Got a match?

lasorda1

Another day, more questions.

A new condo in besieged Vancouver dumps unsold units at reductions of $100K and up. A 900-square-foot box that was $766K is now ‘on sale’ for $500K. Are they delusional?

Americans lose their shorts over $165 million paid in AIG executive bonuses. Did they not notice the company’s already burned through $183 billion of their money? Do they know a billion is a thousand times a million?

Chrysler Canada says unless the guys who actually build their cars fork over $20 an hour in concessions it will leave the country. Should I set my new Jeep on fire? Has president Tom LaSorda ever built anything in his life? Are the guys on the line responsible for Cerberus Capital rolling the dice and buying the company with money it couldn’t pay back?

And how about this question from Jackie and Mark, who just sold a house not far from the Chrysler assembly plant in Brampton:

Can you tell us if you think we are doing the right thing? We have sold (conditionally) our small home in Brampton with a small haircut (4% less than previously would have). Everyone is thinking we are nuts as we are able to pay around $10,000 to principal every year and now we will be renting. We had the lowest variable rate around that you are not able to get anymore. But we have to renew our mortgage next year. (Bought for $210,000 and now owe $168,000). Sold for mid 200s. Do you still think housing will go down a minimum of 30% for these entry level homes that are affordable with these low rates? How long do you think that might take?  Thanks for much for any thoughts.

Well kids, first, I don’t know what kind of condition you have on your sale, but unless it’s something minor (home inspection, getting insurance), you have no sale at all. These days I would not entertain any offer conditional on financing or the sale of the purchaser’s home. Mortgages are  cheap and any serious buyer will come pre-approved. Conditional on another sale? Pffft. Don’t waste my time.

Sounds like you’ve been suckered into having your property tied up with an iffy deal at precisely the time when the greater fools are out cruising the burbs looking for prey. Bad move.

Second, if you bought for $210K, still owe $170K, can pay it down by $10K a year, and are selling because you might face higher payments next year, what else aren’t you telling us? Interest rates will not be a whit higher in 2010, so there must be another reason for the sale. If it’s to net a capital gain of $40K, that’s cool. Just don’t diss this blog with cheap suburban obfuscation. We know where you live.

Will entry-level homes in Brampton fall by a minimum of 30%? If Chrysler pulls out, it’ll definitely have an impact, but houses selling for $250,000 today are not going to be changing hands for $175,000 in nine months. Rather it’s the high-end homes, those being listed for $500,000 and above, which will be taking the serious shave.

Besides, why sell a house you can pay down the mortgage on, for another one in the same area and price range a year from now? The cost of selling and buying is not low – $13,000 for commission, $5,000 or so to move and $3,500 in land transfer tax and legals. That’s more than twenty grand – money you’d be smarter to put against your debt than piddle away for no return.

If you work the line for that threatening thug LaSorda, I understand. If you’re trying to build real estate wealth, you just blew it.

141 comments ↓

#1 [email protected] on 03.17.09 at 8:46 pm

Who’s the current Lee Iacocca type of leader at Chrysler these days? Don’t see one. Don’t even something like a K-car. Charger isn’t you K-car that’s for sure. Not sure what everyone thinks of Chrysler’s pull out threat to Canada, but go right ahead Chrysler.

#2 Cash is King on 03.17.09 at 9:03 pm

Chrysler works have a “collective agreement”. Sorry boys, must cancel your agreement and renegotiate for 25% less. AIG managers have “contracts”. Sorry taxpayer we cannot tear them up…they will sue us for the value of their contracts.

To think that Tom Lasorda’s father was a local Union President. he must be turning over in his grave. The reason Chrysler stopped making minivans in St. Louis was because their quality in St. Louis was crap. (and a devalued Canadian $) But as we all know, it’s quantity before quality at the no-longer-big-3. Pattern bargaining is dead.

#3 Real Estate Deal or No Deal on 03.17.09 at 9:09 pm

This is a link to a short 3 minute clip on the Ford Plant in Brazil … if Canada and the USA could get rid of the UAW and the CAW and put one of these in place … then manufacturers could be successful, and hopefully we would have cheaper vehicles.

http://info.detnews.com/video/index.cfm?id=1189

#4 Yalie on 03.17.09 at 9:12 pm

The “guys on the construction line” got the best deal they could negotiate at the time, and good for them. It was all fine while times were good. Now that same deal is going to kill their jobs. Cerebrus may be scumbags (like most hedge funds) but they’re right to demand wage concessions to match their competitor’s wage structure. They have no other choice.

If the construction line guys can’t comprehend this, then they deserve exactly what they get.

#5 Basil Fawlty on 03.17.09 at 9:28 pm

Cerberus; the mythical three headed dog that guards the gates of hell. With a handle like Cerberus, this company could only be run by Dr. Evil or his diabolical sidekick Mini Me.

#6 Jim Genac on 03.17.09 at 9:33 pm

Garth;

You make the comment, “Interest rates will not be a whit higher in 2010”.

I’d be interested in your thoughts on Peter Schiff and his claims that we are sitting on the cusp of hyper-inflation.

(Schiff’s speech to Austrian Scholars Conference March 13th, 2009… http://www.youtube.com/watch?v=DyYFqOAqEzw )

Not a credible position. We are trying to escape the jaws of deflation. There will be no threatening inflation and no rate increses in 2010. — Garth

#7 Grumpydawgs on 03.17.09 at 9:35 pm

With the massive overhang of unsold auto inventory piling up on docklands and farmlots around the continent I’m surprised we don’t hear of a major ‘1/2 price’ blowout sale. The 2008 models are sitting in the field and the car plants are building 2010 models? It doesn’t make sense.

On the ‘Wet-Coast’ the number of pre sale condo walkaways is growing and the developer lawsuit train is growing by the day.

One pre-sale Development is reducing prices saying that ‘construction costs are going down” and if you believe this smarmy tact I’ve got a bridge I want to sell you. The real reason is that the outrageous asking prices garanteed that there would be 100% walk aways in two years. Current prices are still so outrageous that I will go out on a limb and say that in two years time any current buyers would have woken up from the fog of bubble mania and run in the opposite direction anyways. One woman interviewed on TV said ” I feel like I won the lottery”! I don’t remember the reporter saying that she’d been living under a rock, but ‘mamma mia’, what a dolt.

#8 Stephen Smith on 03.17.09 at 9:37 pm

Garth why is oil surging in the last several days if the economy is in such a tailspin? And further is this a worrying sign?

For the same reason stock markets have climbed – on the chance this may be the worst of the recession. That means growth ahead, and higher demand for energy. BTW, car sales last month in China were up 25%. — Garth

#9 Sail1 on 03.17.09 at 9:40 pm

I think Tom LaSorda is on the right track, on how to best to deal with the CAW. Auto workers wages are inflated, and products are inferior, why don’t they just put these dinosaurs out of their misery, instead of throwing our tax dollars in the garbage. And if he thinks he can do better in the U.S. with the difference in health cost, gods speed pack up and hit the road. This is a tactful move on Chrysler’s part to score a real reduction in labor cost, unlike the kiss on the cheek G.M. workers got.

#10 Da HK Kid on 03.17.09 at 9:41 pm

I didnt think there were any small homes in Brampton anymore. Anyhow, I agree with Garth that interest rates will be down for a long time. You could if locked in for a very low rate 5-7 years ride this whole thing out and pay off that house easy!

There are going to be no 30% haircuts on low end 905 homes, maybe 15-20% but then if you sell you are likely not ahead as rental has a resistance on bottom as well.

A home worth $200K should rent for $1,111.11/m when I use my 15x model.

A 30% haircut on $500K+ homes very probable. Keep your house pay it off it seems, divert for now, if you dont have cash on hand the extra including the $10K principle paid you apply until you have at least 3-4 months cash reserves first, then get back to paying off this little puppy.

You seem to be a low risk candidate for selling, one of very few.

#11 linda on 03.17.09 at 9:49 pm

I absolutely agree with you about the guy on the line Garth. Another scapegoat, another ‘blame the victim’.

#12 guava.ca on 03.17.09 at 9:54 pm

http://www.google.ca/search?hl=en&q=site%3Aguava.ca+%2289+binscarth%22

89 Binscarth started at $6.95 million back in Jan 2008.

Now asking 2.85 million in March 2009.

I’ll take two, then. — Garth

#13 Jennifer on 03.17.09 at 10:16 pm

There will be no threatening inflation and no rate increses in 2010. — Garth

I wouldn’t be so sure, GARTH.
Hyperinflation may start already at the end of 2010y.

Wanna bet? — Garth

#14 Average guy on 03.17.09 at 10:26 pm

A rather nasty response to a legitimate question, Garth. Perhaps Jackie and /or Mark work for Chrysler. At the very least their neighbourhood will be devastated if Chrysler moves out as numerous neighbours will be out of a job and will be forced to sell under pressure. As for your suggestion that you would not consider an offer conditional on financing because a serious buyer would come to the table with a pre-approval you should be aware that most pre-approvals are conditional on appraisal so if the bank feels the purchase price is too high, your pre-approval may be useless paper, suitable only as firestarter if things get really bad.

#15 OttawaMike on 03.17.09 at 10:34 pm

The Chrysler mini van will not die with Chrysler. They are already building the VW minivan on the same Windsor line. Another valuable asset from Chrysler is the iconic Jeep brand. Somebody will pick those assets.
Govt. has to figure a way to let Chrysler die gradually to minimize the waves through the supplier/dealer network and the 100,000 plus jobs it represents. Remember Mercedes couldn’t make Chrysler profitable and even the Chinese ran away screaming when approached to take them over. My single joy in seeing Chrysler go bankrupt is Cerberus taking the hit.

#16 Average guy on 03.17.09 at 10:41 pm

You might not like Lasorda or what he stands for but at least he’s got the stones to take a stand, not like the wet noodle GM used to negotiate with the CAW. No need to dwell on the AIG ripoff or who got all the big bonuses after the bailouts of the U.S. banks. We’ve got our own dirty little secret here. $7 an hour reduction? GM management showed they have little interest in saving this bloated whale, but are only interested in prolonging the life of this albatross to ensure the timely payment of their exhorbitant pays and bonuses.

