The S.I.

Pumper1

“So,” I said, leaning in a worldly way against the thick green, discoloured tubes swathing the serious end of the mobile unit, “how’s business?”

About this moment, the hungry end of one of the tubes was being thrust into a white plastic hole in the sand, immediately and noisily encountering several thousand gallons of swill in my cottage holding tank. POOPR1 belched a few puffs of diesel smoke as the onboard pump raced. Ray was mopping the brow beneath his Coors Light baseball cap with a hand he’d pulled out of a fluorescent orange rubber glove. At 68, he’s an odoriferous oracle I see twice a year.

Economists generally rely on three sets of indicators. Leading indicators, like the stock market, give a clue as to where the economy is going. Lagging indicators, such as unemployment, show where we have just been. And coincident indicators, like GDP or retail sales, snapshot where we are today.

Then, there’s the Sucking Indicator. This powerful tool tells me quickly what’s going on in my local economy – a resort area 200 kilometres from King & Bay whose beaches are thick with visitors in the summer. Well, most summers. Not this one.

As the tube happily ingested liquid, making small but satisfied humping noises, Ray estimated the SI is down this year, “by a good 50%.” Cottages that are corporately owned, normally booked solid from May to Labour Day, have been occupied only two or three weeks. The number of properties for sale has jumped and precious little has sold – even prime beachfront homes that change hands at best once a generation.

“It’s the jobs,” Ray elaborated. “And the debt. Not enough of one and too much a’tother.” He  thrust the now-troubled tube, gasping and sucking air, further into the orifice until it sated. “Don’t know what people are thinking.”

Meanwhile in Ottawa another indicator was being released on a hot Friday in August. The Finance Department revealed a budgetary shortfall of $5 billion in June. It was a remarkable departure from the monthly surplus of $1.6 billion a year earlier.

In fact, a disaster. Government revenues plunged by more than 13% while spending mushroomed over 25%. While a collapsing economy shrunk GST, income tax and corporate tax  receipts, a new army of unemployed and billions to bail out the car companies drove federal finances deep into the red.

Ottawa spent almost $13 billion more than it took in between April and June. The latest numbers indicate things are deteriorating. At this rate, we’ll have a deficit of between $50 and $60 billion – 50% worse than Brian Mulroney’s corker which resulted in the GST and crippling mortgage rates.

This will up the national debt by at least $200 billion, according to Parliament’s independent budget chief, and propel it to a new high of more than $600 billion.

More importantly, it means the feds will be back issuing massive quantities of new bonds in order to finance the deficit. The consequences of this are well-known – higher interest rates as hundreds of billions in federal financing requirements compete with US treasuries, corporate borrowings and every other debt instrument for available investors.

The tube was now lurching from side to side, as if licking up the remaining tasty solids on the bottom. Ray’s bright orange fingers wrestled with it for a few minutes before he shuffled back and disengaged the pump. The green serpent suddenly went flaccid.

Ray continued on economics. “When we got married our rent was $25. We bought nothing we couldn’t pay for, and we worked our whole lives. Still do. I drive a school bus in the winter, this thing in the summer, and the wife cleans the high school.” Children, I asked?

“You bet,” he said, “and my grandkid is about to get herself married. Guess where? Not at the community centre, but in Vegas. Damn! You think we’re goin’ to that?”

He laughed. Shook his head. Coiled the beast.

“I’d talk to her,” he said. “But, you know, she’s not listening. We don’t know nothing. We’re old.”

The heavy truck wheels strained and spit some sand as they dug for traction. Ray waved when he exited the gate. I reached down to install the cap, looking into an empty tank. When I see him next, it will be April.

Likely he’ll be the same. Granddaughter and country, not so sure.

172 comments ↓

#1 RM in Oakville on 08.21.09 at 9:43 pm

“I’d talk to her,” he said. “But, you know, she’s not listening. We don’t know nothing. We’re old.”

I’m in my late 40s and spent the first 30-odd years thinking the same thing about my parents. They got it bang-on regarding only buying what you could afford and eschewing debt.

However they’re still under the impression that RE is the best investment one could ever have, it will always go up, and their experience bears this out: most of their (substantial) retirement savings is based on an inflation-backed and baby-boomer-stoked RE boom (with a few interruptions) between the 60’s and a few years ago. So their experience has told them that this is just another “interruption”. Maybe it is. But I’m betting that the steady RE gains of the last 4 decades is going to have a much longer “interruption” this time.

Trouble is, try explaining that to them.

My guess? A lot of the naive kids today buying houses they can’t afford are being egged on by their parents who lived in a different time and don’t know any better.

#2 john m on 08.21.09 at 9:52 pm

You have an amazing mind Mr Turner…….and an amazing way of putting things into the proper perspective! :-)

#3 Albertaboy on 08.21.09 at 9:56 pm

Very much agree with the premise of this article. Those with “boots on the ground” have a very good feel of what’s going on. Here in AB, I asked a guy who did some work for me how his business was doing (he operates heavy equipment digging basements for new homes, installing septic tanks, etc). He said business is easily down 50% over last year.

Having been in the business for the last 25yrs in the area and seen the ups and downs of the markets, his take was that it was only the beginning and he was happy to be renting, have his equipment paid for and that he bought a $30K lot in the Okanagan 5yrs ago to retire on.

#4 Jonathan on 08.21.09 at 10:02 pm

Only $19 billion in commercial real estate sold in the US in the first 6 months of the year.. WHAT?

Canada is down 55% YOY at $5 billion. Still 150% more then the US on a per capita basis.

#5 rubberduckie on 08.21.09 at 10:02 pm

Best. Post. Ever.

#6 Nostradamus Le Mad Vlad on 08.21.09 at 10:28 pm

“The S.I.” — The Sucking Indicator, Sports Illustrated or, for those oh-so-smart economists who dinna know nuttin’, the Shit Inquisition!

The Feds.’ revenues slid more than 13%, so guess where that’s gonna be made up? That’s right — the GST will head north to 7% or maybe 10%; other provinces will jump on the HST bandwagon, saying they need to boost their revenues but [un]knowingly, they are now part of a major fiscal worldwide takedown.

Sooner or later, sumtin’ will crack and it may not be financially, either.

“. . . the feds will be back issuing massive quantities of new bonds in order to finance the deficit.” — Probably will apply here, as The Rest Of The West Is Broke, so who we gonna call? BONDBUSTERS!
http://www.moneyandmarkets.com/even-warren-buffett-is-now-saying-bonds-could-crack-2-35136

‘. . . We don’t know nothing. We’re old.” — Trying to ‘splain the rudimentary fundamentals of life to kids today is like talking to a piece of deadwood, ‘coz “Whatever – Huh?” is about all they know. Good conversation is a lost art.

It’s good to be old! Let them holler for help all they want — they made their own bed, now they can sleep in it.

“. . . country, not so sure.” — Around time for the Cdn. Bank Holiday!
——
For those interested in manufacturing, it is declining. —
http://mjperry.blogspot.com/2009/08/manufacturing-employment-drops-to.html
“So, less than 9% of the US work force actually makes products for sale (and remember, today the US Department of Labor considers flipping burgers a manufacturing activity), so in round numbers this means that for every American actually making a product for sale there are 11 other Americans trying to make a living by sticking stickers on that product, inspecting it, and of course filling out all the mandated regulatory paperwork the government demands be submitted for that product. And then they wonder why we cannot compete with other manufacturing nations.”
——
For all to see — just the heading. Iran WILL let UN inspectors in, and prove to themselves there are NO WMD there. Anything Israel or the US says is a blatant lie. —
http://www.guardian.co.uk/world/2009/aug/20/iran-un-nuclear-iaea-report
——
I mentioned in a prior post about how the feds. or provinces may start taxing (or closing) Farmers Markets, etc. The US is already doing that, now going one step further. —
http://nalert.blogspot.com/2009/08/seller-beware-feds-cracking-down-on.html
——
Spoof on ordering pizza in 2012, from the ACLU. Good fun, if you like the NWO! —
http://www.aclu.org/pizza/images/screen.swf
——
This appears to be the main reason — and cause — of the fiscal takedown, but the comment from wrh..com is better! —
http://www.thedailybeast.com/blogs-and-stories/2009-08-20/goldman-execs-blame-anti-semitism/full/
“Yep, when they fall back on screaming “Anti-Semite”, they are in a panic!”

Then, this —
http://www.moneymorning.com/2009/08/21/commodities-regulation-controversy/

followed by . . .
http://www.uncommonwisdomdaily.com/the-stormy-seas-of-liberty-2-6372
“A currency crisis … a superpower mired in an unconventional war … cutthroat capitalists preying on honest merchants … political activists mounting “tea party” protests . . .”

#7 Rhab the renter in Victoria on 08.21.09 at 10:32 pm

Question for the investment guru’s.

I currently have some money in high yeild bonds and I’m up about 13% so far this year. If things transpire as Garth says and govt issues new bonds and increases interest rates to attract investors what should I do with my bonds?
Logic would dictate that existing bonds would fall as new higher yeilding bonds are issued but currently some high quality corporates are yeilding double digits. Will rates and bond prices really go up enough to make much of an impact? Also if rates go way up we will still be in recession and cash starved corporations will just issue higher yeilding bonds to compete with the govt.

I would appreciate some input.

