For a good time, call Mark


“You think I’m kidding about the End of the Recession!
Pull my Finger… and you’ll find out!!!!”
-- Grantmi, posted @ 11:33 am

Here’s a memo that mortgage lenders hope you never read:

Our 1 and 2 year rates are very competitive, and  it appears as though rates will remain fairly low for more than another year.  With us paying 50bps on a 1 year and 65bps on a  2 year, you can give your client an excellent rate right now,  you get paid quite well for such a short term,  they won’t be tied to a 5 year product, rates will likely still be good at the end of 1 or 2  years, and you can then get paid again by placing them in a new product!  Over the long term, you will earn more money…

This is the actual pitch one mortgage company is making to mortgage brokers.

Here’s the translation: Hey, these low mortgage rates are a drag for making money and Mark Carney says he’ll keep them in the dirt for another year. Sure, this is a sweet deal for borrowers who lock up the cheapest rates they’ll ever see, but if you talk them into a short loan we’ll pay you a nice fat fee. And the best part is, you’ll get another fat one in a year or two when the suckers come back for a renewal! You get paid twice for selling them two mortgages. Isn’t this great? And when they renew they’ll be so freaked out that rates are shooting higher you can sell them a five-year loan at way higher interest and r-e-a-l-l-y score…

Welcome to Mark’s World. Here the dream lives. Every citizen can, with the right policy and a press release, be made into an indebted, frenzied little consumer on whose straining back the economy will be lifted.

Homebuilders will build new McMansions. Realtors will sell at rising prices. Home Depot will be stuffed with renovators. Mortgage companies will loan without end. Car dealers and auto workers will be rescued. Banks will be made whole. And the entire country will feel better because the central bank says the recession thingy is paws-up.

Well, you have to admit. It’s a plan.

Governments in Canada and the United States have spent more money than God has to stimulate the economy, and it hasn’t worked. After trillions of dollars, the number of jobless people is a lot higher, the number of functioning factories is a lot lower and the economy is still contracting. Any number of things could happen to send us into the second dip – the swine flu pandemic, another Katrina, a run on the greenback, a spike or dive in oil prices, chaos in Pakistan, whatever.

The political elite have ushered in an unprecedented amount of fiscal stimulus which, in the US, is more than was used after the Great Depression. This has shot public budgets to hell, created record deficits, is driving up the national debt and will ensure higher taxes and less opportunity down the road. At the same time, interest rates have been artificially reduced to lure consumers into new debt and fatter mortgages as they become horny for big-ticket items.

Tax incentives for more spending have been created (like the home reno tax credit); banks have been allowed to offer long amortizations and zero-down payment deals; and soon people will be paid money to trade in their cars. Against this background, the Bank of Canada has been having nonstop pressers to tell people everything is looking peachy. And this week, Mr. Carney showed he has stones rivaling those on Parliament Hill as he declared the recession over.

The message could not be more clear: Borrow. Spend. Sha-na-na, baby. Live for today.

As I said, it’s a plan. It may work. I’m sure the headline writers will oblige, just as we all wish prosperity would return so easily. But it’s hard to be convinced when you’re out of work, under-employed, trying to keep your business afloat or selling to the world with a 92-cent dollar.

But the fact remains it was a credit bubble which got us all into this mess. It wasn’t that we borrowed and spent too little – just the opposite, we blew up. Fact is, we also coming off decades of over-spending and over-consumption by Baby Boomers which created the worst case of asset inflation in history. And the fact is negligent governments allowed and abetted excesses leading to a housing bubble, dodgy financial practices, toxic loans and a savings rate of zero with a consumption rate of 100%.

So, maybe in Mark Carney’s economy this will all work out. Perhaps we’ll see GDP growth, leading to substantial stock market gains (another 240 points on Bay Street Thursday), enhanced productivity and a return to normalcy.

But, for how long?

The wise among us will know not to take on new debt at low levels to buy assets at inflated ones, because while the price of a house may fall, the borrowing does not. They’ll know if you do borrow, don’t gamble. Smart people will realize cash is once again king. Geniuses will scramble to pay down debt just as neighbours are desperate to get more of it. Survivors will prepare for the unexpected shock, as well as the inevitable consequences of today’s actions.

In the real world, you cannot borrow your way to wealth.

In Mark’s World, ya just party.


#1 ca on 07.23.09 at 11:03 pm

Thank you for bringing a dose of reality to the ongoing surreal events. It is difficult to remain calm when all around insanity seems to prevail.

#2 rog on 07.23.09 at 11:05 pm

Spin doctors , what a bunch of B.S. Its not over its just about to happen next will be a depression just look south.

#3 Rob on 07.23.09 at 11:06 pm

Well, Goldman Sachs men control the Federal Reserve and U.S Treasury in the States. What better way to steer Canada down the same road , put and ex Goldman Sachs man, Mark Carney in charge. People won’t understand what is going on until they accept the reality that globalist bankers are engineering the colapse of North America. How else could they justify a new world reserve currency, controlled by them, a global private bank (IMF) and a one world military force (U.N) to crack our heads if we don’t like it. The Merger between Canada, Mexico, and the U.S is still in their sights. But this can’t happen until the old system is colapsed. Why do you think the provinces are homonizing their tax codes from east to west? The next step is to harmonize with the U.S and Mexico. People need to wake up, the politicians are just street hustlers pushing a global agenda.

#4 Nostradamus Jr's Analyst on 07.23.09 at 11:06 pm

Here are some worthless proclamations from the early 1930’s.

“… a serious depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall.”
– Harvard Economic Society, November 10, 1929

“The end of the decline of the Stock Market will probably not be long, only a few more days at most.”
– Irving Fisher, Professor of Economics at Yale University, November 14, 1929

“In most of the cities and towns of this country, this Wall Street panic will have no effect.”
– Paul Block (President of the Block newspaper chain), editorial, November 15, 1929

“Financial storm definitely passed.”
– Bernard Baruch, cablegram to Winston Churchill, November 15, 1929

“I see nothing in the present situation that is either menacing or warrants pessimism… I have every confidence that there will be a revival of activity in the spring, and that during this coming year the country will make steady progress.”
– Andrew W. Mellon, U.S. Secretary of the Treasury December 31, 1929
“I am convinced that through these measures we have reestablished confidence.”
– Herbert Hoover, December 1929

“[1930 will be] a splendid employment year.”
– U.S. Dept. of Labor, New Year’s Forecast, December 1929

“…there are indications that the severest phase of the recession is over…”
– Harvard Economic Society (HES) Jan 18, 1930

“There is nothing in the situation to be disturbed about.”
– Secretary of the Treasury Andrew Mellon, Feb 1930

“The spring of 1930 marks the end of a period of grave concern…American business is steadily coming back to a normal level of prosperity.”
– Julius Barnes, head of Hoover’s National Business Survey Conference, Mar 16, 1930
“… the outlook continues favorable…”
– HES Mar 29, 1930

“… the outlook is favorable…”
– HES Apr 19, 1930

“While the crash only took place six months ago, I am convinced we have now passed through the worst — and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us.”
– Herbert Hoover, President of the United States, May 1, 1930
“…by May or June the spring recovery forecast in our letters of last December and November should clearly be apparent…”
– HES May 17, 1930

“Gentleman, you have come sixty days too late. The depression is over.”
– Herbert Hoover, responding to a delegation requesting a public works program to help speed the recovery, June 1930

“… irregular and conflicting movements of business should soon give way to a sustained recovery…”
– HES June 28, 1930

“… the present depression has about spent its force…”
– HES, Aug 30, 1930

18. “We are now near the end of the declining phase of the depression.”
– HES Nov 15, 1930

“Stabilization at [present] levels is clearly possible.”
– HES Oct 31, 1931

“All safe deposit boxes in banks or financial institutions have been sealed… and may only be opened in the presence of an agent of the I.R.S.”
– President F.D. Roosevelt, 1933

Thanks Mark, for adding your worthless prognostication to the pile.

#5 anon09 on 07.23.09 at 11:11 pm

Welcome to the big leagues of financial blogs Garth.

#6 Nostradamus jr. on 07.23.09 at 11:12 pm

1 & 2 year mtges do not apply in North & West Van.

…It is expensive here for a reason.

You know that old saying…”those that can do, those that cant teach, or is it preach, or is it b*tch.