#17 ted on 03.17.09 at 10:49 pm

Garth you are becoming very inconsistent. From lets stock up on generators and growing our own food, to the worst is behind us. You are all over the place. I am starting to believe the greater fools are the ones who buy into your prophetic words which are as reliable as the Sun’s horoscope section. You are just trying to cover all your bases just to be right.

So lets get back to the guy who is trying to sell. First he screwed up for allowing subjects and most likely won’t sell. Then he made the worst mistake of his life by selling as he will never be able to buy up the property ladder. So which on is it?

Of course you should have a generator and grow food. That is entirely consistent with my financial view. Such actions, including maintaining a cash reserve have nothing to do with the course of stock markets or current economic conditions – they simply help people re-establish control over their own lives. That is the goal. You obviously are not even close. — Garth

#18 kitchener1 on 03.17.09 at 10:59 pm

Chrysler Canada is doing what it must to survive. IMO they are looking to pull out of Canada and have already made the descion, they are just looking for a scapegoat, weither its the government or the CAW is irrelevant.

Its easy to talk about principle but when the CAW workers end up losing their $30 hour jobs instead of working for $24 hour and end up working somewhere else for half the benefits for $15, its going to be Chrsyler Canada that has the last laugh.

#19 POL-CAN on 03.17.09 at 11:07 pm

Mish says:

Price wars: It’s a good thing. And for those wanting to buy a car, my advice remains to wait. This is just the start of inventory clearing price wars.

http://globaleconomicanalysis.blogspot.com/2009/03/gm-toyota-honda-and-grocery-store-price.html

Same applies to housing. Feb/March numbers = dead cat bounce.

Same for the stock market as we have a ways to go down yet.

#20 CS on 03.17.09 at 11:52 pm

Garth,
I understand not having the sale of someone’s house as a condition, but why not financing? Personally, I would never put an offer on a house that didn’t have financing as a condition. It’s maybe 4-5 days to ensure that my bank will finance this particular house and get an appraisal if the bank wants one – our current financial institution wanted a formal appraisal before going ahead with the mortgage on a piece of land, and said ‘never mind’ for a house in the same area. I think ‘subject to financing’ – unless you don’t need any mortgaging, is always a good idea.

That’s what pre-approval is for. — Garth

#21 Dave on 03.17.09 at 11:52 pm

maybe the woman is looking to upgrade in the next few years for a home that is listed close to $500k…if that’s the case, they’re making a good move.

Remember, there won’t be jobs coming back for over a year. The real estate market will likely dwindle for a few years- especially during deflationary times. The days of lavish lending are over- that world is not coming back.

I say sell your home and in a few years for the same price you’ll get something newer, nicer, bigger and in a better neighbourhood.

#22 bobs your uncle on 03.18.09 at 12:06 am

If the automakers were banks they would have been bailed out by now. I laughed when Obammy expressed “outrage” at the bonus package for AIG. Why wasn’t he expressing outrage at bailing them out at all?
The whole bailout thing stinks.

#23 canuck on 03.18.09 at 1:27 am

BC Condo seller lowers prices not only for present buyers, but include pre-sold units:

http://www.cbc.ca/canada/british-columbia/story/2009/03/17/bc-condo-amacon.html?ref=rss

Other BC buyers in the market or those who bought pre-sale units will demand like treatment. The seller is offering a minimum 22 per cent, or $100,000 to $250,000 discounts, on its Beasley development in Yaletown.

Condo sales must be plummeting for sellers to be offering these types of deals. All buyers have to do is bide their time and better deals will be forthcoming as assets decrease in price due to these deflationary times.

#24 canuck on 03.18.09 at 1:37 am

#12 guava.ca,

Wow…89 Binscarth is in the Rosedale area. A very desirable location. Reduced from over 4 million to 2.85 million. Are wealthy buyers sending servants to que up at the door?

#25 Vancouver_Renter on 03.18.09 at 2:06 am

#26 previous thread…

“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.”

Here’s my story. We sold 2 Vancouver condos in 2006 and were pressured by everyone to buy a house. I just couldn’t stomach it given house prices were way too high by any traditional measurement (versus incomes, versus rent, versus comparable houses in other cities with less rain, less crime, etc). It’s kind of easy to speculate with the bank’s money. But when you’ve worked and saved for 20 years to earn it all, it’s harder to buy into an irrational bubble.

Looking back over all my past investments and speculations, most of the winners have resulted from being a contrarian. Most of my big losses have occurred as a result of jumping into a frenzy once the easy money has already been made.

My gut told me that a big shakeup was coming – although I admittedly didn’t know if it would be inflationary or deflationary. Either way, I figured that real estate would get hit. In deflation, house prices fall by default. In hyper-inflation, interest rates initially move up preventing people with average incomes from affording big mortgages.

Instead of buying in 2006 we rented an $850K house (which is just an average unimpressive house in Vancouver) for roughly half of what it would have cost in mortgage interest, property tax, utilities, maintenance, etc. Our rent is $2K.

From my tracking, our rental house hit a manic peak market price of $1M in 2007 then declined back to $850K by 2008 and currently might fetch $650K. I’ve got a few contacts “in the know” and these numbers are pretty reliable.

So in the last three years of renting, we’ve saved roughly $24K/year in renting versus owning PLUS we can now buy the same house for $200K cheaper. Total savings are close to $300K to date when you factor in other ownership and sale/purchase expenses.

With the equity in the 2 condos I bought gold bullion funds in 2006, which increased in value more than 50% in the last 3 years priced in Canadian dollars. Everyone thought I was nuts, but I just didn’t like the irrational debt bubble that was going exponential.

In October/November of 2008, I sold most of the bullion and bought a basket of gold shares when they were beaten down to nothing because, according to 300 years of history, gold miners perform the best in a deflationary contraction after the initial free fall. It was difficult to buy them because it felt like I was doing the wrong thing… everyone was dumping and it looked like the market had no bottom.

It turns out that was a good move on my part, as gold shares did finally hit a bottom on November 20.

Going forward, I believe that gold shares (especially gold miners with healthy financials) will outperform other markets over the next few years. When every other business is losing money, these guys are starting to print money – just as they did in the 5 deflationary contractions of the last 300 years. Go have a look at the most recent earnings reports for any number of gold producers.

The tricky part is knowing when to get back into real estate. I’m looking for the sucker’s rally that draws naive investors back into the market – specifically speculators and young buyers who have never studied history. This sucker’s rally might happen this year. I don’t know.

The time to buy will be when the love affair with Vancouver real estate is OVER. You’ll know we’re there when just the words “real estate” make everyone sick to their stomachs and changing topics… Kind of like the feeling everyone had with gold stocks on November 20, 2008.

In the back of my mind is also the demographic influence. The Baby Boomer generation left younger generations with over-priced houses. Going forward, I think they’ll do the opposite. Once all 100 million of them in North America really get going in downsizing and raising capital for retirement, WATCH OUT. Real estate – especially the big houses – might just be a dud investment for not just a couple years but a couple decades.

Finally, I predict Vancouver real estate prices will bottom at 65% below the peak 2007 prices. But what do I know? I’m just making educated guesses like many other people. And I don’t have a crystal ball, like Garth has! ;-)

#26 Happy Renter in North Van on 03.18.09 at 2:15 am

So, we’re (Canadian taxpayers) are supposed to blow a 3 Billion wad for 9500 lousy jobs here (temporarily)? BTW, don’t forget you owe us taxpayers a Billion for your transfer tax scams! We’re at the point where 9500 jobs lost in a month is almost a rounding error. Mr. Lasorda, take your lousy rink a dink operation and stuff it up your backside, but make sure you pay that 1 Billion on your way out…

#27 Van MD on 03.18.09 at 4:20 am

“Carnival Cruise pullout to cost Vancouver $18 million”

http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20090317/carnival_cruise_090317/20090317?hub=TopStories

Who was it that said Vancouver will become the new trade capital of North America? ;)

#28 Davinci on 03.18.09 at 4:50 am

Those people should keep the house and buy gold or silver. The printing press will take care of the rest.

I always wondered what it would feel like to be the only sane person when everyone else is crazy. Ever since I started to read about how paper money works, I started seeing the world in a different light. It’s unbelievable how 100’s of millions of people think that they can earn interest on paper money in the bank.

Are you f’n kidding me?
1. The oldest book on the planet tells us not to do this because…
2. The math does not add up!

Let me explain, if I had one ounce of gold earning 2% interest over 6000 years I would own every atom in the universe and it would be gold.

So if you and everyone else think they can earn interest on trillions of dollars, well, talk about greater fool.

I know what you are thinking… this time is different. Well, so did the Romans, the Chinese 657 times their paper went to zero, Germans, etc.

Truth is, man’s desire is unlimited as the amount of paper money men can create.

Got Gold?

#29 Puzzled on 03.18.09 at 5:08 am

>>Rather it’s the high-end homes, those being listed for $500,000 and above, which will be taking the serious shave……The cost of selling and buying is not low – $13,000 for commission, $5,000 or so to move and $3,500 in land transfer tax and legals. That’s more than twenty grand – money you’d be smarter to put against your debt than piddle away for no return.<<

So $200-$250K homes are exempt from the oncoming Depression?

Paying down pricipal by $10K/yr is no big whoop if the neighbourhood will drop another 30 – 60%.

Did you just make that up? — Garth

#30 Mike (authentic) on 03.18.09 at 5:45 am

“Do they know a billion is a thousand times a million?”- Garth

Great point and a hard dose of reality. This shows how unrealistic companies and banks are when asking for bailouts. Make no mistake, this is YOUR money, out of YOUR pocket and YOUR childrens pockets.

Don’t want to do business with bailed out Bank X? Don’t want to buy a bailed out Brank X card? Doesn’t matter, you did, you just didn’t get anything in return. When does it end? When do businesses become “Too Big to Save?”

Does this make YOU mad? It should because you had no choice but to caugh up this money because they were greedy, they made bad business decisions, they lost mountains of money and now they want your money.

They/You* are used as 3rd party terms. Does not apply to anyone receiving bailout taxpayer money.

Mike

#31 Munch on 03.18.09 at 5:51 am

Tsk tsk tsk

Still trying to make money from homes?

