manufacturing sector is nuked, but how do you explain this…

Dear Garth: A few weeks ago a friend of mine in a Vancouver suburb put her 1300 square foot half duplex on the market for $430,000.  I thought she was nuts.  18 days later she’s sold it for more than asking as two offers came in at the same time.  I was shocked, I had been predicting a long slow slog for her.   I sold my condo in Surrey three years ago and have been renting ever since, so you know what I’m betting on.  Another friend has multiple offers on his townhouse in Vancouver proper.  Is this a sucker’s rally?  A dead cat bounce?  Or should I have egg on my face for proselytizing the gospel of Garth this past year since reading The Greater Fool. – Jeremy

Hey. Shoots.

Financial markets believe the worst is behind them as far as the banks go. No more bodies working their way to the surface.

Some Bay Streeters are telling me the imminent collapse of Chrysler Canada (it will be out of cash in 90 days), the expected bankruptcy of a major media outfit and of an iconic rags-to-riches manufacturer, and the staggering, unexpected Canadian job losses are all evidence things cannot get much worse. That, they say, forms the basis of optimism. It may also be why money has suddenly started pouring back into mutual funds. Everybody was looking for the bottom of the pit, and we just heard the pebbles under our boots bounce in the murk below.

The expectation grows, then, the economy will stop contracting by the fourth quarter of 2009 and actually grow in Q1 of 2010. This will trigger a monumental market rally – even if the one ongoing now turns out to be an ugly bear trap.

So, why would people buy houses and take on new debt amid rising unemployment, failing corporations and screeching headlines? Are they prescient? Are they nuts?

Please pick an answer.

(a) They’re actually ingénue idiots, being led to slaughter by the own ignorance and hormonal drive to surf realtor.ca and succumb to its property porn. They see prices down from year-ago levels, realize they can rent $400,000 for $1,900 a month, listen to the real estate dream merchants, and explode in an orgy of offer-writing. After all, houses only go up, right?

(b) Phil Soper paid them all to buy something.

(c) Vultures.

(d) The greatest fools of all, totally unknowing that listings will only cascade, overwhelming any uptick in demand, crashing prices through the rest of 2009. Goodbye equity, suckers.

(e) Who cares? If there are enough of them, they’ll move the market, create momentum and arrest the housing slide.

This is called ‘economics.’ Enjoy.


For Garth’s latest podcast, go here.



#1 Mark on 03.16.09 at 8:30 pm

Heres a really interesting look at the subprime confusion, and non-prime situations in Canada and the US


Very interesting how subprimes and alt-a loans in the US during their boom were almost exactly as prominent as 40 year mortgages during ours.

#2 frugalistas.blogspot.com on 03.16.09 at 8:36 pm

Actually… a house nearby in Halifax just sold. It listed for 699K. That’s ridiculous. I walked by it on Thursday and it was gone when we went walking on the weekend, it was gone.

I think everyone’s drunk with cheap credit, which is effectively putting a floor on these large assets. Unfortunately, it will come to an end.

Watched the news tonight, and they spun it in favor of buying houses… sad… it’ll make people more indebted before the big crash. More lemmings off the cliff.

It’s a weird time, and it’s going to get weirder. I think this is one last bump up before things go down for the last time.

…then, it’s party time for those who have saved.

#3 miketheengineer on 03.16.09 at 8:48 pm

Hey Garth

If Chrysler goes under, guess what, about 1/2 of the people at the parts manufacturing facility that I work at, will get thrown outa work. Those people will not find new jobs at their old wages, therefore it is bad news, for everyone, including me and my co-workers. It would turn Windsor into a ghost town, as well as a couple of others. Thousands of people will be affected. Banks will be affected, due to the rapid walking away from mortgages by these people and others as a result of this. This is serious stuff guys. But hey keep buying your off shore built cars….soon we will all be eating rice, and they will be eating steak. I will stick with my Ford, at least it was made in Ontario, by people like me.

#4 Irene on 03.16.09 at 8:52 pm

So, why would people buy houses and take on new debt amid rising unemployment, failing corporations and screeching headlines? Are they prescient? Are they nuts?

Please pick an answer.

People are so brain washed andhave the mentality of this being just a game like monopoly. They buy buy not even giving a thought to whether they will have a job tomorrow, Mentality is the answer I would choose. They don’t have any, They have this attitude if I can’t pay, I’ll declare bankruptcy just like they are doing in the USA. and just walk away.And they definitely are nuts.

#5 Taxpayer like you on 03.16.09 at 8:54 pm

“I know we are losing three jobs for every two that
disappear in the States.”

Garth – I think you mean we are losing 15 jobs to every 100 in the states, giving 3 to 2 per capita assuming a 10
to 1 population ratio.

Our job loss, per capita, is as stated. — Garth

#6 @Garth 2 on 03.16.09 at 8:55 pm

I would love to hear about how this happened in 1990. Or how some technical Fibonacci series line shows inevitable decline in real estate. Or even how Phil Soper cornered the market on squirrels so that we can’t have a depression.

But no, we have instead, this.

This is a puzzling post with a surprisingly noncommittal multiple choice answer. Obviously I’m too daft to figure out the wisdom being espoused here.. Garth what is your point?

BTW, I still say calling the market eight weeks ago was a bit premature.

#7 Puzzled on 03.16.09 at 9:05 pm

Garth, didn’t you purchase a farm/property recently?

and if you did, were you drunk at the time?

POS. — Garth

#8 Too Old Bob$ on 03.16.09 at 9:08 pm

This must mean there is more money floating around out there, then we realize. Where is it coming from? Is it the rich taking advantage of the correction? Are the banks only lending to reliable, working people or do they really care. I mean business is business, but who can you rely on. What happens if these credit worthy people also lose their job. Something is fishy.

I know things have slowed down in the East, but here in (collapsing) Alberta, it is business as usual. The traffic is rushing everywhere, stores are busy and prices haven’t come down yet. The new Cross Iron Mills mall is scheduled to open in August. 80% leased so far.
Something stinks and it ain’t fish.

#9 guava.ca on 03.16.09 at 9:10 pm

I’m seeing houses in many parts of Toronto listed at 2006 prices and selling over asking in a week or two. On the other hand, many sellers in C04 and C12 are doomed. No idea what will happen in the next few months but we definitely live in interesting times.

Happy St Patrick’s Day!

#10 lgre on 03.16.09 at 9:15 pm

It looks like the so called ‘meltdown’ we have been witnessing is just the pre party…wait till the real party begins. The system does not rest until all the suckers all eliminated..no suprise here.

#11 Mike B on 03.16.09 at 9:18 pm

Is it any wonder… Spring brings out the moron in morons… none more so than first time buyers who see a meagre single digit decline and free money and away they go. I have been to many an open house here in Toronto and seen buyers mostly apalled at the still sky high prices … some look at the place … See the price and then hand bacl the listing sheet.. I have seen much more of that then quick sales unless they are mega cheap..
hey you lower interest rates and people forget their heads and take a header into the pool of debt.

#12 Nick Cave on 03.16.09 at 9:21 pm

It transpires that Garth just bought a property. So given the marked softening of his latest posts, perhaps he is looking for some justification for yet another greater fool ;-)

For anyone that thinks about it, jobs will ultimately tell the longer housing story.

The States are not well, and we cannot distance ourselves from their troubles. In fact, ours may be amplified.

The quality of the Economist articles and commentary are far beyond what you will find here (certainly including mine!): http://www.economist.com/opinion/displaystory.cfm?story_id=13278305

Thanks for the analysis, psycho-boy. I’m so transparent. — Garth

#13 TUT on 03.16.09 at 9:21 pm

I though “economics” was the art of solving problems instead of creating them.

Buy I’m possibly wrong.

#14 Stephen Smith on 03.16.09 at 9:22 pm

My son and his wife just sold their condo in Burlington for $25,000 more than they paid for it 2 years ago. They had it on the market for less than 3 hours and had two offers, both above what they had agreed to list it at.

I don’t know, I don’t get it and I have stopped trying to figure out this market. I have no idea where all this is going at all, and I think most people, especially the experts are in the safe frame of mind, I think that’s what worries me most.

#15 RM in Oakville on 03.16.09 at 9:22 pm

I think those of us who take advantage of variable-rate mortgages and remain gainfully employed can use this time to our advantage.

For example, in my case my mortgage is a variable LOC mortgage now at 2.5% and I’m using the drop in interest rates to bulk up on principal payments. The result? Since last fall, I have an additional $500 per month going to principal rather than interest. Being a LOC mortgage of course means I can pay as much as I want/can (as long as interest payments are maintained) whenever I want, without penalty.

I don’t know how common or available these things are nowadays of course but I like the flexibility this one offers.

#16 Nick Cave on 03.16.09 at 9:25 pm

you are, indeed

#17 OntarioHouse on 03.16.09 at 9:27 pm

I’ve walked into several home builder offices in the Halton area and I’ve noticed that pretty much all of the builders have begun lowering their prices. They cant sell anymore.
Resales over 400,000 are just sitting.

#18 Gres " We know the answer Garth on 03.16.09 at 9:29 pm

U and I know is days and more negative stuff will happen
U and I know this is a controlled market&media campain. Is no fun is masses control physology is not used, after 2 weeks they ignore negative news – this became a natural self-defense, there is a need for positive news to have them back “on the system”
Is going to go down see-saw fashion until the masters’ paranoia gets satisfied, and I do not see that close enough.
Let’s talk in 2 weeks, there wasn’t enough pain to have even justifed starting this hole mess, we are only 20% through.
The master have spoken. lower your heads

#19 OntarioHouse on 03.16.09 at 9:33 pm

Basically what I see happening is that the lower priced homes like townhomes are selling where as the bigger homes are not. I guess it always boils down to price.

#20 Dan in Victoria on 03.16.09 at 9:35 pm

Hmmm. i’m going to say all of the above.I call this the salmon school syndrome,you can fish for hours with all your new fancy and shiny equipment and not get a thing,then all of a sudden something triggers them and they go nuts biting anything that is put in the water in front of them,on occasion bare hooks will even work,then as fast as it started nothing.Ahh but the ones we caught are gorged with no room left in their bellies and in some cases there are minnows sticking out of their mouths.Something has triggered the school,who’s going to get caught?Who’s not going to get caught?Oh yeah where are the sharks hiding?A long time customer phoned this afternoon for a chat,they have a multi family project that they just completed,sold 3 on the weekend and have some pending offers on others.He was asking what are people thinking? This market isn’t even close to being balanced.Oh well i’ll take the money i think this is a false rally is his take on it.

#21 Jack the Lad on 03.16.09 at 9:38 pm

Man I wish I had a crystal ball… is this the real bottom or just a bear market suckers rally?

#22 @Garth 2 on 03.16.09 at 9:39 pm

#10 Nick Cave,

I’m going to give myself away here as a conspiracy theorist but oh well… The Economist is one of the largest pieces of unabashed arrogant capital tripe going. Written by bankers for bankers and those who think their IQ can be mailed to them with their subscription.

You *can* trust what The Economist prints because very powerful people are behind it, but you *can’t* trust their analysis of fundamental economics because it is always twisted to serve capital. The Economist isn’t news; it’s just commentary and right-think editorial after editorial.


#23 eddy on 03.16.09 at 9:42 pm

(f) they have the cash, are not taking loans, and can buy what they want, when they want

#24 ThumbsUp on 03.16.09 at 9:46 pm

Reminds me of this vid (repost I know)

Peter Schiff vs. RE agent


I’d say
c – (Garth bought one)

#25 jj on 03.16.09 at 9:52 pm

Can’t explain what’s happening either – must be vooddoo economics.

#26 Taxpayer like you on 03.16.09 at 10:03 pm

“I sold my condo in Surrey three years ago and have
been renting ever since, so you know what I’m betting

Hmmm. Seems to me that “betting” one way or the other may not be the best thing to do with your house…

Maybe Vancouver Renter can add something to this. I think he said he also sold in 2006.

I’m sure our poster put his net proceeds in safe interest
bearing instrument. In the meantime, he has been paying tax on that interest at the marginal rate, and has been paying rent, so there is a tradeoff of portions between owning or renting for the last 3 years.

Now we all have to get away from our Ontariocentric
mindset. I dont think Vancouver has lost the jobs that Ont has. Maybe it is “different” in Van. Maybe the market has just overbuilt and is running out of steam, but the economy is not crashing. So maybe theres another 10%
off the market in the next year, taking us back to 2006?
The small percentage he has made on his cash is offset to some degree by equity he would have gained by
paying off mortgage principal. At this point our poster has
gained (or lost) very little.