#7 molson cdn on 07.23.09 at 11:17 pm

Bravo Garth- your last few articles have been excellent. real poetry. i honestly believe you are correct with your observations.

you have to omit, the Mark Carney show will be successfully spun and everyone will believe it.
Keep up the good wok

#8 ASpencer from Canada on 07.23.09 at 11:23 pm

I remember last year at this time you were frothing at the mouth over the economic doom for Canada and yet it was only a fraction of what you expected. The best you can do now is fold up your tent and get out of the way. Let Canada get along without your prognostications. Go on a really long trip or something.

#9 hal smith on 07.23.09 at 11:33 pm

Garth, for this to work interest rates will have to stay where they are for 10 years. Is it possible?

#10 Rich Grover in Vancouver on 07.23.09 at 11:34 pm

I like the sound of mark’s world…

#11 Joseph on 07.23.09 at 11:40 pm

Dead on. In the worst case, I believe you have made the right call on Canada’s real estate market at the wrong time. This may not be the economic cycle which precipitates a marked decline. It could be the next one. Carney’s actions may work to resuscitate an anemic recovery at best, or perhaps better in the short term. But this can’t last forever as there are too many imbalances. We are in difficult times. It is indisputable. Can first time buyers in this blog wait for another 4 to 6 years for this recovery (if it is indeed real) to run its historical course prior to purchasing a house. Not likely. But in the meantime, as you pointed out, any number of international events can preclude this recovery (if it really exists) from taking root, at which point those who acted hastily will regret it. But not all of us are first time buyers, so we can afford to be more careful with our decisions in these perilous times than those who legitimately need a place to call home who have a wife and kids anxiously awaiting one. Once again, you slapped much needed cold water in our faces. You didn’t buy into the hype hook, line and sinker. What we do with that advice is now for each of us to decide.

#12 prairiegopher on 07.23.09 at 11:41 pm

Well looks like it’s over. I’m posting my squirrels on craigslist. Here in Regina we are gearing up to build a domed stadium. Things couldn’t be better here, even if our crime rate is still the highest. Yeehaw, let’er buck!

#13 Cautiously Optimistic on 07.23.09 at 11:43 pm

Garth — Your blog(s) are pretty persuasive. Just not sure where I fit: Carrying 5 townhouse/condo rentals purchased fully leveraged 5 years ago. Renewals coming up and values have increased 15-20% since. My units are clean and not had more than two empty months among the group in that time. Rents covered expenses even at the peak of my variable rate during the term. I’m positioned well in cash, have maxxed out RRSP, and my personal residence is mtg free. Even with the rate rollercoaster over the term, I’ve knocked off an extra 1.5 years from the amms due to the extended low stretch. I’m also heavily attacking the heloc for the original downs at a swift pace due to not having a personal mtg pmt. Doom’n gloomers are telling me your projections will see vacancy rates go so high due to a glut of would-be vendors putting their homes out for rent causing landlords everywhere to take a nasty hit. Since recessions in recent history seemed landlord friendly (low vacancy), I’m having difficulty leaping to the belief that this never-the-likes of-ever-seen-before glut that’s coming will increase the vacancy rate to such a disastrous point – people will still need a place to live – rent or own. The guy who can’t sell and finds a tenant then needs a place to live – no? Not envisioning vendors hanging the rent sign and moving west. Also still working out my plan to vary my mortgages; 2 fixed 5yr, 1 fixed 7yr, and 2 variable 5yr – all with top pre-pmt privileges. Feeling somewhat in control with a small managable dose of the ’Gloomy Garth’ nerves… OR… time to start liquidating?

#14 Basil Fawlty on 07.23.09 at 11:48 pm

“The essence of a credit-expansion boom is not overinvestment, but investment in wrong lines, i.e., malinvestment.” Ludwig von Mises.
Today’s low interest rates do not reflect the amount of risk associated with the repayment of the borowed funds. Therefore, interest rates are too low. Carney and the Goldman Sachs gang, who control economic policy in the US and Canada, have only two tools left in their financial tool box, reduce interest rates or print money. Rates are nearly zero, so that option is about done, which leaves quantitative easing, or in non double-speak and baffle gab, increases in money supply above increases in GDP growth, inflation. Sure we may get another crackup credit induced boom, but the hangover will hurt even worse. The debt will eventually be purged and the longer we wait the more painful the purge. We live in a time of pure folly, our financial leaders are fools and incompetents, and should be banished before they ruin everything. Just look at what is happening in he US and Ireland, then decide if Carney has a clue with his current ideas. What a joke.

#15 smw on 07.23.09 at 11:58 pm

Sha-na-na-na baby live for today?

Garth, you had me at paws up.

#16 ASpencer from Canada on 07.24.09 at 12:19 am

You are an inveterate fear mongering lier Garth. You have no shame!

#17 Freedom 85 on 07.24.09 at 12:21 am

Hallelujah and Amen! You nailed it Garth and Mark Carney can take his roadshow and BS somewhere else. An inventory replenishment cycle make things look like we are getting better but this will amount to a short term bump. By late this year or early next we will be back in the glue along with rising rates.

#18 Phil on 07.24.09 at 12:29 am

“While the crash only took place six months ago, I am convinced we have now passed through the worst — and with continued unity of effort we shall rapidly recover.”

– Herbert Hoover, President of the United States, May 1, 1930

#19 Leonard on 07.24.09 at 12:41 am

Do have Carney’s phone number ? I have a bridge I’ld like to sell him. Very good payment terms too.

#20 Ghost of Tom Joad on 07.24.09 at 12:47 am

Looks like all the New World Order minions have been told to send out the same message to the masses:

Obama on US economic crisis: ‘The fire is now out’

Looks like they’re setting us up for something big.

#21 Lance on 07.24.09 at 12:53 am

Did you hear? The recession’s over! Go spend your money!

The next drop is going to be even more nasty… and I don’t think it’s far away. Our southern cousins aren’t anywhere through this yet and will drag us back down sooner than we’d like. We might see a quarter or two of positive GDP growth, but this ain’t over by a long shot.

#22 don bool on 07.24.09 at 12:58 am

Marc Carney, the weasel who thought up the fraud regarding income trusts and that trusts in RRSP,s don,t pay tax. I,d like to defer this shister back to Russia with his Goldman Sachs buddies. At least someone had the guts to tell this Con to shut the hell up. To have a position as the Governor of The Bank Of Canada is beyond me. Respect for this institution and our country as a whole is fading fast.

#23 Jason on 07.24.09 at 1:19 am

Reminds me of this short 3 minute video I watched the other day:

Sorry if this has been posted before, but I also found it amusing:

#24 Nostradamus Le Mad Vlad on 07.24.09 at 1:21 am

“The political elite . . . will build new McMansions. . . . sell at rising prices . . . Mr. Carney showed /\ interest rates have been artificially reduced to lure consumers into new debt and fatter mortgages.”

The present set-up is beginning to resemble “Ripley’s Believe It Or Not”, and sheeple won’t believe it one little bit when they discover they are hogtied to their McMansions, can’t sell them and only have their E.I. / Welfare cheques coming in to support them.

One poster in the previous entry said to look for a major downturn come Sept. / Oct. The more I see of the neanderthals running this country, with help from the donkeysaurs in DC, the more I know it to be true.

Whether the downturn happens this fall, next year or whenever doesn’t matter — it will happen (because the elite have decreed it so), and there’s not a whole heck of a lot anyone can do.

I guess it may lead to the following. Something I’m not overly familiar with — the M-1, M-2 and M-3 stuff, reflation, trillions being added on to something or other.

A separate report ((no link) from DC indicated that the jobless rate was quietly increasing, business decreasing. The same probably resembles Canada.
If China invests its’ unbounded wealth abroad, either they’re going to fly ahead or become dead broke, and as the white (Aryan) race has almost finished their cycle, with the Red Race (China, etc.) set to take over (after we’re gone), I bet on the former.
For all goldbugs here, there and everywhere —
The torch has been passed from Walter Cronkite to Jon Stewart! —
Everything is proceeding as per normal! The UK is picking up speed, next is Germany and other parts of Europe. —

#25 Munch on 07.24.09 at 3:44 am

Brilliant, Garth!


Now for my Value Add – a blog by a dude calls himself “Le Fly” – very much your style (just 10 times stronger) and makes for interesting reading, every now and then.


Fond Regards

Le Munch :o)

#26 Sean in E-Town on 07.24.09 at 4:41 am

“The political elite have ushered in an unprecedented amount of fiscal stimulus which, in the US, is more than was used after the Great Depression.”