#8 CTM on 08.21.09 at 10:33 pm

Insightful as always Garth…

To the O. Oracle shit smells like money I bet.

Try this one on for size as an indicator:

Sandwich board in downtown, Eau Claire Calgary at a “all day” parking lot (now quite empty,) reads;

ALL
DAY
PARKING
20$

It’s in Revelations people!!!

#9 HappyJack on 08.21.09 at 10:35 pm

(snip)
“More importantly, it means the feds will be back issuing massive quantities of new bonds in order to finance the deficit. The consequences of this are well-known – higher interest rates as hundreds of billions in federal financing requirements compete with US treasuries, corporate borrowings and every other debt instrument for available investors.” (snip)

What would happen if the available investors can`t or won`t lend us any money ?

I recall seeing a tv documentary in the early 90`s where one of our commonwealth countries (I think it was New Zealand). Their credit rating had been lowered and were a financial basket case with Canada not far behind, woke up one morning and found no one would loan them any money. They bit the bullet and had to balance their budget overnight !

“Talk about putting a crimp in your lifestyle”

There was a humorous aspect to the story. A neighbourhood wanted a police presence, so the government said they would supply the police officer, but the people would have to supply the small shack for an office and the police car. The people were holding bake and cookie sales, also selling advertising on the police car to raise money !

Keep Smiling

#10 Peter Wiener on 08.21.09 at 10:43 pm

#1

Agree some demand is coming not only from parents egging on, but assisting with downpayments. Classic bubble/greedhead dynamics with predictable results.

To reason wuth your parents regarding RE, perhaps this example would work;

a parent of an acquaintence bought in Rosedale approx 60 years ago for approx Cdn $ 20,000, sold in 2008 for over Cdn $ 2,000,000 as she was having a hard time budgeting for city taxes approaching Cdn $ 18,000 at time of sale and she retired.

In other words, she enjoyed a 100 X up on the deal – do you think the buyers at 2,000,000 will see 200,000,000 by then? It’s a corollary to the ‘Laws of Large Numbers’ and usually highly improbable, but worth noting for its absurdities.

#11 conan on 08.21.09 at 10:54 pm

I am hearing business is down about 25 % for most sectors.

Builders that I know say 2009 will be just as strong as 2008 for housing starts but 2010 is a big mystery.

#12 Crash on 08.21.09 at 11:04 pm

We need a return to these ‘old fashioned’ values. Unfortunately, the powers that be don’t seem to think these values are of any value.

#13 Republic_of_Western_Canada on 08.21.09 at 11:04 pm

This is how Bill-68 ‘gun control’ started (promised at a few million) but ended up at 2 billion bucks purely wasted – delivering no benefit whatsoever.

Not sure yet if the percentage overrun of this year’s final deficit will be anywhere near as bad, or if financing a tragically unnecessary deficit will be as useless, but both programs are shit either way.

#14 Best place on meth (aka NJ's Analyst) on 08.21.09 at 11:12 pm

>>>As the tube happily ingested liquid, making small but satisfied humping noises, Ray estimated the SI is down this year, “by a good 50%.”

He thrust the now-troubled tube, gasping and sucking air, further into the orifice until it sated.

The tube was now lurching from side to side, as if licking up the remaining tasty solids on the bottom. Ray’s bright orange fingers wrestled with it for a few minutes before he shuffled back and disengaged the pump. The green serpent suddenly went flaccid.

He laughed. Shook his head. Coiled the beast.<<<

You should write romance novels.

That was beautiful, man – just beautiful.

*sniff*

#15 hal smith on 08.21.09 at 11:26 pm

The real estate “bubble” will not pop. The government will not let it pop because it will crash the economy. Hell, it IS the economy. Sure, we have the oil sands and we build some cars in Ontario but how many people does that employ in the “photo grande” ? The real economy here is building houses that we flip to each other for higher and higher prices and filling them with cheap shit we buy from China. When that stops we are toast. And we the people don’t want it to stop either because the housing “bubble” is the only way to get rich in Canada. What are you gonna do, build widgets and compete with China? Open a nail salon? Invest in the stock market? hahaha remember Nortel? BreEx? GM? DotCom? Remember INCOME TRUSTS? It’s housing baby and it’s tax free too. Pass the helium baby……..

#16 Harry S on 08.21.09 at 11:33 pm

Garth … open up yer political blog and forum … the pot is boiling over with excitement …!!!!

#17 Bruce on 08.21.09 at 11:35 pm

Is that actually a picture of Ray’s truck?

#18 Calgary_rip_off on 08.21.09 at 11:37 pm

Garth,

If the government has a deficit, just tell the money printers in Ottawa to print off more money. That is what was done in the U.S.A. Expect that no country will have its own sovereignty. Canada is still linked to England, right? So much for independence.

Arent countries expected to be in debt by $2 trillion anyway these days?

The central problem is trying to find security.

It used to be that the King would tax everything. Now if you “own” your house, the city can decide to throw you out of your house if its in the way of a new thoroughfare. Or if the police dont like what you are doing for your driving or anything else they can imprison you.

There really is only one solution as an individual: 1)Learn how to fight intellectually: a)through evasion and deception, b)through confrontation and not backing down, 2)learn how to fight physically: a)hand to hand fighting with and without weapons, b)with guns/knives/swords/distance weapons and 3)have a ton of more money than the other guy so you arent even in that system as that guy. The problem remains that there will always be someone better than you for 1 , 2, and 3. The solution: Accept that there isnt any protection, and work on #’s 1, 2, and 3 as listed above in any way possible. Dont assume that your government or anyone else gives a hoot about you or will do anything about fixing any problems.

#19 LS on 08.21.09 at 11:37 pm

Fantastic post Garth. The imagery is a little disturbing. I think I’ll sleep better not thinking about all the tasty solids you managed to make in 6 months…

#20 Elle on 08.21.09 at 11:51 pm

Garth – Wow!

DOUBLE WOW!
Thanks for all the effort you put into your work.

Great piece of writing. My eyes were so glued to the graphic detail in your post – I could hardly unstick em!
Funny, I never realized before, just how slightly erotic a septic tank could be.

OK so back to the S.I. In my community – BTW, I live on coastal RE – the markets are up and down…..mainly
up right now. With the bubblette still going on, people are quite optimistic about the economy – HATE the HST for the most part – but optimistic. However, new housing starts are down 73% for July, the stock market players don’t seem to know what to play anymore. Stores aren’t as busy as they were a short time ago. Even Wal-Mart was so empty last nite it had an echo, a bit unnerving!

Also there is this feeling in the air, hard to describe, it’s a little like waiting for the other shoe to drop.
Seriously , it’s our O.S.T.D. Indicator.
elle

#21 Calgary_rip_off on 08.22.09 at 12:04 am

Garth:

Here is a music video highly applicable to the times ahead:

Cacophony: “Desert Island” from Speed Metal Symphony.

Enjoy.

http://www.youtube.com/watch?v=_k5-3eKwr5Awww.youtube.com/watch?v=_k5-3eKwr5A

#22 don bool on 08.22.09 at 12:59 am

Who needs politics when you can write like that.

#23 Ulsterman on 08.22.09 at 1:09 am

The following wise words spring to mind regarding the wisdom of parents and the folly of youth: “When i was 17 i could not believe how dumb my parents were; by the time i was 30 i was astounded by how much they’d learned.”

#24 Ernie on 08.22.09 at 1:10 am

Not only right on the mark but entertaining as well. Thanks

#25 Lynn on 08.22.09 at 2:23 am

Slow here too, in Penticton. The cab driver I had last week estimates his tourist fares are about half of what they were this time last year and most of them are from western Canada. Fewer American passengers than usual.

#26 Lance on 08.22.09 at 2:46 am

There are certain one-man operations like this that touch a lot of individuals and businesses and gather a lot of on-the-ground economic evidence that is hard for a statistician to gather until well after the fact.

My local barometer is our two-way radio repairman (we have many and they require frequent repairs and vehicle installs/uninstalls). In the past year, he has done most of his business doing uninstalls of radios, not new installs-says a lot of companies are taking fleet vehicles off the road. His business is down a good 50% and he is having trouble making ends meet.

His monthly visit is worth a hundred economic studies all wrapped up in to one friendly 10 minute conversation.

#27 Elle on 08.22.09 at 2:48 am

# 79 – CONAN (Mass. confusion)

“You guys google JK Wedding yet”

I just can’t stop smiling when I watch this, lol
thanks so much for mentioning it.
this video would cheer up even the grumpiest of grumpies!
elle

#28 El Rojo on 08.22.09 at 6:42 am

Garth,
I have been following your blogs faithfully since I attended one of your speaking engagements. Your insite into the financial world is truthful and devoid of the spin the Realtors, Economists,etc. seen to put on everything. Todays Blog has left me rolling on the floor as I picture old Ray lumbering out the gate with his tankfull of political promises. Great work Garth.

#29 miketheengineer on 08.22.09 at 7:07 am

Garth et al:

We must be “swimming” in gasoline in Ontario, due to the number of people on EI, not working, companies shut down.

Answer me this:

Why is gasoline so high?
Why is gasoline so high?
Why is gasoline so high?
Why is gasoline so high?
Why is gasoline so high?
Why is gasoline so high?
Why is gasoline so high?

I think the big boys who rule our lives, are “taking every last cent from us”

It is time we start talking about this. Start to complain.