VCR – can you tell us how this is working for you? Thanks.

#27 ThumbsUp on 03.16.09 at 10:16 pm

US homebuilder & Realtor economists forecast ‘recovery’ in 2008.


#28 me.day.trade on 03.16.09 at 10:21 pm

it’s all that cheap money out there.

BoC interest rates at all time low and variable rates charged by the banks makes the monthly payemnts “affordable”.

#29 Paul: Relax - Prices dropped 9.2 NATIONALLY on 03.16.09 at 10:40 pm

Despite February’s gains, sales are still down 31% year over year, as are prices, which have fallen 9.2% in the past 12 months, CREA said.


#30 Cendrine on 03.16.09 at 10:50 pm

We sold our house last week at 97% of list after fielding two offers the same evening. We’re feeling pretty lucky after having our house on the market since last summer.

Some observations: We had many inquiries/showings from buyers in larger centres who had houses to sell of their own. The flood of showings started in mid January. I am speculating that they are trying to downsize or release equity from their homes by buying relatively less expensive homes in smaller communities. As Garth said to one prospective seller regarding selling now “There is a small window of opportunity – jump through it”. This window is closing fast as listings are growing by about 1000 per day right now.

First time homebuyers are taking advantage of current incentives, price depreciation and vast selection. Prices will go down some more but more choice properties will be gone by then. Some properties I have had my eye on for the past several months have already been sold in the last couple of weeks. I am hoping for some more desirable listings for this weekends house hunting expedition (too many McMansions on the list right now).

It’s spring, a time of change and renewal. If people want to get settled in a different home by the summer then sales will be quite brisk in the next few weeks. Further declines in price by the desperate will start by June/July.

#31 JM Vancouver Island on 03.16.09 at 10:52 pm

I’m still renting a house for $1800 that would cost me $2800 to own (even with the low interest rates available today). It clearly does NOT make sense to take the leap and buy a house in Nanaimo at current market prices. I am looking for a decline of 20-25% to make it interesting enough for me to jump in. There is still too much risk to the downside to buy. If you look at Case-Shiller house price graphs you will notice that house prices would slide and then temporarily rise (particularly in bubbly cities) and then fall more again. There is no question low interest rates will soften the blow but I have faith the correction is coming.

#32 Jon B on 03.16.09 at 11:07 pm

I say it’s the Last Hurrah before reality sets in.

#33 Basil Fawlty on 03.16.09 at 11:07 pm

Well governments are trying to get people borrowing again through low interest rates and bank bailouts. They are trying to restart the debt based economy based on borrowing to consume. Most people I talk to think it is a good time to buy because prices have fallen some and rates are low. They have no conception that the basis for a sound economy is savings-investment-production, rather then borrow-spend-repeat. Most people have no conception that while the most massive credit bubble in world history has maintained our standard of living over the past 20 years or so, our manufacturing base ie. production, has been siphoned off to cheap labour and lax environmental countries.
People have no clue that the endgame of a credit bubble leaves government “pushing on a string” as no amount of new credit will stimulate further growth. We are not quite there yet, but you can see the light on the locomotive barreling towards our precious lifestyle’s.

#34 bobs your uncle on 03.16.09 at 11:08 pm

If you are wondering why houses are still being sold remember that the public sector has not seen any layoffs yet. No matter how incompetant or redundant they are they are still pulling in a paycheck.

Until the provincial governments and federal government start laying off the drones the full impact of the recession will not be seen.

Lobby your local politicians to start downsizing the public trough. Most of those drones could care less about an auto worker or tradesman.

#35 Anon on 03.16.09 at 11:09 pm

With respect to previous comments on Garth’s last post:

If one digs a little deeper into the numbers for the Central area (C1-C15), one finds that the prices for DETACHED houses are down even more than the averages shown previously which include all dwelling types. Here are some numbers:

(Not sure if this cutting and pasting will format properly. The first number is the weighted average of all detached homes, second number is the weighted “average” of the median values of these same homes and third is percentage change in average prices YOY.)

Feb-09 All Central $865,454 $742,180 -12%
Jan-09 All Central $750,865 $649,757 -17%
Dec-08 All Central $961,842 $839,238 -09%
Nov-08 All Central $950,362 $753,819 +02%
Oct-08 All Central $807,689 $739,990 -15%
Sep-08 All Central $801,833 $681,663 -12%
Aug-08 All Central $801,833 $681,663 -10%
Jul-08 All Central $857,192 $720,100 -07%
Jun-08 All Central $932,625 $768,535 —-%
May-08 All Central $962,197 $803,413 +12%
Apr-08 All Central $966,817 $797,975 +07%
Mar-08 All Central $909,373 $781,623 +11%
Feb-08 All Central $979,185 $836,452 +05%
Jan-08 All Central $907,813 $744,762 +05%

If one averages the percentage drops over the last 8 months, it works out to a 10 percent drop YOY.

What is the source of this info? This is just using data from the monthly Market Watch reports published by TREB. If anyone wants to verify the numbers just work them out from the numbers TREB provides. I have been itching to buy and figured it would be prudent to keep a close eye on what the numbers are saying, rather than the crap Ms. O’Neil spews out.

As an aside, I think it is funny that when prices were increasing, TREB would have no problem using the word UP. For instance, they said “sales to date (were) UP 13 percent…average price (was) UP four percent” (June 2007). Now that they are falling, they dont make mention of prices being DOWN from previous months. They simply say “the median price in February was $312,900 from the $324,000 recorded during February of 2008.”

Prices remain outrageous. We will wait it out, thanks.

#36 Aizlynne on 03.16.09 at 11:13 pm

If a house is priced right for the market, it will sell. In my neighbourhood, some homes are sitting a year without selling. The biggest problem seems to be their price. The ones priced “aggressively” are selling. That means they are selling $20-$30K less than their counterparts on the market.

#37 Shawn on 03.16.09 at 11:14 pm


On the general topic of falling house prices

A lot of people whined for years that we need affordable house prices.

Now increasingly we have that world.

How do people like it?

People, be careful what you ask for!

#38 Investx on 03.16.09 at 11:35 pm

“This is a puzzling post with a surprisingly noncommittal multiple choice answer. Obviously I’m too daft to figure out the wisdom being espoused here.. Garth what is your point?”

Wondering also.

#39 char on 03.17.09 at 12:20 am

The tune “Happy Days are Here Again” was a big hit in 1930 during the dead cat bounce . Markets proceded to the 1932 bottom, off 89% from the peak.

But not in a straight line. The point is no market has ever moved in a straight line.

(And in 60-80 years no one will have seen any of this coming again.)

#40 a lesser fool on 03.17.09 at 12:31 am

hey there y’all,

I have been reading the blog here (along with the plethora of commentary) for a couple of months now, ever since reading Garth’s book back in January. After finishing After The Crash I partially felt relieved that I had finally discovered some Canadian specific material that was relevant to my experience/perspective regarding the economic crisis; the other partial truth was that I had pooped in my pants after realizing that we might have misssed the opportunity to sell our home and protect our equity. I had wanted to do so back in the fall but my wife had just become pregnant and was not in the mood to move in the least.

Nonetheless, against my wife and immediate family’s “better” judgement, I put our 3 bedroom house on the Calgary market via MLS on Feb27th for $379K (close to a full $100K down from it’s apparent value during the peak in 2006).

I am quite pleased to announce that as of tonight, after about 16 showings, our house conditionally sold for $10K below our asking price. No crazy conditions or demands, one counter offer each with a 2 month possession date. From the details of the contract I learned that the buyer was a single female, had seen the place twice in 3 days and was putting down $165K (only financing $195K). I am figuring that either she is recently divorced or managed to sell her own over-valued property during the peak and came out of it with a wad of cash. Either way, that’s just speculation on my part and doesn’t take away form the fact that we apparently have found a greater fool in this here town of Calgary. After RE commission and mortgage cancellation fees, we are coming out of the deal with $109,500. Four years ago we put down $30K on the home which totaled out at $295K after upgrades and CMHC fees. Clearly, even after missing the peak we are still coming out pretty solid and have a serious nest egg with which to plan the next phase of our lives with the third member of our new family.

I feel fortunate to have come across Garth’s insightful and thorough work and to have been exposed to some of the thoughts and reflections shared here by the participants. Some of the weblinks and source materials proved very useful and I appreciate everyone’s support of one another as well as their (mostly) constructive criticism :) what a learning experience!

Our agent shared with us tonight that he figures we are currently at the crest of this here wave/dead cat bounce. That said, if you wish to contact him about selling your own home I would highly recommend his services. Very honest, very pro. He also provided the services of a “stager” who helped us get the home in showing condition – we received many positive comments about the look and feel of the place.

here’s to hoping and praying that the deal goes through without a hitch in two months time………


~furture renter

#41 EcoInsurgent on 03.17.09 at 12:37 am


The UK has announced they are going to regulate banks to ban home loans for more than 3X income. If this passes, the UK market will crash massively. About time.

#42 Sam on 03.17.09 at 12:49 am

like I said before .. the bust party is over before it started. even i have started looking for a house now. :)

#43 lisa on 03.17.09 at 12:49 am


I am seriously considering buying a new townhouse with my boy friend. We would both be first time home buyers. The builder for the places we’ve somewhat decided on has dropped the price by about 50k. So we’re now looking at 335k including taxes for 1650 squarefoot townhouse in the Surrey Langley border .

Our reasoning is as follows:
Perhaps because we haven’t really followed the market that closely, but it seems to us that the townhouses aren’t falling at that high of a rate (for used townhouses anyways) , so coupled with the lower mortgage rates, it seems like as good as any time to buy. We’re getting close to our mid 20, and are still living at home so we do want to get out soon.

housing prices have increased, but what is an insane increase? My parents house costed them 212k back in 94. Now it’s worth about 350k. Is that a crazy increase in the span of 15 years? I really have no idea.

Like I said, we’ve only started looking at the prices of homes recently (last year or so), so maybe we are lazy people and should research the housing market more, but the price of a townhouse, does not seem that bad? What were the prices in comparision before?

Anyways that is how we’re feeling towards the housing market and why we’re seriously looking to buy now.

Maybe you guys can give advice :) thanks!

#44 Torquemada on 03.17.09 at 12:50 am

“This is serious stuff guys. But hey keep buying your off shore built cars….soon we will all be eating rice, and they will be eating steak. I will stick with my Ford, at least it was made in Ontario, by people like me.”

These are the crap arguments that make me mad. This guy is asking us to SUBSIDIZE inferior products! Why should I buy a worse car just because it gets built here? So that people in Windsor can keep their jobs?

What these people fail to realize is that if I buy the best vehicle for my money (whether the vehicle is built in the US, China, or Narnia) I can use my savings to purchase something else. Who knows? That something else may be produced by a Canadian firm.

People who argue that we should buy local products to keep jobs here don’t realize that unproductive jobs keep capital from flowing to productive enterprises. And it’s only productive enterprises that help an economy grow.

On the other hand, it may be smart to keep these guys working in the auto industry. I’d hate to think of the damage they’d do if they entered economics.

#45 vantown on 03.17.09 at 1:06 am

The smug, all-knowing tone of the original post and some of the comments is off-putting.

As if options (a) through (e) cover all possibilities. I’m an (f), neither an “idiot”–I know where the market could go–nor a fool. It’s quite simple: I am well paid, don’t expect to lose my job, and am sick, sick, SICK TO DEATH of being a renter this late in life. If I’d been less a bear, I would have bought five or six years ago, and I’d be just fine now: a home is not just an investment, which seems to be the received wisdom here.

I will probably wait longer, but I can afford to buy at current prices, even if they still look insane, particularly here in Vancouver. If I’d been less fearful of declining prices, I would be an owner now. So if there’s a chance of something wacky happening, like a resumption of a bull market in real estate, why not jump in now if one can truly afford it? If logic has been defied in the past, what precisely makes it different now, if there are enough people with enough money and credit, even in the current climate, who can buy?

#46 Jay Currie on 03.17.09 at 1:16 am

Hello, markets clear.

When you see sales it is largely because people have priced the real estate at a clearing price. Is that the right price? Who knows? And that is not the point. The reality will always be that there are people who actually think the 2006 price is a good price. And they may be right.

Here is the odd thing about the current “meltdown”; it is confined to things which were crazy to begin with. McMansions, sub-prime buyers, credit default swaps, a bet that I’ll make my credit card payment in 2014?