Garth, that’s a pretty crummy metric, as any Keynesian will tell you, the US government was so small that the FDR administration ran such a small deficit as a percentage of GDP that they’d have been admitted to the Euro. But yes, rates only have one way to go: up. When the economy recovers the monetary stimulus will be the first thing withdrawn to keep capital coming in. What we have is a surplus of savings right now, not spending, so we’ll hike interest rates first and then tackle the debt since the higher interest rates will make the debt more expensive… gotta love that vicious cycle, but it’s true. And in the long run, all this leveraging will have proven to be very bad for those of us up to our eyeballs in debt, definitely.

One last point. The stimulus was already called too small by Krugman et al, and if 8% of GDP qualifies as more money than God, He needs to cut down on the granite countertops. We are nowhere near the debt wall, about 16-25 years before our debt-GDP hits 100% and ten before we’re back up to the height of the Mulroney era. You’re weakening your incredibly strong case by mixing absolute and incremental statistics. The US is about 8-15 years away from it at this rate, and no growth, and the western world is somewhere in the middle.

PS Steve Smith mentioned you on his facebook page in passing, don’t know if you know who he is beyond a fan of your political work.

#27 Squidly77 on 07.24.09 at 5:14 am

I knew it!

How true, Garth.
Garth, you are a shining light in the dark, cold age that we find ourselves in…

It’s all coming apart now.
She’s gonna blow soon.
A real bloodbath to come.
I predicted a while ago here in Calgary the realtors and the CREB are gonna ruin this city.
Good honest Calgary families are gonna be victims of the scum.
What happened in California, Florida and phoenix will happen here. It should have happened already.
CREB cannot win. I will not allow this.
Bob did it again so he can ski another month sooner this year.
We must unite against the realtors, specs and the banks who force money down our throats.
I need another beer.

#28 Keith in Calgary on 07.24.09 at 5:22 am

Who needs more proof?

The banks are pushing the brokers to sign anybody. Regardless.
When I work in the banks in the early 80’s, we also pushed those mortgages. But I soon could not find the ethical reasons to do so. I embrased a new career: used car sakes. At least in that field, one cannot influence the economy with crazy speculation, right?
I found my perfect niche there.
I sleep easy at night that I am not part of that any longer.
What I find ethical these days are blogs that delete comments made by folks who do not agreewith the ongoing theme such as here:

That’s what make me happy. Now squidly and I can post all of our delusional comments all day. Unchallenged!

#29 mattbg on 07.24.09 at 6:27 am

Listening to one radio station this morning, they are essentially promoting this like it’s a done deal — the recession is over and good times are on their way back.

#30 Industrial Guy on 07.24.09 at 6:36 am

The media got it all wrong. The Bank of Canada said yesterday, “the Recession is over” . They missed the part about “The Depression has started”

#31 buy gold on 07.24.09 at 6:39 am

As I said, it’s a plan. It may work
( I read a bit of optimism in this line Garth?)

#32 Samantha on 07.24.09 at 7:02 am

Nice memo. We should adopt a slightly modified version of an old adage:

“Screw me once, shame on you. Screw me twice, shame on me.”

It’s over. Just like that. And, they didn’t do anything, other than to keep that interest rate thingy down. Oh, and now we’re supposed to resume consumption and spend like it’s 1999. There, all fixed.

Golly, we sure dodged a bullet on that one. Aren’t we lucky? Um, maybe not so lucky.

BoC may say it’s over, but will the recession leave? Will the bad boy recession become a rude party guest who just will not leave? You know who I’m talking about. The one who puked in the potted plants and wrote his name in urine on your new carpet among other carnage and has managed in one evening to devalue your home faster than rising interest rates?

Or, is our recession a love affair gone horribly wrong and now the ex (picture Glenn Close) keeps popping up at the oddest times? Our fatal attraction with debt isn’t going to end well. Perhaps, it won’t hurt as much for people wrapped in that nice big credit bubble.

Nah, they’ll get it in the end and it is going to be very painful.

#33 VOODOO on 07.24.09 at 7:27 am

Graphs missed by the Bank of Canada:

Wholesale sales (wholesale sales have fallen for eight consecutive months) and inventory-to-sales ratio:

Unemployment rate (“June 09 employment for students aged 17 to 24 is DOWN 93,000 over June 08).
(scroll down to the middle of the page):

And the BIG one, GDP:

#34 john m on 07.24.09 at 7:34 am

By Jason DeParle
updated 1 hour, 37 minutes ago

WASHINGTON – Years of state and federal neglect have hobbled the nation’s unemployment system just as a brutal recession has doubled the number of jobless Americans seeking aid.

In a program that values timeliness above all else, decisions involving more than a million applicants have been slowed, and hundreds of thousands of needy people have waited months for checks.

And with benefit funds at dangerous lows even before the recession began, states are taking on billions in debt, increasing the pressure to raise taxes or cut aid, just as either would inflict maximum pain.

Sixteen states, with exhausted funds, are now paying benefits with borrowed cash, and their number could double by the year’s end.(NYT) <<<<<<<<< and this is recovery????????????????–we deserve to be told the truth!

#35 David on 07.24.09 at 8:08 am

Goldman Sachs protégés like Carney have a wonderful propensity for blowing economic bubbles while the real economy does the limbo. Pronouncements from Carney are worthy of a 99% discount. Will Carney add the securitised mortgage market implosion to his resume as career accomplishments in a few years hence? Quantitative easing is a great one also, completely debase the purchasing power of the Loonie for future generations and ultimately push up interest rates and government deficits.
Capitalism is supposed to punish feckless behaviour, at least according to its leading lectors. Welcome to the world of sour lemon socialism where the public gets to collectively pick up the tab.

#36 Jonathan on 07.24.09 at 8:28 am

Someone here.. I think it was Peter Weirdo questioned why the government gets to choose the winners and losers and not consumers – ie. home depot, remax, contractors, public servants and construction workers are the winners.

It’s so clear why.

Because Harper and Flaherty want to stimulate borrowing and spending. Not earning and spending.

All these tax credits lure people into spending money we don’t have.

#37 Jonathan on 07.24.09 at 8:30 am

Does anyone get the impression that Carney is willing to do anything to be right about the 3.8% growth rate next year even if it means causing a meltdown in Canadian finances shortly thereafter? I’m willing to take bets that he has his own ego in mind, not Canada.

#38 anon09 on 07.24.09 at 8:36 am

A Worldwide Bubble in Everything

#39 Gord In Vancouver on 07.24.09 at 8:36 am

Most men get excited when they arrive at a hotel pool and see Megan Fox, Jessica Alba, or Jennifer Lopez sunbathing.

Mark Carney gets the same reaction when the Canadian dollar increases by a penny.

#40 another poker face moment on 07.24.09 at 8:39 am

This time I would call his bluff. I didn’t all the stuff went back came back firing at all cylinder.
Marky realized inflation will bite him in the butt and wants to raise interest rate back up. He can’t all a sudden raise it back up, it’s because oh recession was in the past.
The lowered interest rate meant to make people spend money at normal rate. The money is so freely flow out there it caused a bidding war everywhere.
Look at Nortel everybody is bidding for a piece of brankrupt company? Because I can.

#41 Happy Renter in North Van on 07.24.09 at 8:40 am

Isn’t a “Carney” someone who works at a travelling carnival? I guess our BOC chairman fits that role perfectly… although, he’s more specifically a carnival “Barker”… “Step right up… Get your cheap loans!”

#42 VOODOO on 07.24.09 at 8:41 am

Oh my. Everyone must see this article. We are being lied to by the BoC and our government. This is the tip of the iceberg folks. Garth is doing the right thing by preparing a bunker:

“A further 17,000 [Irish] state jobs must go (equal to 1.25m in the US), though unemployment is already 12pc and heading for 16pc next year.”

#43 squidly77 on 07.24.09 at 8:45 am

i am watching with great amusement at the low life housing calgary bull realtor posting under various alberta bloggers poster names

he does not have the required intelligence level as the comments have surpassed his capability to respond and counter post and he has now resorted to posting under names that arnt his

who knows now whos talking to who
he makes a mockery of this blog and has reduced its usefulness

garth something needs to be added here so that a blogger may lay claim to his title or this blog is done

adding a simple picture to ones user name would suffice

this comment need not be posted as its not a complaint but a concern

the fool has done the same thing on all the blogs

#44 Munch on 07.24.09 at 8:48 am

“You are an inveterate fear mongering lier Garth. You have no shame!”