Read about Hydro in the Mississauga News. Looks like a 25% increase for some users between now and 2010.

Why? Why are we paying so much? We must be swimming in Hydro?

I don’t understand this at all. Demand down, supply of gas and hydro in abundance, shouldn’t the price go down? Is this not a free market…..

#30 wjp on 08.22.09 at 7:32 am

Here is the problem in a nutshell, unemployed, underemployed, and with little hope of a jobs recovery on the horizon. All this so called stimulus money thrown about by the feds including bailouts will not bring one job in the manufacturing sector back to Canada. In fact, all the bailouts have succeeded in doing is saving about 1/2 the jobs and rewarded incompentence in the former private sector, and with the track record of the American motor car companies, these jobs could hardly be a given as safe.
Now if the government had directly given bailouts to the unemployed, e.g. 1 million to those over 50, 750th to those over 40, and 500th to those over 30 and those under 30 to remain on E.I., we would be in better shape at the federal level than we are today. Once a lump sum has been given, you are removed permanently from E.I. eligibilty, so you would have to invest your lump sum wisely. But the politicians are concerned only with what happens on their watch and how it affects their electability, so don’t look for any sensible long term solutions (such as sustainable technology and green energy jobs) from Ottawa as they are only looking to the next election regardless of party. This attitude has been picked up corporate executives with the only difference being corporate bonuses as the carrot driving the immediate agenda, once again regardless of the long term consequences. The driving force is power in one case and greed in the other.
We support such actions when we continue to vote on party lines or when we buy shares enabling corporate executives to inflict their lust for greed at shareholder’s expense. Wonder if we will ever get the message? I doubt it!

#31 dd on 08.22.09 at 8:22 am

#1 RM in Oakville

…spent the first 30-odd years thinking the same thing about my parents. However they’re still under the impression that RE is the best investment one could ever have…

Same here. They like it because 1) it is paid for 2) they can actually see it and live in it. Who am I to tell them to sell everything and rent … at 75? No matter what happens they are mostly in cash, pensions, and owned RE. They have done well.

#32 dd on 08.22.09 at 8:28 am

#29 miketheengineer

“Why is gasoline so high? Hydro We must be swimming in Hydro? Demand down, supply of gas and hydro in abundance, shouldn’t the price go down? Is this not a free market”

It price should go down, however, oil is still at $75 barrel. That is what the price is on the world market so we have to pay it. And hydro, have the capital and maintenance costs been going down? Probably not.

#33 dd on 08.22.09 at 8:37 am

#4 Jonathan

“Canada is down 55% YOY at $5 billion. Still 150% more then the US on a per capita basis”

True, however, at $500B (US equiv = $5Trillion) total debt we in much better shape than the US, not to mention health care and pension funding.

#34 dd on 08.22.09 at 8:40 am

#7 Rhab the renter in Victoria

…I currently have some money in high yeild bonds and I’m up about 13% so far this year….

If you are getting a great yield why cash in? Wait to maturity. Is there a better investment out there that would protect from downside pricing risk?

#35 dd on 08.22.09 at 8:42 am

#8 CTM

“Eau Claire Calgary at a “all day” parking lot (now quite empty,) reads; ALL DAY PARKING 20$ It’s in Revelations people”

Wow, two years ago that would be $15 a hour!

#36 bigpictureguy on 08.22.09 at 8:45 am

#15 hal smith on 08.21.09 at 11:26 pm

Is this guy for real?

#37 dd on 08.22.09 at 8:46 am

#15 hal smith

“The real estate “bubble” will not pop. The government will not let it pop because it will crash the economy”

Oh that is funny. Tell that to the US Fed.

#38 bigpictureguy on 08.22.09 at 8:48 am

#6 Nostradamus Le Mad Vlad on 08.21.09 at 10:28 pm

Everytime I see his post I quickly scroll down. Hurts my eyes! Can you write summarize relevant points versus cut and paste a long list of nothing?

Thank you.

#39 Darryl on 08.22.09 at 8:51 am

Garth
Thanks for ruining my breakfast with the disgusting image that you conveyed . The sewage image did’nt help either.

:)

#40 Dean on 08.22.09 at 9:40 am

Maybe his granddaughter is eloping to Vegas for a small ceremony. Price that out vs a large family wedding anywhere and see who’s shaking their head.

You haven’t seen the community centre, have you? — Garth

#41 Calgreedian. on 08.22.09 at 9:52 am

Good post Garth. I’m 41 and work in an office where I am the second oldest person there.

I rent, don’t drive, have a pay as you go credit card and put more than 30% of my take home pay to back taxes. (Tech bubbles, inexperience and no financial education don’t mix).

The younglings who are leasing cars, buying condos, iphones and flat screen TVs are convinced that I am an idiot.

*sigh*

Welcome to Calgreedy, the bleat goes on.

#42 calgaryrentertoo on 08.22.09 at 9:59 am

#4 Jonathan …

Never mind the US …how do you like these apples.

http://www.calgaryherald.com/business/real-estate/commercial+transactions+downtown+Calgary+first+half/1917201/story.html

It is different here…

#43 Munch on 08.22.09 at 10:05 am

Very good, Mr Turner

#44 rory on 08.22.09 at 10:09 am

Hey Nostradamus Le Mad Vlad

Please ignore the likes of #38 bigpictureguy’s comments …sounds like a guy that wants everyone else to do his work for him …gov’t bureaucrat maybe …lol.

Keep up the good work Nord.

Seriously bigpic …pick on something important and worthy of your handle BIGpic versus the small stuff like how Nord puts out his work …oh and TY …sheez …chill out or pass over the post … it is not hard.

#45 Peter Wiener on 08.22.09 at 10:11 am

# 15 Hal Smith

“When that stops we are toast.”
Some people are already toast, guess you didn’t get the memo.

#46 Elle on 08.22.09 at 10:14 am

# 14 Best Place on Meth(AKA NJS Analyst)

“you should write romance novels.
Just beautiful man – just beautiful”
“sniff”

So loved your take on Garths post! – thanks for the chuckle!

PS – could I just say ……. about the ‘Meth’ part of your
name, I get it but ……it distorts who you really are.

#47 Peter Wiener on 08.22.09 at 10:22 am

#26 Lance

I think you are correct. People can bs all they want about how good or not-bad things are, but guys in businesses like your acquaintance tell the real story. Thanks for that post, I was suspecting that things were generally softer in business than some have been letting on.

#48 Peter Wiener on 08.22.09 at 10:26 am

#38 bigpictureguy

I’m sitting here laughing, cause you are so right. That scroll function is handy sometimes, isn’t it?

#49 Peter Wiener on 08.22.09 at 10:31 am

#29

To put it succintly, no it is not a free market.
I think they are following the European pricing model – demand goes down, prices go up so the revenues remain constant – that’s what happens in markets that are not left to freely adjust.
This country needs an enema.

#50 JoeK on 08.22.09 at 10:32 am

Heard on local CBC news this morning:

“Police had to be called out to control a crowd of 100 people wanting to see a house for sale on the corner of 8th & Victoria, in East Vancouver. The house is under foreclosure and is listed for $640K. The house next door is also for sale, at a non-foreclosure price of $840K.”

http://www.realtor.ca/propertyDetails.aspx?propertyId=8619440
http://www.realtor.ca/propertyDetails.aspx?propertyId=8597912

#51 char on 08.22.09 at 10:39 am

Hey Garth ,

I’m with #’s 2, 20, 22 etc. : you have a gift !

Any novels or short stories hidden in a drawer ? I’m serious.

#52 Herb on 08.22.09 at 10:54 am

#16 Hairy S,

you’re alive! I can hardly wait for all that stored-up, newly-directed neo-Con commentary for amusement.

#53 Bill on 08.22.09 at 10:58 am

#21 Calgary Rip Off

Is this the “Desert Island” played with Jason Becker and Marty Friedman?

Great solo

#54 Herb on 08.22.09 at 11:07 am

Recovery mode
Ottawa housing market is bouncing back after five-month slump

Great news at
http://www.househunting.ca/story.html?id=1920614

Unfortunately the Editor-Lady of the Ottawa Citizen “Homes Section” has not permitted even a hint of a slump to surface in the pages of this real estate marketing rag. Will readers realize that this headline does not compute, or will they allow the manipulation of the market to carry on merrily?

#55 dave99 on 08.22.09 at 11:07 am

#30, WJP, that would cost more than $10 trillion dollars.

#56 Got A Watch on 08.22.09 at 11:11 am

“It’s a great time to buy real estate” – some “guru” (cough) just heard on the radio. Yep. That’s the advice. du jour. Also says “Never listen to the media, they are far too negative!” How can you go wrong with advice like that?

Huh? I am not sure where Planet Guru is, but it must be in another universe. Here, the MSM media always accentuates the positive, and never mentions the negative. If you just listened to them, you’d be buying up your whole block, since it’s obviously “On Sale!” now.

Must be related to Hal Smith above. ‘Reality-detachment’ is a disease that is endemic. The victims are everywhere.

btw, speaking of septic stories, eat a lot of corn on the cob. It’s almost indestructible, does not break down in the septic tank. I had a couple friends over one time, I was digging out the cover of my septic tank for the ‘honey wagon’ coming the next day. We lifted the heavy lid, and I remarked “Look! Somebody had corn!” – my 2 friends ran to heave in the bushes while I laughed. City folk, so soft.

