The rube report


Attention, class.

As of this day, there are 610,000 Canadians collecting pogey.  In the US, about 6.1 million people are on unemployment benefits. Yes, on a per capita basis, exactly the same.

Ottawa coughed up $75 billion to rescue our banks by buying their soon-to-be-maybe-toxic assets, those 0/40 mortgages. In the US, Washington splashed $750 billion over the banking sector to prevent its collapse. Yeah, right again, proportionately the same.

Governments in Canada will soon be sucking up an equity stake in GM and Chrysler since they are already into these staggering companies for billions. Ditto in Washington.

Canadian households have the highest level of debt as a percentage of disposable income in history, sitting at just under 130%. In the United States, families have also never been so indebted. In that country, it’s just over 130%.

We have newspapers and television stations keeling over, with CanWest battling bankruptcy and CTV begging the CRTC for new revenues. In the US, media in many major markets are on their knees – a reflection of how badly advertisers are doing.

We have swine flu. They have swine flu. Their steel plants are shutting. Ours, too.

Their interest rates are, like, zero. Ours have crashed to nothing. They are paying first-time homebuyers. So are we.

But wait. The median home price in the US dropped 23% in the past year, and in markets like California (the size of Canada), home values are down between 50% and 70%.  But up here, the national average has declined by merely 7.5% in the past 12 months. In fact, as the current magazine cover above shows, some people think this is a giant, double double, made-in-Canada buying opportunity.

Are they prescient? Or just frigging nuts?

Well, if you ever needed a concrete example of how our we-are-not-Americans complex can compromise good judgment and intelligence, go buy a copy of Canadian Business. The mag has set a new low in questionable journalism, I’d say, in a manufactured piece peppered with irrelevant factoids and conclusions intended to get advertiser hormones flowing. I mean, class, let’s not forget some of the true facts here:

* Americans let real estate prices inflate without any attempt at correction by the central bank, and so did we.
* Americans relaxed lending standards with subprime teaser mortgages and liar loans. We dropped them with forty-year ams, zero-downpayments and self-recognition mortgages.
* US banks got lazy and greedy and approved almost all lenders. Our banks okayed mortgages based on postal codes.
* American household debt levels are extreme. So are ours.
* At the height of the American housing bubble, people were spending six times their incomes for houses. In Vancouver they were spending 10 times their incomes.
* The US housing meltdown has lasted for more than 4 years. Ours is one year old.
* The American economy crashed by a stunning 6.2% annualized rate in the last reporting period. Ours plunged by 7.3%.
* The Americans regressed from the worst federal budget deficit ever to an even-worse one. We bungee jumped to one of our worst-ever deficits, from a surplus.
* GM is losing a third of its workforce in the States. In Canada, half the guys on the line will be gone.

And today the feds announced monthly Canadian job losses of 79,600 – equivalent to a US figure of almost 800,000 – a staggering number which they have yet to hit.

So, our housing market correction should last one-quarter as long as the American melt? Based on what, exactly? The fact we’re not Americans?

Sorry. Failing grade. We may have better beer and hockey thugs, more donuts and duck-strewn tailing ponds, but do these things really make us superior? Is a young couple buying a semi in the Beaches for $600,000 getting the opportunity of a lifetime? Or squandering a future?

Time will tell. But the odds are this pathetic blog will be even more relevant in a year than it is now.

Class dismissed. And don’t forget your damn flu masks.



#1 Steve on 04.28.09 at 9:53 pm

This time, is different


#2 Fellow01 on 04.28.09 at 10:14 pm

I’ve been following this blog for over a year….and agree with pretty much all that gets posted…pretty much…but fr the life of me I can’t understand how the general Canadian public can be so naive to the fact that were falling apart and the government is blending taxes to hurt us more…and no one says or does anything….I really figured that this spring the RE market would have stayed it course, but a fellow employee is looking to buy due to relation from within the company and has been outbid on the 3 houses he but offers in…people are coming in at 100% of asking…with no questions??? I just don’t get it…or maybe everyone else knows something I don’t.

#3 Blair on 04.28.09 at 10:16 pm

Well said, teacher. Hope the class listens.

Three houses on my street sold for their asking prices within a week of going on the market this month. People were lining their cars on the streets during the afternoon of each open house. I can say that cause I went to see what the big deal was. Apparantly we do think we are special and different than the USA.

I think the Greater Fool capital of Canada is Ottawa.

Ottawa = Greater Fool Capital.

What do you think, Teacher? Fellow classmates?

#4 lightning_kash3 on 04.28.09 at 10:24 pm

Thanks Professor Garth Turner

#5 Herb on 04.28.09 at 10:25 pm

There you go giving us the cheerful facts again, Garth. Now how the hell do we get them shouted from the rooftops? You know what’s happening, some of us know what’s happening, but the sheeple are kept in the dark and fed lies.

Since there is no voice that would rise above the pattern of mis- and disinformation for commercial gain and political profit, there will be no change in either economy or politics until the sheep are skinned, not just sheared. Good luck to all of us until then.

#6 Bottoms_Up on 04.28.09 at 10:30 pm

Ottawa is partying like it’s 1999. I gotta say it’s like David (Garth) and Goliath (media, colleagues, friends, parents) out there. I’ve watched David throw stones daily (on this blog) for the past year but Goliath continues to spin….

#7 Investx on 04.28.09 at 10:33 pm

Is it possible that Canadian RE hasn’t tanked as bad yet because we don’t have people walking away from their houses without liability as they do with foreclosures in the US?

#8 soesoe on 04.28.09 at 10:35 pm

Your argument makes too much sense – a turnaround after 1 year simply goes against all logic. But why do there seem to be so many Fools out there??? The media hijack is killing me.

I have been living in the USofA since 2003.. I’ve witnessed the housing price surge and sudden decline starting in 2006. Luckily my husband saw it coming and we got out in time. We currently rent a fabulous 2400 3 year old home for $1600/mo in Point Roberts WA about 40 minutes from Vancouver BC.

I feel frustrated with the current market in Canada as we are planning to move back to Vancouver in about 12-18 months. We are financially very fortunate and could afford a house if we wanted one in Vancouver, but you have convinced me that buying would be the a very regrettable move!!! Paying $1.5 million for an average house on a 33′ wide lot on the Westside of Vancouver just plain ridiculous – right? The prices have fallen a bit – but it’s still obscene. Things are moving compared to last spring – I don’t understand who is buying – a Million $ for a crappy house? On the flip side a nice home on the Westside rents out for around $4,000 per month (also ridiculous). So for now I’ll hangout waiting in Point Roberts just 40 minutes from Vancouver and wait.

Btw, I love your blog and have passed it on to many of my friends who seem committed to becoming the next Greater Fool!

#9 Paul Fist In Your Face on 04.28.09 at 10:38 pm

Two more piggies off to market.

#10 supersocco on 04.28.09 at 10:44 pm

The global recession is undermining every part of Canada’s trade sector, driving exports down an alarming 22 percent this year alone…

#11 squidly77 on 04.28.09 at 10:44 pm

look at the subprime resets for 2007-08 and add the four colour tones up
now add all the colour tones together for the impending doom of opt-adjustables/subprime/alt-a/prime and agency mortgages that will re-set in 2010-11

now consider that most of these homes have lost anywhere between 30-50% of their value (to date) and most of these mortgage amounts are far larger amounts of money then the subprime resets of 2007-08

this will result in a total meltdown of our financial system as we know bank will survive

#12 Paul Fist In Your Face on 04.28.09 at 10:45 pm

And piggies fighting over a corpse.

#13 Paul Fist In Your Face on 04.28.09 at 10:55 pm

The Big Bad Wolf is now on the trail of the Three Uber Piggies.

#14 Cendrine on 04.28.09 at 10:58 pm

Ah, the flu masks….if you want a supply of masks, you better hurry. During the SARS crisis, I couldn’t get any masks for my business, not through my medical suppliers, not any hardware store, not anywhere. If you want to stock up, you want N95 masks and you’ll need at least a couple dozen per person, assuming you wear one per day and you don’t abuse by taking it off repeatedly and allow it to become misshapen from the initial fitting. And they are not cheap, averaging about a buck apiece.

About the spring market…we finally bought a place after five weeks of looking, being outbid at least once, being told that this one will not entertain a lower price or the bank will not entertain less than 200k for that power of sale (and needs new fixtures and doorknobs to replace the ones taken by the foreclosed owners) and generally finding that open houses were busy and homes were selling even before we could schedule a showing. Things are not bad enough for the majority to make a difference in RE. DH believes the MSM commentators who point to some signs of recovery. He is a bit confused by Mark Carney, though – gee, wonder why? Perhaps sales are led by naive first timers who have never lived through a recession, have not really paid attention to the news or who just plain don’t understand that history will repeat itself.