At some point the markets notices that their more exotic ideas wore no clothes. They were naked as the proverbial Emperor.

However, and here is the key point, there is only one Emperor but tens of thousands of regular people. We are all fully clothed.

We need to begin with that realization. So long as we can keep a job in the family and are not underwater on our credit cards, asset deflation is not an immediate problem. In fact, for the employed, it may even be an opportunity.

Buying a house at 2008 prices was lunacy, buying a POS house at 2009 prices may very well be a good deal. Buying stocks last October was nuts, buying gold and energy right now…could be the Viagra in your portfolio.

#47 Coho on 03.17.09 at 1:18 am

What about a 6th choice?

f) Fear

Ah, the many faces of fear. Some are fearful to buy, while others are fearful NOT TO BUY…thinking that if they don’t buy now during this “downward house price hiccup” (as they see it) they’ll never get another chance.

I guess some are putting their money and faith in the evil system bailing itself out on the backs of the sheeple. Who else has their money on evil winning the day?

#48 Mi Too Bitz on 03.17.09 at 1:52 am

# 3 Mike…

…OK..so you want me to buy a Ford or Chrysler so you can have a job? I get saddled with an inferior car, with an inferior warranty followed up by inferior customer service so you can continue to make inferior cars? Are you out of your mind?? Thanks, but no thanks. I have used my money and bought a new Camry (cash, no payments). I am confident that this car won’t crash and burn on me in the first 100K. Plus I know Toyota will be the last man standing (the company and their cars).

I suggest that your next job is one making something that people actually want and value. You may be employed longer that way.


#49 Lance on 03.17.09 at 2:19 am

This may end up driving handfuls of houses on to the market in order to capture this slight uptick in housing activity and completely flood the market and prime the pump for a big decline through the rest of 2009.

Bear market sucker’s rally in Canadian housing?

#50 Glenn on 03.17.09 at 2:26 am

There’s one option no one has considered. The goal of all this stimulus was to halt the deflationary spiral and restore some level of confidence.

The piper has to be paid but there’s actually two ways to get back to the mean average since everything must revert to mean:

– everything gets repriced back to the mean average in one mighty and devastating blow or;
– halt the deflationary slide and in a sense freeze the markets so that nothing appreciates for 10 or 15 years. until the effects of miniscule inflation (i.e. growth) brings prices back into line with the mean.

It’s a long shot but it is possible and would require a high degree of cooperation and discipline.

#51 ulsterman on 03.17.09 at 2:47 am

i’m not surprised by the multiple offers on properties mentioned here. Thse of us who read bear blogs are a minute minority of the population. Just imagine if your entire perspective was guided by the mainstream newspapers, finance ministers, and TV news?

All i here from these sources is “sales are up”, “interest rates are at generational lows”, “this is likely the bottom”, “long term the real estate the market always goes up”. If all YOU ever read was this and you had a job, a downpayment, had been waiting to buy for years, and had been offered an incredibly low-rate mortgage, you too may be leaping in with both feet.

I don’t agree with their sentiment, BUT i do understand the thinking.

#52 gold bug on 03.17.09 at 3:48 am

I think you got it, Garth.

People see lower prices and can’t resist. It’s pointless to try to figure it out. My experience is that there’s nothing logical about residential real estate. People want it so they buy it.

And that would be OK, except that I’ll be on the hook as a taxpayer when Ottawa underwrites CMHC’s next bad batch of mortgages, or invents some sort of phoney-baloney wealth-transfer scheme that bails out spenders and hurts savers.

That said, I’m still not buying a Ford. Or a Chrysler. Or a GM. Or any other crappy domestic vehicle. It’s bad enough that I have to pay for NOT buying those cars, thanks again to Ottawa.

#53 WillsDad on 03.17.09 at 4:12 am

long term this deck of cards will fall for no better reason than baby boomers with no boom boom left. asta la vista, baby!

#54 WillsDad on 03.17.09 at 4:13 am

house of cards, that is…

#55 Vancouver_Renter on 03.17.09 at 5:01 am

I see it through the eyes of my young brother in law. In his adult life, he’s only seen real estate go up. In his mind, it’s a sure thing. When prices fall 10% and mortgage rates drop, he’s practically peeing himself with excitement to buy a bigger, fancier house.

In his government-employee world, everyone has job security and the party is still on. “Global deflationary contraction? What’s that?” As he dives into a deep rain puddle to avoid the daily neighborhood gun battle between rival gangs he declares, “Vancouver is the Best Place on Earth!… BEST ON EARTH!!! Don’t you know that?”

I predict that in 2009 Vancouver real estate will hold up somewhat. The real cataclysmic crash is coming in 2010 after the Olympics is over and all that is left is debt and gloom.

#56 Tony on 03.17.09 at 6:49 am

Since Alberta went into a housing crash first thanks to David Dodge and his one quarter percent rise in the bank of Canada rate June 23rd 2007 which split the housing market right down the middle in the whole province Alberta should be the first to come out of it. Yet with rising oil prices and a depressed Canadian dollar (which gives oil prices another 30 percent boost) property values continue to plunge. Townhouses and apartment are selling at a 40 yes forty percent discount from the peak June 23rd 2007. Here’s an example, a similar apartment in the same complex sold for $100,000 more or almost 50 yes fifty percent more at the peak.

#57 john m on 03.17.09 at 7:11 am

As the saying goes there’s a sucker born everyday,some just have to get burnt themselves to find reality.Madoff’s wealthy investor’s are good examples of greed and little research and look how many there were. After all some people still believe Harper’s predictions… as conflicting and unrealistic as they are :-)

#58 Ben on 03.17.09 at 7:27 am

Anecdotally, I saw a lot of sold stickers on the For Sale signs this weekend in Milton. Granted, a lot of these houses were towns and semis – as others have mentioned, the mid-to-high range detached houses do not seem to be selling as well. Overall, I think the low interest rates have brought out the first time buyers. This rally will not last – there are too many job losses coming down the pipe.

#59 Jonathan on 03.17.09 at 7:53 am

Need to look no further then 0% interest rates – well below free market rates. Mortgages are ranging from 1.3-3.5%. This is like throwing gasoline on the economy. It means it costs nothing to hold on to property if you are a seller, so you are not desperate to cut prices. When the government gets involved in the economy, the free markets stop working.

These policies could cause very high inflation. Soon you will see oil, copper and steel skyrocket. Buy stocks now or in the next few months. Sell them around the beginning of 2010.

Inflation will require a rapid increase in interest rates. The increase in interest rates along with a massive rise in commodity prices will throw the economy back in to a second, probably more severe recession. The second recession will be a movement of a government controlled economy back to a free market one. Government intervention is very costly.

#60 SaraBeth on 03.17.09 at 7:58 am

Y’all talk a lot about the worth of a house…the equity, the re-sale value…”cashing in” seems to be a common phrase….

Whatever happened to the idea of a house being a HOME and NOT an ATM?

#61 JamesT on 03.17.09 at 8:11 am

“But hey keep buying your off shore built cars….soon we will all be eating rice, and they will be eating steak. I will stick with my Ford, at least it was made in Ontario, by people like me.”

And it’s that entitlement attitude that keeps me away from “American” cars. You really are ignorant and have your head up your @$$!

I drive a Honda. It was build in Ontario. My sister is an engineer at the plant. Her husband also works there. So enough with the BS lectures, fear-mongering and sensationalism. Enough with the bailouts. This is capitalism at work.

#62 Adam on 03.17.09 at 8:12 am

(f) Who cares? As long as one of those suckers wants to pay too much for my house.

#63 MikeB on 03.17.09 at 8:17 am

Anon #35…”prices are outrageous still” Amen brother
Amen.. we too have seen prices drop but still the massive greed on some sellers is through the roof.
Old couples who bought their house for 7-10K some 30 years ago asking 800K with barely a thing done to it in 20 years.

Anon keep us posted please..

#64 Jonathan on 03.17.09 at 8:18 am

Interesting to note that on 60 minutes that Bernanke pin-pointed that the system wasn’t working because of the massive inflows of savings from other countries for the past 12 years – 1997. This sparked all of the bubbles. Perhaps he can adopt my name for what I have called this, the “Asian Savings Bubble”. He clearly states that this cheap money fueled all the other bubbles.

I’m becoming a little repetitive here but I think this is the most important issue that we face today.

These inflows were cyclical. But if you look below the surface, they were clearly a bubble. Asia forced cheap money in to America in response to the Asian Financial Crisis. It worked well and surely surpassed economists expectations on both sides of the Pacific.

The free cash generated fictitious gains in inflated assets in America. This provided the ‘wealth effect’ America has felt for the past decade. This wealth meant America spent more and this money would quickly cycle through the American economy and back in to Asia. US savings went from 7% to -2%. But with a negative savings rate and crashing asset prices, it becomes extraordinarily hard to fuel another boom. No more booms mean no more money being sent in to Asia. This means the bubble would collapse. In came the world governments with their planned 3-4 trillion in 2009 spending to get this cycle to continue.

Take a look at the US trade deficit and Asia’s trade deficit and note that they are both crashing towards zero. No more free money from the west = higher interest rates.

Someone should have told the American government that if they wanted this bubble to continue, they should have implemented a Buy China policy rather than a Buy America. Too late.

#65 Grantmi on 03.17.09 at 8:20 am

More spin now from the MSM!! (Trying to protect their jobs. lay-offs now at all major newspapers)

Place: Vancouver Sun
Date: March 17/09
Owner: Fiona Anderson


Now she’s quoting Monday Morning Quarterbacks – Jock Finlayson, Bernie Magnan, and Helmut Pastrick!

Boy! These dudes all got it right along the way, eh!!!!?!?!

Love the wiggle room! IF, MAYBE, COULD BE, HOPE, EXPECT, CONSENSUS (whose), WORST IS OVER!

Mine: When Monkey’s Fly out my butt!!

But this is the best: James Brander – Proff at Sauder School of Biz ad UBC!

“If [government officials] are too optimistic they lose credibility and losing credibility is very, very bad,” Brander said.

“The most important thing for government officials is to have credibility, so I would take Bernanke’s comments as being his honest, best prediction,” he said.

Honest! HONEST!!!

Did anyone notice Uncle Ben’s voice quivering during half his responses to Scott Pelley! Me thinks Uncle Ben doesn’t believe in his own recipe!!

Please pass the Frank’s Hot Sauce!!

#66 Mike (authentic) on 03.17.09 at 8:23 am

48 Mi Too Bitz & Goldbug: Cars “So you want me to buy a Ford or Chrysler…inferior car …inferior warranty…inferior customer I have used my money and bought a new Camry”

(I’m a different Mike BTW than the one who started the topic)

We have always been GM drivers, good product at a great price and lots of selection to boot.

Last GM car was a 2004 Chevy Aveo5 we bought new. Didn’t cost us a dime in repairs, never broke down and hauled more than a pickup! (6′ trees, 14′ ladders, 900lb rock, doors).

Yes, we’d buy another Chevy. But I don’t agree with the auto or bank bailouts, that’s just plain wrong.

Now, I’m looking at the new 2010 Chevy Camaro… What a car, even the V6 has 360hp! Even built in Canada too!


#67 Herb on 03.17.09 at 8:24 am

“This is called ‘economics.’”

And that’s why I call economics The “science” of reading entrails after the event.

#68 Mike (authentic) on 03.17.09 at 8:27 am

Bouncing baby house sales.

My advice is to keep your eye on the ball, the YoY sales numbers and YoY prices. None of that data is going up right now.

Buyers are out there, as Garth says, Greater Fools and (Ringling Bros. and) Barnum & Bailey’s quote “There is a sucker born every minute!”

So, it just happens there are more suckers born per minute today than in 1930! Thus, more sales.

But with the tight credit lending conditions, raising unemployment, record foreclosures, closing companies and sky high bankruptcies one thing I can guarantee is there isn’t as many buyers out there right now as there were in 2006.


#69 Future Expatriate on 03.17.09 at 8:31 am

Things can’t get much worse!?!?!?!! ROFLMFAO.

Suckers deserve greatly to lose what they lose.

#70 timbo on 03.17.09 at 8:40 am

In Calgary construction is getting really ugly now. Drywall,tapers,roofers,electricians,plumbers,framers are all feeling the effects. The problem with the stated unemployment rate is it does not cover the sub-trades subcontracting and those trades that are now part-time.

Unless you are running service in your trade your probably stuck with a 50% drop in wages and this is just residential. Commerical work from what I hear is now starting to turn as my contacts are saying layoffs are immenent.