And another fascinating septic tank story – up till very recently, the septic pumper truck driver could drive over any farmers field and just spray out the ‘honey’ to empty his truck, no treatment required. I believe the Gov has banned this practice now, but I am sure many are still doing it – far cheaper than unloading it at a proper ‘treatment’ plant. A cash deal of course, why bother with that pesky Gov paperwork.

#57 R on 08.22.09 at 11:51 am

I am waiting for the B.C. budget release on Sept 1st. With all the cuts they are predicting I think the days of overpriced real estate might be over. I pitty the Sheeple who bought into the Vancouver/Victoria markets in the last 5 years. There are no victims only volunteers. I think I see a huge flock of Vultures circling over B.C. They must be the same ones who are feeding off California.

#58 lgre on 08.22.09 at 12:14 pm

#15 hal smith on 08.21.09 at 11:26 pm

keep reapeating the same thing, you are starting to sound like my pet parrot..except he knows more words.

#59 hal smith on 08.22.09 at 12:21 pm

#36 bigpictureguy

You obviously don’t see the “photo grande”. If this bubble pops the whole ponzie economy pops with it. We will be screwed till 2020, so the powers that be will keep pumping in the helium. And we will help them keep it inflated and believe whatever they tell us and do whatever they ask cause we want to build our equity now. We are sheeple, remember? A long slow unwinding and a lost decade is the most likely scenario starting in 2010. And the sheeple will sleep right through it……..

#60 rory on 08.22.09 at 12:23 pm

Hey GT …on septic systems.

Are you cleaning out twice a year because the cottage is vacant during the winter and not enough action to keep it from freezing or just being an obsessive compulsive or maybe prudent…I have cleaned ours once in like 7 years. Could even be longer …so what gives …am I the one that is not doing what he should be doing or does the gov’t have a mandate on this as well.

It’s a tank, not a bed. — Garth

#61 rory on 08.22.09 at 12:26 pm

GT …sorry I just got it …you have no leech field …cottage built on rocks so all is just storage …oops.

Environmentally sensitive area. No septic beds allowed. — Garth

#62 john m on 08.22.09 at 12:30 pm

#29 miketheengineer on 08.22.09 at 7:07 am <<<<<< i agree Mike we are getting ripped off at the pumps,the price of oil per barrel in relation to the price at the pumps is a total rip-off. Fat chance the Harper government or any other political party for that matter will question the oil companies tho. Even considering the huge price gouging by these played a large part in the destruction of our economy and still are.We are and have been at the mercy of the oil companies for much too long. Hydro is another one..i just got out a previous bill–electricity used $11.46-delivery charges $45.83-regulatory charges $1.67 (whatever the hell that is ) debt retirement charge $1.47 and gst for a grand total of $63.44 for $11.45 in electricity used? Considering most of the power lines around here have been there "since christ was a cowboy" one would certainly think they have been long ago paid for but if that is not enough they estimate the bill part of the time always at a much larger total than actual consumption putting one into a higher billing bracket (this is not reimbursed when the actual reading of the meter takes place). I would certainly like to see an audit on where all this money is going.

#63 EJ on 08.22.09 at 12:36 pm

So I checked the CBC website today and there’s a big picture of Mark Carney crying for even MORE power for the central bank. Can you believe it? These imbeciles are one of the main causes of all these financial problems, and they now want the power to do even more damage.

If these guys had an ounce of responsibility, they would have raised rates long ago when they saw this bubble forming.

And don’t get me started on the 2% inflation/theft target.

#64 Dean on 08.22.09 at 12:37 pm

You haven’t seen the community centre, have you? — Garth

LOL. I wasn’t thinking about the community center, I was thinking about the liquor bill. That generation sure knows how to drink, particularly when they aren’t paying for it :)

#65 Bobby on 08.22.09 at 12:57 pm

Of course, you always have to talk to the guy at the coal face to really gauge what is going on.

The airwaves are innundated with supposed experts saying the worst is behind us.

Here in Victoria, real estate sales are supposedly breaking all records. But ask the clerk and she will tell you it is predominately 0% down and 40 year amorts. Many high end homes are languishing on the market.

Luxury car sales have tanked with dealers pushing deals on 2 year old new vehicles. Foreclosures at Bear Mountain on penthouses. Condo has been on the market for months with no takers. Why pay 549K for a condo with exorbinate fees when you can get a house there, twice the size with views for asking less than 50% more. Of course, no takers there anyways.

Spoke to a colleague in the construction business. Many of his peers are looking for work with nothing in sight.

Oh yah, but he did mention the government says the recession is over. Yah, right!!

#66 North of Upper Middle on 08.22.09 at 1:11 pm

Who is Munch?
“Well done, Mr. Turner,” he says.
Munch sounds like some sort of Dr. Evil character egging on his nemesis. “No Mr. Turner, I don’t expect you to support gold purchases, I expect the economy TO DIE!”
Next thing you know Garth will post a photo of himself painted all in gold. Half the gold bugs here will think he’s seen the light, the other half will think he’s mocking them.
The rest of us know ’twas ever thus.
So when he takes a poke at my post you’ll know for sure he’s (giving me the) Garthfinger!

#67 InvestX on 08.22.09 at 1:17 pm

hal smith:
The real estate “bubble” will not pop. The government will not let it pop because it will crash the economy.

Oh, but where RE crashed all over the world, the governments were OK with that and let it happen?

#68 catamaran guy on 08.22.09 at 2:10 pm

Garth,have you considered a composting toilet??

there is a learning curve,but they can work if you take care of them.

(they make one for boats too)

makes the stupid federal discharge pump out laws easy to comply with!

#69 Barb .. a reader in Calgary on 08.22.09 at 2:14 pm

#16 Harry S …. “Garth … open up yer political blog and forum … the pot is boiling over with excitement … !!!!”
– – – – – – – – – – – – – – – – – –

Hell–o Newman!

#70 Steve on 08.22.09 at 2:40 pm

Like Calgreedian I’m putting >30% of my monthly income away. And I drive, but will be making the move to transit only soon.

#71 Men With Hats on 08.22.09 at 2:42 pm

G :
Have an idea for a novel .
A wizened little oracle shares all his,financial, secrets with the masses through a ‘free’ blog .
The great unwashed ignore his advice at their peril as they sink deeper and deeper into debt .
Oracle decides to reverse his direction and tells all his clients to take on massive debt and to buy depleteing assets (houses)
He exposes his flock to ‘Black Swan’ events .
After the fact, the event is rationalized by hindsight, as if it had been expected.
He builds,and defines, a theory called ‘Quantum Knowing’ which uses reverse logic to come to logical conclusions in the market place.
When applied to markets it is a resounding success .
The oracle’s disciples become rich beyond belief .
The oracle applies all his knowledge to the ‘Fifth Pillar’ of logic . What you know you don’t know so game the market .
Throw money into a bushel of stocks and stand back .
The oracle is invited by his government to design all of its financial needs and programs .
His theories are so important the government insures his brain for six trillion dollars .
All of the oracles writings become ‘Top Secret- classified’ documents .
He is surrounded by a phalanx of bodyguards who shadow his every move .
Eventually the oracle becomes deeply disillusioned and starts writing,what he thinks, is gibberish .
In reality his writing is more precise and illuminating .
The oracle becomes a virtual prisoner of his government and he is housed in an enormous tower surrounded by a moat .
The council of twelve design a neuro net and plug the oracle in .
To fog the neuro net the oracle plays bridge,in his mind. All four hands endlessly .

Black Swan theory:

http://www.damodaran.com

http://tinyurl.com/lt9o6q

#72 Manitoban on 08.22.09 at 3:05 pm

Thank you for “The S.I.August 21st, 2009”. I’m 76 and have been reading your blogs & comments since the start of your political blogs and the current one. Am
in full agreement with the commenters who wrote “That was beautiful, man – just beautiful. *sniff* “ and “DOUBLE WOW! Thanks for all the effort you put into your work.” and “Today’s Blog has left me rolling on the floor as I picture old Ray lumbering out the gate with his tankfull of political promises. Great work Garth. I don’t agree with #16 Harry S about rushing in a political blog “ the pot is boiling over with excitement …!!!! “ What excitement?? I do agree with the
comment “Who needs politics when you can write like that.” I love politics and have always been a liberal thinker, so I do not object to your entering the fray,
even if I cannot fathom your need to do it. For those who equate liberals as only spenders, their is no inconsistency in liberal social concerns and fiscal conservation & responsibility. The same can be said of other so called “liberals in a hurry” who when achieving power are very able fiscal managers. I also find it easy to respect & approve of conservative governments (by any name) who do not need to go to extremes to achieve power.
#6- “ Trying to ’splain the rudimentary fundamentals of life to kids today is like talking to a piece of deadwood, ‘coz “Whatever – Huh?” is about all they know. Good conversation is a lost art.” Sounds like a person who only can hear himself talk, never spent 30 seconds listening- not strange to hold such an opinion.
To the comments “A lot of the naive kids today buying houses they can’t afford are being egged on by their parents who lived in a different time and don’t know any better.” and “When i was 17 i could not believe how dumb my parents were; by the time i was 30 i was astounded by how much they’d learned.” let me say
that after hearing the 5 past & current generations repeat the same words, if you are lucky enough to hear the next 5 generations after mine, you will hear it again. To those who try to tell old folks to sell their home and rent, please remember that most do not see $$$ in front of their home #. Whatever value it may have on any given day, should it be sold, is not seen as a profit or loss situation or a capital gain opportunity. Their main concern is a cost of living only, seen in terms of municipal taxes, utilities, ground mtce and general home upkeep. Of course the individuals with larger incomes are more likely to voice their concerns over personal income taxes or taxes in general than are the average retired persons.
Why would anyone seek to give unsolicited advice (financial or otherwise) to old folks ?
C’est la vie, mes amis.