It always amazes Your Munch that the “kooks” (Mad Ones) always sem to identify themselves through either bad spelling or bad grammar!

Always happens!

#45 Munch on 07.24.09 at 8:49 am


{blushing, examines the “sem” in previous post with utter disbelief}

Myself excluded of course!

#46 dd on 07.24.09 at 8:49 am

“The message could not be more clear: Borrow. Spend. Sha-na-na, baby. Live for today.”

So what happens in 2 or 5 years when we are all mortgaged up? If we don’t get another market implosion, it will be years of low low growth.

#47 dd on 07.24.09 at 8:53 am

…a return to normalcy. But, for how long? Smart people will realize cash is once again king. Geniuses will scramble to pay down debt just as neighbours are desperate to get more of it. Survivors will prepare for the unexpected shock, as well as the inevitable consequences of today’s actions….

Well said.

#48 VOODOO on 07.24.09 at 8:55 am

Garth here’s one for ya to feast on.

#49 dd on 07.24.09 at 9:01 am

David Rosenberge: What is really happening in the economy.

#50 PTDBD on 07.24.09 at 9:22 am

Kudos goes to Public Health Canada for their outstanding Flu Watch site.

#51 Denis on 07.24.09 at 9:26 am

“Mr. Carney showed he has stones rivaling those on Parliament Hill as he declared the recession over.”

Can someone please photoshop Carney with a “Recession Over” banner behind him on the deck of an aircraft carrier?

Oh … the hilarity to reference Bush “jumping the gun”

#52 dd on 07.24.09 at 9:31 am

#6 Nostradamus jr.

…North & West Van.…It is expensive here for a reason…

Wow, you potheads really like to overspend.

#53 Got A Watch on 07.24.09 at 9:33 am

I don’t think Carney realizes it, but he has just opened his mouth too wide. Echoed by the clueless ‘Harper the Economist’ and the just plain incompetent Flaherty. If the economy does not recover this Quarter on his pre-announced schedule, in a way that is actually visible on Main St., their credibility (what little shreds they have left, I admit it’s not much) will be blown to the four winds.

The CONservatives are now staked to this position, which has odds of less than zero of actually happening, IMHO, regardless of the manipulated/fictional Government “statistics” to be released to support their glassy-eyed rosy pop-can smoker “best” case that they will trot out. When it does not happen on schedule – cue massive electoral defeat.

Carney is out of his mind if he thinks the economy will be in a real “recovery” by September this year. That would make this one of the shortest and shallowest Recessions in recorded history. Right in the face of the fastest and wides global GDP collapse ever – stats I am reading show this time out is much worse and happening much faster than the “Great Depression” on a global scale, which makes this one the “Greater” I guess. And while the USA is mired in a deep slump that is not improving by September. Sure.

Newsflash – recessions due to the bursting of the biggest credit bubble in history are not over in 1 year, and are not shallow. Nor is recovery quick, and not robust.

I have stated this before: the Party in Power always gets the blame when the economy goes south. Voters get mad and vote for the Other guy in retaliation. That outcome is almost certain for the Harperites. They will have fallen into the open septic tank they dug for themselves, no sympathy here, and I voted for these morons, to my everlasting shame. Voters won’t blame the Opposition, Carney is seen as a “Government Official”, and his comments being echoed by the PM and FM just cement that alignment in the public eye. Harper should have been more cautious, and Dim Jim should just keep his big mouth shut. I imagine Iggy is grinning today.

“The stimulus was already called too small by Krugman et al” – Krugman is the poster-child for clueless economic idiocy. A guy who is not business savvy enough to run a chain of outhouses, but who is feted in academic circles because of his Nobel Prize. A perfect example of someone who is all reputation, no content, or as they say out West “All hat, no cattle”. Read Mish for several harsh takedowns of the Krug.

“A Spencer from Canada” – LOL. I see the CONservatives have hired some trolls. Back under the bridge with you.

#54 Nostradamus jr. on 07.24.09 at 9:46 am

U.S. Great Lakes Cities in Trouble?(Will that effect Ontario’s neighbouring cities?)

>>Detroit Heads For Bankruptcy; 50 Cities Must “Shrink to Survive.

US cities may have to be bulldozed in order to survive

Inquiring minds are reading how 50 US cities may have to be bulldozed in order to survive.<<

#55 PTDBD on 07.24.09 at 10:00 am

Hmmm, this call by Carney seems to back up the optimistic growth forecasts by Canadian bankers. Personally, I don’t bet anymore against those who have the power to create unlimited money. The tsunami has morphed into a never ending, monumental super wave of paperprestidigitized currency that has vaulted us over the end of the rainbow.

Party on dudes!

#56 Keith in Calgary on 07.24.09 at 10:22 am

Well all I have to say is that the Calgary Herald is editing out the negative comments on their article about Carney’s announcement.

After they were flooded with these, they changed it to no commentary allowed. ROTFLMAO !!!!!

#57 tjmikey on 07.24.09 at 10:26 am

“Fraudulent Information”

If one of the definitions of fraud is to mislead I would have to think Carney’s comments would qualify.

Either that or he is just plain stupid.

Or, all of the above.

#58 Denis on 07.24.09 at 10:28 am

Eric Sprott’s take on the current economic situation:

“We are now in the early stages of a depression. The economic indicators we follow to track real economic activity are all signaling a slowdown of massive proportions. You wouldn’t know it reading the mainstream papers of course – they all focus on the relative decline in the slowdown’s intensity. Reading about the slowdown ‘slowing down’ is not the same as growth however, and does not warrant excitement in our opinion.”

“We find the similarity between the 2008 economic collapse and the 1929 economic collapse disturbing. Don’t get sucked in… the real economy is still struggling and the market has yet to reflect this.”

“In our view, the only thing propping this market up is investor sentiment. Earnings have not improved. Keep it simple, stupid – investing is and has always been about the real economy, and this market is ignoring the hard data. You can invest in sentiment if you want to, but as we have said before, we prefer to invest in real things.”

Another good read is just how bad the situation is with the American’s current spending habits. Basically, the Head of the Fed is now a Traveling Bond Salesman and everyone that bought in 2008 needs to buy 3 TIMES as much in 2009 (and they’re currently behind Quota) –

The recession is NOT over! If our biggest trading partner is in such bad shape … How the hell can this thing be OVER??!?!? Carney needs to divide the REAL economy and REAL numbers from SENTIMENT being driven by his own statements that we’re fine and dandy!

#59 wjp on 07.24.09 at 10:45 am

When government officials or central bank employees talk the economy up, beware!!!

#60 Vancouver_bear on 07.24.09 at 10:54 am

What new HST means for BC….worth reading.

I am not flying out of YVR, not going on cruises out of Port of Vancouver, now I have one more reason to spend my money NOT in BC as much as I can. I can handle the tax hike easily, but for a good reason will boycott services in BC. Moving closer to the border and will get Nexus pass. Thank you mister Campbell for making our life even more miserable. BC will not be the best place on earth starting July 1 2010. I predicted it 5000 years B.C.

#61 Kelly McMae on 07.24.09 at 11:32 am

Who are these trolls spouting venom at the Garth? I try to find reason to confer that this blog is “fear-mongering” and aimed toward personal gain. I’ve yet to find a logical tract that confirms such sentiment.

What are the desired outcomes for Carney’s proclamation that the recession has ended? Who does this perspective serve? What are the theoretical economic underpinnings that are being employed to support said proclamation?

The thought that immediately comes to mind is that we are so close to the brink of a major collapse that the only thing left to do is to pretend that the emperor is wearing a parka.

#62 Grantmi on 07.24.09 at 11:33 am

New caption for your pic of Carney!!

“You think I’m kidding about the End of the Recession! Pull my Finger… and you’ll find out!!!!”

#63 interloper on 07.24.09 at 12:05 pm

RE: #13 Cautiously Optimistic on 07.23.09 at 11:43 pm

“people will still need a place to live – rent or own. The guy who can’t sell and finds a tenant then needs a place to live – no? Not envisioning vendors hanging the rent sign and moving west.”

Can’t speak to your situation or area up there, but I can tell you what happened to us down south of you. We heard these same arguments, and they turned out to be wrong.

The crunch came from both the demand and the supply side.