If your going to buy a in Calgary right now wait….please…If 1000’s of jobs are being cut in our neck of the woods who the heck is going to prop up house prices. I firmly believe that a mass movement back to the family basement is coming as people are just waiting and praying for some spring miracle that I doubt will happen.

Lastly, if your looking for a truck or car you should see a flood of 1-2year cars for sale soon as fleets are being cleared as they collect dust. We have 7 Vans out of 18 sitting parked now and probably 4 more ready to collect dust.

Amazing how fast the change has come and still some people are still in denial..

#71 Avalon Shawn on 03.17.09 at 8:43 am


“I am seriously considering buying a new townhouse with my boy friend. We would both be first time home buyers. The builder for the places we’ve somewhat decided on has dropped the price by about 50k. So we’re now looking at 335k including taxes for 1650 squarefoot townhouse in the Surrey Langley border . ”
If you review one of the older blogs from either earlier this month or last month, you should see that generally there is large gap between houses listed in Surrey versus houses sold in the last few months. (I believe it is 7 or 8 to 1).

My advise is if you can rent for a year do it. If you really feel you have to buy do not get caught up in over bidding scenarios, and current market prices, I suggest you will have ample leverage to bid on property below ask prices.

As a former first timer be sure you budget for the extra costs after the purchase, ie furniture, heat, hydro, property tax, land transfer tax etc put aside $5-15k for this if you can.

#72 Brian on 03.17.09 at 8:44 am

“But hey keep buying your off shore built cars….soon we will all be eating rice, and they will be eating steak. I will stick with my Ford, at least it was made in Ontario, by people like me.”

Mike: Maybe if you and the CAW were prepared to accept $45 / hour (call it a porkchop) instead of $77 (a steak), you wouldn’t have to eat rice when you lose your job.
Unions are the virus that eats their own host.

Those “off-shore cars” you describe are built by people in other Ontario towns (ie. Cambridge) who are willing to accept reasonable wages.

#73 pbrasseur on 03.17.09 at 8:48 am

@ Jonathan (#64)

“Interesting to note that on 60 minutes that Bernanke pin-pointed that the system wasn’t working because of the massive inflows of savings from other countries for the past 12 years – 1997. This sparked all of the bubbles. Perhaps he can adopt my name for what I have called this, the “Asian Savings Bubble”. He clearly states that this cheap money fueled all the other bubbles.”

It’s clear that cheap money fed all the bubbles. But there is a different (and quite positive) way to present this as this is not just a financial thing.

All this Asian saving corresponds to a massive increase in productivity fueled by the arrival of millions of new cheap workers into the world economy, in one word: globalization. This helped inflation to stay low in the wertern world which allowed interest rates to stay low as well. Too low for our own good. That in conjunction with western governments tendency to prop-up home ownership created a massive real-estate and asset bubble.

Crisis are unavoidable, we humans will always create them, but this one has been made worse by the failure of the Fed and other central banks to foresee the problem and to do something about it.

One thing should not be lost however: The economic emergence of Asia and other parts of the world is no cyclical thing, the pace of development may be different but will most certainly continue.

And that will continue to fuel world economic growth for many year to come. This is a globalization bubble but is doesn’t mean globalization is over.

#74 Gord In Vancouver on 03.17.09 at 9:02 am

I wish I could pick

(e) Who cares? If there are enough of them, they’ll move the market, create momentum and arrest the housing slide.

but have chosen

(d) The greatest fools of all, totally unknowing that listings will only cascade, overwhelming any uptick in demand, crashing prices through the rest of 2009. Goodbye equity, suckers

….as Calgary saw a bear rally bounce after its market went into the toilet. Unfortunately, sales and prices returned to their original levels.

I’ll change my sentiment once established (and reliable) real estate organizations, not just one poster, publish statistics which tell me that things have changed for the better.

#75 Jake on 03.17.09 at 9:08 am

Hey All,
I do agree that capitalism should run its course, but stop referring to domestic vehicles as the “inferior crap no one wants.” No one wants? What a BS blanket statement that is. There are Ford and GM vehicles everywhere. Sales have been slow, but that goes for many of the “foreign” brands as well. They have to get back to profitibility and reorganize themselves, but I think there is still a place for Ford and GM in our auto market. I have had a Ford Escape and a Toyota Camry and both have been excellent vehicles. I have actually put more money into the ’03 Camry SE than I have into the ’01 Ford Escape, and which one do you think cost more in the first place?

#76 PTDBD on 03.17.09 at 9:12 am

Everyone saw those pallets of money on the 60 Minutes Bernanke segment. They then heard Bernanke say that the Fed can create money without it adding to the debt. The money numbers going to the banks are just increased.

Their parents had told them that money did not grow on trees, yet here they saw the paper prestidigitizer with their own eyes. Money IS made from trees and is limitless. They listned to the second most important man in America, the sorcerer’s apprentice of fiat paper wealth.

They then heard Canada’s Carney waxing eloquent about showing off all his tools. Central bankers are not impotent even though they have debased interest rates to almost 0%. They have vowed a pledge of unity in their synchronized cliff diving. Global holistic quantitive easing is what he termed it. In short, they will create money out of thin air and compete with the money out there in buying up products. Hell, in the States they are even buying stocks! Universal debasement, one for all and all for one.

Soon Banks will be free to change their accounting rules to value those toxic assets that caused so many problems to a value more to their liking. Mark to market accounting – letting the trading market decide, will be replaced by fantasy accounting. Let’s take it one step further, comrade, let’s eliminate this pesky accounting entirely.

When unlimited newly created money enters the system nothing is produced. The country’s false sense of wealth will increase. The real value of the previous currency will be debased. People see this and spend like crazy, realizing that their savings will evaporate.

#77 dd on 03.17.09 at 9:19 am


There is only one stat at this point that will tell if the turn has happened. That confedence has come back into the economy; US housing prices.

#78 Jake on 03.17.09 at 9:22 am

#100 Irene from yesterday,
In regards to the global warming debate, I never said I was a scientist. I said I was a man of science. I will be performing surgery in a few years, not scientific research. I did my undergrad in biochemistry and encountered the global warming debate there. I am 28 years old. Thanks for trying to call my bluff, but you missed.
Just so everyone knows, there is good money to be made performing favorable research on both sides of the global warming debate.

#79 Jake on 03.17.09 at 9:26 am

Garth, thanks again for this entertaining and informative site. I pick this site over hockey for my hour long diversion from med school everyday.

Have you considered psychology? — Garth

#80 dd on 03.17.09 at 9:27 am


We are in the eye of the hurricane. Things seem calm, almost optimistic.

Unless the US, Europe, and Canadian consumers start buying like there is no tomorrow AND that there are investors willing to take that debt on … there will be no recovery.

The system is still deleveraging. Banks still have to sell mass amounts of assets to unlever their balance sheets. I don’t see a recovery at all. Sell into this rising market and short when you get a chance.

#81 smwhite on 03.17.09 at 9:29 am

#37 Shawn

Show me the affordable home prices, not the affordable credit. I’ve been on this blog for a year now, bitching about principal versus interest rates. Interest rates are variable kids, the large amount of cash BORROWED from the bank is not.

The affordability now created by historical low interest rates will disappear. As will the entry level buyers. That is of course if you think those coming out of school/university with such great job prospects; will be able to save enough working retail to buy those overpriced town homes.

So if you think that now is a great time to buy tap your toes, grab your ankles and waddle in.

We all got drunk on credit and now the answer is a stiffer drink…

#82 Al on 03.17.09 at 9:34 am

It’s spring time everyone!

I’ve got an itch to get out there and do something! Maybe I’ll buy a house, do a quick flip. It’s a great time to buy. Houses are cheaper now than they’ve been for awhile. What a great idea!

Errr. Maybe I’ll just get a new digital camera and take pictures of birds and flowers.

#83 Alberta Girl on 03.17.09 at 9:41 am

#44 – Kudos, i couldn’t have said it better myself. I sold my Toyota and bought a Ford a few years ago and what a peice of crap my Ford is. I would go back to Toyota in a second, however, no one wants to buy my crappy Ford!

#84 canuck on 03.17.09 at 9:42 am

#40 Lesser Fool

Congrats on the sale of your house. Assume you’ve made up your mind that you’ll be renting and not touching the proceeds until such time as real estate completely tanks. You could very well end up with a house with a very low mortgage. Once, you do buy, ensure you buy at very low rates and keep making maximum payments to reduce interest. Save, save, save as opposed to spend, spend, spend. Read Doityourself books while you’re waiting and buy a house that needs tender loving care to restore it to maximum value.

#85 Jonathan on 03.17.09 at 9:51 am

#73 pbrasseur

I of course agree with everything you have said.

By no means is Asia’s success story going to stop. It may make it a little rough for the next couple years.

You nailed the issue. Productivity. They produce way too much product for far too few consumers in the west. It is a capacity nightmare.

If you want people to pay current prices for all those Chinese goods, and absorb them in quantity, then you have to pump money back in to the west.

The other option is to reduce the prices of goods. This is what China is facing right now – deflation. China must now invest internally and get its own consumers to pick up its demand for products and more importantly, services.

Of course this transition of funds will cause a massive rift in the money markets and the result in my opinion, will be rising interest rates.

#86 bobs your uncle on 03.17.09 at 10:04 am

A few years ago Bernake wrote a paper about the Zero Bound interest rate problem. Once you hit zero interest rate, or close to it, and you still have deflation or very low inflation you have to look to other means to create inflation.

One way of course is to print more money and throw it around. Devalue the currency. They have done that and so far it hasn’t worked other than enriching Goldman Sucks and a handfull of other favoured banks. The problem is that as bad as the US dollar is it is still better than any other currency so people still buy it.

The next move is to monetize the debt on the banks balance sheets. Great for the banks but bad news for taxpayers.

#87 Happyplace on 03.17.09 at 10:05 am

I have been looking for a house/townhouse/condo in Toronto for over two years now. Most real estate agents I’ve met are still towing the party line, yet I get calls back constantly wondering if I’m ‘still interested’ in the property which leads me to believe that things are not o.k. at least in the townhouse/condo market. I even had one agent offer me $12,000 cash back from the vendor to make upgrades. As far as detached houses go, there has been very little price change and not much for sale yet.

#88 Chris in England on 03.17.09 at 10:05 am

From an email received today:

“George Stroumboulopoulos, from CBC’s ‘The Hour’, has invited Don [Campbell, REIN*] to be a guest on his show this week to discuss the state of the Real Estate market across Canada. I encourage everyone to tune in this Wednesday March 18 at 11:00pm… check your local listings for exact times.”

*REIN = Real Estate Investment Strategies and Tips

I’m expecting something a bit different to Garth’s appearance the other week!

#89 Jado on 03.17.09 at 10:15 am

It seems like the banks, real estate agents, and anyone else on that side of the economy are willing to take any good news and run with it.

I was at my fiancee’s place yesterday and her uncle who is in the process of selling his house was there. He said the realtor put the house $15K higher than what he thought it was going to go for AND that the realtor said house prices are going back up.

My fiancee looks over at me to watch my eyes roll.

We get into the discussion on the fact that just because the realtor wants to price it $15K higher, doesn’t mean it will sell. Truthfully, I haven’t seen prices drop very much in Ottawa, but i’ve also not seen houses sell very much in Ottawa. So that leads me to believe that prices are still too high and sellers are being stubborn or ignorant (probably both).

I think it’s great to be optimistic, but at the same time realtors need to be aware of the real world and what is happening right now, in 6 months, and in the near future.

#90 PTDBD on 03.17.09 at 10:20 am

Canadian taxpayers to pay salaries for two years of 3000 Afghanistan police.

#91 MikeB on 03.17.09 at 10:31 am

To illustrate the utter greed on the seller side out there.
We saw a house on the weekend that was listed at 789K .
A house that needed a ton of work but granted in a super nice area. Smallish rooms and old baths and kitchen.
One of the owners had some ailment so naturally you felt sorry for the couple. Low and behold the house was relisted on Monday at 818K , YES AN INCREASE. Needless to say I didn’t feel sorry for them anymore… just utterly ignorant and greedy. I will have to put my emotions in check from now on and realize that this is a business transaction and best to deal with it on that level.

#92 Dan in Victoria on 03.17.09 at 10:45 am

Lisa #43 Heres a good blog for you. Its out of Langley, you’ll have to go back into the older posts.This is where I found out about Garths site. http://housing-analysis.blogspot.com/ Good Luck.