#73 hal smith on 08.22.09 at 3:50 pm

#67 InvestX
The government here has seen what happened all over the world when RE crashed and will not let it happen here cause We are different here. It will be a long slow unwinding that will take 5 to 10 years and the sheeple will sleep walk right through it and wake up in 2020 with sore bums, not sure what really happened.

#74 lili on 08.22.09 at 4:55 pm

I wish, really, that I could understand the mechanism of the proposed real estate crash we are supposed to have soon.

Interest rates may go up, but will that make people hate houses? I mean, a lot of people I know L-O-V-E houses. They will do anything for a house. If 40 year ams exist, why not 50 year ams?

People don’t care about interest rates, principal, debt, or anything else. Mostly they care about location, location, location (and of course kitchens and baths).

To change this perception, a severe Canadian-style crisis would be required and I’m afraid more crises are not in the cards. Garth is not predicting any new nasty secular movements because he knows he’s already stuck his neck way out… and there’s every chance that his timing is way off (i.e. the broken clock phenomenon).

Of all the things that can happen in a recession, stubborn unemployment is the most desirable.

As opposed to the bank balance sheets that need repair, the need for credit even at the taxpayers’ expense, equities and bond prices that must rebound even if based on self-fulfilling talk of inflation, and the monetization of all the bad formerly investor-grade debt to save the skin of the elite… I’m sorry, but employment for regular Joes comes dead last in our economy.

So jobless recovery here we come (again… and again… and again…); and if the last thirty years have made anything clear to the wise, it is that regular folks will not participate in real recovery beyond some cosmetic overlay.

As long as working-aged people don’t perceive the unemployment as contagion, they will continue to buy homes at inflated prices. And the contagion effect will not be believed unless we exceed unemployment levels seen during the Great Depression, using our already goosed stats, i.e. not happening.

I’m sorry guys, but the drum beating around here is pretty loud and boisterous, but unfortunately it’s being done in an empty forest… there’s noone around to hear it and consequently the “Greater Fool” chorus line is mostly generating some clangy god-awful irrelevant noise in a vacuumed abyss.

Enjoy those bunkers fellas…

Amortizations longer than 35 years are not insurable. So much for your eloquence. — Garth

#75 DrC on 08.22.09 at 5:53 pm

Mmmm, sounds like we should be able to negotiate a good deal on a cottage; maybe we can take a little summer holiday after all. It’s been a hard decade being the cash rich, asset poor “loser”, watching my friends buy more and more expensive sh*t on credit while I freecycle discarded furniture off the sidewalk and save my pennies. It shames me but now I can’t help but indulge in a little schadenfreude…

#76 ex-van on 08.22.09 at 6:18 pm

Beautiful post, Garth. I don’t always agree with you, but, Dang! you’re a kickass writer.

#77 Sudcouver on 08.22.09 at 6:19 pm

#57 – R, How do you think the budget will impact Van real estate?

#78 rjag2034 on 08.22.09 at 7:10 pm

Well the stars appear to be in alignment for Victoria and Vancouver to get a kick in the teeth in the coming months. With our Provincial budget next week it looks like massive layoffs and cutbacks are in order, increases in smoke and gas taxes are very likely as well. Looks like the ride is over kids, the koolaid has taken effect.

#79 Peter Wiener on 08.22.09 at 7:23 pm

# 74 lili

You are profoundly ignorant of both practical and theoretical economics and their histories and it shows. I don’t know what, if anything you do for a living, but my guess is, it can’t be too challenging as you seem unable to grasp simple concepts like historical precedent. You seem to be of the opinion that because everything seems alright, it is alright and all traditional indicators of duress in the economy are to be ignored. (Its different this time!)
Ignore the red flags at your own peril if you must, but please don’t embarrass yourself by suggesting that because some of the population has decided to throw caution to the wind that their decisions are fiscally sound.

Your comments about unemployment having to reach Great Depression levels in order to undo this bubble are based on what exactly – your feelings, wishes, hope?

Are you aware of past severe downturns in Canadian RE in ’74 /’75, ’81-’81 and ’90 /’91? In comparison to today’s catalysts for a downturn they were a walk in the park and yet commercial properties LOST UP TO 90% of their inflated values from the peak valuations, for example in the aftermath of the ’90 / ’91 debacle..

Don’t believe me, I’ll give you a factual example;

2 King W (nw corner of King and Yonge Streets in dwtn Toronto)

sold for Cdn $ 120,000,000 in ’89, taken back by the bank and sold some 8 years later for Cdn $ 14,000,000.
for a staggering 88.3 % NOMINAL loss.

If you include the forgone interest, heating, insurance, security, municipal taxes, maintenance and other expenses REQUIRED to keep the buiding viable into the equation, it was a TOTAL LOSS for the lender WITHOUT ADJUSTING FOR INFLATION!

Check the city records office or go into the archives of the Toronto Star who did an article on all the major downtown office properties that were foreclosed upon by the banks where they list the last (or highest historical) price paid prior to the downturn in ’90/ ’91 and the subsequent sale price some years later – it will absolutely astound you. And these are ‘A’ and ‘B’ buidings in prime locations and tenant ready and not being priced in a credit contraction depression, but in a fairly deep RE recession.

As I have mused earlier on this blog about other wishful thinkers posting here, you lili are exactly the kind of person WHO WILL DISAPPEAR from this blog and never to be heard from again once the fundamentals assert themselves. I know this to be true because I have been thru two of these cycles and made out well buying from people of your ilk as your net worth dries up and blows away with all the illusions overpriced RE brings.

On the other hand, I and those of my ilk on this blog will be a buyin’ and a bloggin’ gleefully. Frankly, it is these steep drops for good economic reasons that have padded my net worth over the years.

You’ve got a lot to learn and if you lose your attitude, you might just learn something here from other FACTUAL posters – I know I have and I’ve got a pretty strong background in finace and RE as it is.

#80 Peter Wiener on 08.22.09 at 7:33 pm

# 71 Men With Hats

Let me guess – acid flashback?

#81 Best place on meth (aka NJ's Analyst) on 08.22.09 at 7:49 pm

Hi Lili,

The Real Estate Board just called.
They said they’ll no longer be needing your services.

Good luck with your future endeavors.

#82 Patel on 08.22.09 at 9:07 pm

Lili…..u r so silly……….

#83 WillsDad on 08.22.09 at 10:19 pm

I was painting houses in Calgary in the summer of 2003.

Had a job painting a house in Mount Royal, not far from the 10 million house that just sold there. The house I was painting was right beside the American consulate, so you can picture the neighborhood’s quality.

The owner told us that he bought the house during the last real estate crash, early-mid 90s, for $300,000.

In 2003, it was worth well over a mill.

Today? well, I’m just guessing, but in the neighborhood of 2.5-5 million, depending on the greater fool.

So, Lilli, did people not like houses back in the 90s?

#84 dd on 08.22.09 at 11:00 pm

#74 lili

Lets have some fun!

…Interest rates may go up, but will that make people hate houses?…
No, but it means that you have less of a house and prices will adjust downward.

…If 40 year ams exist, why not 50 year ams?…
Then you are basically renting. So why not rent because it is cheaper in the long run.

…People don’t care about interest rates, principal, debt, or anything else…
Is this your financial plan?

…To change this perception, a severe Canadian-style crisis would be required and I’m afraid more crises are not in the cards….
So why did the crisis happen? I will tell you why. Too much debt. What has changed since? Nothing.

…There’s every chance that his timing is way off…
It a mugs game to time these things. However the direction of trends do tell a story. What trend? The increase in debt from the consumer to the government. But how is the government going to pay down the massive debts? Unload on the consumer (taxpayer).

…As long as working-aged people don’t perceive the unemployment as contagion, they will continue to buy homes at inflated prices….
What planet do you live on anyway? Sure homes will be bought at inflated prices like stocks can be bought at inflated prices. But does this make one rich or smart? Most likely not. When assets prices are high there is more downside price risk. When asset prices are low upside potential is greater.

Go back to school and learn the basis about finance and economics.

#85 dd on 08.22.09 at 11:14 pm

#73 hal smith
#67 InvestX

…The government here has seen what happened all over the world when RE crashed and will not let it happen here…

The market want to unwind, to delever, to deflate because a lot of the debt out in the market shouldn’t be there. It was never be paid back.The government is interfering on the naturual course and trying to blow up the bubble once again.

#86 HJD on 08.22.09 at 11:20 pm

Enjoy reading your website and the comments. Why not add a hit-counter? It would be interesting to see how much traffic you’re receiving, and the ratio of comments/hits.

#87 dd on 08.22.09 at 11:22 pm

#63 EJ

…Mark Carney crying for even MORE power for the central bank….

Really. So what is he worried about then if the recession is over? Is the other shoe going to drop?