Sad, really, that people cling to past (dead) models, and just cannot seem to move on

The time for flipping homes is OVER, children!

get OVER yourselves and go do some REAL work

buying and selling homes is NOT real work

#32 SaraBeth on 03.18.09 at 6:52 am

#2 Cash is King wrote:

“Chrysler works have a “collective agreement”. Sorry boys, must cancel your agreement and renegotiate for 25% less. AIG managers have “contracts”. Sorry taxpayer we cannot tear them up…they will sue us for the value of their contracts.”

BINGO!! I was thinking the same thing when this lame excuse for these “retention” (for people no longer even with the company) bonuses was first mentioned….

:-/

#33 David on 03.18.09 at 7:53 am

Garth

It is good to see that you are out of politics and back into your element that you became known at.

I believe the questions being asked are due to some people not understanding all the facets of financial matters.

Your point is plain common sense. However, one has to have some knowledge of the process in order to understand what is being said.

The blog question and the comments with answers or further comments is a useful tool to guide people through it all. Especially in this time of uncertainity.

#34 Jonathan on 03.18.09 at 7:59 am

Dodge: Rosy Outlook from Carney and Harper Unrealistic:

http://business.theglobeandmail.com/servlet/story/RTGAM.20090317.wrdodge18/BNStory/Business/home?cid=al_gam_mostview

#35 Waiting for it on 03.18.09 at 8:26 am

Garth,

I have always heard (esp in this market) that it is still a good idea to have the offer conditional on financing in case the bank appraisal differs (ie is lower) from the purchase price?
Something about affect the amount of downpayment you would be required to put down if you’re looking at a conventional mortgage?

#36 Sean Maguire on 03.18.09 at 8:41 am

“And how about this question from Jackie and Mark, who just sold a house not far from the Chrysler assembly plant in Brampton”

Your points are great Garth (especially the interest rate one…ING is at a hair over 4% for a 5-year fixed), but wouldn’t the fact that they are down the street from the possibly-soon-to-be-very-quiet Chrysler plant have a larger than expected drop in their home’s value?

We don’t have enough information to know, but even if they don’t work *at* the plant, the specific location might lead to a larger-than-otherwise expected drop in that particular house’s value, no?

#37 dd on 03.18.09 at 8:42 am

#28 Davinci o

“Truth is, man’s desire is unlimited as the amount of paper money men can create. Got Gold?”

If you would have held gold since the last upturn you would be breaking even… 25 years ago

#38 bobs your uncle on 03.18.09 at 8:47 am

#28 Davinvci

We not only have fiat money, now we have fiat government. Have you ever tried to explain to anyone that the Federal Reserve is not part of the US government?

#39 Glenn on 03.18.09 at 8:50 am

Gift for my wife was a car for New Years. Choices were Ford Focus, Chevy Aveo, and Hyundai Accent. One of the things that stuck with me during the shopping perioid was warranty issues.

Lets say I buy a 2009 Ford with 5 year 50,000 mile warranty, then Ford goes belly up in 2011. What happens to the warranty I paid good money for?

Its a very real possibility, so I went ahead and got the Hyundai. I wonder if I am alone in this line of thinking.

#40 Bill-Muskoka (NAM) on 03.18.09 at 9:02 am

#31 Munch on 03.18.09 at 5:51 am

I could not agree more. What I am waiting for is the insurance companies to realize these ‘Flippant’ people do not know the Building, Electrical, or Fire Codes and their ‘handyman work’ is a disaster waiting to happen.

When the claims start becoming so great that the insurance companies are stuck, then watch reality strike like a lightening bolt.

Truly a case of ‘Follow the money!’

Perfect title for this topic ‘Got a Match?’ Yes they do, they built them right in! Oh, and the Home Inspectors will NOT find the problems for them either.

#41 Jacqueline on 03.18.09 at 9:06 am

I agree with some others here that you are all over the place and seem to be trying to cover all your bases.

The economy sucks. Markets are uneven. There will be no depression. But neither will we return to 2007, and there are many opportunities now to make money. What’s hard to understand? — Garth

#42 Jacqueline on 03.18.09 at 9:07 am

If you are revising your opinion just acknowledge it.

#43 David Bakody on 03.18.09 at 9:10 am

Bank pre-approval is as easy as ABC, hello many times I have just walked into my bank and asked if I could have a quick chat and if she was busy left a message I would send an e-mail or call the 1-800#. That is why you should stop by and do a finacial update now and then along with a chat.

As for the kids who are running from the big bad wolf … you been told …. and for what is worth …. why ask after you made your foolish move …. should have asked first …. or if you bin reading this blog one would think something would have set in eh?

#44 Bill-Muskoka (NAM) on 03.18.09 at 9:25 am

#5 Basil Fawlty on 03.17.09 at 9:28 pm

Funny how Chrysler came back strong under Iaacoca’s leadership. After he left then Daimler-Chrysler came along, and the Germans decided to divest themselves of the relationship, so Cerebrus took over. Right then I knew Chrysler was in trouble because they were controlled by a money grubbing bunch of profiteers, not people knowledgeable about the industry.

Chrysler/Jeep/Dodge has some of the best products made and I truly hope to see them survive. They have made several major fupaws recently with their SRT (Street/Road/Track) Division wasting money building Born Again Muscle Cars.

Yes, they are sexy, powerful, and neat, but impractical in today’s market. They should concentrate on what they do best which is innovation in family transports like the Caravan, Journey, Caliber, and Compass. Fuel efficient vehicles that serve people’s needs.

The Caliber, especially, is one of the best vehicles anyone is making and they are not having to discount them to sell them. The very powerful 2.0 Litre engine gets 39 MPG which is really good, and they now have a lifetime warranty on the power train. Someone did their engineering right on this baby!

On another matter, I see IBM is negotiating to buy Sun Microsystems. God save us all from Big Blue (Should be Big Blew It). They blew their chances to lead by failing to get a license for the Windows 32 bit API, then dumped their excellent OS, Warp, because of it.

Sun has been the leader for software openness with their Java system, Open Office suite (free BTW to all and much better than Microsoft’s Office). Sun has helped millions prosper by taking a stand against Emperor Gate’s. If IBM takes them over I think all these wonderful applications and openness will be immediately buried.

Right now we are very locked into computers and Sun has been the last of the truly independent suppliers of our future.

IBM is to computers what GM is to cars…Over the Hill when it comes to the average consumer!

#45 doom and gloom on 03.18.09 at 9:33 am

Garth;

You make the comment, “Interest rates will not be a whit higher in 2010″.

I’d be interested in your thoughts on Peter Schiff and his claims that we are sitting on the cusp of hyper-inflation.

(Schiff’s speech to Austrian Scholars Conference March 13th, 2009… http://www.youtube.com/watch?v=DyYFqOAqEzw )

Not a credible position. We are trying to escape the jaws of deflation. There will be no threatening inflation and no rate increses in 2010. — Garth
_____________________________________________

I’ll take Peter Schiff’s opinion over Garth’s any day. He has been way ahead of the curve.

Fine. Take it. Live with the consequences. — Garth

#46 Tom on 03.18.09 at 9:36 am

“Yalie on 03.17.09 at 9:12 pm The “guys on the construction line” got the best deal they could negotiate at the time, and good for them. It was all fine while times were good. Now that same deal is going to kill their jobs. Cerebrus may be scumbags (like most hedge funds) but they’re right to demand wage concessions to match their competitor’s wage structure. They have no other choice.

If the construction line guys can’t comprehend this, then they deserve exactly what they get.”

They signed the LEGAL CONTRACT just a few months ago and times were not good. Puppets like you are so uneducated and ignorant from the corporate media one can only laugh. This has NOTHING to do with wages but rather an attack on the working class. A wise man once said to me that the working class are stupid people to exploit for pennies on the dollar. The fact is Not only do they owe Canadian taxpayers almost $1,000,000,000.00 that’s one billion dollars but they are demanding MORE billions from taxpayers plus they want to break a LEGAL CONTRACT they signed with the workers just a few months ago. The company is trying to spin the blame on the worker when it is the company who should be attacked.

#47 Da HK Kid on 03.18.09 at 9:41 am

Quite simply 905 built WAR TIME or 50’s 3-4 bdrm ranch style houses didn’t inflate at the rate the McMansions did over the last 30 years and especially those in new developments over the last 10 years.

I would guess at this moment in time that anyone who purchased a $400K+ home in the last 5 years either a new home OR without 25% down are going to be in for some trouble.

This would be anyone in Ontario all the way to the Left Coast where homes could go back to pre 2003 levels when this is done, maybe 2002!

There will be no quick recovery, deflation will take hold for some time and when some level of inflation returns it may be very hard to purchase a home. Double digit manipulated unemployment rates and 17-20% real unemployment is very probable.

The pool of wealth and quantifiable buyers will have have an inch of water in it!

#48 frugalistas.blogspot.com on 03.18.09 at 9:50 am

Garth, I somewhat with deflationists.

I think the ‘inflation’ calculation is grossly misrepresentative of what is going on. Yes, there is asset deflation of large assets like homes, cars, electronic equipment… and of fuel as well.

The flipside is that there isn’t much deflation going on in food. Prices have been going up, at least in Halifax.

I still think that we are seeing the ‘deflation’ of large assets, but inflation in the core consumer goods. After all, you only need a television once or twice… but you need food constantly. The net effect, though, is seemingly deflationary, as the CPI seems to be dropping. The increase in food prices is masked by decreasing asset prices. Very little demand now, and the prices reduce (for large ticket items).

So, is there deflation? What about stagflation? Selective stagflation?

#49 Got A Watch on 03.18.09 at 10:08 am

For those who think the bottom is here
Naked Capitalism has a great post today on the current state of the US banking system:

“It’s the writedowns, stupid”

“As aggressive as this campaign by the U.S. government is, it will have limited effectiveness because the extent of the writedowns of assets already on the books is going to be too massive.In fact, there are four asset classes where we should expect significant further deterioration in quality

1 Residential Property. There is significant evidence that residential property distress has moved well into the Alt-A and Prime classes of borrowers.

2 Commercial Property. There is equally ample evidence that the commercial real estate market is imploding. There will be huge writedowns in this asset class in 2009.