#93 Some Guy. on 03.17.09 at 10:52 am

Garth, I need you guidance more than ever….i’m sure it can’t be a good time to buy but maybe I just need reassurance????

#94 Calgary37 on 03.17.09 at 11:01 am

Russia proposes creation of global super-reserve currency
Published on 03-16-2009

Russia suggests the G20 summit in London in April should start establishing a system of managing the process of globalization and consider the possibility of creating a supra-national reserve currency or a “super-reserve currency.” The Russian Federation’s proposals for ways out of the ongoing financial and economic crisis and for a post-crisis order of the world financial system have been published on the Kremlin’s website. The proposals have been dispatched to the leadership of the G20 countries, the CIS and international organizations.

Read the rest at:


Also read:
Kazakh president proposes global currency

Dollar Crisis In The Making: Before the stampede

One-world currency emerges … again
‘Acmetal’ considered as solution to global economic recession

U.S. dollar replaced by … digital gold?
Electronic currency could be global money of future

Silver: Crunch Time?


Power to the People. Let the Revolution Begin.

#95 pbrasseur on 03.17.09 at 11:28 am

Jonathan #85

“…Of course this transition of funds will cause a massive rift in the money markets and the result in my opinion, will be rising interest rates.”

Correct I think, at some point the massive arrival of new cheap workers into the world economy will taper off and inflation will again become an issue. The big question is how quickly.

I don’t have the answer to that but I think it should occurs rather gradually. For example I don’t think China can overnight become self-reliant on interior demand, that will happen of course but gradually, as their standard of living rises. This is not a bad thing neither, if the Chinese consume more they will also buy more of other’s products and still contribute to world growth, albeit differently.

And China is not alone, there is also India, Indonesia, Brasil and even Africa that will come into play.

To some extent globalization is just beginning, for now many countries are mere providers of cheaper manufactured goods but as their standard of living rise they will contribute even more to the world economy. The potential for growth is absolutely MASSIVE, I don’t think many people realize it.

But of course not of that will happen in an orderly and smooth fashion, there will be other crisis along the way, that we can always bank on.

#96 ncoffee on 03.17.09 at 11:49 am


do you really think there’s any chance of this uptick arresting the housing slide for any prolonged period of time? For real?

The uptick seems to be a pretty minor spring bump as far as I’ve seen. Isn’t this just people buying a little more real estate because it’s March, not February?

#97 PTDBD on 03.17.09 at 11:53 am

There is hope! A green shoot…
IRS is issuing guidance to aid victims of Ponzi Scams.

The more money the government prints, the more it buys equities, bonds, ABCPs and other CRAP with that money to prop them up, the better case we have in proving that this entire Confidence Game is a Ponzi scam.

We can get tax restitution for our losses. :-) going forward :-)
We can finally stop being Ponzis.

#98 Peter Coupland on 03.17.09 at 11:54 am

RE foreign cars.

Half of all Toyota’s sold in Canada are are built here.

#99 pbrasseur on 03.17.09 at 12:02 pm


“Russia proposes creation of global super-reserve currency ”

Yeah right, before or after they get rescued by the IMF?

I think Russia is mostly trying to defect attention to the fact that with the barrel at $40 it is rapidly becoming a bankrupt state where government keeps power through repression and propaganda.

As for the chances of a world currency: zero.

Even the Euro has trouble right now as it is proving it is quite difficult to keep a currency together without effective political power behind it. Fat chance of that happening for the world anytime soon.

#100 Another Albertan on 03.17.09 at 12:16 pm

China’s middle-class numbers around 110M or so, about 8% of the population. Their purchasing power is roughly 1/7th of a middle American (if I recall correctly).

The personal savings rate is huge – around one-third of earnings – but high savings rates do imply that their middle classes are likely unwilling to spend freely, if only because China isn’t the nanny state it was 30+ years ago.

Yes, the potential is massive. I won’t argue with that contention. The biggest rub that the global economy is encountering is that the US consumer is the consumer of last resort… and they aren’t consuming. That leaves a lot of global trade surplus, especially in countries whose middle classes aren’t large or established enough to be able to consume the delta.

This is going to take a while to mop up before we can consider things to be “back on track” and I agree that the process will be far from orderly and smooth.

#101 jess on 03.17.09 at 12:32 pm

also be careful of the trick where signs go up and the house really isn’t for sale
some realtors use their own houses as “staged” to get clients
this article in the new york times will get ya fired up

also how come Gsachs is offering loans to it’s employee’s with the bailout money?


#102 Got A Watch on 03.17.09 at 12:33 pm

We are just taking an intermission before the next wave of the crisis hits. It’s Spring, and hope blooms early.

The economy in most regions and nations is in freefall right now. In fact, I can’t think of one that is immune to his crisis. Irrational exuberance in B.C. aside. And the crisis is still ongoing, no bottom in sight, despite what you read in the MSM.

The next tidal wave of bad credit is about to reach shore, in the form of (cough, former) Prime mortgages, commercial real estate and bad credit card default.

All the Government interventions, useless as they have been, were geared to cleaning up the past problems that have surfaced first. They are not in any way ready or able to deal with another wave of bad credit bigger than the first few.

The US Government is doing its very best to replicate the 20 year Japanese experiment with zombification of the economy. Canada is tied to the US anchor, and anchors do what you would expect, sink to the bottom.

IMHO anyone who buys real estate this year or next, unless you are buying it for at least 50% off of the ‘peak value’, will just prove themselves ‘The Greater Fool’ conclusively.

No real estate bust is over in 18 months. Maybe if the economy was healthy and booming, but then by definition, the real estate market would no be busting down either.

I keep saying this for those who do not know: the average length of the ‘prices are falling’ phase of a real estate market cycle is 4 1/2 years. We have just burst the biggest credit bubble in history, so it would not be difficult to foresee prices falling for 5 years straight before bottoming. That would be about 3+ years from now, or Fall, 2012, at my guess.

At that point, real estate is out of favor, most Realt(ho)rs have quit, and no one wants to buy. That is called a ‘capitulation bottom’, and represents the psychology of the real lowest price point. Given the concerted media campaign right now from the clueless to ‘buy now’, we are no where near the real bottom yet.

There are many years to go in this crisis yet. Whatever property you want to buy, wait 5 years, then buy it for half of today’s price or less. If you still have a job.

Don’t be a Greater Fool.

#103 smwhite on 03.17.09 at 12:41 pm


I thought it was cool to be like Ponzi?

Ponzi, I meant Fonzi…


I’ve bought my last domestic auto, Canadian made, Toyota is heads above the competition, then again, they run their company with their brains, not their raisins.

#104 Two-thirds on 03.17.09 at 12:41 pm

@ #11 Mike:

“Spring brings out the moron in morons”

That’s classic! Perhaps I should start a bumper-sticker company, no shortage of material in this blog. :)

Regarding today’s post, I too am calling it a suckers’ rally. Who’s buying now? Those who had planned to buy in late 2008, but got spooked in the Fall (and by “The Fall”). Or, those who had wanted to buy in 2007, but lost multiple offer wars. Wanton wannabe-homeowners could only restrain themselves for so long. “I’m a RE buyer, and I have needs” – LOL

As a FTB myself, I must confess that about a month ago I was *seriously tempted* to buy a showhome, which had been reduced by $50K. I have a 20% down payment, a secure job, and no debt. After running the numbers, and a couple of scenarios, though, I decided to wait, but keep monitoring the market.

I can see why other FTB are taking the plunge now. When local house prices have dropped $100K on average, interest rates are at rock bottom, and supply has exploded, it takes a lot of self control not to pull the trigger on an “affordable” property.

Not to mention the relentless waves of RE propaganda, by RE agencies, banks, MSM, co-workers, etc.

In my opinion, this rally will be short-lived, and once enough *qualified buyers* have satisfied their lust, the market slide will continue. Sellers are not desperate enough yet, in my opinion.

But, rationality is in short supply these days, so who knows what’s next; fear and greed can manifest themselves in many different ways.

#105 smwhite on 03.17.09 at 12:48 pm


#106 Bob Bagina on 03.17.09 at 1:02 pm

It’s hilarious that Canadian car companies blame others for the crappy cars they make. Produce cars that people want and that last, and you’ll hang around. Sell crap, bad fuel efficiency, and you’ll be gone. Tough for awhile but people will adapt. they always do.

As for housing, it’s still not affordable for me and the misses. I’ve accepted though the premium that I pay for living in Rocktoria. If I moved to the Pig though (Prince George), houses are darn cheap in that little resource based town.

I’ve done math on interest rates and realized that 3-4-5% doesn’t really make that much of a difference. I’d still be eating crappy (kraft) dinner and wonderbread.

#107 a lesser fool on 03.17.09 at 1:04 pm

#84 Canuck

“Congrats on the sale of your house. Assume you’ve made up your mind that you’ll be renting and not touching the proceeds until such time as real estate completely tanks. You could very well end up with a house with a very low mortgage. Once, you do buy, ensure you buy at very low rates and keep making maximum payments to reduce interest. Save, save, save as opposed to spend, spend, spend. Read Doityourself books while you’re waiting and buy a house that needs tender loving care to restore it to maximum value.”

Canuck, you are most correct in making these assumptions: we will certainly be renting and are banking the cash and waiting for the bottom. (though i am consider taking a small portion of that cash and buying up some stocks that will be at generational lows in the months and years to come.) we are curious to see just how small a mortgage we can muster as we will be saving saving saving, just as you’d said. i would love to buy something outright, in cash, and be done with the concept of commonly accepted systemic debt. we have calculated that out of the $60K handed over to the bank in the past three years, $40K of that went towards INTEREST ONLY. good grief – i look at that so much differently now compared to when we first bought: all around us events were unfolding that were happening on a much much larger scale as the bubble grew and grew and yet we remained unaware of the larger context. now we have a better comprehension of that larger context and in the mean time have developed some fairly decent tools to make future judgements with. in the end, we are much better prepared to make decisions which take a much broader perspective of future ramifications. i simply feel fortunate that we were able to sell – don’t you love it when preparedness and opportunity arise?!

we are shifting ourselves into being a one car family and will be eliminating extraneous spending so as to better position ourselves to become lifetime savers who deal mostly in cash – funny thing is that i was always this way growing up UNTIL i became aware of the notion and practice of credit. i still remember the day that my parents told me that i needed to develop a credit rating and therefore needed to at least start using a credit card. so i did. and that was pretty much the only financial lesson that i learned from my parents. when i look at them today, i see that they have lost almost half of their investments to the crash and can also see their three main RE assets depleting in value every single day.

as for the DIY aspect of it, i am all over that! i work with my hands in my career (self-employed, chef) and very much enjoy engaging my immediate environment “avec mes mains”. there may even be a farm in our future as we seek to combine several of our work/hobby interests into one all-encompassing venture.

anyhow, yadda yadda yadda – sorry for the ramble, but i am actually really excited for what the future brings (including my child-to-be). until then, here’s to the process of gaining wisdom,

~future renter

#108 JoeCalgary on 03.17.09 at 1:05 pm

#99, pbrasseur, if you look at the last link on the last thread you will see that the IMF itself is being urged to use “quantitative easing” in the form of “Special Drawing Rights” as a way to pump more money into the global economic system. Merkel is digging-in her heels at giving more money to the failing East European countries, but something has to be done before they collapse.

On the surface, it would seem Russia has things to gain by those countries falling once again to its sphere of influence. You’re right in that its economy is shaky right now, but it has been shaky before and has recovered.

#109 wjp on 03.17.09 at 1:27 pm


#110 wjp on 03.17.09 at 1:31 pm

“AIG paid 73 employees bonuses of $1 million or more; 11 of whom are no longer there, according to NY Atty. Gen. Cuomo. ”

Someone should be held accountable and once again brings proof that bailouts are not about preserving jobs but rewards for failure!

And we want to bailout companies in Canada?

#111 Increasing that 1% on 03.17.09 at 1:33 pm

In my neck of the woods, still SW Ont., @6 houses away from mine on both sides, one just sold in one day , the other had sold in 2 days. Both @ 300k.

#62. Adam, wrote:
“(f) Who cares? As long as one of those suckers wants to pay too much for my house.”

I’m in a much better place for selling now, (and mine’s cheaper) and reassessing my plan. Actually even hesitating @ price I was going to ask… too little? hmmm..but I know there’s still the closings coming up…

Did hear of a previous neighbour who’d bought larger home nearby in last 2 yrs, recently laid off, new baby, and separating….