On the demand side, demand destruction affects housing too:

– Individuals continue living with parents, instead of moving out. (Reduced rental demand.)

– Individuals move back in with parents. (Increased rental vacancies.)

– Individuals move in together, share a unit. (Increased rental vacancies.)

Both supply and demand:

– People move in with family/relatives. Yes, even entire families move in with other entire families. (Vacated unit available, but no demand for replacement unit.)

On the supply side:

– Speculators purchased/constructed additional units. Already living in their home, purchasing an additional unit to rent out. (Increased supply.)

– “Conversions”. Renters kicked out of rentals, rental units converted to Condo or other saleable “ownership” unit. Rental market capacity then increased to take on the displaced renters. Now “Conversions” back on the market as rentals, or being “Reverted” back to apartments. (Increased supply.)

– Owners of vacation or second (or additional) homes attempt to rent out their units, to bring in additional funds. (Increased supply.)

Those are just off the top of my head.

It may be hard to imagine those things happening right now, just like it was for a lot of people down here during the “good economic times.” But when the bad times come, in the end people do what they have to.

#64 jess on 07.24.09 at 12:11 pm

zombies and the profit bubble?

“The conventional terms – inflation, deflation – are no longer adequate for describing the overall monetary effect of excess liquidity recently released by the Federal Reserve, the nation’s central bank, to deal with the year-long credit crunch. This is because the approach adopted by the Treasury and the Fed to deal with a financial crisis of unsustainable debt created by excess liguidity is to inject more liquidity in the form of both new public debt and newly created money into the economy and to channel it to debt-laden institutions to reflate a burst debt-driven asset price bubble. The Treasury does not have any power to create new money. It has to borrow from the credit market, thus shifting private debt into public debt. The Fed has the authority to create new money. Unfortunately, the Fed’s new money has not been going to consumers in the form of full employment with rising wages to restore fallen demand, but instead going only to debt-infested distressed institutions to allow them to deleverage from toxic debt. Thus deflation in the equity market (falling share prices) has been cushioned by newly issued money, while aggregate wage income continues to fall to further reduce aggregate demand. Falling demand deflates commodity prices, but not enough to restore demand because aggregate wages are falling faster. When financial institutions deleverage with free money from the central bank, the creditors receive the money while the Fed assumes the toxic liability by expanding its balance sheet. Deleverage reduces financial costs while increases cash flow to allow zombie financial institutions to return to nominal profitability with unearned income while laying off workers to cut operational cost. Thus we have financial profit inflation with price deflation in a shrinking economy. What we will have going forward is not Weimar Republic type price hyperinflation, but a financial profit inflation in which zombie financial institutions turning nominally profitable in a collapsing economy. The danger is that this unearned nominal financial profit is mistaken as a sign of economic recovery, inducing the public to invest what remaining wealth they still hold only to lose more of it at the next market melt down which will come when the profit bubble bursts.

Hyperinflation is fatal because hedging against it causes market failures to destroy wealth. Normally, when markets are functioning, unhedged inflation favors debtors by reducing the value of liabilities they owe to creditors. Instead of destroying wealth, unhedged inflation merely transfers wealth from creditors to debtors. But with government intervention in the financial market, both debtors and creditors are the taxpayers. In such circumstances even moderate inflation destroys wealth because there are no winning parties. Debt denominated in fiat currency is borrowed wealth to be repaid later with wealth stored in money protected by monetary policy. Bank deleveraging with Fed new money cancels private debt at full face value with money that has not been earned by anyone, i.e. with no stored wealth. That kind of money is toxic in that the more valuable it is (with increased purchasing power to buy more as prices deflate), the more it degrades wealth because no wealth has been put into the money to be stored, thus negating the fundamental prerequisite of money as a storer of value. This is not demand destruction because decline in demand is tmeproarily slowed down by the new money. Rather, it is money destruction as a restorer of value while it produces a misleading and confusing effect on aggregate demand.”

#65 Jon B on 07.24.09 at 12:17 pm

Sad to say that there is little evidence out there that living within or below your means is the economically responsible thing to do. I cannot understand how the current debt-ridden path is sustainable. How can so many live so far beyond their means for so long? It’s just got to end at some point.

#66 jess on 07.24.09 at 12:21 pm

…the banksters play book :borrow at 3, lend at 6, on the course at 3.

#67 BigAl (Original) on 07.24.09 at 12:23 pm

Its strange that now they (MSM, BoC, et al) are declaring the recession is over and finished – but during the whole past 10 months were denying being in a recession.

#68 joel brico on 07.24.09 at 12:39 pm


One more link to add:

#69 David Rockefeller on 07.24.09 at 1:00 pm

#3 Rob – Enough with the NWO/Globalist propaganda.

#70 Nostradamus Jr's Analyst on 07.24.09 at 1:07 pm

1 in 7 homes in the U.S. is now vacant.

#71 Dan in Victoria on 07.24.09 at 1:14 pm

I would trust the Taco Bell Chihoahua long before listening to that carpet bagger.Recession over,pain next.What else is he going to say they’ve gone all in.This IS NOT going to end well.

#72 Seilfworcehtsa on 07.24.09 at 1:19 pm

“Against stupidity even the gods themselves struggle in vain.” Instead of an incredible BoC governor who speaks truth to reality and inspires confidence we have an incredulous governor who inspires head scratching.His musings are not only inconsequential, they are indefensible. Flaherity wanted a cheerleader and he got one. And it may a well have been a she with a lovely set of legs instead of a he with hardly a leg to stand on.

#73 Samantha on 07.24.09 at 1:36 pm

Perhaps we could all take a lesson from the consumer in this article:

Consider his assets and the bank’s reason for decline.

#74 don bool on 07.24.09 at 1:42 pm

ASpencer from Canada on 07.24.09 at 12:19 am

You are an inveterate fear mongering lier Garth. You have no shame!

Now, now, Mr. Marc Carney and(or) his subordinates, this is very unprofessional conduct. I,m amazed at how proverbial liars and cheats are the first ones to cry foul when confronted with the truth. Or do you and the Carney Harper gang just defer the truth?

#75 TJ on 07.24.09 at 1:53 pm

This caught my eye – and goes along with Garth’s post today – big time.

Irate bank customer hits back –

Defiant Mapua artist Roger Griffiths today made a stand against Westpac by withdrawing his $190,000 savings in $20 notes.

The bank provided a red-and-black carry bag to take away the cash after meticulously counting it in front of Mr Griffiths at its Nelson branch.

Mr Griffiths, a loyal Westpac customer for 25 years, decided to withdraw his money after the bank rejected his application for an $80,000 mortgage. “It’s about time normal people took a stand.”

He said the bank turned down his application because he did not have a regular income as an artist. However, he was a successful artist, exhibiting his paintings at the World of Wearable Art complex, in Christchurch and New York, he said.

He wanted to buy a $385,000 property in Mapua, had $200,000 in cash and was going to sell his $110,000 campervan.

That more than met the bank’s criteria for a 20 per cent deposit, and the property which included a home and commercial premises would have returned $500 a week, he said.

He was disappointed when his loan application was rejected, but it was Westpac losing $111 million to Lane Walker Rudkin Industries that tipped his decision to withdraw his money.

“They can lose $110 million with LWR but turn down a normal customer who has never missed a loan payment,” he said. “If they don’t have the trust in me after 25 years, there’s a problem for Westpac.”

Having decided to withdraw his money, he then decided to make it hard for the bank by requesting payment in $20 bills.

He said the Nelson branch told him it did not have that amount and he would have to also go to other branches at Stoke, Richmond and Motueka. However, he insisted the bank have the money ready to collect at 9am today. He then took it to the Nelson Building Society, saying he would rather deal with NBS because it was part of the community.

His message to Westpac: “If you don’t support the community, the community won’t support you.”

#76 VOODOO on 07.24.09 at 1:54 pm

I can’t help but think of that poor soul who bought that burnt out, water-damaged house in Guelph.

#77 Mike (Authentic) on 07.24.09 at 2:10 pm

I am sure like the vast majority here and the growing minority of Canadian think how can the “problem” be fixed when we haven’t even ADDRESSED the problem as of yet?

Debt. Way too much of it. Government Debt, Corporate Debt and private debt.

You can’t cure debt by getting yourself in more debt. These 2 negatives do not make a positive.

So, when the Canadian Gov’t (or US) thinks we are out and everything is recovered, ask yourself.