I’m paying attention to my 80+ yr old clients when they say “I’ve never seen it this bad” and they see a depression forming. I don’t have a link, perhaps it’s from TAE – an observation that unemployment in early 1930 was only slightly LESS than what we have today.

#15 Shawn on 04.28.09 at 10:59 pm

Garth says:
Ottawa coughed up $75 billion to rescue our banks by buying their soon-to-be-maybe-toxic assets, those 0/40 mortgages.

But But But… There were the mortgages the Feds were insuring through CMHC. The Feds alreay owned losses on those.

Garth, I thought I told you a million times not to exaggerate.

(An old joke I know, the first time I heard it, I laughed so hard, I almost kicked the end out of my crib…)

#16 Paul Fist In Your Face on 04.28.09 at 11:01 pm

“Squeal piggy, squeal!”

#17 john m on 04.28.09 at 11:02 pm

Great post Garth–Harsh reality!………. to portray things as otherwise is criminal and takes a special kind of damn fool to be sucked in……sadly enough there appears to be lots of them………..

#18 dbg on 04.28.09 at 11:05 pm

Buying opportunity – Squidly77 did you hear that. Time to jump into that Alberta market and get even with all those terrible realtors and Alberta home buyers over the years. You will be the hero of Wild Rose Country.

Just show them all those graphs (crashing in Calgary/Edmonton) you’ve collected.

Maybe the Coming Depression will finace you with a gold backed mortgage.

Austin Powers ……… “Still groovy baby”

“I love the Fiat baby ………yeah”

#19 Cendrine on 04.28.09 at 11:11 pm

Anyone else note that most people don’t seem to want to talk about the economy and pessimism is vigourously dismissed? Perhaps it is so bad that denial is the only way to cope…..

#20 Val Mel on 04.28.09 at 11:11 pm


I am in the Southeast corner of British Columbia….and…people are not lining up to buy houses here…in fact after a (very) short buying spree in the spring (at reduced prices) the housing inventory is increasing rapidly…especially in the last week.

I know one fellow in the newspaper business that has been declaring that prices will not drop here.

His house went on the market last week.

He has that “deer in the headlights” look….must have believed his own rhetoric.

The unfortunate ones that did not sell early are suffering a 1 % decline per month…..

1% decline per month…for now….when the E.I. wears off for the Tembec workers then the decline will be more pronounced.

Ready for Power of Sale in the Kootenays…..once known as the hottest real estate market in the country….

#21 Davinci on 04.28.09 at 11:26 pm

This is good information it provides more strength to my argument that Canada will see hyperinflation with the US.

Throw in the fact that:
The Bank of Canada, for example, has sold most of its gold reserves and held just $78 million US worth as of September 2007.
Mark Carney who is running the printing presses is from Goldman Sucks.
Thus we are not going to be the first man out of the US dollar.

#22 hal smith on 04.28.09 at 11:27 pm

Don’t you all get it??? Without us selling each other houses for higher and higher prices and without going deeper and deeper into debt and without all the associated spinoffs from housing ( building trades, furnishings, electronics, lawyers, realtors, bankers etc.) we have no economy. They have to keep the bubble going or we are all screwed.

#23 Real Estate Deal or No Deal on 04.28.09 at 11:28 pm

Hey Garth,

If “flu masks” aren’t part of the survival kit … I am sure they will be now!

I have a big melon and will need the extra large.

They come with every xurbia Bad Day Box. — Garth

#24 Mike on 04.28.09 at 11:30 pm

No one should buy a house under any circumstances, then?

When does it make sense to buy a house?

Are we destined to be renters the rest of our lives? Would that be so bad?

Questions, questions, teacher.

#25 Gord In Vancouver on 04.28.09 at 11:32 pm

Are they prescient? Or just frigging nuts?

This is a regional question. Vancouverites think they’re prescient while people in Windsor say “frigging nuts”. I’m part of the former but agree with the latter.

#26 kitchener1 on 04.29.09 at 12:05 am

Its to late on a weeknight for me to do the appropiate research, anyway, here is how i see it.

In 2001 the average medium price for a SFH in Toronto was approx 240K (please correct me if I am wrong)
The unemployment rate was something like 4%, prosepect of finding employment was good, interest rates where in the 6% range.

In spring 2009, average SFH in Toronto is 350K, unemployment at 8%, prospect of finding work is not so good, interest rates at 4% ( I am talking 5 year fixed, same difference if talking about variable rates)

um, what gives?

#27 canuck99 on 04.29.09 at 12:54 am

: “So, our housing market correction should last one-quarter as long as the American melt? Based on what, exactly? The fact we’re not Americans?”

To a certain degree, yes, according to a Bank of Canada study on the matter. Over the last 130 years and 5 major RE corrections in Canada and the U.S. Canadian RE corrections are faster than the U.S.

“This price decline however, occurs more rapidly in Canada since the average contraction lasts only 3.5 years in Canadian cities compared to 4.4 years in the U.S. cities. ”

This is from a summary I posted on this BOC report about 8 months ago:

Oh, and by the way, the summary also found over the last 130 years that Canadian RE prices falls on average 10% *MORE* than in the U.S.

#28 Mark on 04.29.09 at 1:00 am

Surely though there is one very good reason it may not crash as badly here?

And that’s because people are stupid and believe this stuff being fed them by the media.

(well when i say, “wont crash as badly here” – i mean – “yet…. ours will happen when everyone else is recovering for a double whammy”)

#29 Steph on 04.29.09 at 1:01 am

Makes perfect sense that houses are selling for the ask. Rates are at all-time lows and media across the board is reporting buying opportunity of a lifetime. Great opportunity to sell if you ask me. Not to be facetious but we do know the power of the magazine cover as a contrary indicator. In any case, I sold my house a month ago, semi-detached and all the houses on the street are similar style. I got a record sale price for my street. Call me crazy but I don’t think you sell your house for a record price at “the bottom” or AFTER a recession.

#30 Grantmi on 04.29.09 at 1:09 am

Is it just me… am I seeing more real estate signs up for sale… but also…. (ready for this)…. ‘FOR RENT’ also slapped onto it as well!!

Desperate times a coming! You called for rents to start dropping Garth…. I think that time is coming sooner then later.

Move Along… nothing to see here!!


#31 . . . fried eggs and spam . . . on 04.29.09 at 1:13 am

“. . . Or just frigging nuts? . . . buy a copy of Canadian Business.” — Walnuts, Brazil nuts, Pecans, Salted Peanuts, Pistachios and more are all the good-flavored and tasty nuts.

Canadian Business is m$m garbage, so it’s just plain nuts!

Good post. Nice to see Vancouverites spent at least ten times their income on stuff they couldn’t afford. First-class sheeple — Keep Up With The Joneses, no matter the cost.

Intent on following the herd mentality, combined with a very healthy dose of utter stupidity will leave these folk wailing for bailouts. Screw ’em. They dug themselves into a large hole, they can get themselves out and then start again.
Turns out US and Cdn. banks are not the only ones with toxic assets. —
Just as most of the world’s export markets have crumbled, now Canada’s takes a bow and exits stage left. —
Guess who is about to start bailing on US Treasury Notes? Yep — China. —
Is Vitamin D better better than flu shots? —

BTW, in 1900 Argentina used to be one of the richest, most promising countries in the world. The bankers destroyed it in the end. Sound familiar?

#32 Munch on 04.29.09 at 1:18 am


You are FLIPPING arrogant, or at least you come across that way!

But, somehow it works!

It might even suit you!


Keep it up, I really enjoy reading you every morning!


Munch From South Africa

#33 Coho on 04.29.09 at 2:17 am

Most people are either misinformed by media or uninformed because they are ignorant that a real estate bubble has begun to lose air, or both. And because of this, they lose their perspective on what constitutes a true price correction.

When gas has been selling at $1.05 a litre for a period of time and goes down to $0.99, then it becomes a “good deal” and people line up to take advantage of the “cheap fuel”, even if their tank is still half full so they can save a whopping dollar.

Of course, people need to fuel up whereas people don’t “need” to buy a house, but it is the same psychology. And the media ‘fuel” this psychology with stories such as the above…the message being: “Buy now while it’s cheap”.