3 Leveraged Loans and High Yield. In February downgrades were outpacing upgrades 49 to 6. Heavy losses are likely to occur due to defaults.

4 Credit Cards, Auto Loans, and Student Loans.

So, it should be pretty clear that we have some serious losses still left to work through in the financial sector. I reckon the U.S. banking system is effectively insolvent. This is what Nouriel Roubini means when he says there will be $3.6 trillion in writedowns before this is all over. This means that banks do not have adequate capital to absorb the likely losses facing them later this year.

To date we have addressed this problem by throwing more money at it — bailing out the banks and attempting to prevent asset prices from falling. I predict this solution will lead to another panic if continued indefinitely. (Remember, between now and the summer or fall, the unemployment rate could reach 9-10%, while home prices would still be falling and default rates rising.) American citizens would realize the system is insolvent and would cease to trust that a reasonable solution was in the offing.

Confidence in America’s banking system is already lacking, especially in the large banks and large regional banks. This confidence can only be restored if banks are adequately capitalized now and in the future. Were we to suffer another round of major writedowns and capital injections into major institutions, I expect all confidence would be lost and bank runs would begin in earnest. This must be avoided at all costs.

Given the lack of capital the banking system now has and the likely level of writedowns, many institutions are fundamentally insolvent. They must, therefore, be liquidated or nationalized BEFORE confidence in the system is lost and bank runs occur.

Buying up assets at inflated prices, halting mark-to-market, and reducing interest rates to zero will not reduce the problem assets on bank balance sheets enough to avoid further massive writedowns.

Conclusion
In sum, most available evidence suggests bank writedowns will be massive — perhaps larger than the present capital base of the U.S. banking system. While, present measures of recapitalizing and bailing out faltering institutions and buying up toxic assets may prove adequate to prevent further writedowns and capital erosion, I would rather err on the side of caution.

Caution dictates an aggressive response — one which should include nationalization or liquidation of a significant number of banking institutions. Anything less is wishful thinking, the consequences of which could be very dire indeed.”

Main point – what needs to be done is not. Much more at the link. Also another great post about the “Swedish Model”. Always a good economics read there.

#50 jess on 03.18.09 at 10:16 am

And nationalists had called on Beijing to ban foreigners from buying one of China’s most successful brands.

#51 Future Expatriate on 03.18.09 at 10:27 am

#17- What’s so hard to understand?

Garth’s money is optimistic; it has to be to survive.

Garth, on the other hand, is not.

Goldbugs’ gold is pessimistic; it has to be to beat Garth’s money.

Goldbugs are still very pessimistic and not falling for any sucker rallies in any paper market.

Minus of course the idiot gold paper surfers.

Only time will tell which was the right approach.

#52 smwhite on 03.18.09 at 10:32 am

I had a conversation with a chum and his better half a couple years ago, the property ladder.

They were determined on buying despite the high likelihood they were buyer to the top, my point was buy entry level if you have to:

There is more market for your home for either (A) entry level buyers or (B) people downsizing because of job loss, etc.

Also to remember is that losses of 10% – 20% on a 250K home is $25K to $50K. Do your own math on higher end homes.

Funny also that the CREA is complaining that the declining average prices in Ontario, BC and Alberta are skewing the Canadian numbers, it was never a problem when they were skewing them on the uptick.

#53 smwhite on 03.18.09 at 10:42 am

Davey Dodge and his truth telling…

“Policy-makers, especially in Canada, need to be thinking longer-term and more “sensibly” about their recovery plans, he said, rather than setting up spending plans that just paper over today’s problems or “piss money down a rat hole” in the hopes of a quick recovery.”

http://business.theglobeandmail.com/servlet/story/RTGAM.20090317.wrdodge18/BNStory/Business/home

#54 Jim on 03.18.09 at 10:43 am

The CAW should take whatever they can get. Where else can high school dropouts find jobs that pay anywhere near that well and have incredible benefits. Most of these people would end up working for a quarter of the wage if they lost their jobs. I have two degrees and am finally making a decent wage, but my benefits are nowhere near an theirs, and like most of the population, I have no pension. Why should we subsidize these people when they make inferior cars? My Honda is 17 years old and runs great. I’d never by a GM or Ford.

As for the blowout condos in Yaletown- I mean Lame Town, the characterless, shallow neighborhood, that lacks any nice architecture-the only reason I see these units being blown out is that they want to get them off their books before the house of cards collapses.

Jim

#55 dekethegeek on 03.18.09 at 10:44 am

#31 Munch,munch,munch
While i agree with you that selling homes is not “real work” just remember that the next time you buy a house and use a realtor.
Has the South African Prime Minister beaten that rape charge yet?
Just curious.

#56 CS on 03.18.09 at 10:49 am

Garth,
I understand not having the sale of someone’s house as a condition, but why not financing? Personally, I would never put an offer on a house that didn’t have financing as a condition. It’s maybe 4-5 days to ensure that my bank will finance this particular house and get an appraisal if the bank wants one – our current financial institution wanted a formal appraisal before going ahead with the mortgage on a piece of land, and said ‘never mind’ for a house in the same area. I think ’subject to financing’ – unless you don’t need any mortgaging, is always a good idea.

That’s what pre-approval is for. — Garth
___________________________________________

Yes, and if the bank isn’t going to want an appraisal, it’s all good – but if they do and the appraisal comes in under what you’ve offered, you’ve signed an unconditional sales agreement that you’re stuck with.

#57 Herb on 03.18.09 at 10:59 am

What about our government’s bailout of – itself?

There will be no “quick return to surplus” such as the Tories promised. To save their government, they have blown a hole in the budget that will take years and years to repair.

Andrew Coyne, “Rosy Scenario, please call your office”, at http://blog.macleans.ca/category/blog-central/national/andrew-coynes-blog/

#58 lgre on 03.18.09 at 11:06 am

$210k for a house is cheap, they should of kept it. i dont see prices going further then that..if that? Brampton is one of the cheapest place to buy in the GTA so I dont see houses declining past another 10% there on houses under $300k. Prices of 30% will be seen in places like BC and Alberta for sure once the sheeple wake up and realize that their dream is over.

Housing drops are relative to location, just like in the U.S..some places got hit hard and some not. Same will apply in Canada.

#59 ncoffee on 03.18.09 at 11:10 am

“For the same reason stock markets have climbed – on the chance this may be the worst of the recession.” – Garth

So whatever happened to our following in the footsteps of the US, only with a two year lag … ? Garth, some of this recent optimism is confusing me. Now, I’m but a student when it comes this Greater Fool college of real estate knowledge, so please bear with me here as you’ve done in the past. I understand that, yes, there’s a chance this is the worst of the recession, and yes, just that belief can/will drive things in a positive way (and yes, climbing back up from the worst might take a real long time) … and if that’s all you’re saying, well, sure, that seems perfectly consistent.

But although possible, it’s highly improbable that we’ve already hit the worst of it, isn’t it? How do all the country- and world-wide financial problems we’ve all read about and discussed here solve themselves without impacting us moreso in the near future?

#60 PTDBD on 03.18.09 at 11:25 am

AIG Bonus jawboning – “why wasn’t this anticipated and written into the bailout?” Er, hmm it was anticipated, and the legality of the bonuses were endorsed and passed precisely the Bill. Somneone was aware.

With humble shuffling of shoes, and eyes suitably downcast, and with a humble nod to a Calculated Risk Anonymous poster, ChickenLittle’sYoungerBrother approaches the highly paid, sagacious right honourable Senators and Congress and shyly points to the Dodd Amendment to the Stimulus Bill…

H.R.1
American Recovery and Reinvestment Act of 2009 (Enrolled as Agreed to or Passed by Both House and Senate)
——————————————————————SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE.

The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary.

sorry, for the intrusion CNN…go back to your regularly scheduled outrage

#61 lgre on 03.18.09 at 11:38 am

Garth I hear you on pre approval but its not engraved in stone, so saying that I would still have financing as a condition..someone would have to be dumb not to, specially in this lending environment..banks change their lending practices as the economy changes along with interest rates. Having financing as a condition is a must unless you are paying cash..otherwise do not trust anything or you may get burned or trapped in something you may not want..like a higher rate then you though you may get 3 months prior.

#62 Greg W., Oakville on 03.18.09 at 11:48 am

Hi Garth,

Did you see the Rant on “Rick Merer Report” yesterday?
Thought you might enjoy it. 1min 46sec
Go to link and click, RMR: The Rant, in lower right corner.
http://www.cbc.ca/mercerreport/video.html

#63 MikeB on 03.18.09 at 11:49 am

Far be it from me to be pro-Union but it is important to realize that VW Germany did go the route of making cars out of Mexico many years ago. This played out in disastrous ways. Car quality was so poor they did finally re asses their production process. Some stuff is made in Portugal, Slovakia and some stuff even in Canada. Only stuff made in mexico, Jetta Sedan and Beetle. Other stuff made in Germany.
Having said that it appears that Chrysler has quite a number of options to get their products made seeing as the Germans have obviously found some adept suppliers.

The recent rally in the stock market only benefits the traders and the insiders who know about the momentum. Unless you buy etfs and takes your chances you won’t realize much gains from the rally.
All about the process of transactions… make money on the buy side and on the sell side… gotta love brokers.

Sorry Garth… burn that Jeep and buy a Toyota. Had mine since 97 and still moving very well. Will try to keep it another ten years if I can..

Inflation… Still feel that some food prices are quite high including rice and flour and recently noticed that a big can of coffee at “no frills” went from 6.99 to 8.99
which is almost 30% increase. Certainly possible to see hyperinflation if US can’t get their act together on the banking side. Still sick about how arrogant the AIG folks are… imagine almost bankrupt and on the verge of collapse… bailed out 4 times …. over 80% owned by their government and then taking money and giving it to the very folks who did the shady stuff in the first place AS A BONUS.. I thought bonuses where for good performance .
Agree with POL-CAN, RUBINI, Meredith Whitney all that there is more pain to come. ALOT more . But then we will get better and pay off our debt over the next half century and condos will become 8 million dollars and our taxes will drop and salaries rise , cars will be made in Oshawa …. Ohhh sorry did I say that out loud. I really gotta stay upwind of the glue huffers next door to my office building.