If yes, then awesome, we are out.

As of now, we are so deep in debt that what we think is the light at the end of the tunnel is the oncoming train.


#78 jess on 07.24.09 at 2:21 pm

with cities buying up extra units does this not subsidize rent in that it keeps it from falling?

People are coming to Calgary to take advantage of the job market,” said Segboer. “But there’s no housing here for them once they arrive here. They can sure find a job, but they can’t find anything in the market because the rent is absolutely crazy right now, and affordable housing has a long waiting list.”

The Sunalta shelter was forced to close because it stands in the way of construction for the west leg of the LRT….

TClients have been given the option of going to the Mustard Seed shelter, while others have moved to permanent housing because there are more apartment vacancies in the city now than previously, Baldwin said.

In May, the city also said some of those displaced by the closure will be moved into permanent housing funded by nearly $6 million it set aside to purchase up to 90 units.

#79 Herb on 07.24.09 at 2:29 pm

A Spencer from Canadar:

is that you, Hairy S, in wolf’s clothing?

#80 Future Expatriate on 07.24.09 at 2:31 pm

Let’s see, would I want to take a bunch of crashing paper from the US and hold it as an investment, or would I rather have a currency backed by gold from Russia?

Russia to mint gold?

Depends on how much oil I had, probably. How fortunate for Russia that most of the world hasn’t enough oil for the US to bother with stealing.

And how fortunate for the planet.

Maybe the Canadian gov is trying to prop up the economy so it can buy back all the gold IT sold…

#81 David Bakody on 07.24.09 at 2:52 pm

Again well spoken words for he wise, those who wish to believe Mark Carney …. fill your boots! Strange thing is though …. stores shops are still closing and the malls are full of mall walkers only. Those boom boom housing area’s of new homes that stopped overnight are still frozen in time. Garth & friends: I mentioned the 40-20-2-20 world order plan and I still see it taking shape and I am willing to bet dollars to donuts that few who lost their good job (salary and benefits) will be hired back. As for automobiles, as soon as all the good used cars ( lease buy backs and unsold 2008/09’s) are gone look to pay big time and should the government step in with incentive money look for deals to play the one for you three for me game ….as with housing. Mr Garth Turner just explained how greed can set in with the bankers ( hands in your pocket) why not all merchants ….. hello greed is good remember? the big boys lost bundles and the WTO/WB had governments print more money and where do y’all think it went? oh what fools the working class are ….. ” WC Fields and his talking dog is alive and well” …. and there are millions willing to bite on a sure deal>

#82 Men With Hats on 07.24.09 at 3:03 pm

#16 ASpencer from Canada on 07.24.09 at 12:19 am

You are an inveterate fear mongering lier Garth. You have no shame!

And you are a twinkle toed little fairy .

#83 PTDBD on 07.24.09 at 3:13 pm

You all think interest rates have to go up? Think again There seem to be alternative monetary solutions available.

A 93 year old Canadian revolutionary challenges The Bank of Canada.

Following the cookie crumbs from Ellen Brown’s Web of Debt led to this interesting Canadian. I asked her why Canada, which has no Fed, cannot just create money at no interest whenever supply is needed to support additional growth.
According to Krehm, The Bank of Canada currently only adds 5% of new money creation. Our Banks, through lending, create the rest.

The concepts are simple, once explained. Are they correct?

Is economic nirvana for the masses around the corner?
:-) going forward :-)

#84 PTDBD on 07.24.09 at 3:21 pm

Russia’s gold: Paper, Scissors, Rock
paper covers rock and can be paperprestidigitized in pallets

Trillions are spawning like tribbles and will soak up all the rock and oil available.

#85 Rhino on 07.24.09 at 3:24 pm

Recession over, eh?

Meanwhile, another small Canadian manufacturing company in electronic components quietly closes their doors here in Montreal. Only dozens and not thousands sent away so not likely to hit the news. Friend gets short changed on vacation pay and termination pay, loses benefits.

Nice to know there is nothing to worry about. Gee… maybe they will find a good job after 5-6 years search!

After all, the unemployment stats will soon improve soon once all those unfortunate souls drop off the EI lists…

#86 Men With Hats on 07.24.09 at 3:27 pm

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the center cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: somewhere in sands of the desert
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Reel shadows of the indignant desert birds.
The darkness drops again; but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?

William Butler Yeats, January 1919

#87 Dan in Victoria on 07.24.09 at 3:53 pm

Post #16 ASpencer from Canada,you’ll have to expend a few more mental calories than that,from what I have seen here, the insult level is higher than that.

#88 DoodooBrown on 07.24.09 at 4:13 pm

HEHE. You said horny.

#89 Industrial Guy on 07.24.09 at 4:25 pm

The governor of the Bank of Canada warned Canadians today to brace themselves for the eventual return of interest rates to historically higher levels. 8% to 10% mortgages are coming back!!! … Didn’t that Garth guy say something like this was going to happen?

The dominoes are in place ….all we need is a little ……. push. Maybe something unexpected south of the border.

#90 DeLaSoul on 07.24.09 at 4:44 pm

Hi Garth, thanks again for the insight. We’re about to sell our house and I vaguely remember a post giving tips on the process. Can you (or anyone else out there) post a link to it? Much appreciated…

#91 Vancouver_bear on 07.24.09 at 4:46 pm

Shooting in the Nostradumba$$ wonderland:

Got guns?
They will be made legal soon, as people will need them for protection in this new crime, drug and auto theft capital of the world…

#92 anon09 on 07.24.09 at 4:52 pm

Stock Traders Find Speed Pays, in Milliseconds

#93 gold bugger on 07.24.09 at 4:58 pm

Guys like A Spencer read a blog that predicts gloom, look out their living room window, see sunshine and the SUV that takes them to their high-paying job, and say: “I don’t see a problem. You’re fear-mongering.”

I’ve been reading a blog called The Daily Reckoning for nearly a decade. They were warning long ago about the situation U.S. America finds itself in. For many years, it looked like they were prophets of doom that never came.

When gold was $275 an ounce and the mighty U.S. American consumer ruled the world, they said it would end badly and gold might go up. It took a while, but they were essentially correct.

Not sure how anyone can believe it will be different in Canada.

Maybe Garth’s a little early because BoC free money has propped up the Canuck consumer for a while. But it can’t last. He’ll be right eventually.

#94 Samantha on 07.24.09 at 5:08 pm

#85 Dan –

Well said.

Yes, let’s not lower the bar now #16 ASpencer. I give your comment a 2. One step above “Liar, liar pants on fire.”

And what’s with this “You have no shame” nonsense?

I mean come on here, Garth isn’t posting naughty pics of himself – just pics of some naughty people.

If having “no shame” means trying to help people by educating them and raising awareness of the less than ethical aspects of real estate and finance, then actually your comment becomes a compliment.

Drop an “S” in your name, did you?

#95 john m on 07.24.09 at 6:04 pm

i heard today from a source the latest scam is to take advantage of easy money–buy with nothing down–re-mortgage–after all there’s no appraisals if you know the system and scoop up some cash –stash it for the crash which is coming and walk away with a nest egg–file bankrupcy and live the easy life———hmmmmmmm i really wonder how many are doing this?–There’s not as many fools out there as there is running our country methinks….hmmmmmmmmm

#96 DonDiego on 07.24.09 at 6:13 pm

Canada Had C$7.53 Billion Deficit in April-May, Finance Says
Share | Email | Print | A A A

By Alexandre Deslongchamps

July 24 (Bloomberg) — Canada reported a C$7.53 billion ($6.96 billion) budget deficit in the first two months of the fiscal year that began April 1 amid declining tax revenue and higher spending, including benefits to unemployed workers and government aid for car companies.

The country’s deficit in April and May was more than eight times larger than the deficit recorded during the same period last year, the Finance Department said today from Ottawa.

Revenue fell 6.9 percent to C$34.5 billion in April and May, the ministry said in today’s report, including a 38 percent drop in goods and services tax revenue to C$2.29 billion. Corporate income tax receipts plunged 24 percent from the year- ago period to C$4.36 billion, the report said.

Program spending rose 13 percent from the year-earlier period to C$36.9 billion, which includes aid the government provided to Chrysler LLC and General Motors Corp. Transfers to people, including jobless benefits, rose 16 percent.

For the month of April, the deficit widened to C$3.98 billion from C$1.08 billion in the year-earlier month, the finance department said. The deficit was C$3.54 billion in May, compared with a surplus of C$200 million last year.