#34 Charles Powne on 04.29.09 at 2:29 am

Garth, as usual you’re spot on about the myth of “Canada is different”, but as someone who has lived in Oregon and BC at different times, beg to disagree with you about the superiority of Canadian beer. Of course there’s an easy way to resolve the matter, just meet me the next time you’re in Portland and I’ll provide the evidence in delicious liquid form!

#35 ted on 04.29.09 at 2:31 am

This is your best post yet. This delusional talk about how we are better than americans so things are okay here is going to kill us. Thanks for putting it in such clear terms. Hope more people get it.

#36 Coho on 04.29.09 at 2:37 am

Interesting, the timing of the global financial meltdown coinciding with the front end baby boomers beginning to retire. And the wealthiest generation yet to come thought it could keep its wealth. Nope, the ruling elite would have none of this.

And now there’s this flu making the front pages all over the world. Whether this flu is deliberately overblown, or it is potentially as serious as they say, it is yet another nail in the coffin for sheeple of Earth.

All we’re missing now is all out war…but let’s be patient…all in due time.

#37 Da HK Kid on 04.29.09 at 3:34 am

Time for some tough love!

For those of you who have read this blog and went out and bought a house in the last year anyhow, or plan to in the next because you’ve been played by the media, RE agents and banks, sorry, you failed Garth 101. I may only offer your the following!

We will personally not say we told you so!

We will not boast and celebrate in your demise!

But we will pick up the pieces that you have left us by buying your home for a minimum 30% off current value because the market says so,

And, another 15% off since you will be caught in a downward bidding war of desperation.

We can do it the easy way or the hard way via picking your home up for 50% + off in a foreclosure too.

We are not picky who be buy from, just smart!

One last thing, shall I make the deposit cheque payable to Mr. & Mrs. SHEEPLE?

#38 Mike B on 04.29.09 at 4:15 am

Agree with other classmates… In toronto… Utter sheit is selling.. Some of it close to asking… Nothing I know of above… There are no bargains IMO… Reators are telling me this is their best year ever…Spring brings out morons but low interest rates gets them to buy… free money….FOR NOW

#39 Chris in England at the moment on 04.29.09 at 5:28 am

From the BBC

‘Armageddon’ Virus

The virus could spread to south-east Asia where it could mix with the highly virulent H5 form to create an “Armageddon” virus, said Prof Oxford.”


I know we are living in strange times, but have Mexico and S-E Asia really become near neighbours overnight?

That being so, and using the Prof’s reasoning, we could wake up one morning and discover the economy has revived in S-E Asia and that could spread to Mexico and travel up through the US and into Canada. Sorted! I’ll have some of those houses please.

#40 ally ally oxycontin free on 04.29.09 at 6:13 am

#3 Blair on 04.28.09 at 10:16 pm

Fellow classmates?

Does / Is … it as apparent to anyone else, as it is to me, that HarperOONY / O’Flairity / Carney have gone over to the totally organic side?

#41 David Bakody on 04.29.09 at 6:13 am

The facts speak for themselves ……. just the facts Garth …. just the facts …. Knowing the problem is in indeed the solution ….. Thanks Garth ….

Pay down debt and save wisely in all areas.

#42 Kash is King on 04.29.09 at 6:38 am

Perhaps what we are beginning to see, is the value of our dollars beginning to erode. If that’s the case the $number of a house may appear to be falling less, or even levelling, but each dollar represented is worth less.
I have a hunch that if our currencies had the same punch of even a short year ago, that oil would likely be under $10 a bbl. It now sits @ $50, but that might be only because the dollar is actually worth less now.

So, a house could still be devaluing in “real” terms, but the “nominal” amount could stay the same. This would keep the sheeple happy, and allow the privately-owned central banks to in effect print their way out of debt.

We may be witnessing inflation by stealth.

#43 ally ally oxycontin free on 04.29.09 at 6:46 am

Fear NOT for your pensions

Pension Benefit Guaranty Corporation (PBGC)

We offer the reassurance just in CAISSE you’re worried.

#44 TS on 04.29.09 at 6:55 am

After all of the ranting and raving by the naysayers, the facts are quietly sitting and staring them in the face. Great post Garth!

#45 hmm.. on 04.29.09 at 7:15 am


#46 Nostradamus jr on 04.29.09 at 7:48 am

Uh Oh…Must be full moon time again…all your crazy renter sheeple are congregating here on “The Rube Report” blog.

…You renters who have sold, congratulations, you own “paper backed by whiffs of smoke”.

Garth, you should create a blog why Vancouver/Hongcouver, (under Real Estate rule #101, w/ Location, Location, Location) will become the next Financial/Trade/Cultural/Leisure capital of the world.


#47 Toronto C9 Renter on 04.29.09 at 8:07 am

As Yogi Berra said, “It’s tough to make predictions, especially about the future!”

When you predict future home prices, you’re essentially predicting interest rates. Given Carney’s latest commentary, and what Bernanke will likely say today, it might be a good while before rates rise significantly.

Although bloggers here are very RE focussed and decidedly bearish, most normal people aren’t interested in trying to time the market. They just want to get on with their lives, including settling in a home.

So its looking like the big crash of 2009 is on hold indefinitely.

“Nothing to see here folks, move along…”

This blog is clearly not for normal people. Move along… — Garth

#48 Kris on 04.29.09 at 8:25 am

Point taken, point taken.

But here’s something I can’t understand Garth. We were in Fort Myers last weekend, which is supposed to be one of the harder hit areas of the States. What we found was not exactly what one would expect. Jam packed shopping malls, busy residential strip malls with no vacancies, new cars and motorcycles everywhere, busy hotels, heaving restaurants. There were slightly more for sale signs up than that last time we were there 3 years ago, but not that many more. And real estate prices? Well, high end properties that were going for a million 3 years ago are now going for $850k, big deal. The only cheap houses there are junkers in the middle of deep suburbian neighbourhoods, where nobody wants to live.

I agree with much of what you say, but what am I missing here?? Are people just enjoying their unemployment and blowing what cash they have? Will changes be more noticeable in 6 months when EI, savings and severance run out?

The stats you quote and what I see out there in the streets do not jive.

#49 smwhite on 04.29.09 at 8:32 am

#46 Nostradamus jr

Uh Oh…Must be full moon time again…

Must be, all the crazies are back with their Vancouver financial capital babble.

Glad you found your Shangri-La, but nobody is buying you brand of crazy. Get yourself checked out for delusional disorder.

#50 Happyplace on 04.29.09 at 8:42 am

Nostradamus, no one is fooled by your name change.

#51 purplecrystal on 04.29.09 at 8:55 am

I have been thinking of buying a house since 2007. I have done a lot of searching and seen some houses… Then I read an article about you on Global and Mail, I followed the links of that article, I become a daily reader of your blog; I bought Great Fool and After the Crash, therefore, I decide to listen to you and wait even I am still keeping eyes open of the house market.
However, I was confused in the last couple of weeks: some houses interested me have gone so fast and the prices are ridiculous. I just could not understand and feel frustration, because I don’t know how long I still have to wait to see the price to go down to a reasonable and affordable level…
Then I heard a very bad and sad news: a guy just bought a house several month ago, he was on EI now; but he could not stop worrying about his mortgage, his next job…, so he killed himself.
I was wondering if he got a chance to read your blog before he bought his house, he might not be trapped by the house and still alive in this world.
Keep on the good job, Garth, you are saving people…

#52 John From Campbellville on 04.29.09 at 8:58 am

#46 you obviously have gone to the school of harpernomics
Get real

#53 hagbard on 04.29.09 at 8:59 am

Anyone know if the RE bubble ever hit places like Leamington and Kingsville Ontario? That is, small towns. I’m guessing that a house for $250k here won’t have that far to drop, considering much of the drop is probably already priced in.

The pressure is on to buy, and I have little to fight with since there are few houses to lease around here (we won’t move to Windsor).

#54 josh on 04.29.09 at 9:02 am

not sure what the big deal over this mag,there trying to stimulate the economy, this is a way to try. wont work but they will try and try.

#55 Some Guy. on 04.29.09 at 9:02 am

You’re doing god’s work Garth, keep it up.

I would have made many a mistake without this site so thank you for keeping a rosy future still very much a possibility for me.

and lastly – where do I put all this cash??? What investment vehicles do you recommend????