#64 Da HK Kid on 03.18.09 at 11:52 am

Garth et all, do you subscribe to this analysis on

Inflation/Deflation Uncertainty

http://club.ino.com/trading/2009/03/inflationdeflation-uncertainty/

#65 K-W Realtor on 03.18.09 at 11:55 am

Real estate is local and I can only comment on practices here. As a veteran Realtor/mortgage consultant, I prefer to see a short financing condition inserted in offers to purchase regardless of whether I’m representing seller or buyer clients(unless of course the buyer has cash). A preapproval determines only the credit worthiness of the buyer. Each mortgage lender will still require the buyer to meet a number of conditions which may include an appraisal.

I work in an industry that struggles to maintain a professional image. At times like this we must set aside expediency and recognize that following systems that are intended as checks and balances constitute prudent practice.

#66 atrax on 03.18.09 at 11:58 am

http://edocket.access.gpo.gov/2006/pdf/06-4538.pdf

A trip to the statute books showed that the amended version of the 1934 act states that “with respect to matters concerning the national security of the United States ,” the President or the head of an Executive Branch agency may exempt companies from certain critical legal obligations. These obligations include keeping accurate “books, records, and accounts” and maintaining “a system of internal accounting controls sufficient” to ensure the propriety of financial transactions and the preparation of financial statements in compliance with “generally accepted accounting principles.”

#67 linda on 03.18.09 at 12:00 pm

If the worker’s and the small-business owner’s who employ them were more than cogs in the wheel, an expendable commodity to make mega-money on the backs of; well, we might stand a shred of a chance. As K. Olbermann says, (I like his news-style) -“Good Night and Good Luck!”…crumple, crumple…throw…

#68 Al on 03.18.09 at 12:01 pm

#28 Davinci,

Now just try to imagine a world without paper currency. How does it work?

#69 RJAG2034 on 03.18.09 at 12:29 pm

With the auto workers they are the victims here and the perps are the unions, the management and government. The unions are to blame for pushing the envelope too far and then forcing one manufacturer to accept terms, then applying the same tactic to the other 2.

The management is to blame for being so weak and caving to the outrageous demands and ridiculous pensions.

The government for caving to both of them and providing tax breaks for all those years and current bailout packages.

They are all to blame and the one that will be hurt is the line worker.

Sure its going to hurt, but if Chrysler leaves then its one less company for Ontario to provide a social safety net for and on the backs of all Ontarians. This whole process of penalising succesful companies and subsidising failing ones has to stop.

And you know what will happen if Chrysler leaves, another company will step in and pick it all up and offer the workers 40-50% less than what they are currently earning and can you hear the liberal and ndp uproar when that happens!

So CAW take the 20% haircut, keep your folks working, or dont and let them potentially lose it all.

Funny how the unions dont step in and buy the company and prove to the world that they can pay $75/hr and be succesful. Because it wont work and they know it.

#70 PTDBD on 03.18.09 at 12:31 pm

“The buck stops here.”

AIG top contribution recipients according to foxbusinessnews: Chris Dodd, Barack Obama

Currently CNN is researching that Dodd Amendment which made the Bonuses untouchable and haven’t found anyone in Congress or Senate who admits writing it in. Maybe they can start by asking them if they admit to reading it?

#71 linda on 03.18.09 at 12:38 pm

If anyone wants to follow the money, there are always excellent financial links and opinion at Progressive Comrades Blogspot- along with some intense humour to wash it all down.

#72 Mike (authentic) on 03.18.09 at 12:43 pm

28 Davinci on 03.18.09 at 4:50 am Those people should keep the house and buy gold or silver. Let me explain, if I had one ounce of gold earning 2% interest over 6000 years I would own every atom in the universe and it would be gold. Got Gold?”

Davinci, let me put a fly in your (and other GoldBug’s) ointment…

What if “we” don’t want gold, it’s just a metal. What if society wants Tulips or sea-shells or copper instead? The only reason gold has “value” is because we all agree it has “value”… you can’t eat gold, you can’t live in it, you can’t make tools out of it, it’s really not much use to the “average” person.

If the world was coming to and end and you had a whole bar of gold and I a loaf of bread I wouldn’t trade.

Does that mean food holds more “value” than gold? Yup.

Mike

#73 dg on 03.18.09 at 12:52 pm

Here is an article for anyone that thinks inflation and high rates are coming soon to a neighborhood near you.

http://www.chinadaily.com.cn/world/2009-03/18/content_7592856.htm

Deleveraging is the word folks, which means cheaper and cheaper assets and that includes gold(you crazy gold bugs).

#74 jess on 03.18.09 at 12:55 pm

how wonder how many re deals are lease to own?

#75 Mike (authentic) on 03.18.09 at 1:20 pm

That’s what pre-approval is for. — Garth

In 2003, we got a pre-approval from PC Finiancial for $236k for our first home we were excited! After negotiating with a new home builder and went to PC Financial for the money they said no. It seems a pre-approval is not the paper it’s written on (and the builder told us that too). We then went to CIBC and got approved.

A pre-approval is just what you “could” be approved for, not what they bank “will” give you.

Mike

Next time go to a real bank, not a grocery store. — Garth

#76 marnic on 03.18.09 at 1:57 pm

Garth:

Schiff’s arguments are pretty compelling, as are yours. Tell you what, a flat of Molson Canadian says the US dollar is tanking a year from now.

#77 Mark on 03.18.09 at 2:03 pm

“Do they know a billion is a thousand times a million?”

I didnt.. I’m English – a billion to me is a million times a million :-)

#78 Herb on 03.18.09 at 2:27 pm

PTDBD,

your #59 and 69 are just “ducky” to-day!

#79 Alex on 03.18.09 at 2:59 pm

To #67 Al:

It is simply the world without inflation and overspending – both have skyrocketed since 1971 when the bankers decided to abandon gold and silver standards.

Paper money without precious metal backing is extremely manipulative…

Cash is King? The worst idea possible!

#80 PTDBD on 03.18.09 at 3:12 pm

Got a match? Throw a few of those pallets of paper on the fire. Hell, throw in the furniture too!

Today: Fed to pump an extra $1 trillion into the mortgage market and longer-term Treasury securities.

Paper prestidigitation for the levitation, hyper-inflation nation
Money from nothing soon makes nothing out of money.

#81 Realtor on 03.18.09 at 3:15 pm

#20

Garth iam a veteran realtor and Iam telling everyone out there that you need a financing condition in the offer if you need any kind of financing, pre approved or not. Pre approvals aren’t worth the paper they are wrote on right now. In the last 4 months I’ve had 3 pre approved mortgages fall through on purchases. Most lenders are now wanting appraisals done on all purchases. If the appriasal doesn’t pan out guess what? Your pre approval means squat. You can’t do an appraisal on a property until you know which one you’re buying, so yes, you need a financing conditon, especially as prices are changing so much right now.

Your comments are illogical. With prices and appraisals falling, the opposite is true. — Garth

#82 Alex on 03.18.09 at 3:16 pm

To #71 Mike (authentic)

The only reason gold has “value” is because we all agree it has “value”… you can’t eat gold, you can’t live in it, you can’t make tools out of it, it’s really not much use to the “average” person.

This is a HIGHLY ignorant statement!

This is very naïve of you Mike, cannot see the difference between tulips and gold bars? This simply shows that you are not educated and need some intensive research ASAP.
Why don’t you google ‘gold standard’ and ‘role of gold and silver in human civilization’ before mocking the person above?

So are you suggesting that all the central banks in the world are fools and should exchange their gold and silver bars for bread?
Maybe Royal family should sell their bars and diamonds and buy tulips and shells instead? :))))

#83 Skeptic on 03.18.09 at 3:23 pm

What about the Spring market “not happening”?!? Even the Brampton couple from this article wrote “We have sold (conditionally) our small home in Brampton with a small haircut (4% less than previously would have).” At least in the GTA, I don’t see sellers lowering prices and being “overwhelmed” by the new listings. Observations?

#84 jess on 03.18.09 at 3:23 pm

for joe the realtor the term is called
– flyboarding
http://www.macmillandictionaries.com/wordoftheweek/archive/040416-flyboarding.htm

#85 Bill-Muskoka (NAM) on 03.18.09 at 3:26 pm

Oh, now it comes out? How interesting!

Chinese-made drywall ruining homes, owners say

Homeowners’ lawsuits contend the drywall has caused them to suffer health problems such as headaches and sore throats and face huge repair expenses.

The drywall is alleged to have high levels of sulfur and, according to homeowners’ complaints, the sulfur-based gases smell of rotten eggs and corrode piping and wiring, causing electronics and appliances to fail.

“It’s economically devastating, and it’s emotionally devastating,” said Florida attorney Ervin A. Gonzalez, who filed one of the lawsuits. It would cost a third of an affected home’s value to fix the dwelling, Gonzalez said.

“The interior has to be gutted, the homeowners have to continue paying mortgages, and they have to pay for a [temporary] place to live,” Gonzalez said.

Isn’t Globalism Grand?

#86 Carole AB on 03.18.09 at 3:35 pm

#75 Marnic

I agree Schiff’s arguments are compelling. Schiff is also going mainstream Canadian, as he has a new “Dr. Doom” series on CBC’s The Hour with G.S.

http://www.cbc.ca/thehour/videos.html?id=1064309873

Dr. Doom:
“The problem is we are on the verge of an economic collapse”

#38 Bobs your Uncle

Here is a recent article by James Quinn, Wharton School of Economics on the Fed:

http://seekingalpha.com/article/125092-grand-illusion-the-federal-reserve-part-1

#87 Increasing that 1% on 03.18.09 at 3:37 pm

“Conditional on another sale? Pffft. Don’t waste my time.” – Garth

I have someone VERY interested in my house, they just put theirs up for sale, and they know I’m planning on listing very soon. I’d love for them to have it, but want to sell asap…

When I list, my understanding is I could put this potential buyer as an exception, then if I do get an offer with listing, I could give my potential buyer @ 48 hours notice to give firm offer…? (Then we would do things privately)

But how would an agent be in regards to selling with this in background?