Buyers are buying in certain areas and settings, where houses weren’t for sale often and now are down @7-8%, and cheaper decent homes/townhouses.

If people have family and friends and ‘stable’ job, and good chunks to put down, then they have that area in mind they want.

There aren’t that many rentals, not in similar areas/settings/conditions…ie: if you have kids, want to have them going to same school, be in nice area/street you’re limited with rentals @here, for now…

#112 jess on 03.17.09 at 1:33 pm

some of you may enjoy the view: aig lender of last (insurance resort) off shore circle game?



#113 miketheengineer on 03.17.09 at 1:42 pm

Chrysler Closing/Bankrupcy:

A couple of things / some thoughts.

1) I do not work at Chrysler. I do not make 70 per hour. I wish I did but the parts supplier I work for does not have CAW. I barely make it as it is. Part supplier pay is not as good as OEM pay.

2) 10 to 20 jobs are dependent on every Auto Job at Chrysler. If 10,000 go down in a Chrysler bankrupcy, the 100,000 people are in direct dire consequences.

3) Toyota and toyota suppliers build parts for Ford. Mazda engines are in Ford Products. Ford has some very good products right now, read consumers reports. I have a Ford Focus. I have only changed a wiper blade and tires in 100k. It has been by far the best car I have ever owned. It has a mazda engine in it.

3) Chrysler minivan is a top seller, and currently sells in Ontario for about 18k, and I believe this is about 1/2 the price as a Honda Oddesy. This is a good deal. Get it now before they close, cause after you will pay 40k or more for a Toyota or Honda. This is the best bang for your buck. The new ones are really good value.

4) These people may end up losing their jobs. If they do (say all 100,000) eventually go off work, they end up on WELFARE. Guess what, then everyone gets to pay to support them. Wouldn’t it be better to have people working than to have them on Welfare?

It pains me to see entire communities devistated by what is going on. This is not going to end any time soon. I see at least 2 years maybe 3 before any relief will happen. Lots of hardship and dispare for lots of people. It is not only the workers. It affects everyone. If workers don’t pay tax, we can not afford to pay teachers, and public works people and government people. Look at California and read the newspapers and see our future guys. It ain’t going to be pretty next year, when assements are down, city money is not there to pay for services, and things are closed because the money won’t be there……

Think about it before you spend your next dollar. Think about it.

I pray for a positive outcome and remain optimistic, but it is getting very difficult.

#114 Increasing that 1% on 03.17.09 at 1:42 pm

Re: last post:”I’m in a much better place for selling now..”
I do realize if a lot of listings come up now for the ‘Spring Market’, I may be screwed

#115 rory on 03.17.09 at 1:43 pm

Hi all … I have brought up this potential issue of under funded public service pensions plans previously and hoped that the MSM would notice …this article is a good start.


“DB plans are expensive to administer and can bleed businesses dry if they are faced meeting their pension obligations during a downturn, for example.”

“Unfortunately, the defined benefit plan is going the way of the dodo in the private sector, although it was never something small businesses could afford,” Ms. Swift says, noting the unfairness of private companies paying taxes that go toward funding generous pension plans for public sector employees, many of whom retire early, while most businesses themselves cannot even dream of offering their employees the same.”

I have my fingers (and toes) crossed that the gov’t of the day will deal with this, if necessary, in a way that is fair to all (most) Canadians. Sooner or later this is going to rear its ugly head – IMO.

#116 dd on 03.17.09 at 1:43 pm

Caterpillar to lay off 2,454 workers in 3 states.

What recovery?

#117 dd on 03.17.09 at 1:47 pm

#94 Calgary37

“Russia proposes creation of global super-reserve currency”

It has already been created. It called the Chinese yuan.

#118 dd on 03.17.09 at 1:50 pm

#46 Jay Currie

“So long as we can keep a job in the family and are not underwater on our credit cards, asset deflation is not an immediate problem … buying gold and energy right now…could be the Viagra in your portfolio”

If you buy gold and energy for you portfolio and there is asset deflation and layoffs these will be an immediate problem. Your stocks will decrease.

#119 Comrade Okie on 03.17.09 at 1:54 pm


“Let’s take it one step further, comrade, let’s eliminate this pesky accounting entirely.”


It’s standing in the way of the Titans and something must be done.

#120 Joe Realtor on 03.17.09 at 2:20 pm


Realtors putting their own homes up for sale in order to “get clients”? Sounds like a lot of work to me, but then my ancestors were pack rats too. Wouldn’t it be easier doing someone elses open house?

If you are serious about your claim, and have witnessed this first hand or can prove it, you should report the Realtor to either RECO in Ontario or CREA. There would appear to be a breach of ethics there – or at least I’m sure the governing body could find one.

#121 Real Estate Deal or No Deal on 03.17.09 at 2:27 pm

Miketheengineer …

Hey, if North American auto manufacturers ever built a product that people wanted and was as good quality as an off shore product, then I (and millions of others) will buy them.

I am sure you are aware of the incredibly advanced robotic Ford plant in Brazil that while it would lay waste to 1,000’s of jobs in manufacturing in North America … Ford would be able to create a better product and compete much more effectively. I understand that UAW and CAW are the only barriers for this type of plant to be offered in North America.

I had a Cadillac and it was just crap! I drive a diesel Jetta today and am very happy.

Here is the link of a short video of the plant incase you want to know about it.


#122 Mike B formerly just Mike on 03.17.09 at 2:28 pm

Ohhh many many months ago… last October to be precise many of us wailed and thrashed over the idiotic bailout that was proposed by Hank “hand in my pocket” Paulson. We squawked that he was an insider saving the ass of his buddies at Goldman Sachs and wanted carte blanche with no accountability. That alone was a give away. Yet the masses fell into line and argued if we did not we would see the collapse of the system… best described as systemic risk. Today some six months later Americans and the world find out that much of the money given to AIG was in fact funelled to third party companies, tops amongst them Goldman Sachs. While the current administration argues about the previous administration were the cause of this we step back and realize that Geithner was part of the old administration who created the first bailout package.
Gotta love that. Finally Americans get it. Canadians.??I got no hope for us…. we just buy houses and cocoon.
We are such hockey pucks, present company excluded.


#123 Jim Genac on 03.17.09 at 2:43 pm

People ask ‘why are sales going up’? I think it’s simple… advertising.

The R/E shills have been bombarding the news media with stories about ‘what a great time to buy’ it is. Low interest rates, prices lower than last year when they were told ‘get in now or be priced out forever’.

That fear is still being leveraged.

That doesn’t mean there aren’t great deals out there. Let’s face it… if you think the market is going to go down 50%, and it is down 15% now – but you find a property you can buy for 45% down… you buy it.

Many are making purchases because they are buying into media blitz. And some are making purchases because that individual deal is a great opportunity.

#124 David Bakody on 03.17.09 at 2:56 pm

Reports of a housing boom is more like a apartment boom, in anticipation of the millions who have sold or walk away from them and they must “RENT”. This will change when EI/UI/Savings run out. There are still more listing every day and prices have dropped and car lots are full. As far as the stock market is concerned one day of profit taking with a sudden fall can spook investors for a long time. Who knows? me I am standing pat.

#125 Two-thirds on 03.17.09 at 2:59 pm

@ #67 Mike:

“Last GM car was a 2004 Chevy Aveo5 we bought new. Didn’t cost us a dime in repairs, never broke down and hauled more than a pickup! (6′ trees, 14′ ladders, 900lb rock, doors).”

Isn’t the Chevy Aveo made in Korea? (Daewoo)


#126 $fromA$ia on 03.17.09 at 3:07 pm

Ok guys, the last few days on the TSE have lead with Bank stock rallies. The reason is for the precious dividends. Theres no where else you can get these kinds of dividends or %return. The dividends a week ago were in the 7%(TD)-10% (Bank of Montreal) Checking today the Dividends have dropped around 1-1.5% thus far with no dividend cut declarations.

As the Canadian Bank stocks have gained 25% in the last few trading day I am nervous of a DIVIDEND TRAP.

DIVIDEND TRAP means tha banks cannot afford to pay out the stock dividends any longer and cut them, this will drop the stock values significantly!!!

Buyer be ware, protect your $$$ :)

#127 jess on 03.17.09 at 3:17 pm

zombie buildings

#128 David on 03.17.09 at 3:31 pm

Anecdotal stories about dumb people who do not understand systemic risk does not invalidate the general case.
The economy is shedding jobs at an alarming pace. Naturally enough there are those brave souls who believe that the unsustainable bubble will somehow magically reflate, if they close their eyes and wish hard enough. If the wishful thinking that drove people to purchase of an over valued asset based on nothing more than hunches than real estate never goes down and there is no financial risk with buying a home then good luck!! So called sophisticated financial players like AIG and Bear Stearns felt exactly the same way two years ago.
Bad financial news does travel slow and hits the dumb and the desperate last.

#129 Keith in Calgary on 03.17.09 at 3:51 pm

What recovery is correct.

My landlord (a national RE company owned by a pension fund) just reduced my rent $100 a month on a luxury condo…..so I pulled more comps from the internet and found that there are 1,950 apartments and/or condos currently for rent in Calgary…..with 400 of them listed between $1300-1400 a month…..so I am going back for “another” $100 decrease before I re-sign my lease renewal.

It’s gonna get really tough on all the RE speculators trying to rent there way out of this mess…….

#130 Dave on 03.17.09 at 4:02 pm

Our reasoning is as follows:
Perhaps because we haven’t really followed the market that closely, but it seems to us that the townhouses aren’t falling at that high of a rate (for used townhouses anyways)


you’re far too impatient. No advice here will help you. Your destiny is written on the wall and its your impatience that will punish you financially in life. Do what you have to do, but I must say that it’s mind-boggling when I hear people like yourself trying to catch a falling knife.

The market is declining dramatically, yet you have zero patience even in these conditions.

I’m not sure who deserves more ridicule, the ones who purchased before the bubble burst, or the people like the above who see the market is declining and has zero patience to let the market live its course.

some deserve to be buried in debt i guess

#131 PTDBD on 03.17.09 at 4:04 pm

Listen to them all squeal about the few million in AIG bonuses – it’s peanuts compared to the rest. Imagine if the Trillions in bailouts raised a proportional stink?

Penny wise, pound foolish.

#132 Carole AB on 03.17.09 at 4:24 pm

#94 Calgary 37
“Russia proposes creation of global super reserve currency”


March 16 2009 GEAB 33

According to LEAP/E2020, there are only two options left for the G20 leaders who gather April 2nd in London: either they rebuild a new international monetary system, creating the conditions for a new global system that involves all the main global players, and reducing the crisis to a maximum of 3 to 5 years; or they strive to prolong the current system, thrusting the world into a decade long tragic crisis starting at the end of 2009…

Post – G20 summit strategic and operational recommendations
1.. Treasury Bonds: Double or nothing

Sell Treasury Bonds as soon as you can! The market will suddenly reverse before the end of summer 2009, turning into a death trap, as there will be no bidders left apart from the US Federal Reserve buyng with devalued US dollars ( compared to other currencies). British Gilts are already in this situation and must therefore be avoided. In 3 months from now only invest in bonds issued by solvent states. (solid national savings, significant currency reserves, good social protection system).

2. Currencies: The crucial moment is approaching.

Either do not invest in, or sell, Get away from the Yen and Swiss Franc: Tokyo and Berne are compelled to engage in a process of competitive devaluation to save their exports; and Switzerland is about to see UBS, and probaby a number of other large Swiss banks, swept away in the collapse of the global market of USD-denominated assets. The Pound Sterling is now waiting for the day of its final collapse, as the BofE has launched a process of monetization in order to finance the UK’s deficits. As soon as the FED acknowledges the fact that it has been doing the same in the US, (a matter of weeks now)the US Dollar will follow the same trend.

3. Stocks: Santa Claus does not exist.
Keep on avoiding stocks, unless you are a fan of risk and Russian roulette…losses will escalate in 2009 and 2010.

#133 Jimster on 03.17.09 at 4:36 pm


Those cars are assembled in Cambridge, but they are built in Asia. That large plant you see from the highway is largely for show, and the politicos.

Only the menial assembly tasks are done here. All the high paying engineering and management is done in Asia. All the parts come from Asia too. They stack the parts like paper plates and assemble them here to save on shipping costs and hookwink unsuspecting(or un-patriotic) buyers like you.