#56 Mike B formerly just Mike on 04.29.09 at 9:03 am

The Rube Report Indeed. How is it a good time to buy if the prices are still high?? So you get a house and beat out someone by paying an extra 10% and in five years that interest rate you have is now up by double and your principle on the mortgage is practically the same . Who’s the fool now…. I have witnessed on many occasions here in Toronto moronic buying…. It is eerily similar to what Garth describes…. Big eyed first time buyers looking over a true junker house and seeing a slightly below average price tag and thinking they better get in now. If prices do rise here then they are bucking the trend and it is because there are 30,000 sales people out there pumping the market. That is a difficult thing to fight ….First timers with 30 grand in their pocket and a pre approved mortgage at teaser rates are chomping into the market.. Even the higher end stuff is being overpaid for. I would be VERY interested into the insights of the dude and POL CAN who often bring great perspective to the RE market.

#57 mattbg on 04.29.09 at 9:08 am

Cendrine (#14), naive first-timers who haven’t experienced a bad recession are definitely a part of what’s keeping things going right now, but they are being egged on by their parents who should know better. A lot of first-timers are being encouraged by their parents to buy houses now, based a very narrow view — the historically-low interest rates, and the age-old expectation that real estate will always increase in value over the long term. The same two things that were driven to the extreme in the US and destroyed that market.

It’s becoming really hard to empathize with the problems around me because they are more self-inflicted than not, and you’re complicit if you don’t point that out.

#58 mike from oakville on 04.29.09 at 9:17 am

Garth – my wife & i make a good living, but we have been pretty conservative the last few years – paid off the mortgage (on admittedly too much house, but we’re not planning to move any time soon), have cash in the bank (spreading it around to keep under the cdic limit), and a secured line of credit if we need cash in a hurry. Also – we need to get 2 new cars in the next year or so.

What can we do to take advantage of the current situation?

#59 Hammond Shomton on 04.29.09 at 9:17 am

Breaking News

#60 Bill-Muskoka (NAM) on 04.29.09 at 9:21 am


Stop the presses!! Hear ye! Hear Ye! forget all about the housing markets, Swine Flu, etc., the really important news is that the National Post has exposed how Harper really is as (gag, cough, choke, puke) human being!

Well, they have anyway by printing for all to read an excerpt from your ‘Sheeple’ book and giving you column inches to speak the truth.

Damn, finally the MSM is speaking some actual truth about the most despicable POS I have seen, even worse than Bush (who can’t help most of it because he is a natural moron). Yes, Caesar Disgustus, aka, the self-appointed King of Canada, posing as a majority PM, is being publically thrashed in ink FINALLY!

Our democracy and future are at stake and thanks to your honesty he and his little band of thugs are exposed, not by the usual MSM innuendoes, but by first hand, eye-witness facts.

Thank you Sir! Maybe the rest of Canadians will get on the reality train. Just like Senator Arlen Specter did when he defined the current state of the Rethuglican Party in the U.S. and is moving to the DNC for the good of his country’s future.
Me vs. Stephen Harper

#61 Chris in England at the moment on 04.29.09 at 9:29 am

Happyplace #50: “Nostradamus, no one is fooled by your name change.”

No, we saw it coming!

#62 Basil Fawlty on 04.29.09 at 9:46 am

Has anyone noticed that while many hee have been debating the merits (or de-merits) of gold. The Chinese were quietly purchasing 400 Tons, yes 400 Tons. But, what to they know?

Proof? — Garth

#63 Got A Watch on 04.29.09 at 9:52 am

#19 Cendrine – I have been warning we were heading for the rocks for about 4 years now. All that got me was being named “Dr Doom”, and having people argue strenuously that “you don’t know what you are talking about”.

Well, now that events have proven that some of us were all wrong, and it was not me, they just don’t want to talk about it. I have been warning friends for 2+ years to sell stocks, sell real estate, pay off debt and get ready for hard times. Out of maybe 40 people, only 1 took any action, the rest dismissed the idea.

Today they talk about the weather, or hockey,or Blue Jays, or Dancing or Idol, or whatever, as long as it has nothing to do with the economy.

People just don’t want to know what they don’t want to know, and you can’t change that. Bringing these topics to their attention will earn you no gratitude. It gets worse when they realize you were correct all along, then they get angry and want to shoot the messenger.

Nowadays, I just smile and say “It’s complicated”. If people ask me what they should do, I recommend prayer. It’s just not worth it to try to change anyone’s mind. They will have to suffer the consequences of their bad decisions without any help from me. Even family members. I’ll let them live in my basement, if it comes to that, but that’s about it.

There is no cure for stupidity and irrational exuberance. Only the inevitable consequences when it all goes bust.

#64 Bobby on 04.29.09 at 9:53 am

Here in Victoria, it looks like Reduced and New Price are two realtors that have a large market share. The condo market has collapsed with lots and lots of product available. I had one realtor admit to me yesterday it’s a buyers market. Please make any offer, she said.

It’s gonna get ugly out there.

#65 905er & Spouse on 04.29.09 at 9:58 am

RE: #50
Nostradamus, no one is fooled by your name change.

I was…but am not now…thanx for pointing that out

Happyface….Now I have another poster to remember to skip

#66 Bill-Muskoka (NAM) on 04.29.09 at 10:04 am

#62 Basil Fawlty

That may well be more for the purposes of renovating their temples than monetary applications. They use real gold all over the Forbidden City and it is being renewed as a major historical project. A mere 400 tons or tonnes would not be surprising whatsoever.

Apparently they liked FDR’s W.P.A. (Works Project Administration) plan to put people back to work and it resulted in some of the finest architecturally magnificient buildings in American history.

Maybe Oddawahaha can employ all the soon to be out of work GM employees in scrubbing down Parliament Hill? The dirt and grime there is atrocious. It may be oozing outward through the stone from within starting in the PMO.

#67 Joe Provoloni on 04.29.09 at 10:53 am

Don’t know much about all this investing stuff. But there is this oil and gas service company called Trinidad Drilling. TDG on the Toronto stock ex. It has traded as high as $19 plus. By Mar 2009 it was down to almost $2. I figured, what the heck. I’ll buy because I figure oil prices will go up again and service companies will follow. Anyway, in 1 month I doubled my investment. I figured now was a good time to buy because I figured good company stock is undervalued.

Seems I was right.

Also read the National Post review on Garth’s new book.


#68 gold bugger on 04.29.09 at 11:01 am

I work with a guy who has $4K in equipment payments every month and he’s making $15/hr and once in a while makes a few hundred bucks working construction, but nothing steady. He’s house shopping with his wife right now. In the $400-$500K range.

Nobody that’s heard him talk about it has recommended he have his head examined.

The world is officially upside down.

#69 Future Expatriate on 04.29.09 at 11:03 am

Masks available at yet Garth?

Heck, just skip right to the body bags.

#70 confused and a little crazed on 04.29.09 at 11:12 am

Hi guys,

I think we are also headed for another stock correction…unemployment up…swine flu up and GM and Chrysler going down. Even if they survive. They will be cutting their staff by eitheer a third to 1/2. Let’s see the unemployment #s then . 1 wk for chysler and 11 month for GM. and I still won’t buy their cars after this. The product is not worth it.

#71 eddy on 04.29.09 at 11:14 am

this magazine cover is laughable. if it was in the US people would think it’s a satire, you know like mad magazine

#72 cowgirl kiss on 04.29.09 at 11:16 am

First, I bought 3 copies of Greater Fool and asked my friends to read them. They said that it was cool that I was concerned, but that it would be different in Alberta. Then I decided I wouldn’t buy After the Crash for them, but would just recommend it as really important reading – some ideas at least. Again, dismissed as being too gloomy. Now they are shuffling their feet, trying to decide whether they should sell their houses, shares, etc. and complaining about how they are being shortchanged. I give up.

For my part, I am now really excited about the opportunities out there – I believe it will be a great time for those of us with some “against the herd” strategy.

I think I am curiously feeling that I am in the crisis, but I understand it and can benefit from it rather than freaking out. Like Ted Turner, who recently invested heavily in solar power, I see blue skies and interesting times ahead – but I am thinking waaaay outside the box and it feels great.

#73 TS on 04.29.09 at 11:17 am

Basil Fawlty on 04.29.09 at 9:46 am

Has anyone noticed that while many hee have been debating the merits (or de-merits) of gold. The Chinese were quietly purchasing 400 Tons, yes 400 Tons. But, what to they know?

Obviously Basil Fawlty is making up statistics with his posting….it would be nice if he actually did some research before posting unsubstantiated drivel.