#88 Dean-oh on 08.22.09 at 11:24 pm

Lili, Totally agree, people love houses. For obvious reasons a home of one’s own is security, safety, a place of their own. That is why we are in this state of affairs. People willing to work most of their lives for a home. Would are ancestors ever believe that we would need a forty year loan to pay off a home?

This is the greatest scam of over a thousand years. Canadians have more land, timber, energy, resources per capita than any other nation in the world. Why would we have to pay more for real estate than anyone else?

It’s all about supply and demand. Supply must be limited to us for this to happen. But why would supply be limited to us? First of all the banks want a low supply so that we need a large mortgage to pay off. The government has obliged and has limited available land. When my ancestors first arrived in this country the Government (crown) gave them land. All they had to do was work it and develop it for a certain amount of years and it was theirs. This is how it should be. As this is our land our nation.

There is an unseen hand in all of this. It is organized. for those who investigate and seek they shall find out what and who they are. Their only enemies are of divine nature. Our only chance to stop them is through divine means and hence this is why we are in the situation.

My 2 cents.

#89 lili on 08.22.09 at 11:26 pm

It is definitely a good question why I continue to post here. Some people don’t like me. Perhaps I have an insidious little addiction to plumb the depths of greed and hubris of so many of the regulars here, just to be sure that it exists. (And it does.)

Mr. Wiener and wild-west-style commercial real estate speculation aside, I assume most people here (or at least in Canada) are in search of a happy home and family, and some security in their old age. I’ll admit that BOC-buttressed housing inflation stands in the way for a lot of people. However, it is also true that it really doesn’t matter what you want, it’s whether you can afford it.

Hence my comment about unemployment. The numbers are positively staggering, but to whom?

If you’re gainfully employed and hold a narrow, uninformed, capricious view of living, then by God you’re out there buying. The market has shown that this is not a small camp of people. Also, world powers are not tossing all-time low overnight lending rates, massive stimulus and kitchen sinks at a passing problem. This has to get fixed somehow(!), and that Canadian real estate remains anomalously above par is of no real consequence… except to the local inhabitants, and to those that have little imagination beyond historical precedent (Peter, are you related to John Meriwether?)

Where I live, freshly minted wannabe I-bankers reading the Economist feel quite secure when they read that our banks are the best regulated, most robust in the world, and notice that their investments have largely recovered. And what about when Toronto Life, a vapid exclusionist rag if ever there was one, talks about Toronto being the new world financial capital following Wall Street’s demise? This tripe actually means much more to the people that can afford houses than Garth’s restless bloggings and the attached raging cohort (no offence intended…I love you all)

And so, I ask again modestly, with a very true assertion that I have a neutral bias on the outcome, what is the event that causes the dramatic wake-up call in, hmmm.. let’s say the Toronto or Montreal resale home market?

#90 dd on 08.22.09 at 11:29 pm

#41 Calgreedian.

…I rent, don’t drive, have a pay as you go credit card and put more than 30% of my take home pay to back taxes….

Same here. Moved downtown from the burbs, walk to work, got rid of one car, and save like hell. Quality of life not quantity.

#91 Nostradamus Le Mad Vlad on 08.22.09 at 11:46 pm

#38 bigpictureguy on 08.22.09 at 8:48 am
#48 Peter Wiener on 08.22.09 at 10:26 am

“. . . That scroll function is handy sometimes, isn’t it?”

Ditto. Briefly, birds of a feather flock together, so dumb and dumber. As you only believe in freedom of speech for yourselves, I suggest you head off to another blog. You won’t be missed.
***
#44 rory on 08.22.09 at 10:09 am — “. . . sounds like a guy that wants everyone else to do his work for him …gov’t bureaucrat maybe …lol.”

Hi Rory, you may be on to something with the “gov’t bureaucrat maybe” part, as the govt. despises truth coming out, e.g., possible Cdn. bank failures are beginning to look like A Marriage Made In Hell.

Hence, this may lead to the Cdn. “Spring Surprise”. How safe, relatively speaking, are local credit unions? —
http://yayacanada.blogspot.com/2009/08/mystical-mysteries.html

Also, a link I posted a few nights ago from The Guardian (I think) said that Iran had invited UN and IAEA inspectors, and they were satisfied there were no WMD being built there (facilities don’t exist).

This — http://www.haaretz.com/hasen/spages/1109229.html — takes the opposite view

“Iran is still not fulfilling its obligations related to its nuclear activities, despite allowing United Nations inspectors access to a reactor and allowing an upgrade to monitoring at a uranium enrichment plant, a senior Obama administration official said on Friday.”

Webmaster’s Commentary: “Note that this alleged ‘…senior Obama administration official’, apparently, cannot be sourced.

“Folks, this is the same “Israeli propaganda two-step” we were getting right before the invasion of Iraq, so if this tripe sounds familiar, it bloody well should.

“Even after having re-opened its sites to inspection by the IAEA (which, of course, Israel, as a non-signatory to the NPT refuses to do), what we’re going to get, between now and the time the bombs will probably will start falling, is the mantra that no matter what Iran tries to do, it can never be enough to satisfy Israel or the US.”
——
Adding fuel to the fire — first para. says it nicely. —
http://moneynews.newsmax.com/streettalk/stiglitz/2009/08/21/250720.html
——
8:32 clip of the elite + NWO. —
http://www.youtube.com/watch?v=lkKbE9qCzQo&feature=fvw
“Fifty men run America and that’s a high figure.” 1936 — JFK’s and RFK’s father.

#92 Chris no longer in England on 08.23.09 at 12:14 am

Garth, I’ve only lived here a short time but I wonder how anyone is making a living. This is a tourist area but the streets are quiet, the restaurants are quiet, and the stores are quiet. I was in about the best known restaurant in the town last night and it was less than a third full at 8.30 pm. As I have been watching since June and expecting things to get busier, I can tell you it isn’t. Every time I have been to what should be a busy mall 20 minutes away, it has been practically empty and I have been pounced on by bored sales assistants. If these places are not making money in August (and apparently didn’t make money in June/July either) when will they be making money? I have never worked in retail, but even I can see this is a disaster. And if a tourist area can only boast activity in its local supermarkets, then something is badly wrong!

#93 HouseBuster on 08.23.09 at 12:27 am

Hey Garth…Can’t the BoC keep rates down as long as they want through Quantitative Easing?

As long as oil is high or going higher the Canadian dollar will stay up so they can QE as much as they want and defer the problem until 10 to 15 years down the road.

Which means interest rates are not going up anytime soon. Thoughts?

#94 Happy Renter in North Van on 08.23.09 at 2:46 am

#74 Lili – The future is not a linear function of the past… ask the RE schmuck owners in the US who are underwater… In Canada, we’re not special, just 2 years behind the US cycle… This is the “dead-cat bounce” phase of our real estate cycle…

#95 Mike Hunt on 08.23.09 at 6:33 am

#79 @wiener-boy

There you go ranting and ridiculing again like a big old bully. I thought you had decided to leave and never post here again. What happenned?? Did we all misread that?!

Go away, punk…

#96 JET on 08.23.09 at 7:44 am

lili,

Nice prose, but I find a couple of your statements contradictory.

On the one hand, you said, “…regular folks will not participate in real recovery beyond some cosmetic overlay.”

And then in almost the same breath, you said, “As long as working-aged people don’t perceive the unemployment as contagion, they will continue to buy homes at inflated prices.”

Are working-aged people and regular folks not the same? How can people in general not participate in the recover and not perceive unemployment as contagion at the same time?

With respect to concerns about our current housing market. I have a little analogy. My family was visiting a friend’s trailer in one of these trailer park “resorts”. Despite a cloudy day, my wife decided to take our toddler to the outdoor play area with the others. I raised concerns on deaf ears but not wanting to rain on the parade, I followed a long. We were at the pool for not more than ten minutes when I felt a couple of drops from the sky. I again raised concerns again and suggested we should at least bring the tyke inside. I again derided. “Don’t worry! It was the water from the kids splashing in the pool!” I was told, “Go in a get a diaper. Pretty please?” What can I say to that? I walked back to the trailer to get a diaper, continuing to feel drops from the sky. On my way back out to the pool with the diaper, the drops from the sky turned into a full down-pour, and what do I see? My wife with kid in one arm, and holding a towel over head with the other, running for cover!

#97 Peter Wiener on 08.23.09 at 8:19 am

# 95 Mike Hunt

If it isn’t a loser (you )defending another loser (lili).
How’s that “investment banking” going for ya?

Did you ever get around to reading that rebuttal (post # 144 under the first Subprimal thread), I can post it again for all to see if you like! Where is your factual refutation of that? Oh, suddenly nothing to say?

Like I said buddy, you are out of your depth and full of crap, just like your posts. Everything I post is based on my experiences (and I have a lot after 4 decades in businees) or easily referenced fact – you not so much!

Hey buddy, you’d like nothing better than to have me off this blog so you can go on posting bs without opposition or someone to call you to account for your horseshit.

Again Mike, ad hominen attacks are for those who can’t provide a cogent, fact based argument, but have to rely on the tactics of a four year old.

So, have at it a-hole!

#98 DontBelieveTheHype on 08.23.09 at 8:21 am

Garth – I remember in the 90’s vacation properties dropped quite significantly. Do you see the same thing happening this time around? In the past it seems that vacation properties are sold to prop up the principal residence. You mentioned corporate owned and “generational” properties where you are. I wonder if things have changed this time around…

#99 bigpictureguy on 08.23.09 at 8:23 am

“hal smith on 08.22.09 at 12:21 pm #36 bigpictureguy You obviously don’t see the “photo grande”. If this bubble pops the whole ponzie economy pops with it.”