Better you mother on a Harley than your sister in a Honda

#134 Dave on 03.17.09 at 4:53 pm

Stocks: Santa Claus does not exist.
Keep on avoiding stocks, unless you are a fan of risk and Russian roulette…losses will escalate in 2009 and 2010.


you’re talking about something too vast to make an assumption like this.

Thats like telling Canadians “there’s a lot of CO2 exposure in China, I wouldn’t breathe if I were you”

some people are doing well in the stock market. You don’t seem to understand what the stock market is though.

#135 pbrasseur on 03.17.09 at 5:01 pm

@Carole AB

leap2020 looks like nothing but anti-American crap to me, about as credible as Nostradamus!

#136 princess on 03.17.09 at 5:02 pm

At the same time, a house in Rosedale, C1457218 – C09 – 89 BINSCARTH RD,TORONTO reduces it price 30% to $2,850,000 from $4,250,000 . What does this say about the market in Toronto?

#137 . . . fried eggs and spam . . . on 03.17.09 at 5:19 pm

#101 jess at 12:32 pm — “also how come Gsachs is offering loans to it’s employee’s with the bailout money?”

The following is from wrh.com last night . . .

“Apparently, Obama is ‘outraged’ at AIG for their bonuses . . .

“I guess the president doesn’t follow Goldman Sachs, which paid out a company record $11B in pay and bonuses after grabbing $10B from taxpayers.

“Gee, let’s see…

“$11B (GS) vs. $165M (AIG)

“110% of taxpayer funds (GS) vs. 0.1% of taxpayer funds (AIG)”.

Should still be on whatreallyhappened.com. Bear in mind that Paulson, Carney (who was appointed by Flaherty) and plenty of others worked for Goldman Sachs, but someone has to be the scapegoat for this. AIG fits the bill nicely.

BTW, the size of the CDS / derivatives’ mess? US$190,000 per person, covering the entire planet. — http://tinyurl.com/68c9hy
Goes (somewhat) with the above. — http://tinyurl.com/5ygxw

“What is going on right now is as contrived as it comes.

The chart shows a rising index price with declining demand for all stocks.

The same thing is going on in the futures industry, where oil is up 38% since Obama took office, and demand has fallen almost as much in the same period of time.

Hey, Rocky! Watch me pull a rabbit out of my hat!



#138 MenWithHats on 03.17.09 at 5:28 pm

Carney is still a deliberate idiot and a member in good standing of the trimvirate of stupidity .
When first appointed I moaned ” Oh,Christ another fool on the hill ”
He and Bernanke are peas from the same pod .
Three point oh eight growth in the second half of 09′
It is to laugh .

#139 Bob Bagina on 03.17.09 at 5:30 pm

So instead of taxpayers footing the bill for EI and re-training taxpayers should provide a bailout for an inefficient industry, so that it can continue to be inefficient.

Once upon a time somebody was selling square wheels, and eventually someone came along saying that square wheels were stupid and you should check out these round ones. Well, no way we’re going to stop making square wheels cause then the guy who measures the squares won’t have a job, and the guy who cuts square blocks won’t have a job, and square wheels are a national symbol, and so-and-so makes the square pegs, and etc…, etc….

Re-train the auto-industry and invest in technology/innovation, and stop handed over money to people still producing square wheels.

#140 Go Green on 03.17.09 at 5:30 pm

#75 Jake
Hey All,
I do agree that capitalism should run its course, but stop referring to domestic vehicles as the “inferior crap no one wants.” No one wants? What a BS blanket statement that is. There are Ford and GM vehicles everywhere. Sales have been slow, but that goes for many of the “foreign” brands as well. They have to get back to profitibility and reorganize themselves, but I think there is still a place for Ford and GM in our auto market. I have had a Ford Escape and a Toyota Camry and both have been excellent vehicles. I have actually put more money into the ‘03 Camry SE than I have into the ‘01 Ford Escape, and which one do you think cost more in the first place?

Jake – How many people keep their vehicles as long as you do? I bet the majority don’t. When they trade them in or sell them on their own the majority of NA vehicles the resale value is the pits. No where near those of Japanese cars. We own 2 Japanese cars – a Camry 07 (bought in 08) & an Accord 2000 (bought in 04)- both used for which we paid cash. I would never buy a NA vehicle – did it once and regretted it. I know many people who went to do a trade in on a 3-4 year NA car and were disgusted by what they were offered. They bit the bullet and bought Japanese vehicles.

BTW, my DH travels a fair bit and loves his Camry. I only put about max. 2K/yr on my Honda. I’m retired, have health problems, and use it to do groceries, etc. We would have bought a smaller Honda for me, but we went to one of those multi-dealer sales, and after 4 hours of bargaining, we got it at a great price. I love my car, have both rust checked every year, & will keep it for many more years. I’ve always kept my Japanese cars for 10+ years.

Until NA auto makers get their act together and build cars that are fuel efficient and retain some resale value, I shall never support them.

#141 Jelly on 03.17.09 at 6:09 pm

I agree with the positivity that is apparent lately.

There are a lot more sales all of a sudden and people

are spending money again because of the cheapness of

it. A friend of mine just sold a Spec home in Lethbridge

for the ASKING PRICE! It was not a cheap home either.

Another friend of mine is purchasing FLIP

homes in Calgary and there are loads of investors that

want to join her. Crazy! Everything has changed all of a

sudden. A family friend has sold a bunch of homes in

Lethbridge and now needs to find more construction

guys as he did not expect it to be this busy.

I guess people are not that concerned with the price of

houses as long as it has gotten cheaper and the

mortgage is cheap.

Huh! Who knew?

Will this hype just facilitate more rallying in a few

months? It sure is starting to pan out that way.

After all, it’s all about the psychology of the matter.

#142 Got A Watch on 03.17.09 at 6:18 pm

Binscarth Rd, if you have ever been there, has some very nice old mansions. They have all been renovated, but it feels like an old neighborhood.

Probably one of the “finest” addresses in the city, if you are looking to be pretentious. Not exactly comparable to much else. Location etc. Big house, really big taxes. Snobby neighbors.

I used to bicycle along there, nice area for riding.

Shows you even the “rich” are not as rich as they thought. The pool of “rich” is getting shallower.

It’s just a sign of the times.

#143 john m on 03.17.09 at 6:23 pm

Anyone making the largest investment in their life (for most their home) should be only doing it when they see potential for growth—loss of value is disaster! Jobs are disappearing at an alarming rate,foreclosures are increasing at an alarming rate,wages are dropping,the wonderful oil companies are jacking their prices up at the pumps (very sneakily)at $140 a barrel for crude we paid $1.20 a litre at the pumps now were paying 80 cents for $47 a barrel crude…..the greed goes on…….the troubles of the present are only a glimpse of what the future holds……if anyone sees anything positive in this scenario please let me know because i don’t.

#144 Chris in England on 03.17.09 at 6:42 pm

EcoInsurgent #41: “The UK has announced they are going to regulate banks to ban home loans for more than 3X income. If this passes, the UK market will crash massively. About time.”


WILL crash massively? It has been crashing massively for the past year! Prices are still going down and with this in place the market will dwindle to an untidy stop. But please – not before my house is sold. We have buyers but it is not yet watertight. This is good news though, as they might think twice about messing us around if this is their last chance to fling around more than 3 x salary! Now I am feeling very positive about having them in a trap. Thanks for that!

#145 Jake on 03.17.09 at 6:48 pm

#140 Go Green,
Congrats on purchasing 2 used vehicles with cash. Move aside Donald Trump, there’s a new high roller in town. Let me know when you are ready to unload the Honda. At 2K/year that thing will practically be new when you are done with it.
By the way, 4 hours of bargaining…..are you serious? That’s precious blog time you’ll never get back.

#146 jess on 03.17.09 at 7:02 pm

120 Joe Realtor

follow the uk housing fraud or any countries housing market and the bubble is built the same.

mortgage fraud seems to be going up

With so many ongoing cases, FBI investigators are not focusing on individual borrowers but industry professionals generating fraud schemes that could total as much as hundreds of millions of dollars.


#147 dd on 03.17.09 at 7:10 pm

#21 Jack the Lad

“Man I wish I had a crystal ball… is this the real bottom or just a bear market suckers rally?”

Look at the tSX graph for the last 3 months. It reached a high of 9500 in January. There will be more bad news out in the weeks to come. The markets are rallying to days of no having the bad news. Honestly there is no reason why there is a rally. Q1 numbers will hammer the message home.

#148 David on 03.17.09 at 7:12 pm

@ $fromA$ia:

“Ok guys, the last few days on the TSE have lead with Bank stock rallies. The reason is for the precious dividends”

You are dead wrong. Did bank investors suddenly realise all at once on March 10th (when the rally began) that bank dividends were juicy? If you paid attention you would realise that the bank rally was driven by anticipation of the US mark to market suspension hearing on March 12th and has continued thereafter because of the positive outcome of the hearing for banks’ balance sheets. Do some research.

#149 dd on 03.17.09 at 7:12 pm

#31 JM Vancouver Island

With the job losses in the forestry section gaining speed a 20% reduction will come.

#150 @Garth 2 on 03.17.09 at 7:24 pm

“At the same time, a house in Rosedale, C1457218 – C09 – 89 BINSCARTH RD,TORONTO reduces it price 30% to $2,850,000 from $4,250,000 . What does this say about the market in Toronto?”

It says that, as always, there are very few people in this city that will ever afford a home in Rosedale. In other words, it says very little.

#151 Katheran Milne on 03.17.09 at 7:30 pm


REALTOR on the West Coast of B.C. since 1976, 33 years and 6 recessions.

Believe it or not the answer to this real estate paradox, actual can be found in the robins!! They are one of the indicators of a parallel awakening in the real estate industry for humans, as we also “wake up” from winter, and get busy scurrying around looking for new “dens” to move into.

There are actually much bigger, scarier issues, which should be concerning us, than the real estate winter market, but let’s look at that for a minute or 60. It has been my observation and experience that the real estate industry does not know how (or chooses not to) analyze data correctly or “transparently.” The industry is not proactive in informing the public about downward trends. The real estate industry, as a predictive, competent source of reliable information, is very, very, conveniently broken. The real estate industry benefits greatly from the ignorance and confusion the public has, about how the real estate industry really works.

Having personally logged, tracked and monitored every aspect of the industry for many years, I found certain variables that have always remained predictable, reliable, indisputable, absolutely true and consistent

Here are some real truths versus the “great urban real estate myths”: The best days to advertise are Monday, Tuesday and Wednesday not Friday, Saturday and Sunday. The best months to sell a property are January, February and March not summer. The next best months for sales are September and October. People don’t buy homes in summer to “get ready for their kids going back to school” as they are busy being on holidays! Most people do not buy houses in August – it is generally the second worse time to sell a house next to Christmas! Buyers wouldn’t dream of doing anything as serious, unpleasant or demanding as house hunting, with a pack of kids having been underfoot for two months! They wait until the kids are back in school and they have a moment’s peace of mind in which to think straight! Hence the market begins again a few days after the Labour Day weekend.

The only common denominator I can find to explain this trend is SAD (Seasonal Affective Disorder.) The one constant I have found, year after year, through good times and bad, high interest rates or low, come hell or high water, is the sun. People, like all other animals in autumn, begin to “get ready to hibernate” and look for “dens.” We remain “active house hunters” until the end of October to mid November (at the latest) in a good economic year. Then nothing, until the day after New Years Day, when we begin moving away from the shortest, darkest day of the year December 22. We begin moving around again, becoming “active house hunters,” waking up January 2nd to begin our annual preparations for Spring. As the days get longer people become more and more distracted by “waking up” activities such as gardening, spring cleaning, having babies, getting boats and campers organized for summer fun. We have less and less interest in house hunting en masse, after Mother’s Day as the days grow longer. Sales get slower and slower until September “hibernation” den hunting begins again.

I have confirmed my theory by asking many teachers about migration patterns of children entering school. Teachers have confirmed that indeed the most new faces in school do not appear in September but just before Christmas and just before school gets out for summer. Count back 60-120 days to find the date the parents made their offers on their new homes.