#88 Dave on 03.18.09 at 3:37 pm

What if “we” don’t want gold, it’s just a metal. What if society wants Tulips or sea-shells or copper instead? The only reason gold has “value” is because we all agree it has “value”… you can’t eat gold, you can’t live in it, you can’t make tools out of it, it’s really not much use to the “average” person.

If the world was coming to and end and you had a whole bar of gold and I a loaf of bread I wouldn’t trade.

Does that mean food holds more “value” than gold? Yup.

Mike

————————————–

i understand both sides of the argument, however, even in the most barbaric times, gold will represent capital preservation. Those with abundance of bread, potatoes etc. will seek preservation and will trade that abundance for something they can preserve their wealth with. Gold has proven to be ideal in those circumstances.

I do agree that the de-leveraging process will take some time and so we”ll see deflation for 2 years at least. Everyone seems to be disagreeing on when we’ll see high inflation. Schiff says it could happen in 2010, Garth says it won’t happen in this generation. I think we’ll see high inflation within the next 5 years.

Also, those that are criticizing gold yet identify these times as a deflationary economy, have you researched how well gold stocks did during the deflationary depression of the 1930’s? Its obvious you haven’t..

#89 Bill-Muskoka (NAM) on 03.18.09 at 3:38 pm

Perhaps we should call the current financial fiasco the Humpty-Dumpty Era? It surely fits perfectly!

Humpty Dumpty sat on a Wall (Street that is)

Humpty Dumpty had a Great Fall

All the Kings’ (and President’s, and PM’s) men

Couldn’t put Humpty together again!

Perhaps Humpty is just a Rotten Egg that needed to be Cracked open and exposed to rot?

#90 McFly on 03.18.09 at 3:41 pm

Here is an interesting article for those of you wondering about cash:

http://www.kitco.com/ind/schoon/mar182009.html

#91 Bill-Muskoka (NAM) on 03.18.09 at 3:44 pm

#61 Greg W., Oakville on 03.18.09 at 11:48 am

Thanks for posting Rick Mercer’s Rant! It is one that we should all email to Steve and Tom Flannagan. Absolutely one of Rick’s BEST!

#92 Bill-Muskoka (NAM) on 03.18.09 at 3:47 pm

I would also suggest watching Rick’s Rant from March 10 dealing with Attack Ads!

Now, the question is this ‘Why can we not have politicians and parties who have the same Common Sense Reality that Rick Mercer, and most of us have?’ Hmmmmmm?

#93 eddy on 03.18.09 at 3:54 pm

some folks who are pre approved by a lender still want cof- just in case the bank appraisal is drastically out of whack with purchase price, if the appraisal is lower, the buyer may want to Try and re visit price, this should probably be worded as ‘conditional on appraisal’ -sellers beware

#94 Bill-Muskoka (NAM) on 03.18.09 at 4:01 pm

Well, I am not sure about the rats abandoning the ship, but at least one bat seems to be wanting to get Off Planet?

Space shuttle Discovery blasts off with bat stowaway

#95 Bill-Muskoka (NAM) on 03.18.09 at 4:08 pm

#81 Alex on 03.18.09 at 3:16 pm

Mike is right. Value is all about perception and market demand. Gold, while being a major precious metal for electronics manufacturing and such, has no actual value beyond what people place on it. The same goes for diamonds or other precious metals and gems.

There are other metals worth far more than gold.

BTW, the world got off the Gold Standard decades ago and switched to the Oil Standard. How’s that move worked out?

#96 DG on 03.18.09 at 4:10 pm

@44 (Bill Muskoka): Sorry, I have to take issue with your claim that “Chrysler / Dodge / Jeep has some of the best products made”. I’m currently renting a Dodge Charger while my car is having some bodywork repaired from a dumb parking scrape. The Charger is, without question, the worst vehicle I have ever driven. The ride is poorly damped and bouncy, the steering wheel barely feels connected to the wheels, the ergonomics are dreadful and the cheapness of the interior materials beggars belief. In short it feels like it would have been uncompetitive a decade ago. In fact I can’t think of a single vehicle in Chrysler’s line-up that is remotely competitive with the best in class, particularly if you extend that comparison beyond the North American market to cars sold in Europe.

Despite all of the excuses about labour contracts, pension liabilities and the general state of the economy, the US manufacturers have to accept that they have not invested enough in product development for decades, and have relied on a large and relatively insular domestic market to mitigate the need to produce genuinely innovative, fuel-efficient and good-to-drive vehicles.

It’s partly our fault as consumers for being obsessed with the amount of metal we get for our money, rather than the inherent quality and engineering integrity of the product, but it doesn’t help anyone to pretend that Chrysler’s (or most of Ford and GM’s US-market products) are anything but mediocre.

#97 WillsDad on 03.18.09 at 4:14 pm

Garth,

Your advice on not bothering to make the deal conditional on financing is ridiculous. There is positively no good reason to not do this. It is standard operating practice in the RE Industry, and it prevents people from getting into something they cannot afford. You are playing fast and loose with other people’s money when you give out advice like this!

“Next time, go to a real bank, not a grocery store”-Garth; hmm, I’ve had an account with PC Financial for 10 years or so. Haven’t paid a dime in monthly service fees in that time. I used to work for Scotiabank and as an employee I got a great deal by paying a flat fee of “only” $9.99 for unlimited transactions at BNS. Do the math on how much I’ve saved in that time. By the way, they are a division of CIBC and all CIBC machines are free to use. Maybe you should not be so defensive with your advice, it takes away from your credibility. Just a thought.

A financing condition weakens an offer to the point of impotence. Real men go firm. — Garth

#98 smwhite on 03.18.09 at 4:15 pm

#71 Mike (authentic)

As more and more inflation gets stuffed into the torpedo tubes, its value for being pretty(or a door stop as per the G man) goes up. So will natural gas, oil, uranium, base metals, soy, wheat.

Supply and demand dictate price, not the end of the world scenario that involves you huddled in the corner coddling your bread.

Short of sticking a silo on the top of my house, I’d have invested in loafs of bread but silver and gold have better shelf lives and take up for much less space.

#99 jess on 03.18.09 at 4:17 pm

back to the kennedy operation twist
http://tinyurl.com/cz7erc

#100 barb the proofreader on 03.18.09 at 4:23 pm

Chrysler’s threats? Ignore. They’ve already made up their minds.
It’s their own BAD management that put them in trouble. They are looking to displace blame in the wrong place.
They are fools, not only for running their company into the ground, but now for idle threats to get others to save their management asses.

Canada must not undervalue itself. With universal healthcare we are very desirable to companies.
A message to any company that threatens to leave Canada: “When you leave, don’t let the door slam on your phoney-baloney excuses”. There are plenty of better, stronger companies that will replace you.

#101 john on 03.18.09 at 4:30 pm

Garth,

I also agree with others that you have become scattered and eratic with more optimism than pessimism for an unspecified reason. Where once your opinions were clear they are now shades of grey. At what point did this optimism come into play? Was it Citibank showing profitability or…the Obama factor…or something else. I think you need to be specific and state what exactly was the tipping point which resulted in this optimism. Many of us have invested in your books, your xurbia products and invested our time into you. Now is the time to be forthcoming with all of us. Why not make this the basis of your upcoming posting

#102 smwhite on 03.18.09 at 4:41 pm

http://www.coinflation.com/coins/1946-1964-Silver-Roosevelt-Dime-Value.html

http://www.coinflation.com/coins/1932-1964-Silver-Washington-Quarter-Value.html

Check this out, in 1964 the US stopped using silver in coins(1968 for Canada). The ratio is a little under ten to one but bare with me, in 1964 USD.

Average Cost of new house $13,050.00
– The average home would have translated into $163000 USD with today’s silver prices @ $12.50

Average Income per year $6,000.00
– $75,000 USD with today’s silver prices @ $12.50

Gas per Gallon 30 cents
– $3.75 USD with today’s silver prices @ $12.50

Average Cost of a new car $3,500.00
– $43750 USD with today’s silver prices @ $12.50

Loaf of bread 21 cents
– $2.50 USD with today’s silver prices @ $12.50

United States Postage Stamp 5 cents
– $.62 USD with today’s silver prices @ $12.50

Average Monthly Rent $115.00
– $1438 USD with today’s silver prices @ $12.50

Ticket to the movies $1.25
– $ 15.63 USD with today’s silver prices @ $12.50

Some items are in line with today’s prices and some are inflated, as well as deflated.

For instance, automobiles have deflated drastically, then again, when manufacturers in North America are only building cars to last 4 years…

Housing, well no surprise to this blog that housing has inflated in comparison. Rents have deflated. When you do the reverse math on housing, it puts silver @ around $16.85 depending on what you consider the cost of the average home in the USA, I used $220K. You can probably bet at least another 10% decline in home prices before any relative good news to employment picks up, maybe the average price is going to $165K(Thats another 25%).

http://www.realestateabc.com/outlook/overall.htm

#103 Got A Watch on 03.18.09 at 4:48 pm

#45 Peter Schiff was right on most of his macro economic calls, before this crisis started. He gives good video clips.

But he totally blew it as an “advisor”, losing his clients up to 70%+ of their capital, on his “China + de-coupling” theory which did not pan out.

That is just plain incompetence. When you manage others money, you have to be unemotional. He was married to his macro theories trading plan, and it was wrong.

He has still not acknowledged being wrong, the height of arrogance. “Just hold on” is not an investing plan, it is just hoping against hope.

If you have to blindly follow some guru, you better pick one who has a track record of being right most of the time. Or your money will get Schiffed.

#104 Jackie and Mark on 03.18.09 at 4:57 pm

Hmm, here are some other things we didn’t mention:

1) The family buying our home is downsizing to this home with significant equity from the previous one (already sold it). Financing is a non-issue. The home inspection is the only thing required.

2) As one guest correctly assumed we are planning to upsize to a larger, more expensive home in the next year or so in another city. We will likely rent for a while and this will make it easy for us then to get a home in the area we really want with a no-conditions sale.

3) We are not near the auto plant but do have neighbours who work there.

But, I think you answered our question which is that these affordable, starter homes really won’t go down in value as much as the much pricier homes, and probably not overnight. Also, yes, if we were planning on staying here we should probably just pay down our debt.
Thanks.