Hal what planet are you on ? Where was the Fed in 1980 when interest rates were 18%? Did they arbitrarily decide to decimate canadian families? Or is that Flaherty and Carney are just so omni powerful he can control market rates at will today?

It’s a wonder how are nation can elect the right PM when 50% of our population cannot distinguish between fact and fiction.

#100 Peter Wiener on 08.23.09 at 8:27 am

# 93 House Buster

Do you not think that investors will want to be compensated for the dilution that they will suffer through QE (increasing the monetary base by simply printing more dolars) in some proportion to that dilution, in addition to an elevated risk premium for such third world economic tactics?

History says they will, which would ultimately make QE counterproductive by raising interest rates, causing high inflation and in the endgame, crashing the currency’s value.

#101 Peter Wiener on 08.23.09 at 9:06 am

# 89 lili

“Some people don’t like me.”

A little sensitive are we?

How can you make a statement like this? Have I missed something here? You don’t seriously think someone (me for instance) dislikes you because they provide historical facts that counter your argument, do you? I’ve never met any of the posters here, but I certainly hold no ill will for anyone – and if you cannot say the same, perhaps you’d better reflect on that!

Surely even an infantile personality such as Mike Hunt or even the ADHD afflicted, drivel spouting Le Mad Vlad realizes that this is a forum of discussion and that jabs and jibes aside that there is no personal animosity for anyone here, just their (often unreasoned) opinions. Right?

This is a real estate blog, not a popularity contest!

We are supposed to be, through our postings, trying to COLLECTIVELY divine the potentially “Troubled Future Of Real Estate” according to the subtitle of this blog.
Please correct me if I am wrong.

Actually, I find this blog very informative, not so much as to its factual content, but as a gauge of sentiment concerning RE in Canada and general Canadian attitudes.

I find it interesting that most posters that disagree (often strongly) with me never even address the content of my factual postings, but rather react by seemingly emotionally reflex to the tone of those posts in ad hominen attacks and nonsense, but alas few if any facts. I find this most telling and actually a bit scary; – indicating, I fear, that most people are quite sensitive to the factual refutation of their little ‘dream world’ of their existence.

I PURPOSELY POST INFLAMMATORY REMARKS TO EMPHASIZE MY POINTS AND PROVOKE REACTION TO DISPLAY THAT THE CANADIAN RE MARKET IS LARGELY BASED ON EMOTION and to suggest that for that reason alone its sustainability is SUSPECT. Perhaps a little too high of a concept for some to understand here.

#102 Peter Wiener on 08.23.09 at 9:10 am

# 99 bigpictureguy

Took the words right out of my mouth, except you have stated them better and more succintly than I ever could.

Bravo!

#103 Madame Guillotine on 08.23.09 at 9:26 am

Something this teacher had to retire to learn.

http://stoplying.ca/video/the_crime_of_the_canadian_banking_system.htm

#104 Peter Wiener on 08.23.09 at 9:26 am

# 95 Mike Hunt suplementary post

I also find it odd that you like to make fun of my posting handle (eg wiener -boy) as somehow that psuedo-slur will taint the content of my factual posting, yet you disparaged a poster several weeks prior for suggesting you grow up and use a more tasteful handle than Mike Hunt (if posters don’t understand, repeat the name 10 times quickly and you’ll get the childish and vulgar play on phonetics). Perhaps a change of your first name to Imak is in order and no doubt more accurrate in your case.

Have a lovely Sunday whatever you call yourself!

#105 Makeorbreak on 08.23.09 at 9:33 am

I enjoy Nostradamus le Mad Vlad’s daily contributions on this site. They are informative and interesting.

Keep it up, Mr. le Mad Vlad.

#106 Maurice on 08.23.09 at 9:34 am

#88 Dean-Oh

You are dead on target with the fact government conspires to limit housing to create price increases. Local Planning Jurisdictions continually go through Official Plan Reviews. Each time limiting the amount of Developmental lands, by increasing Green Space. Ontario brought in the Green Belt Legislation, further driving up the price of developmental lands. Then take Region of Halton and other GTA Municipalities and their Development Levie Charges. Now approaching $20,000 for a single family home; where other areas like Dufferin and Grey Counties charge nothing. Residents of the GTA love high Development Charges as it drives up the value of homes for exsisting home owners. The Assessment goes up and the Municipalities get more Property Tax Revenue. Have you ever seen Mill Rates drop in proportion to the increase of assessment? Never! It is all a conspiracy at all government levels to prop up real estate to get more tax revenue.

#107 OttawaMike on 08.23.09 at 9:40 am

Sitting on cash and debt free after my home sale I have been interviewing money manager, financial advisor types. The first 2 told me that wise citizens are investing in Canadian Real estate because it is one of the few solid investments after last fall’s index crash. The 3rd fellow is a youngish advisor referred to me and when it comes to investing we think alike so I hired him on an annual fee basis. He did mention to me that he’d just purchased his first home and hoped I was wrong about the pending correction but agreed that it was entirely feasable.
Out for a beer recently with a visiting UK plastics executive. Steve travels frequently with 6 plants spread about the Eurozone and USA. He is astounded that property values have held and are increasing in Canada. He politely asked me to explain why this is and I used some of the points from this blog to explain it to him. He had been in Dublin on a getaway weekend the previous week and told of the devastating drops they took on their R.E. but also noted you could not tell looking around as people were still consuming and spending like any other western city.

PS: This blog is a much more pleasant read when everybody just gets along. If I don’t like something/someone, I scroll past. No need to trash each other. Personal attacks do not add any value….

#108 Makeorbreak on 08.23.09 at 9:55 am

http://ohio.realestaterama.com/2009/08/21/nearly-one-in-two-mortgages-in-ohio-is-underwater-or-close-to-it-ID0197.html

#109 Munch on 08.23.09 at 10:09 am

#66

You will have to do better than that!

Ripostes are not that cheap!

#110 dd on 08.23.09 at 10:13 am

#89 lili

Lets have fun part 2!

…However, it is also true that it really doesn’t matter what you want, it’s whether you can afford it….
At 40 or 50year mortgages like you suggest, they can. That is until the rates go up. But like you said, nobody really cares about debt. That is except for the bankers that want to get paid back.

…This has to get fixed somehow…
With cheaper debt? Isn’t this the thing that got up here in the first place? So what happens if the solution is less debt? A restriction in leverage. Your banker friends will be newly unemployed then. Shame.

…Our banks are the best regulated, most robust in the world…
Sure they are. The regulators are right on that. But however what about the 0 down and 40 year mortgages? If the market drops 1% the banks might be out of the money. Not so robust now.

…And so, I ask again modestly, with a very true assertion that I have a neutral bias on the outcome, …
BS. We all have a vested interest on the outcome. When the bubble pops the government will come in and throw money at the problem and YOUR taxes (and mine) will go up.

Wake-up.

#111 Mike Hunt on 08.23.09 at 10:15 am

@Wiener

I did refute your earlier post, but it seems it went right over your head. Go back and try re-reading it again (this time very, very slowly). I don’t have the time or the inclination to try to explain it to you again.

On another note, I was hoping you would stick by your written promise, but alas, your word is worth nothing and you obviously can’t be trusted or believed. You are exactly the type of person I try to avoid in business and life.

Too bad there isn’t a feature allowing one to ignore certain posters here… (will have to try manual ignore mode instead!)

#112 Munch on 08.23.09 at 10:18 am

Methinks #101 doth protest too much

#113 dd on 08.23.09 at 10:22 am

#96 JET

…We were at the pool for not more than ten minutes when I felt a couple of drops from the sky… I again raised concerns…the drops from the sky turned into a full down-pour…

Jet great story. But I don’t think lili will connect the dots between RE, the warnings, and rain.

#114 Makeorbreak on 08.23.09 at 10:25 am

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/08/23/MN4H18MESA.DTL

#115 dd on 08.23.09 at 10:28 am

#93 HouseBuster

…Can’t the BoC keep rates down as long as they want through Quantitative Easing…
But we also have debt to issue. Debt is based on the BOC rates. Lots of debt coming to the market in the coming years so the rates will have to be raised to compete.

…As long as oil is high or going higher the Canadian dollar will stay up so they can QE as much as they want and defer the problem…
$ goes higher and manufactoring exports decrease … means will need more QE.

…Which means interest rates are not going up anytime soon….
Again, who is going to buy our debt if the rates are low?

#116 lili on 08.23.09 at 10:28 am

#96 JET you asked: “How can people in general not participate in the recovery and not perceive unemployment as contagion at the same time?”

How to answer simply? Basically, they are fooled. Although that probably sounds trite, it is wholly accurate in my estimation. “Income inequality” is a bunch of syllables that make academic the notion of systemic robbery. You don’t have to be unemployed to be missing out on the economic spoils. You can feel snug as a bug in a mortgaged rug as long as you can make the payments, even if you can barely manage. As long as the social norms suggest you are being prudent, then you won’t question your decisions… much.

So that’s exactly the situation. Regular folks I know are just happy to have a job, no matter what. As long as the unemployed are not seen and not heard, there is a tendency to believe they don’t exist, or at least they exist somewhere else: A man without a face has no voice. Consider the hungry and dying people around the world that we have never met.