To contact the reporters on this story: Alexandre Deslongchamps in Ottawa at [email protected].

#97 Nostradamus Le Mad Vlad on 07.24.09 at 6:15 pm

#27 Squidly77 on 07.24.09 at 5:14 am — “It’s all coming apart now. She’s gonna blow soon. A real bloodbath to come.” — and —

#30 Industrial Guy on 07.24.09 at 6:36 am — “They missed the part about ‘The Depression has started’.” — and —

#32 VOODOO on 07.24.09 at 7:27 am — No explanation necessary. Here are the real meat and potatoes of why the deck of cards has collapsed. Most don’t even realize it yet. — and —

#58 wjp on 07.24.09 at 10:45 am — “When government officials or central bank employees talk the economy up, beware!!!”

Along with numerous excellent posts by several bloggers here.

But one question remains: Why are the US Fed, BoC, BoE, etc. all printing / creating artificial money out of thin air at full speed, knowing full well none of it will do a damn bit of good (except for the elite)?

One reason could be this:

There is a greater chance of Richard (I Am A Crook) Nixon being re-elected again, and he is currently on permanent vacation.

Harper / Flaherty, Obama + minions, Brown and his underlings have no better than a zero per cent chance of restoring their respective countries finances back in order.

The US’s debt level rises US$44 mln. each second; Canada is $84 mln. per day. The UK is on the verge of doing an Enron (going bankrupt altogether), which is probably why the bird – human – pig flu virus was conveniently introduced, in order to kill off unnecessary sheeples.
#78 Herb on 07.24.09 at 2:29 pm — “A Spencer from Canadar: is that you, Hairy S, in wolf’s clothing?”

If it sounds like a hairy, smells like a hairy, quaintly resembles a hairy and has not progressed from pre-birth hairy levels, then by god, you’re right!

Snugglebums! How I’ve mist you!

#98 ralph on 07.24.09 at 7:00 pm

I watched numb nuts Mark Carney on Cpac flap his gums. To think that they pay this guy the big bucks to look after the economy. Amazing!!

#99 Simon on 07.24.09 at 7:07 pm

Is all this hype about the end of the recession and super normal bank profits just a bunch of stock market manipulation? Look what they are saying on CNBC…

Is Goldman and others manipulating the markets and using loop holes in the electronic trading system to insert themselves into a middle man position between buyers and sellers?

#100 NKVD Black Raven on 07.24.09 at 7:46 pm

Carney is the Harper/Flaherty fall guy for what’s coming. They’ll find him some other sweet deal later.

In Toronto Mayor David Miller and CUPE are in cahoots.
The city saves on the 24 K bankroll and the union gets its dues.

#101 blobby on 07.24.09 at 8:09 pm

Quote : “You are an inveterate fear mongering lier Garth.”

Gees dude, learn how to spell!

And go back to telling yourself over and over again that your “investment” was a good one.

#102 $fromA$ia "Garths Nugget Boy" on 07.24.09 at 9:00 pm

MArk’s World, JUST VISITING!!!

#103 taxpayer like you on 07.24.09 at 9:15 pm

Maybe its time for a little refresher on the definition of a “recession” – two consecutive quarters with negative economic growth measured by GDP. So at the very
bottom of the downturn (either flatline or upturn) the recession is over by definition. It doesnt mean things are as good as they were two quarters ago. By the definition,
it actually has to be worse. Nor does it mean things are getting substantially better. There is no measure of debt
or unemployment included either. It doesnt mean you
can get a job, or a raise, or pay off your mortage. So maybe Carney’s claim is correct, it just means nothing on an individual basis.

#104 taxpayer like you on 07.24.09 at 9:34 pm

96 Mad Vlad

44M per second
158B per hour
3.8 trillion a day.

Please check your source/math.

#105 TJ on 07.24.09 at 9:34 pm

Heh – no sweat – we can handle this, because we live in “The Most Fiscally Backward, Corrupt, Slimy Fiefdom in The WORLD”…and we can all absorb 7-12% tax increases in just about everything.

Think this well just be so helpful to the struggling Ailine Industry.

The citizens are drowning and instead of chopping bloated government and stupid no win programs – we get THIS:


The following goods and services are currently exempt from provincial sales tax, but will be subject to the full 12% harmonized sales tax when it is implemented next July.

Residential fuels (electricity, natural gas) and heating

Basic cable TV and residential phones

All food except basic groceries

Non-prescription medication



School supplies (books will continue to be exempt)

Personal services such as hair care

Dry cleaning

Household maintenance such as renovations and painting.

Real estate fees. (*This will be helpful to this hallucinating Housing Market……)

Movie and theatre tickets

Funeral services

Professional services such as accounting and home care

Airline fares within Canada – GOODBYE Air Canada.
YVR is going to take a huge hit.

The worst is over – everyone back in the pool.


#106 Alex on 07.24.09 at 10:59 pm

taxpayer like you:
‘So maybe Carney’s claim is correct, it just means nothing on an individual basis.’

Thanks, but it wasn’t neccesery. We know that, just want to point it out.

#107 Alex on 07.24.09 at 11:01 pm

Ops! I think I’m going to laern how to spell.

#108 Cautiously Optimistic on 07.25.09 at 12:02 am

Re: #62 interloper on 07.24.09 at 12:05 pm
Thanks Interloper. Your hindsight = my foresight. Had a bad case of suspecting the answer before asking the question. Open mortgages all around!

#109 Glenn on 07.25.09 at 12:45 am

I heard on the Alex Jones show that the combined “banker bailout” funds, at this point, would be enough to pay off every single mortgage in America.

We the taxpayers are forced, at gunpoint, to bail out the subhuman filth that herded us into this quagmire, while those same pigs get to keep the loot, evict us for kicks, then sell the house to the next sucker.

The people can’t take much more of this, that’s for sure.

#110 Mark on 07.25.09 at 1:22 am

@104 (TJ) :

Surely the HST was only announced to stop people talking about the BC-RAIL scandal and set their focus elsewhere?

#111 Got A Watch on 07.25.09 at 10:12 am

#63 jess- Excellent. Henry C.K. Liu is one of the most thoughtful economists out there, always a deep read that requires pondering afterwards and often a re-read or two.

#112 Shoobedoowa on 07.25.09 at 10:30 am

“There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved.”
– Ludwig von Mises

#113 Nostradamus jr. on 07.25.09 at 10:47 am

Goldman Sachs et al…skimming?

Bailouts pays of whom?

Politicians will soon see their consituents w/ pitchforks.

Be glad you are not a politician Garth, but soon to be known as Canada’s Robspierre.

2012, This does not end well.

#114 jess on 07.25.09 at 11:02 am

yes, got a watch…I agree with his agrument against the notion that 6% unemployment is full employment.

So tell me how can you have a shortage of labour when your country has 6% unemployment?

#115 Herb on 07.25.09 at 11:34 am

Nostradamus Jr. @ 112,

finally a prognostication from you that might be credible!

#116 Sphinx on 07.25.09 at 12:04 pm

Now, I could state with confidence that Carney fits the profile of a real estate agent, “It’s always a good time to SPEND”

Let the history books record the events of the time we live in, unique time indeed!

#117 jess on 07.25.09 at 12:19 pm

would this counter nova scotia theory that immigrants are buying houses?

#118 Eduardo on 07.25.09 at 12:21 pm

#119 taxpayer like you on 07.25.09 at 1:49 pm

113 Jess

I used to be perplexed about the the 6% unemployment as being regarded as “full employment”. It was explained to me that the umemployment rate takes into account workers who are temporarily laid-off due to plant shutdowns as well as seasonal agriculture / fishing /
resource workers, who may actually be quite satisfied with their situation and wait until their normal work resumes. You can also have the circumstances where say a construction worker is laid off in his home town, and, if he is confident more local work is coming, will not pursue out-of-town work. Ironically, that is argued to be an
indication of a healthy economy.

#120 Grantmi on 07.25.09 at 2:27 pm

you know what. All I know is what I see.

Sure! Some homes have sold in Vancouver…. but every where I look there are till empty lot homes up with for sale signs!

if the market is so hot.. WHY aren’t the builders who own these lots starting to build on them instead of having multiple RE signs on them to dump??!!?!?

This is a total head back to me!