The reason people are confused about when markets are active, besides that the industry likes it that way, is because when people buy a house, they generally make the physical move and do the actual legal title changes 60-90-120 days after they made the offer. The offer may be made several weeks to months after the buyers came out of “hibernation” to begin their search. Hence, the reason people think they are seeing people “buying” in the summer. Moving dates are not the same as buying dates on a contract. If you take the moving dates and count backwards, the facts will invariably, support my observations. This also accounts for why statistics are so far behind reality. Land title offices release statistics based on the completion date when the title is actually transferred – not the date the offer was made. Therefore, the newspapers are translating sales based on transfers at land title office that are 60-120 days after the “actual” fact so the public can never know what is going on in a timely manner. There has never been any evidence that I have seen, that the reporters or statisticians get this, and it has been my experience, that by far, the majority of Realtors don’t get it either. If they do, they certainly haven’t been sharing it with anyone! When Real Estate Boards share their statistics, they are skewed in ways favorable to their members and to make things seem better than they are, in bad markets. Comparisons will be made by using whichever numbers can be “presented” in such a way as to not sound quite as bad. The “bad” statistics, are either not mentioned or they are presented in such a manner as to be less than transparent, not lying but not exactly explaining anything either. This is an effective way of dealing with an already confused and muddled public, unfamiliar with the internal workings of the industry.

This skewing of information and elusiveness of truthfulness reminds me of a quote I saw in “Ad Busters” magazine. It applies not only to real estate but virtually every organization, government and corporation in our globalized world that has something to gain from hiding or disguising the truth from the masses.

” . . . . the majority of politicians, on the evidence available to us, are interested not in truth but in power and in the maintenance of that power. To maintain that power it is essential that people remain in ignorance, that they live in ignorance of the truth, even the truth of their own lives. What surrounds us therefore is a vast tapestry of lies, upon which we feed.”

– Harold Pinter, 1930-2008, from his acceptance speech for the 2005 Nobel Prize in Literature.

So, getting back to the robins and the “flurry” of real estate activity being observed . . . it makes perfect sense that we are seeing more sales happening right now, as it is perfectly in sync with all animal’s time for “waking up from hibernation,” stirring, getting out of their “dens” to look for new ones and get organized for spring and babies. This is directly and naturally inspired by longer days of sunlight. Just because we are humans, does not mean we are not affected by the same internal clocks and rhythms that stir all other animals on the planet.

Here is Wikipedia’s description of these phenomena as it relates to winter celebrations:
Even in modern cultures these gatherings are still valued for emotional comfort, having something to look forward to at the darkest time of the year. This is especially the case for populations in the near polar regions of the hemisphere. The depressive psychological effects of winter on individuals and societies are for the most part tied to coldness, tiredness, malaise, and inactivity.
Also, insufficient sunlight in the short winter days increases the secretion of melatonin in the body, throwing off the circadian rhythm with longer sleep.
I expect the numbers of sales to keep going down and prices continuing to drop. To help it all along, will be the sellers and their Realtors, who buy into the urban myth of listing your home in spring and summer when the flowers are up and “everything looks pretty.” This greatly increases the supply of properties at precisely the same time as buyers have lost interest in buying. Greater supply plus falling demand equals lower prices.

I don’t believe the real “recession” has arrived in Canada yet and we are experiencing a gentle spring breeze that is the harbinger of the hurricane to come. On top of everything else going wrong with the whole world, our political “leadership” is fatal.

We should be very concerned about our government and all its eager “handmaidens” trying to lure us in with record low interest rates, to “go shopping” some more! It would make George Bush proud! Excuse me, but wasn’t it going shopping, shopping and shopping, that got us into our current mess in the first place? And how soon we forgot what these same, famously low interest rates, did for Japan’s housing bubble and subsequent collapse in the late 80’s early 90’s. In Japan, they remember the time after that real estate bubble’s collapse, as the “lost decade or end of the century.” Their interest rates were also .5% and real estate speculation went wild on cheap borrowing. When inflation caused interest rates to be push “all the way up to 1%,” the economy collapsed causing such an upheaval that the effects tsunamied around the world. There was fear that collapse was going to be the one that would bring the world to its knees, but we all wobbled through and once again find ourselves, back here again, “knock, knock, knockin’ on Depressions door.”

Another pattern I have noticed is that people don’t buy when interest rates are low or going down. They are lulled into security and feel no need to rush into anything. However, when rates start to climb, it’s like turning a light on in a room full of cockroaches – scurrying in every direction! This time though, I’m not sure how many people will be in a position to do anything even if they wanted to. It doesn’t matter how low the interest rates go if you don’t have a down payment, if you don’t have a job, if your debt service is too high or your credit has been trashed!

As for Garth buying a property now, I believe he mentioned it was a court ordered or distress sale of some sort, which certainly could have made it a real bargain and a rare opportunity for someone looking to buy a big old hotel in needed of renovation. Factors obviously came into play for him that made it worth buying now. Perhaps it was his dream property that he had been searching for, for some time and the price was right! I never understood him to suggest we all wait until the complete bottom of the market can be guaranteed, but has been advising prudence for your own circumstances and opportunities ahead. If you are in no rush then why bother buying right now when prices and selection are bound to get better for buyers.

For myself, renting an adorable property in a great location, for what property taxes would cost me, I expect values to correct downward another 25%-40% by year end where I live. I live in a pulp mill town that has gone from 2500 employees in its prime, to 350 people after this years latest layoffs and can’t afford its property taxes this year! There is no other employer in the town, so opportunities will definitely be appearing this year that will be worth waiting for. Although, I am only 56, I plan to make this my last home and hope to be completely self sufficiency within 8 years. However, as fruit trees and soil remediation for productive gardens, take between 3-5 years, I might just buy sooner, if my dream property appeared tomorrow and was realistically priced for today’s market. It’s a balance of “Your Money or Your Life.”


#152 JO on 03.17.09 at 8:11 pm

113-Miketheengineer – i love the casue – effect logic, but it is wrong. When those workers lose their jobs, some will end up on welfare after a year, but the rest will do what I and all Canadians have to do – get a new job or re-train to do a new job…your argument that we better save them because we’ll spend on welfare wreaks of CAW BS…giving the domestic carmakers any taxpayers money to try an keep them afloat for another year or two before they fail is a negative sum game..that taxpayer money is extra debt, interest and eventual taxes that have to be repaid..all to help a few keep their overpaid jobs and make politicians and unions happy…bailouts never work and never will…the best long term decision is to force em into BK like all other failing companies and re-structure..maybe Hyundai or Honda/Toyota or another interested carmaker can buy the best parts and shed the rest..no bailouts..they are BS. I will never buy a GM or Chrysler car because they want taxpayer money..I will do that for any company requesting taxpayer “help”…what nonsense.

#153 Carole AB on 03.17.09 at 8:30 pm


“you don’t seem to understand the stockmarket well some people are making money”

Don’t shoot the messenger, I suscribe to Leap 2020 and am just sharing…..

Leap 2020 in their recommendation from GEAB 33 says:

“3. Stocks: Santa Claus does not exist

Keep on avoiding stocks unless you are a fan of risk and Russian roulette. The collapse of global industrial production combined with a general recession, guarantees that corporate profits (including those of the best performing companies will at best be very low in the next two years (at least). Concerning the others the large majority, losses will escalate in 2009 and 2010.”

4. Taxes: Mind your step
Assess carefully your opportunities in terms of tax deduction because taxes will be back in the 2nd half of 2009. States will not be able to finance their growing defecits by just borrowing…

5. For Companies: Country-risk becomes determining
Prepare for exchange rate volatility unprecedented in recent history. The riskiest markets (unpredictable currencies, major decrease in purchasing power..) must be avoided in the next months because the solvency of your clients/suppliers will no longer be certain. Country-risk in the case of the US, UK and China is becoming very important.”


More anti american crap: I give you House of Cards which aired on CNBC Sunday night. After all Wall street and California sub prime lenders did start this mess.

It was really good

#154 john m on 03.17.09 at 8:38 pm

#151 Katheran Milne on 03.17.09 at 7:30 pm…………Wow!…ever write a book? :-)

#155 Katheran Milne on 03.17.09 at 9:07 pm


West Coast Realtor 33 years and 6 recessions.

FYI – Realtors are being advised, from the top down, to tune into George Stroumboulopoulos on CBC “The Hour” Wednesday, March 18, to listen to the wisdom of Don R. Campbell on the current state of the real estate industry in Canada.

Google Don R. Campbell and the claims are: he’s “Canada’s Most Trusted Source of Unbiased Real Estate : Research … Don R. Campbell Real Estate Educator, Researcher, Investor & Best Selling Author President of the Real Estate Investment Networkâ„¢,”

Ought to be interesting . . or not. Or . . . more of the same. To bad our industry has to look to snake oil salesmen to find out what’s happening!

Let’s give him a chance though . . . who knows where truth may emerge. Or not . . . .
I still think Garth Turner is my best unbiased and trusted source!! Together with all his blogalongers!


#156 linda on 03.17.09 at 10:41 pm

Men With Hats! Greetings and I agree with your thoughts. And isn’t something ‘fundamentally’ wrong with a system that depends on blood, sweat and tears to exist yet turns on a dime from a few words by few men? On talk TV? If we have to turn to Leno for economic confidence, brother…

#157 $fromA$ia on 03.17.09 at 10:42 pm

Thanks Dave,

Perhaps you are dead wrong. Investers are pouring into the financials and there has been some end day sell offs. Who knows how long the rally will last but it was unstable in early trading today.

We just came off a gold rally and have seen allot of gold stock drop. It looks to me as well as the folks on BNN that investers have taken their money out of the gold mining stock and poured it into the financials.

So what homework am I not doing? I opted not to invest in TD at $32. a share because I don’t beleive that the dividend is stable.

That saying for all the Canadian banks. They are still trading with the world and they are not bullet proof either.

Yes the banks are the best of the worst but the worst is the world financial system.

I beleive we’ll see the Canadian Banks at $20 or less some time before this is all over. Don’t be shocked if you see dividend cuts. The banks are comming out with prefered shares to sustain current dividends as well as other operations. They need money!


#158 linda on 03.17.09 at 11:12 pm

PTDBD, they were the same skids of money I saw footage of, shipped to Iraq, unloaded and unaccounted for. Bush’s bail $$$, unaccounted for. Short-sellers, credit-default swaps, and GREED…By the by, is it any wonder whatsoever, that we’re in this mix to begin with? These are the ‘best and brightest’ running the show and this is what they’ve produced? Any confidence they garner is just that- a con.

#159 canuck on 03.18.09 at 2:05 am

#113 miketheengineer

I also own a 2006 Ford Focus Stationwagon V6. Engine was built in Mexico or the United States. It gets good mileage and had only 6,200 kilometers on it when purchased. We happened to be in the Ford dealership lot when the lady that trades her car every year brought it in. She suffered a 50% depreciation–retail over $26,000, we paid a mere $14,000 and expect we’ll continue driving it ’til it’s too decrepit to start. :-) There are silly people with money to burn!

#113 miketheengineer

I also own a 2006 Ford Focus Stationwagon. Engine was built in Mexico or the United States. It gets good mileage and had only 6,200 kilometers on it when purchased. We happened to be in the Ford dealership lot when the lady that trades her car every year brought it in. She suffered a 50% depreciation–retail over $26,000, we paid a mere $14,000 and expect we’ll continue driving it ’til it’s too decrepit to start. :-) There are silly people with money to burn!

Before we bought the Focus, owned two Ford Escort Stationwagons that ran like energizer bunnies—nothing ever went wrong with them. Spent 20 bucks replacing windshield wipers and had a brake job done on one of them over seven years. We do not get our cars serviced at the specified warranty times. Hubby is a mechanic and monitors the condition of my cars. Not all of Ford’s products are lemons. Our previous Escort we gave to our two grandchildren who are currently driving it. Last week they had the windshield replaced due to a stone chip. Betcha neither of them bother to change its oil! :-) That model stands up to a ‘lot’ of abuse!

#160 Mike (authentic) on 03.18.09 at 6:11 am

125 Two-thirds on 03.17.09 at 2:59 pm @ #67 Mike:

“Last GM car was a 2004 Chevy Aveo5 we bought new. Didn’t cost us a dime in repairs, never broke down and hauled more than a pickup! (6′ trees, 14′ ladders, 900lb rock, doors).” Isn’t the Chevy Aveo made in Korea? (Daewoo) http://en.wikipedia.org/wiki/Chevrolet_Aveo

Well then, that would explain why it lasted without problems for so long! haha.

Hey, that’s an IDEA! Why doesn’t GM buy cars from Honda/Toyota and rebadge them? Quality and reliability would go up and Consumer Reports would rate them “above average”


#161 Stanger on 03.18.09 at 1:49 pm

Merrill Lynch – 9.1 % drop in GDP in Canada in Q1, 2009 – if that is true we are in for a rough ride this year.