The TOTAL worldwide production of gold IN HISTORY has been estimated to be 3.4 billion troy ounces….with 2/3 of that mined in the past 50 years.

Since 14.55 troy ounces = 1 pound that means that in the TOTAL HISTORY of gold mining about 233,000,000 million pounds of gold have been produced. At 2,000 pounds per ton, that is about 116,838 tons of gold have been produced in the history of mankind.

Basil is claiming that the Chinese have stockpiled triple the total amount of gold that has ever been mined in history. What a load of crap.

Here is a link for those that are interested….

By the way, the link is information posted by the US Department of the Interior.

#74 cowgirl kiss on 04.29.09 at 11:18 am

For my part, I am now really excited about the opportunities out there – I believe it will be a great time for those of us with some “against the herd” strategy.

I think I am curiously feeling that I am in the crisis, but I understand it and can benefit from it rather than freaking out. Like Ted Turner, who recently invested heavily in solar power, I see blue skies and interesting times ahead – but I am thinking waaaay outside the box and it feels great.

#75 TS on 04.29.09 at 11:21 am

sorry for mistake in my last posting…. Basil is claiming that the Chinese have stockpiled .0034% of the total amount of gold that has ever been produced IN THE HISTORY OF MANKIND. While this is possible…it would be good to have some substantiated source for his claim.

#76 Irene on 04.29.09 at 11:31 am

This topic I’m sure has come up but Garth, please. My husband would like to open a TFSA and put the limit into a mutal fund recommended by our financial adviser. I don’t agree with him when our mutals have tanked and lost us a lot of money. We are both in our 60’s. What you say Garth? I’ll take your advice sooner than that of the Financial advisor any day.


#77 Bill-Muskoka (NAM) on 04.29.09 at 11:33 am

#67 Joe Provoloni

Thanks for posting that Joe. Unfortunately, the writer has a very poor comprehension of how a real democracy works. A true democracy is not about a ‘party’ representing the people, but rather elected MP’s representing their constituents.

What Canada has is more an ever changing dictatorship akin to a gang war between ideologues.

In a real democracy each MP would have a free vote, a free voice, and a DUTY to keep the people of their riding informed of the truth. That is what WE pay them to be there for, not to be a mindless parrot of the ‘party.’

The way the ‘party’ system works is no different than how the Communist Politburo is structured, in fact the Politburo probably has had more dissent in it than either the Conswervative or Liberal parties.

#78 Bill-Muskoka (NAM) on 04.29.09 at 11:45 am

#73 TS

Check your own math TS. If there has been 116,838 tons of gold mined in human history, then a mere 400 tons is not out of the question. <a href=””Fort Knox had a helluva lot more than 400 tons locked away for decades.

In fact, the stated figure is as follows:

The United States Bullion Depository holds about 4,603 tons (4 176 metric tonnes) of gold bullion (147.399 million troy ounces[1]). It is second in the United States only to the Federal Reserve Bank of New York’s underground vault in Manhattan, which holds about 5,000 metric tonnes of gold in trust for many foreign nations, central banks and official international organizations.

The 400 tons (U.S. tons at 2000, lbs per ton, not metric tonnes) would be equal to 0.34% of the world’s total mined gold based on your figures. Likewise processing it downward in purity from 24 karat to lesser grades would increase the supply substantially.

Your figures are inaccurate.

BTW, the NYFRB’s undergraound vault was in the basement of the WTC and is now BURIED!

#79 Bill-Muskoka (NAM) on 04.29.09 at 11:49 am

The real question now becomes: Is there any gold inside Fort Knox, the world’s most secure vault?

#80 dave99 on 04.29.09 at 12:07 pm

#73 TS,

Uh, how is 400 tons equal to 1/3 of 116,838 tons?

#62 Basil Fawlty,
400 tons of gold is equal to about $10billion. So what is the big deal? That’s a drop in the ocean compared to the $2trillion (2,000 billion) of reserves the Chinese have.

#81 jess on 04.29.09 at 12:15 pm

…they seem to be diverting ships with oil away from the already full ports. …supply backlog?

bloomberg april 29

#82 Alberta Ed on 04.29.09 at 12:15 pm

Kanadian Bizniss has about the same credibility as the Calgary Herald RE section…


#83 Conky on 04.29.09 at 12:19 pm

TS – umm Basil Fawlty said 400 tons NOT 400,000 tons.

#84 Two-thirds - AKA Negazot Prime on 04.29.09 at 12:25 pm

#5 Herb

“but the sheeple are kept in the dark and fed lies.”

Perhaps they just feel safer that way. The shepherd knows its sheeple…

I have almost given up on throwing my pearls at the swine, sheeple, and bulls. Why? Simple:

1) They are not tasty enough for them
2) They do not fancy jewelry
3) Cattle + bears = bad combo

No amount of info, whether charts, reports, polls, etc., will make any of the above change their ways.

Livestock do not know how to read, do math, or act independently.

#85 miketheengineer on 04.29.09 at 12:32 pm

Hey Garth:

Just was reading FREEP.COM. Interesting article about homes dropping even more in Detroit and areas around.


Some thoughts on swine flu:

1) Increase Vitamin C intake. Get 1000mg of Vitamin C in slow release tablets. It boosts the immune system. About 25 years ago, I used Vitamin C to boost my immune system to fight cancer and survived. I researched it about 20 years ago, after I made it, and it is well documented to boost immune system. Check it out a library or internet. (At that time I used the library at McMaster)

2) Oil of oregano…..I have not researched this one, but it is relatively new to immune boosting natural chemical. I have not used it. It is said by others to be effect to prevent flu and colds….any one use it on this web site?

I just started on 1000mg a day Vitamin C….since I would be at greater risk than the average Joe, since I am a cancer survivor.

Good luck to all and god bless..


#86 Bob Bagina on 04.29.09 at 12:35 pm

We were on the ferry and my wife pointed out the article that she noticed on her trip to the tabloid stand. I had to check out what they were saying so I left the Bruins spanking of the Habs for a second to enquire.

Opened it up to lofty quotes from real estate “representatives” and threw it back abruptly with the rest of the tabloids.

Here in Victoria SFH places in the 400K range are going above asking. Not all, but enough to raise an eyebrow.

Young fellas about to complete their carpentry schooling are not finding work and heading back for their plumbing or electrician tickets. The university speaks of student withdrawals increasing due to financial difficulty.

In my circles first time buyers looking to enter have taken an early inheritance from their parents. My parents only plan to pass on their debt.

We do indeed live in interesting times.

#87 Nostradamus jr on 04.29.09 at 12:35 pm

# 65 905er & Spouse

“”Happyface….Now I have another poster to remember to skip””

…..Everyone reads Nostradamus jr. posts…bar none.

China invests in Gold and Copper….true

China is limiting its investment in US Treasuries….true

…They are investing in G & C….but that doesn’t mean its a better investment than US Treasuries.

You see, if world deflation continues, anything and everything, including gold and copper will continue to deflate too.

…The people investing in Canadian real estate honestly believe their Real Estate is the best investment around.

When you consider that everyone needs shelter, that you can’t eat gold or rely on the banks with your paper money investments…you can see why folks are investing in their homes.

…For the very same reason Garth Turner recently bought himself a farm.

No one knows how much he paid for it or where.

…If real estate prices have kept dropping, for all we know, he may have overpaid.

just my two cents…which are worth only one cent, due to deflation.

#88 Investor on 04.29.09 at 12:45 pm


Nice chart of the loan adjustments, I saw that chart back in 2007, but there is a good possibility that the option and alternative loans have already been wiped out of the system through foreclousure before the reset. As far as I know the banks have written most of these loans already, hence the giant write offs. The thing to worry about is the prime borrowers now.

#89 Terpy on 04.29.09 at 12:47 pm

Oh Garth, I love your writing style. That was a great article. And I agree with what you said.

#90 wjp on 04.29.09 at 12:50 pm

#73 TS…it is called “Talking one’s book” in market circles!

#91 POL-CAN on 04.29.09 at 12:55 pm

# 56 Mike B

It might seem like everything is selling but I doubt it. April numbers will be out in a week and a bit. I do not see much moving above the 600 K mark and that is why the ave and med prices are still falling.

On Saturday we went to 2 open houses in little italy (C1). One was a semi at 650 K and the other a detached at 850 K. We were in both for around 30 minutes and were the only ones there. Granted, the weather was very nice before the storm hit but typically that does not keep the serious buyer away.

The 650 K semi was reduced to 629 K today….