Even having Ozzie the Liar on Michael Campbell’s CKNW show this morning… as the Pied Piper (probably 2nd in Vancouver behind Bob Rennie as the biggest charlatan in RE here) telling Michael that the BOTTOM IS IN!! And HAPPY DAYS are here again!!

BUY, BUY, BUY .,,,, (Sheeple People)

Move Along! Nothing to See here!!

#121 Marc on 07.25.09 at 3:45 pm

#109 Mark on 07.25.09 at 1:22 am

I would be more disappointed with HST, if I had actually voted in the May election. Never been happier for spoiling my ballot, then when this HST was announced. If only the 48% of voters who do not bother to collect a ballot, did the same as me, we would have a situation where voters would prefer no one, then the ones who win, or lose. I will continue to spoil my ballot, until politicians go under contract to pay for by-elections out of their pocket, when they resign to seek employment elsewhere, and we are actually given someone like Garth, who belives in voters first, party second politics. Big waste of time deciding who to vote for imo, as it matters not what the platform is, they will do whatever they feel like.

#122 jess on 07.25.09 at 4:39 pm

taxpayer …i was agreeing with mr. lei’s agruement ,who demystifies (the macro ) central bank speak. I understand your local point of view.

Central banks operate on some voodoo theory that NAIRU is the cardinal rule to keep inflation in check, using current unemployment to fight future unemployment, keeping some people out of work now in hope of enabling more people working later. The rationale is that excessively low unemployment is undesirable because it pushes up wages to cause wage-pushed inflation which will require central banks to raise interest rate which will in turn slow the economy to increase unemployment down the road. This necessary unemployment is called structural or natural unemployment and up to 6% of it must be tolerated to maintain a non-accelerating inflation rate. In other word, there is no case for central bank intervention as long as unemployment stays below 6%.

The problem with the concept of NAIRU is that when wages have persistently failed to rise as fast as the astronomical rate of asset appreciation, any talk of wage-pushed inflation is perverse and does not need 6% unemployment to contain. This is particularly true when outsourcing of jobs to low-wage countries has kept inflation abnormally low. In fact, full employment with rising wages is an effective way to close the wide gap between stagnant wage income and run-away asset prices buoyant by debt.

Not only is NAIRU a dubious theory, particularly in a debt bubble, it is also decidedly a pervert moral posture of neo-liberalism. NAIRU condones a policy of making a helpless minority pay heavily now for maximizing future marginal job opportunity that may benefit the majority, instead of foregoing future maximization to ensure that all can have jobs now to share the benefits of full employment equitably. The equity issue is exacerbated when structural unemployment consistently falls on the same segment of the labor force that is least able to fend for itself.

#123 Mike (Authentic) on 07.25.09 at 5:59 pm

#66 BigAl (Original) “Its strange that now they (MSM, BoC, et al) are declaring the recession is over and finished – but during the whole past 10 months were denying being in a recession.”

WONDERFUL comment perfectly put!

Well done.


#124 Mike (Authentic) on 07.25.09 at 6:11 pm

#88 Industrial Guy “The governor of the Bank of Canada warned Canadians today to brace themselves for the eventual return of interest rates to historically higher levels. 8% to 10% mortgages are coming back!!! …”

Where did you hear that (news source please)? I’d like to forward that news to a few people.

8-10% sounds like it will be like weed killer on the green shoots.


#125 Nostradamus Le Mad Vlad on 07.25.09 at 6:18 pm

Bouncing along on a brisk 90-minute early-morning jaunt in the Smokanagan, I heard a strange, hissing sound. Generally, I don’t carry rattlesnakes in my pockets, as they have a tendency to bite, sometimes in the wrong areas.

Turning, I saw a Re/Max hot air balloon majestically descending to its landing spot, and a thought crossed my mind: As much as the balloon had a gentle landing, the housing market is in the process of doing the exact opposite.

Mish’s excellent writing — — is a harbinger of what is going to happen here, probably not this but next year, when the HST kicks in.

Because of the additional taxes loaded on to new homes, re-sale homes may increase slightly, whereas new home sales could fold up shop altogether. This leads to another question, posed by . . .

#103 taxpayer like you on 07.24.09 at 9:34 pm — “44M per second /\ 158B per hour /\ 3.8 trillion a day.

Hi taxpayer. Some links following. I can’t add that quickly, but the numbers are right up there, run either by the second or minute.

Not sure whether the US govt. will be on the hook for all Credit Default Swaps / Derivatives, which amount to quadrillions or whether they belong to GS and JP Morgan.

Also, there are the unfunded liabilities for Social Security, Medicare, etc. — Keep hitting the reload button and there is a new total each time.

Overall, one sees the picture quite clearly — there is no chance of it ever being paid back, and it lends to the war chatter / fear mongering becoming ever stronger, as it did with Iraq (why ARE Cdn. troops still in Af’stan? They have never done anything to us).

One can understand the the predicament the world is in, and a good way to decipher it is to see — — this is what could happen to sheeple across the globe!

#112 Nostradamus jr. on 07.25.09 at 10:47 am — “5/ — 2012, This does not end well.”

The Mayan, Aztec and Incan Calendars (ages) all end between 2012 and 2018. Throw a bunch of orthodox beliefs in there, stir, mix well and good. Enjoy the aftermath!
This may solve the world’s problems in one go! —
An interesting headline which covers three countries. —

Things change so quickly here. From a lovely, warm morning, and on our way home from a Korean / Japanese lunch, I remarked “Thunderclouds. May get a little wet later on”.

Well, we just had a thoroughly invigorating (unexpected) storm — loadsa lightning, loud thunder, furious winds and a drenching. But the air sure smells sweet!

#126 TJ on 07.25.09 at 7:08 pm

Byron King writing about the new U.S. Unemployment statistics – *Just think what this means for their largest trading partner:

Busy airports may or may not be a sign of life in the larger economy. Even unemployed people can buy a ticket and fly somewhere. All you need is a credit card, if you can still get credit. Meanwhile, airline profit margins are tight. Fuel prices are creeping upwards. The airlines are still nicking you for things like $15 baggage fees. And as I flew over the heartland of the nation, I looked down and pondered our collective fate.

Last week, for example, the Federal Reserve predicted that the U.S. unemployment rate would surpass 10% in the coming months.

That’s no big surprise. The true U.S. unemployment rate as at least 15% already when you factor in the long-term unemployed who are not carried on the “official” books.

Then the Fed made a shocking prediction. It forecasted that the U.S. economy would add NO NET NEW JOBS over the next five years! Whoa!

No net new jobs? That ought to scare you. The Census Bureau predicts that the U.S population will grow over five years. But the numbers of new jobs will remain static. That is, for every job gain there will be a loss.

#127 Nostradamus jr. on 07.25.09 at 7:53 pm

Why Vancouver will become China’s home away from home…China’s single, most important connection to North America…

>>China’s New Plan To Take Over The World

Thanks to its smart strategy of lending th U.S. money to buy its products and services, China owns $2.2 trillion in Treasuries and other foreign paper. This makes China rich, but it has also left it exposed to getting clobbered if inflation destroys the value of the dollar. If China starts dumping Treasuries to protect itself from inflation, meanwhile, it will destroy the value of the rest of the paper it holds.

So now China has a new plan. Use those dollars to buy stuff. Companies, land, natural resources, you name it.

Smart! The moment China tries to buy stuff in the US, of course, everyone will freak.<<

#128 Ronaldo on 08.01.09 at 12:19 pm

So it seems another batch of “Greater Fools”will get a chance to stampede over the debt cliff. I wonder what other tricks they have up their sleeves. Recession Is Over? Yeh right! Nice try Mark. Who are you trying to kid?

#129 Ronaldo on 08.01.09 at 3:29 pm

Nostradamus, you are absolutely right on. China is buying up our resources alright. Recently bought a 17 percent stake in Teck (coal). More recently a 42 percent stake in a gold mining company, nickle properties, etc etc. They are all very cheap right now and what better way to secure your requirements rather than import and store the stuff which they have been doing with copper now for quite some time. Recent news that the IMF wants to sell several hundred tonnes of their gold hoard in 2010 and who do you think will be standing in line first to bid on it? Right, China. They want to increase their current hoard of 1084 tonnes. Why do you think that is? Why would they want to continue to buy worthless and depreciating paper when you can buy the real thing by flogging this paper onto someone else. And its just begun. Stay tuned. There will be many more annoucements like this in the days to come. Your right, China is smart, very smart.