#105 Got A Watch on 03.18.09 at 5:02 pm

We are mired in deep deflation now. Fact. Don’t believe me, or not, I care not.

Now deflation is the Central Bankers and Banksters worst nightmare, they much prefer inflation.

So they will try to re-inflate the burst credit bubble, in the hope that deflation will be quelled. That re-inflation has so far served only to pay off the losses of some of the well connected – see where the AIG money went.

The scale of the credit losses is so large that the Governments attempts to re-inflate have so far had no effect, except to expand budget deficits to unsustainable levels.

There are further tsunamai of credit losses coming so large that they will swamp all present bailout attempts, and put an end to any more bailing, it can’t be afforded anymore:

-prime mortgages on homes
-commercial real estate
-credit cards
-other consumer credit – auto loans, student loans, RV & boat loans etc

We are about 20% of the way through this crisis, give or take, my best guess.

Anyone who calls the bottom here, and rushes out to buy real estate, or stocks, will get slaughtered. Many more years of decline yet, with the occasional “false bottom” and Bear market rally along the way.

Don’t be ‘The Greater Fool’. Ca$h is King. Be patient.

#106 Drew on 03.18.09 at 5:11 pm

#73 jess on 03.18.09 at 12:55 pm

how wonder how many re deals are lease to own?

===================================

Wife and I are relocating next month and we just did a lease-to-own. Knowing that there are a lot of sharks in the waters these days who make a living off of failed lease-to-owns, we found the place with a newspaper ad and wrote the deal on our terms.

#107 Realtor on 03.18.09 at 5:18 pm

#80

Garth, the problem with falling prices is that the appraisals are coming in for less than what the buyers paid for the property. That’s a problem. The banks are not going to finance a property under this circumstance. Under this circumstance your pre approval is worth nothing. There is nothing illogical about that.

Pre-approved financing is determined by the borrower’s financial muscle, not the property value. That’s why it’s “pre-approved.” — Garth

#108 TheComingDepression on 03.18.09 at 5:19 pm

Garth are you trying to say your more “educated” then all these guys? Are these people/groups all out of the loop?
Marc Faber says:

The best bet for investors may be to buy a farm and escape from the cities, as a prolonged recession could lead to war, as the Great Depression did. If the global economy doesn’t recover, usually people go to war.
Jim Rogers says:
I expect to see social unrest, civil unrest in the United States a couple of years from now. Yes its changing the entire situation in the United States, the US is the largest debtor in the history of the world. There is a dramatic change taking place.

The world’s century is moving from the west to the east, to Asia and many people have not figured this out yet.

Yes, you are going to see a lot of turmoil in the United States in the next 3, 4, 5 years.
Director of National Intelligence Dennis C. Blair said:
“The global economic crisis … already looms as the most serious one in decades, if not in centuries … Economic crises increase the risk of regime-threatening instability if they are prolonged for a one- or two-year period,” said Blair. “And instability can loosen the fragile hold that many developing countries have on law and order, which can spill out in dangerous ways into the international community.”***
Former national security director Zbigniew Brzezinski warned “there’s going to be growing conflict between the classes and if people are unemployed and really hurting, hell, there could be even riots.”
The chairman of the Joint Chiefs of Staff warned the the financial crisis is the highest national security concern for the U.S., and warned that the fallout from the crisis could lead to of “greater instability”.
Others warning of crash-induced unrest include:
The head of the World Trade Organization
The head of the International Monetary Fund
Senator Christopher Dodd
Congressman Ron Paul (radio interview on March 6, 2009)
Britian’s MI5 security agency
Leading economic historian Niall Ferguson
Leading economist Nouriel Roubini
Leading economist John Williams
Top trend researcher Gerald Calente
European think tank Leap2020
http://thecomingdepression.blogspot.com/2009/03/depression-unrest-turmoil-instability.html

#109 CM on 03.18.09 at 5:37 pm

I agree with others that Garth’s opinion on our economic future seems to have changed a lot over the last few weeks, in an attempt to cover all the bases.

But that’s just my opinion, and it could change next week.

I call it as I see it. You want suicidal nihilism? Go visit The Coming Depression. Take razor blades. — Garth

#110 Realtor on 03.18.09 at 5:40 pm

#80

Garth, I would agree that that Pre-approved financing is determined by the borrower’s financial muscle, but the FINAL APPROVAL is most certainly based on the property value and is most cases an appriasal. More than ever before. Gone are the days where final approval was determined by what your postal code was.

Perhaps in the current economic situation a condition on the appraisal being satisfactory would be more appropriate than a financing condition.

#111 dd on 03.18.09 at 6:18 pm

#103 Jackie and Mark

…But, I think you answered our question which is that these affordable, starter homes really won’t go down in value as much as the much pricier homes…

You live in Calgary? The starter homes are not $250k. They are still over $300 and well out of reach of anything to do with a “starter.” Prices will come down another 20% if employement doesn’t pick up. Why? Because family income is dropping and servicing a $300+ debt is expensive.

#112 TheComingDepression on 03.18.09 at 6:19 pm

Garth give the flock hope, like these “officials” did:

http://thecomingdepression.blogspot.com/2009/03/recessiondepression-has-ended.html

Doesn’t history repeat itself or shall it be for another generation in the future?

#113 CM on 03.18.09 at 6:26 pm

“I call it as I see it. You want suicidal nihilism? Go visit The Coming Depression. Take razor blades. — Garth”

FWIW, I think that’s just fine. But I also think there are people out there who are looking for answers. And when they find your blog, they find a man who gives the impression that he has some special insight, and has a better sense of what our economic/political landscape will look like in the future.

What a lot of people need to realize is that NOBODY has the answers to these questions. If Warren Buffet couldn’t see the economic collapse of the U.S., what chance does anyone else have?

So when people try to give the impression that they DO know what’s coming, and then attempt to cover all their bases, I think they need to be called on it.

#114 kitchener1 on 03.18.09 at 6:46 pm

With this market I see no issues with basing an offer conditional upon financing. Sure a firm non conditonal offer is always best but with the amount of new listing coming up seller should be happy to even get an offer.

Now, if you are talking about “vulture” tecniques, then yes, a lowball non conditonal offer with a significant deposit is best as it will be harder for the perspesctive seller to turn down.

As for what #108 realtor is saying, he makes a valid point. As a perpespective buyer, if I purchase a home for $300K but the bank thinks its only worth 275K and they base there loan to value on that, I am out 25K.

I wonder how long its going to be before houses in the GTA start selling at or below MPAC property assessments?

#115 Comrade Okie on 03.18.09 at 7:13 pm

Next time go to a real bank, not a grocery store. — Garth

Real bank? The definition of which is? Have you popped yet?

#79 PTDBD

Money for nothing and your chicks for free.

#116 dg on 03.18.09 at 7:14 pm

The coming depression
Having a bad day are we.
Why beat up Garth for your narrow view?
The world is big enough that many scenarios exist. I think most people would think that yours is rather ridiculous and that you are a self promoting thug. Ready to beat other bloggers up with your vast amount of material that supports YOUR opinion.
I hope your blog generates a stream of wealth($) or your just wasting your time.

#117 $fromA$ia on 03.18.09 at 7:28 pm

Dave,

How could you think that Canadian banks are so much better? 3 of the 5 CANADIAN banks have services in the U.S.A!!!

You can only research what you can find and what you are told, yet you think that Canadian Banks are so much different? C’mon man quit talking like you know it all.

#118 Coho on 03.18.09 at 8:15 pm

#25 Vancouver Renter,

Sounds like you’ve made some good moves. Good for you!

As you know, in making such good moves, you’ve gone against the grain contrary to “common sense” or the general consenus. What does that tell us? It tells us the people are mis-informed…that we are played by the “insiders” who are the ones making the money.

Main stream media is a very effective venue for the monied interest propaganda to create a herd mentality which gets people to buy high and sell low. We are programmed and manipulated to fill the pockets of our “owners”.

In this evil run world, NOT doing what everyone else is doing and going against “common sense” as you know, can be a good thing.

#119 Marlene on 03.18.09 at 8:18 pm

The problem Garth is that this is a case of someone taking your book literally. There were no parameters on what house to sell and then rent. So many who read blindly without analyzing if the case applies to them, could be dumping their house on your advice and renting thinking “that’s what Garth said to do”. If you recommend renting and make wild guarantees on real estate dropping like mad, some might be screwing themselves royally…like this poor guy who sold based on the Garth don’t own and rent golden rule.

Where did I write that rule? — Garth

#120 Da HK Kid on 03.18.09 at 8:26 pm

Gary Shilling’s got the best record in my books. Have been following him for 2 years. Google him get paid!

#121 TheComingDepression on 03.18.09 at 8:49 pm

HEY DG-” think most people would think that yours is rather ridiculous and that you are a self promoting thug.

Your not for real are you? Like these comments are “MINE”? Beating up other bloggers? Tough being in a constant denial state isn’t it. Sort of like stage 4 cancer..leave it alone it will be alright…

#122 Jeff Riverdale on 03.18.09 at 8:51 pm

Garth,

I still think you should always put subject to financing. When I worked at a bank we would pre-approve people but I would still tell them to make it subject to financing, to save customers potential problems at closing. For example, in BC we had leaky condos. Someone may be approved for a $300,000 mortgage, but at the time the banks wouldn’t lend that kind of money (or any) on a leaky condos. So even though you were personally approved for a high mortgage amount the property could have flaws and the bank won’t lend to you because of the property, not because of your personal financial situation.

#123 Feng on 03.18.09 at 9:00 pm

Garth. You aren’t in politics anymore. OF COURSE “the guys” who actually build Chryslers have to give up $20 or more per hour. They are, and have been, ludicrously overpaid, and if they weren’t responsible enough to have saved, invested, or upgraded throughout their fantasy existence at Chrysler ( I worked at Ford for over 11 years) where even a coffee break was a walk in the park compared to Joe or Joanne Six Pack’s daily existence, then too bad. It ain’t up to government, capitalists, taxpayers or consumers to keep these people ( I was one — unlike YOU, Garth) in velvet diapers the rest of their natural lives.