On the other hand there was a VERY nice vic about 2 months ago that was listed for 599 K and sold within a week for 675 K…. It was priced right at 250 K below the competition…

I hope that this is the last month in this dead cat bounce. Same goes for the stock market which is due for another leg down. Maybe people feel good because of the March/April stock gains? Maybe the next leg down will shock them? I do not know…

I can make this observetion though… If it was not for the PPT and GS driving more then half the volume on the Dow this sucker would have gone down a couple of weeks ago. As things stand it looks like we are at a turning point as today just migh be the final short squeeze. The US banks are insolvent, un-employment is crazy, GDP is falling, earnings are down, house prices are still dropping at 2 % per month, and now the swine flu…. About the only positive that I see is that Obama managed to make it 100 days…

Crazy times we live in.


#92 smwhite on 04.29.09 at 12:55 pm

I know China has been increasing its gold reserve over the past half a dozen years to hedge their US dollars but i can’t find anywhere by how much, however:

Looks like Peter Schiff’s trip to the middle east might have hooked a few fish.

And just to point out, if gold increases much more in price without a rise in oil(or even silver), it will enter bubble territory…

#93 Got A Watch on 04.29.09 at 1:04 pm

#74 – Cowgirl Kiss – The solar sector is not doing too well right now, due to the credit crunch. Solar manufacturers are having great difficulty finding customers with cash who are ready to go now.

Many projects on drawing boards are stuck there, as they are often tied to real estate developments that probably won’t be built for years, if ever.

So, it seems too early to invest in solar now. Companies in this sector, especially startups, may not have enough cash/credit to survive until Banks start lending to their potential customers again. is a good Canadian Blog that covers this sector.

More evidence of this, is the stock of the solar company ‘Evergreen Solar’, stock market symbol ‘ESLR’, often cited as the poster child for the industry. Google Finance ESLR shows the stock now at $2.17, where it used to be much, much higher. Though it is up off the bottom lows.

The companies listed below under ‘Related Companies’ are the whole industry, or at least almost all the larger public traded companies. Their stocks tell mostly the same sad story. You can buy now, but you might have to hold for several years before anything much happens.

The solar revolution has been delayed. Sunny blue skies ahead, one day, when people can afford to buy.

#94 smwhite on 04.29.09 at 1:04 pm

On China gold…

#95 The Gonz on 04.29.09 at 1:24 pm

Here are some facts amongst an abundance of opinions. Toronto prices have fallen 9% from their peak in August 2008. This index is the only one that tracks resale of the same property. I find it much more objective than the ones from TREB or MLS.

9% is not a very high number, which would reinforce Garth’s point that the price fall has not yet gained momentum. The index is not far from 100, at that point prices will be comparable to those of mid-year 2005.

#96 Bill-Muskoka (NAM) on 04.29.09 at 1:33 pm

Oops! My bad HTML. Here is the link properly done.

Fort Knox had a helluva lot more than 400 tons locked away for decades.

#97 Mr.Calgary on 04.29.09 at 1:48 pm


Your “financial advisor” is a mutual fund sales person. RUN AWAY! These people won’t stop drinking the Kool Aid.

BTW, what do you sell? — Garth

#98 The Coming Depression on 04.29.09 at 1:55 pm

I talked to an actor in Vancouver (from Toronto) stating she is going to buy a 5 million dollar home in
Shaughnessy ( high end area in Vancouver). I said that I bet it will be half that price in a year. She laughed. The older guys around her agreed with me, since they were around in the 80’s. I stated what is the difference between Beverly Hills, South Beach and Shaughnessy?
Stunned look. She got on her cell phone and told her producer boyfriend, maybe we should wait…

Maybe you just depressed her. You depress me. — Garth

#99 Gonzo on 04.29.09 at 2:09 pm

#85 – Miketheengineer
Nice irrelevant and ridiculous post. Reminded me of a scene from the Simpsons

Lisa – I have a rock that wards off tigers.
Homer – How do you know it works?
Lisa – You don’t see any tigers around do you.
Homer – Lisa, I would like to buy your rock.

#100 lgre on 04.29.09 at 2:11 pm

“Nowadays, I just smile and say “It’s complicated”. If people ask me what they should do, I recommend prayer. It’s just not worth it to try to change anyone’s mind. They will have to suffer the consequences of their bad decisions without any help from me. Even family members. I’ll let them live in my basement, if it comes to that, but that’s about it”

I agree, most people dont care to listen..and frankly I quit talking, I have become the bad guy in some of my friends eyes..I have never told anyone to sell their homes or even stocks..I just told them to wait on RE purchases..even that was too much for them to handle as RE never goes this point I coudn’t care less, even if they drown in debt.

#101 Calgary_Police_state on 04.29.09 at 2:26 pm

Garth, why the sensationalism?

There is certainly nothing to get excited about…still…in Calgary. You have green light cameras, murders, and housing that prior to 2004 was affordable. Sure, prices have dropped(a little) but that droppage is off of insane prices. Therefore, prices are still insane. There is only one reason to live in Calgary: Work. The scenery is ok, the people ok(if you arent murdered), but the cost of everything here is undermining of any new family’s goal to get ahead. It wont happen here. The herd mentality of conservatism doesnt help that the majority hold on to this delusion that the median is $400K for SFH. I thought this was the prairies, not New York city? It seems it gets harder and harder to get any home. Some say that the condo market in Calgary has collapsed. Where? Condos are still what a house should cost!!! So all this talk of recession and depreciating home values are from those that are smoking crack.

Fortunately I cancelled my subscription to that conservative rag the Calgary Herald. The Sun paper is a bit better, but not by much. At least they dont have that fool Mario Tonegucci-his herd mentality of supporting a real estate boom at all costs is nauseating and disgusting.

He’s just doing the job his paper requires. Blame the Herald. — Garth

#102 Joe Provoloni on 04.29.09 at 2:41 pm

#77 Bill-Muskoka (NAM) on 04.29.09 at 11:33 am

Hey Bill, in the Canadian system the MP represents the party. I know that doesn’t sound good but its true. The nomination papers were signed by the party. The fund raising and campaigning is done through the party. The positions held in parliament are given by the party. Everything is filtered through the party. It has always been that way. All parties whip their MPs. If one doesn’t like it they will probably be expelled from the party, and all parties have done that.

The utopian democracy purported by many does not exist in Canada. Never has. MPs do not represent the people. The party is what got them to parliament and it is the party that keeps them there. If it were different we would see more independents running and winning seats.

So thats the system right or wrong. Garth may have wanted to change it but we see where that went. It has been entrenched for hundreds of years. No one likes the system when their opponent has power and no one will reform when they have power simply because it benefits the one in power. That’s the inherent corruption of man.

Having said that, in this imperfect system that is unlikely to change any time soon, we have enjoyed relative freedom in this country. Freedom to live wherever we wish, freedom to work in any province, freedom to vote, freedom of speech (as long as it isn’t against Islam or gays), freedom to debate on forums as this.

All in all, Canada isn’t a bad place when you compare it to the rest of the world. Could it be better? Absolutely. But whats better for me may not be better for someone else. Some want more government programs and involvement in their lives. Some want government to be invisible. The democracy part comes in when we elect a party that we believe would best represent our interests. After that, its the party that decides what is best for us, not individual MPs.

#103 Dunno on 04.29.09 at 2:45 pm

Well…. DOW up 200 pts ??? Worst 1Q decline in what, 50 yrs??? Houses here in Montreal are selling well???? I really thought is was going to be bad. I thought the houses were going to be sitting,unsold, for a long time, but it’s spring, must buy!
I still think it will crash, but no crystal ball, so don’t know when.
I think patience is a virtue at this point.
This is really going to hurt in a few months… yrs.

#104 Nostradamus jr on 04.29.09 at 2:55 pm

>The looming Conservative-(Quebec)separatist-socialist coalition<

…Uhmmmm, who posted recently that Harper was a Western Separatist in Sheep’s Clothing?

…Uhmmmm, thinking, contemplating, thinking…it was me of course.

Does anyone wonder why I’m called Nostradamus jr.?

Earlier “for the record” predictions…

…Immigration will become a Canadian major countrywide debate.

…Ontario will become another Ohio / Michigan”have not” Economy, as it is an overpopulated manufacturing province.

…Within ten years Western Canada will secede…east of the Manitoba/Ontario borders.

…just three of many predictions…

#105 frank houten on 04.29.09 at 3:12 pm

Looking at houses for 2 years now in rural Ottawa. Prices dropped the last 6 months slowly but the last week saw all this old inventory that was overpriced sell when the 5 year mortgage now can be had for 3.85%(RBC)
Still believing in patience plus havnt found the farm .

#106 smwhite on 04.29.09 at 3:36 pm

#76 Irene

I’m guessing your advisor will try to sell you one of their “managed funds” which is most likely an assortment of that banks mutual funds at differing levels of risk.

Look into your banks “Canadian Resources” based fund. The usually span numerous areas of the commodity sector such as agriculture, base metals, precious metals, oil and gas.

Good luck.

#107 chuck on 04.29.09 at 3:37 pm

Come on ppl. This is the media. It can contort any issue into what it wants. Why is this such a surprising atrocity? The only thing that’s crazy is the ‘can you believe this?’ reaction, which is why that publish this stuff anyway. And it works. Just like all the negative press in the beginning fueled fear in the market, ppl will consider articles like this in there emotional decision to buy. Ignorant, or greater fools or whatever, it’s human nature. The media will probably be one of the largest single determining factor to the recovery.

#108 jwkimb on 04.29.09 at 4:02 pm

#26 In 2001 the average medium price for a SFH in Toronto was approx 240K (please correct me if I am wrong)
The unemployment rate was something like 4%, prosepect of finding employment was good, interest rates where in the 6% range.

In spring 2009, average SFH in Toronto is 350K, unemployment at 8%, prospect of finding work is not so good, interest rates at 4% ( I am talking 5 year fixed, same difference if talking about variable rates)

um, what gives?

Your examples have the same carrying cost per month once inflation of 2.25% is factored in. Was that a trick question? Low interest rates create high prices.

#78 Puhleaze…there is nothing buried at the WTC site. I can see right to the bottom from my office window. Just a big hole, the train station and the freedom tower in there now.
Not seeing house prices in Toronto drop. Not looking forward to renting :(

#109 Bonnie N BC on 04.29.09 at 4:04 pm

Oh this sucks big time- the WHO has just upped the anti on the H1N1 virus to pandemic imminent.

I remember seeing a CBC or BBC production on what could happen if a pandemic hit the world in our 21st century lifestyle.

I don’t want to scare anyone but there a possibility of a complete failure of energy infrastructure as people become gravely ill over a few months.

Yikes – real estate seems like the least of our problems.

#110 cash is king on 04.29.09 at 4:35 pm

Say good-bye to Chrysler

This time next month we will say good-bye to GM.

No Chrysler, No GM, say goodbye to Windsor. Will Windsor’s new moto be …. We’re not Detroit (yet)

We get to say hello to huge % ownership of GM by the province of Ontario.

Lots of tax payer money to invest. Will Ontario be to GM as Petro Canada is to Ottawa?

#111 Future Expatriate on 04.29.09 at 4:51 pm

#109 Bonnie – Real estate has ALWAYS been the least of our problems; here’s the breakdown:

3. Real Estate Crash

2. Global Economic Crash

1. Keeping alive in Pandemic (which the WHO would readily acknowledge already exists if it received the actual info from Mexico and not the tourism fear-spun figures.)

#112 Grumpydawgs on 04.29.09 at 4:58 pm

What we are witnessing is the victory of advertisers over a captive market. Canada is a small market with only two National media organization who account for 99% of the Coverage. The government and the advertisers realise that this country is a vacumn where the average person is easily controlled by the tight application of a one track media message. Peopel here are simply uninformed about the goings on of the world around them. The government has decided to sell ‘optimism and confidence’ as long as it can. It’s a bit like the Roman story of Nero fiddling while the city burned. The goverment chose to say nothing to warn people of the fire and saw subsequently tens of thousands burn to death who were trapped by the blaze.

We have another interesting parellel going on simutaneously with the Swine Flu/Mexican Flu pandemic wherein the government has chosen to side with the tourism industry ( as they did during the SARS outbreak) and not notify the public until forced to by the W.H.O. The CDN Gov didn’t interfer with a single flight coming in from Mexico even when it was obvious that each plane was bringing new cases that would spread the pandemic even more broadly and quickly throughout Canada.

Mexico was quite aware of the outbreak months ago it seems and waited until the end of tourist season before the death toll was too big to hide any longer. Canada’s complacency is shameful. The Liberal party was always listening with sympathy to the tourist lobby from ‘poor little Mexico’ about shutting down bad news from there but this time the entrenched bureaucrats have gone too far.

#113 David Bakody on 04.29.09 at 5:04 pm

#60 Bill-Muskoka (NAM) on 04.29.09 at 9:21 am

Ditto….. well said…

#102 Joe Provoloni on 04.29.09 at 2:41 pm

Hey Joe, the point is Harper AKA GWB jr. has for many years wanted to change the middle of road path that Canadians have driven deep and wide. Think Reform and it all just might come back.

It looks as if we here in NS are about to elect our first NDP government should our Harper Sheeple be forced to dissolve the government ….. election date June 3rd … people here are not happy in many respects with the whole political system. The disrespect Bill Casey received for stating the truth just might have been last spike in the Con Coffin

#114 Justin on 04.29.09 at 5:18 pm

China inreased its gold reserves by 454 tons since 2003:

#115 Bottoms_Up on 04.29.09 at 5:40 pm

“just my two cents…which are worth only one cent, due to deflation.”
actually, your 2 cents are worth 3 cents in a deflationary economy…you heard it here first.

#116 Barb the proof reader on 04.29.09 at 5:41 pm

#109 Bonnie N BC
Hi Bonnie N, long time no see!

Many (in fact most of my Calgary friends including myself) have mild flu symptoms, persistent over 10 days. No one’s gone to a doctor yet, nor do I intend to.

So in the case of that swine flu, which is reportedly mild in U.S. and Canada, how does the WHO eventually decide infection rates when people don’t normally report mild flu?

[hmmm.. friends 3 sons returned from Mexico Apr. 4 – parents developed persistent coughs.. then me, sore throat & aches]

#117 Bottoms_Up on 04.29.09 at 5:48 pm

“This topic I’m sure has come up but Garth, please. My husband would like to open a TFSA and put the limit into a mutal fund recommended by our financial adviser. I don’t agree with him when our mutals have tanked and lost us a lot of money. We are both in our 60’s. What you say Garth? I’ll take your advice sooner than that of the Financial advisor any day.”
Garth has mentioned he likes the potential returns that could be had by investing in equities/stock market/mutual funds. Not sure what he’d advise given your particular situation though.

#118 Bonnie N BC on 04.29.09 at 6:36 pm

Hey Barb the Proofreader

Yes, I missed you too…

I guess the point I am trying to make is we may be in the weeds right now.

I am not overreacting to the “latest breaking news” but there’s some sort of what do they know that I don’t know feeling..

It seems extraordinary that they would go to Defcon 5 (in health terms) in a matter of 24 hours.

Either the WHO are paranoid and trying to cover their asses or something is happening (not public) that gives us pause.

I don’t know, I kinda feel sorry for Obama. Worldwide economic meltdown and now this?

Jeepers, then we have climate change baking away our future. It’s a perfect storm.

Hope you are okay in a healthy way. Don’t be silly go to the doctor – we may be in the eye of the storm.

#119 Joe Provoloni on 04.29.09 at 6:51 pm

#113 David Bakody on 04.29.09 at 5:04 pm

Hey David, there is no doubt that people are becoming frustrated, apathetic, or whatever else with the current political system.

You mentioned the reformers though. If one were to just look at the policies without tainting through political partisanship eyes (not that you are doing that) one would be quite attracted to some of their stuff.

If we want democracy like Bill mentioned, how about free votes in the commons. How about referendums on major issues. How about a sober second thought that is elected and equal and effective. That actually shows up for work.

I bet Canadians would warm to that. I bet voters would become engaged in the process. I bet debate would be more far spread than a bunch of geeks like us on insignificant blogs. Those were reform ideas. Pretty good ones to me.

#120 Dan in Victoria on 04.29.09 at 7:12 pm

That was an excellent post Garth,short, sweet and brutally honest.Thank you.All the ingredients are now in place mixed and kneaded,they just need time to rise,Then they can be placed in the oven to bake.For the life of me I can’t figure this one out.It’s so obvious what is coming down the road.We’ve had a bunch of houses go up for sale in the neighbourhood they have all sold in under a month or so.There was an open house a couple of weekends ago around the corner from us we were driving home from a late breakfast,came around the corner and there were cars scattered every where.What the” H”?I said to the wife.As we were going by a young couple dashed out from behind a mommy missile (Mini Van) oblivious to anything but the house.I had to slam the brakes on to keep from hitting them”stupid lemmings” I shouted at them, got the immediate cease and desist order from the wife.House was sold within a week.Absoutely crazy.They have grabbed the last of the greater fools by the ankles ,turned them upside down and are now shaking them to get whats left in their pockets.This is not going to end well.Not at all.