The comment was valid, until you felt it necessary to sideswipe me. Feeling insecure? — Garth

#124 Another Albertan on 03.18.09 at 9:04 pm

@118 – I’ve been reading Shilling for three and a half years.

His calls have been a little hot (i.e. – early) but he has essentially been correct in his assessments. He has to be one of the best (and under-rated) newsletter writers out there.

#125 Taxpayer like you on 03.18.09 at 9:08 pm

Oh Garth, how soon the flock turns on its shepherd……

OK my turn. I find I’m agreeing with all who have posted re: mortgage pre-approval ie it means squat if the property is over-priced.

So I checked a couple bank sites for pre-approval. Seems they want a lot of particulars, including address of the property to be mortgaged, builders name if applicable,
then need two days to get back to you. Perhaps they do the required backgound checks to verify value of property, then advise if they feel appraisal is needed. Maybe someone has done this recently (no 2003 doesnt work) who can confirm.

As to your “inconsistencies” I think you’ve held true to “dont overpay for real estate”.

25 VCR – awesome post. Way to scary for me though. I woulda hedged my bets – I always do. Family home paid for? Check. Share of income producing property? Check. Cash in bank? Check. Gold? Oops, missed that. But good luck to ya.

Oh and just remember, youre swimming with a fish (coho) that has mono-sex once in its lifetime of 4 years then dies…….

#126 Jeannie on 03.18.09 at 9:21 pm

A few days ago we booked an international flight that included an AIG Travel insurance policy. This was before the AIg scandal broke yesterday. I immediately instructed the agent to cancel the policy, which she did.
A short time later someone from AIG called the agent demanding to know why the policy had been cancelled.
Words fail.

#127 john on 03.18.09 at 9:53 pm

Garth,

I feel misled as well. When one writes a book called Greater Fool and creates a site called xurbia, one perspective is being prepared and the other is visionary. From October I went from your Squirrel recipes, to calling in loans to now (5months later) forecasting the mother of all rallies that is coming in the market and you purchasing a property. Mere months ago one would categorized this as a greater fool transaction. My question is, What has changed?

The economy will stabilize and flatline. It will not collapse. Sorry to disappoint you. (And you should still have a generator). — Garth

#128 guava.ca on 03.18.09 at 9:58 pm

You do not need to have a property in mind to get a pre-approval letter. The pre-approval is 90-120 days of interest rate protection for the buyer and proof that the buyer can afford that price bracket.

If the buyer’s agent allows his client to way over pay for a property, then I guess the bank might refuse to approve the deal after an appraisal. But if you have a competent agent that you trust then your best bet to getting a good deal is making a firm offer.

Exactly. — Garth

#129 Too Old Bob$ on 03.18.09 at 10:16 pm

#117 Marlene. The problem Garth is that this is a case of someone taking your book literally. “that’s what Garth said to do”. some might be screwing themselves royally…

Personally I can’t believe why anyone would take someones opinion literally without doing more research. Just because “Garth says so” we should do it. I think people need to read between the lines and try to get a perspective of what the general sentiment is on the topic at hand. Garth likes to talk Real Estate and has been doing it for years. Like I’ve said before, I have some of his books that are 20 years old. Did I run out and do what he said, hell no, but I did learn a few things about the business. Did I buy his last book, hell no. Nothing against Garth, but there’s probably not much in the book that I don’t already know. In fact the last book I bought was 2020. All my co-workers know that I’ve been preaching what is happening economically for over a year now. I’m no guru, just read the stats and you can figure things out yourself. Not 100% right, but close enough to save youe ass.
People should realize that you can’t be exact all the time or even some of the time. How many guru’s get it right. Someone tells the future and the Dairy Cows come to the barn all in a row. Geez! folks, come on.

My shelves probably consist of 100 or more books on Economics, Politics, Taxes and Investing. This is what you do to help make decisions. Read, learn and make confident choices.
In fact, my wife comments on the fact I have bought these books. She says I should read fiction and fantasy to help relax and release tension. Ha Ha!! if only she knew how much fiction you can get out of some of these books.

#130 Too Old Bob$ on 03.18.09 at 10:21 pm

Oh! I forgot to mention, I’m (time sensitive) about to read a book called: “The Dumbest Generation”. Should be interesting.

#131 dg on 03.18.09 at 10:46 pm

The Coming Depression- “Tough being in a constant denial state isn’t it. Sort of like stage 4 cancer..leave it alone it will be alright…”

Yes, I am in denial. I am denying you the pleasure of earning a dime off your fear mongering. If that’s what stage 4 cancer is like …….it feels pretty good.

#132 john on 03.18.09 at 11:04 pm

Garth,

What particular reasons (no more shades of grey) can you provide as to why the economy will flatline and stabilize.

#133 David Dodge on 03.18.09 at 11:51 pm

Garth’s advice about not putting a financing condition on your offer is really awful. I sure hope everyone reading here has a realtor who can advise them properly. DO NOT follow Garth’s advice. Otherwise, as Garth said earlier, “live with the consequences.” They could be dire.

Then you do not know how to buy. — Garth

#134 Blacksheep on 03.19.09 at 12:01 am

Did anyone notice the fed paying one racked credit card with a second racked credit card.[start the presses]

While the MSM obsessed over AIG bonuses.
[perfectly timed distraction]

USDX dropped 3 points, straight down.

Gold spot jumped $40us straight up.

The fundamentals have not changed.

Got gold?

take care
BS

#135 smwhite on 03.19.09 at 8:46 am

#102 Got A Watch

Go back to Mish’s blog and listen to him tell everybody how smart he is.

The only clients that got creamed were the ones that jumped on board at the top of the market, and SOLD.

#136 Bill-Muskoka (NAM) on 03.19.09 at 9:40 am

#95 DG on 03.18.09 at 4:10 pm

The Charger is a sports suspension vehicle, and it is not meant to be a Chrysler 300. Have you ever ridden in one of the original Chargers? I have and they were designed around performance, not luxury or anything else. They were simply Muscle Cars.

They must not be too bad because they have been giving the Ford Crown Victoria police cars stiff competition and the cops like them a lot. Barrie Police Service uses the Charger as their new patrol car.

I remember the Charger 426 dual quad Hemi used by State Police as well. Top speed was 154 MPH.

The police tried the Chevy Malibou’s and found them underpowered, too small, and poor handling.

Personally, I do not like the Charger’s lines, and have driven many miles in the 300 which is a very nice ride but way too big for my tastes. Having owned Ford and GM I will stay with Dodge and the Caliber. Have had Caravans and Grand Caravans as well. All good handling and comfortable vehicles. The Challenger is at least better looking than the Charger. ;-)

I will never buy another GM vehicle and Ford has improved its passenger seating a lot, but they are still no winner to me. I found Ford’s seats to be the worst back killers I have ever experienced until I drove a rental Chevy mini van. I could barely get out after an hour due to nerve impingment to my legs by the seat sides. Worst design I have ever seen. Ergonomics were atrocious and dangerous IMHO.

Had Datsun once and found a Coor’s beer can has thicker sheet metal. Leaned against the fender and dented it. I think the Japanese cars are wasy overpriced, but good quality. The KIA’s are no thrill to me at all, nor Mazdas.

So I will stay with Dodge as long as they are available.
At least we have more choices that Ladas and Yugos, eh? LOL

#137 Bill-Muskoka (NAM) on 03.19.09 at 11:43 am

#127 Too Old Bob$ on 03.18.09 at 10:16 pm

This episode in life may well replace the Evolution/Creation debacle as the conflict du jour!

Perhaps it will become known as the Reality/Unreality Debacle in the near future?

I wonder how many books will be written about it profering ‘informed analysis?’ For sure, some will profit as they seek the Philospohers Stone of monetary prestidigitation, eh?

#138 bobs your uncle on 03.19.09 at 3:34 pm

The rise in the price of oil is due to the drop in the US dollar. Oil is bought, sold, and priced in US dollars.

The dollar dropped because of the latest $1 trillion the fed is printing. They want to devalue the dollar to try and bring on more inflation.

The Dow dropped because US dollar is dropping.

The TSX went up because Alberta exports oil and Canada, in general, is a commodity producing nation.

#139 Too Old Bob$ on 03.19.09 at 5:15 pm

“This episode in life may well replace the Evolution/Creation debacle as the conflict du jour!”

Whoa! Bill! what you bin smokin? (excluding wild game or fish).

I’m not sure if the Evolutiion/Creation debacle will be considered, but Reality/Unreality, yep!, should open up a few eyeballs and wallets. Question is: How long before it is forgotten, thus back to the same ole. I guarantee this period of life will be written and discussed over and over. What happened, why and how to prevent it again. Lmao! Who will get the blame for the next one. As in the Lion King “The circle of life”

#140 Bill-Muskoka (NAM) on 03.20.09 at 8:43 am

#139 Too Old Bob$ on 03.19.09 at 5:15 pm

Smokin’? Naw, but sometimes my thoughts make people’s brains start to smoke! LOL

Now, a wee bit of explainin’ seems necessary. For many decades people have asked ‘From wence we came’, as you are aware, and they are still fighting the issue. Were we created by an Intelligence or merely lucky pond scum? (Personally, when it comes to Wall/Bay Street, politician, gangbanger, and lawyer types my money is on the pond scum!)

The same thing will happen over this era with eternal debate as to who was right, who was wrong, who wrote the Swan Song of the moronic inflation based wealth creation Scam of the Century.

Watching all the rhetoric and news coverage is almost comical. People like Jim Cramer (CNBC) have now mastered the Back Stroke to the point that they are going faster in reverse than forward. Hard to do with their tail between their legs I would think?

Perhaps the next stroke will be the Butterfly to make Chaos Theory the Scapegoat for it all?

Me, I am sticking with unethical human behaviour perpetrated by the MSM, Hollywood, and the Gamers as the cause of it all. They have been promoting the theories and behaviours that caused people to think ‘I am INVINCIBLE!’

Reality is such an unforgiving Bitch, eh?

#141 Bill-Muskoka (NAM) on 03.20.09 at 8:45 am

Oh, as to the Circle of Life…more like a Circle Jerk in my opinion. LOL! Like the Scar hat says ‘HELP! I’m surrounded by idiots!’