#121 . . . fried eggs and spam . . . on 04.29.09 at 7:21 pm

“This blog is clearly not for normal people. Move along… — Garth” — /-\ and /-\ — “Crazy times we live in.” (by #91 POL-CAN at 12:55 pm) . . .

Thank dog (sorry cat) I’m not a normal people crazy person living somewhere in Sheepleland, the vast metropolis and capital of Chernobyl.

I don’t ever want to be normal! BTW, am I supposed to start my own pandemic, or should I buy one from Walmart?
Just in time to help the average American hopelessly mired in debt sheeple-peeple, and probably coming to The Great White North. —
Curious as to why this is happening, other than the obviously increased military activity happening in Pakistan and Af’stan. If the so-called ‘civilized’ west would pack up and go elsewhere, we might actually get on a lot better with each other.

Could be because Iran has discovered untouched oil and gas fields in their country, and that the first two have already agreed to protect Iran from Uncle Sam.

Second link is that the US (and Canada) are losing control in Af’stan. Same thing happened to the USSR and others before. The war-mongers and drug companies, who are rolling in money and sitting on their fat asses are the only ones who profit from this.
See out-take below. —

“Obama has recently suggested that Washington would nuke Iran to protect Israel – which has never yet signed a treaty with the US – to which the Bush Administration replied contemptuously that it would be very hard to convince American parents in Kansas that their sons should risk nuclear incineration for the sake of a small country in the Middle East. Clearly Obama is a greater war monger on issues involving Israel then even Bush: It comes with being a “Jewish President.”

#122 Barb the proof reader on 04.29.09 at 8:43 pm

#118 Bonnie N BC “I guess the point I am trying to make is we may be in the weeds right now.”

Bonnie, goods heads up on that WHO update, and I know from the past you are good at spotting a news story that has signs there’s more to the story..

Of course we Canadians and Americans can’t see past our noses, and it’s really the nations that are very susceptible that the Phase 5 outbreak level is aimed at.

They’re looking for a better name for H1N1 like “Mexican flu” but who knows, maybe it’ll turn out to be “Bangladeshi Flu” but it does seem to be creeping toward pandemic imminent if it jumps to certain countries.


Also, interesting item #31 . . . “fried eggs and spam”, RE: taking Vit. D instead of flu shot. Article talks about known problems with flu shots. I don’t think anyone should be taking flu shots. Who is profiting off them..

#123 Sean in E-Town on 04.29.09 at 9:45 pm

#93 – Evergreen Solar, you should have a few clicks more on this company sir… first you’d see that they’re one of those companies that’s aggressively growing through this contraction, always a good sign… second, though they haven’t made a dollar in the last four years, their losses only slightly exceed their r&d budget, and third, with the current market capitalization, they’re worth more dead than alive.

#124 marcus aurelius on 04.29.09 at 9:49 pm

Mike #56 and POL CAN #91:

No question, over $600K listings are languishing, and over $1M, sitting dead. Vendors are not lowering asking prices over $1M, but that dam will break in a few months.

The ball-crusher will come with the interest rate rise in a few more years – and don’t think that only the First-Timers will get hit on their overpriced semis and condos: those $1M buyers are often people with no down or trade-up to speak of – the “Iranian Specials” like my North York neighbour (you know the guy – the one who started a little side business importing dual-use technology and breaking the law by trying to re-export them into Iran. Did you notice in that news story that this guy had a $700K house with about 1% down and sub-prime financiers? I’m not saying all buyers in this market are Iranian Specials, but a lot of these yupsters are not exactly meeting those old ‘salt of the Canadian earth’ downpayment standards. Ever wonder what happens when an $800K mortgage rate doubles or triples, and Daddy (and increasingly, to the surprise of the politically-correct, Mommy) is told he/she has to take a Recession paycut, or worse?

#125 Iam on 04.29.09 at 9:59 pm

Swine Flu prevention/cure

For prevention of the condition known as swine flu ask your general practitioner for Oinkment. If you have already contracted the said condition he can provide you with the antidotal Sowpository.

#126 Tony on 04.29.09 at 11:12 pm

It all started here the 3rd Monday back in June 2007 when David Dodge sewered an entire province that being Alberta with his well timed quarter point increase. That lead to the demise of the rest of the Canadian real estate market. Don’t blame the United States blame David Dodge for raising interest rates when he should’ve been lowering them.

#127 Harold on 04.30.09 at 12:11 am

And yet, here in SW Ontario in a small town 20 miles north of London two developers are proceeding with plans to build one floor condo subdivisions targetted at 55+ people who may want to downsize. Both say they think the worst is behind us and that things are looking up.

Of course all of those buyers will need to sell a house first so we shall see what really happens.

#128 Dan in Victoria on 04.30.09 at 1:10 am

Post #122 Barb”Who is profiting off of them” that got me thinking on a diffrent tangent,Tamiflu was on the news tonight.How about former US Defense secretary Donald Rumsfeld,former Secretary of State George Schultz,wife of former California Governor Pete Wilson. If you look around on the internet there is some other disturbing info.

#129 Got A Watch on 04.30.09 at 3:56 pm

#123 – Sean – LOL. Those all sound like good arguments to not own this company now, but maybe in the future when the economy improves.

But I am mostly a day-trader anyway. Obviously your standards of what is a good investment are different from mine. I look for a small instant gain, then I bail. I care not about the long term, I don’t hold for that long.

If you bothered to click on the link, it talks about how solar manufacturing plants are shutting down all over the globe – because customers with money who are ready to install now are very scarce. Due to the credit crunch.

This has nothing to do with the ESLR stock, except they won’t escape the same fate. If customers have no money, the sales won’t be made till they do.

Has nothing to do with how good or not the company by itself is, it’s the wider economy and the credit crunch.

I have a background in this field, actually do have a degree in mechanical technology with a solar specialty. But that does not help me analyze the stock in a time when the markets are not normal. If things were not so bad all over, your analysis would probably be correct.

Good luck with the trade. I just don’t have enough patience to hold it.

#130 Barb the proof reader on 04.30.09 at 4:09 pm

#128 Dan in Victoria: “If you look around on the internet there is some other disturbing info.”

True, like how former Alberta politicians have poised themselves to catch the ball of healthcare profits as they tumble into private hands, nudge by nudge, not for improperly purported money saving purposes but for lining private pockets. Manipulating and strangling the public healthcare system to a false death has been Big Private Medicine’s long term goal. Beware of unbounded greed of medical profiteers in sheep’s clothing, they don’t care who they kill in their money-making wake.

#131 BongoBoy on 05.08.09 at 3:31 am

After years of renting & saving, I recently put 60% down on a modest 3 bedroom townhome in a good Toronto neighbourhood. I live in it for about the same monthly outlay as the one bedroom rental I left behind, taxes, interest & utilities included. It’ll be less once the small mortgage is paid off. Should I have put off buying? Denied myself perhaps years of more comfortable living on the CHANCE that down the road I could get something similar for much less? I suppose it all depends on where your priorities lie. It’s all the house I need and it’s affordable now. Maybe I could have saved $50,000 if I’d stayed in my apartment for another year. Maybe I’ll be dead in six months. Who the hell knows? What I do know is that if real estate crashes, I’ll be riding out the storm in a pleasant, cozy townhome. And as things cycle its value will recover. World population remains on the increase, and the next generation is going to need an affordable place to live too. This is all just another market timing game.

So to those driven to spending hours of their precious lives chasing the dubious rewards of excess wealth I say: enjoy the ride. Because in the final tally, that’s all you may have to show for it. The stock market is legalized gambling for most folks, as is any paper that doesn’t guarantee its principal. Attempting to time the market on any purchase is a trip to Vegas as well. Staying mostly in GIC’s wasn’t making me rich by “first world” standards, but it sheltered me from the latest crash and left me feeling angry for so many friends and loved ones who watched their savings get savaged, victims of the commission driven investment community.

Play with your equity any way you wish. Just listen to grampa: “Spend less than you make and put some away in a safe place for tomorrow.” Pretty simple advice for those of us who value a roof over our heads, some cash in the bank, and a good night’s sleep.