People therefore do not participate in a real recovery due to the fact that incomes remain stagnant, while pernicious inflation eats away at their purchasing power. But they don’t worry about losing their jobs until they actually lose their jobs, and that worry won’t completely overcome the majority’s spending patterns unless some new precedent emerges i.e. a new claims record. That’s not a fact from a study, but it is my personal observation about Canadians in this recession.

The wealth inequality currently hovers somewhere around where it did early last century. We are living in the “bad old days” right now. Working people have lost immense wealth already but as long as they keep working, they feel secure enough to let it happen.

And of course, what you can’t have in terms of income, the elite will happily provide via debt. Remember the Canadian depression-era miners that worked simply to pay back the company store?

#117 jess on 08.23.09 at 10:28 am

Was the contents of the tank the fertilizer for “new growth opportunities” or is it just plain sh–t?
…since 1991 it is Interesting the growth in job title, “financial engineer”
Dictionary of financial engineering By John Francis Marshall (google books)

At least Ray knows what he drives.

#118 OttawaMike on 08.23.09 at 10:30 am

The Borg says Economy improving and all remaining bears will be assimilated:
http://www.thelocal.se/21614/20090821/

#119 Jan Etter on 08.23.09 at 10:33 am

Frequent reader, first time poster.

I read frequently because of my interest in the purported topic of this blog. However, I felt compelled to post for the first time to encourage restraint in the inflammatory comments, words and name-calling, as the blog is veering off-topic too often and, to be frank, wasting everyone’s valuable time.

Blogs are anonymous, in the sense that your real name does not have to be used (e.g. “Mike Hunt”, “Peter Wiener”, to name just a couple of phallic pseudonyms employed here). By the very way in which one crafts one’s prose, one can try to suggest an age, profession, gender, education, life experience, etc. which cannot be verified in the virtual discussion group that this blog is.

Therefore, there is no point in engaging a writer who is either nonsensical, abusive, illogical and/or offensive, since there is nothing “personal” about a blog entry, since the “person” doing the writing may be nothing like the persona being suggested by the words on the screen.

Similarly, as I’m sure many of us have experienced, the same words on a screen are likely to have different tone, context and meaning to each reader, as so often happens with email or text correspondence.

In short, my point is, let’s stay on topic and not get caught up in “personal” issues since there are no real “persons” here. To what extent there are real persons typing those words on the keyboard is another matter, so if you want to get into “personal” issues, please take it outside into the real world (exchange phone numbers, meet over coffee and debate if that’s what gets you going).

#120 OttawaMike on 08.23.09 at 10:35 am

Good thing the depression is over:
http://www.bloomberg.com/apps/news?pid=20601087&sid=a6b04KuJ27aQ

#121 David Bakody on 08.23.09 at 10:42 am

The CDN RE Market is based on making money for the government. Think ….? in the end for those who get sucked into the game will pay higher prices for everything wrt said property. In the interim being house proud does not allow money to enjoy the real pleasures of life from a visit to a museum, a special concert/play or enjoy a fine vacation etc. Oh well hugging granite counter tops can be rewarding, _ dah!!

#122 Manitoban on 08.23.09 at 10:52 am

Comments # 38, 48, 71, 76 & 89, why would you care what others love, hate or are indifferent to your comments ? it is Garth’s blog and only his approval or censure matters. If you need a pat on the back for showing that you can read,think and communicate your thoughts, just pack it up and do something else more productive. Garth already knows “that you may lead a horse to water but cannot make him drink” and I’m sure that his understanding that old proverb gives him the incentive to find new & attractive narratives of many repeats of the same theme to get his points across. My hope is that you will all continue with your
welcomed comments.
I have a big week ahead, starting 1st thing Monday with my furnace annual check up and followed Wednesday with my oncologist report on the expected length of my future and my haircut appointment to end the week. Somehow in between my dates with fate I hope to be able to do definitely productive hours in my hobby of genealogy entirely devoted to my very extensive family spread throughout the world.

Please let us know the news, and let’s hope it’s positive. — Garth

#123 rory on 08.23.09 at 10:55 am

Peter W and gang …# 89 lili asks a very good question:

“…what is the event that causes the dramatic wake-up call in, hmmm.. let’s say the Toronto or Montreal resale home market?”

Obvious are interest rates, unemployment #’s, stock market collapse …what goes first? What to look for, etc.

So what say you?

#124 Farnsworth, Hubert J. on 08.23.09 at 11:01 am

#88

“There is an unseen hand in all of this. It is organized. for those who investigate and seek they shall find out what and who they are. Their only enemies are of divine nature. Our only chance to stop them is through divine means and hence this is why we are in the situation.”

Please, do share more. Provide a link. Or a lotion, a potion, or yet another notion.

#125 Mike Hunt on 08.23.09 at 11:47 am

#122 @Manitoban

You are right. Thanks for helping to add some perspective here.

Hope you get good news from your oncologist this week.

Best wishes

#126 Got A Watch on 08.23.09 at 11:56 am

#119 is correct, well said. #122 states what is really important in life, good luck this week.

The concept of two angry men with genitalia nicknames arguing about who is the bigger dick is rather ironic, don’t you think?

Both of these guys (I assume they are male, judging by the juvenile sex organ related handles) do make some good points. However, as a reader, I skip over both these sex organs comments entirely most of the time, as the amount of insults, inflammatory rhetoric and just plain bad attitude usually outweighs whatever point they are attempting to make.

If you want adults to take your points seriously, try commenting like the adults you claim to be. Some of your comments are informative but the overall tone often negates that.

Don’t drag this place down for your own petty reasons. Remember for each comment posted, there are hundreds reading who do not comment. This Blog serves a very rare and invaluable function in Canada, that of antidote to the MSM propaganda. That message gets diluted by comments that are abusive, credibility becomes questionable at best. Respect Garth, his message is worthy of it, and I believe he has the best interests of this country at heart.

#127 lili on 08.23.09 at 12:11 pm

Thanks Rory #123 for reiterating the question that is unanswered for so many like myself.

Basically, I ask Garth and others, where’s the beef?

My take on the oft-trumpeted factors of doom and gloom are as follows:

Interest Rates: Overnight lending rates will rise, but the Big Five maintain an enormous spread right now and can decide to narrow the spread as the economy “recovers”. This is never brought up here, but instead we have Garth prematurely channelling Eric Malling on the impending disaster that is national debt-financing. We’ll just have to see, but overnight target rates are not mortgage rates.

National Unemployment: As long as the “resistance” at say 15% isn’t pierced mercilessly, and I believe the government has the tools via policy and statistical maneuvering to manage this, I don’t see people panicking. If you believe the bottom is already in, then the discussion has already moved on to getting those poor unfortunate souls back to the grind.

Stock Market Collapse: Well, we know the DOW has been to the 6000s, and there are perma-bears with delusions that it will happen again in Fall. Oh sure. Well if it does, then yes Canadian home prices will retreat again… But it is the only catalyst that seems to matter and Garth is telling you all to run out and buy preferred shares, RRBs, OIL contracts, and of course 10% in gold because these are better investments than housing. Bah!

So as I say, the property bears have painted themselves into a corner. There are no alternative investments that aren’t wildly volatile or provide near-zero returns. Or you could just sit in your backyard and worry about other things while the others drive themselves mad watching BNN in their 2bdrm rentals.

#128 Live Within Your Means on 08.23.09 at 12:20 pm

#122 Manitoban on 08.23.09 at 10:52 am

“I have a big week ahead, starting 1st thing Monday with my furnace annual check up and followed Wednesday with my oncologist report on the expected length of my future and my haircut appointment to end the week.”

Good luck Manitoban. Been there. Alive 6+ yrs after a 12-18 mo. death sentence. Not religious in any way. Surround yourself with POSITIVE THINKING people. I’m now considered as a ‘poster child’ by my Onc to the trainees. I can assure you I haven’t followed all the ‘typical’ medical establishment do’s & don’ts – totally to the contrary. My Onc just keeps saying continue what you’re doing. Years ago I wanted to live to at least receive CPP. NOW, I’m batting for OAS, tho it won’t mean a thing financially for me as it’ll be clawed back. :-)

BTW Manitoban, check out some support groups on the net for your type of cancer & treatment options. Write down all kinds of questions to ask your Onc. and if you should have to be operated on in a hospital learn how to make your stay as comfortable as possible. If you need more info, I’ll gladly give Garth the right to provide you with my email.

Again, good luck Manitoban. Don’t let the other trivial daily matters get your down. Concentrate on your health & love. That’s all that really matters. The other daily matters are trivial in comparison. Not sure if this little ditty is really applicable, but I like it. ” Love while you’ve got love to give. Live while you’ve got life to live.” Piet Hein

#129 Elle on 08.23.09 at 12:22 pm

# 126 – GOT A WATCH

“the concept of two angry men with genitalia
nick names arguing about who is the biggest dick
is ironic, isn’t it?”

You said it so well…………it’s also very funny!
Thanks for the laugh.

#130 jess on 08.23.09 at 12:22 pm

new definition of massive fraud and no accountability -amnesty. (tax avoidance schemes )

What probes reveal
http://cnews.canoe.ca/CNEWS/World/2009/08/22/10564431-ap.html

The professor confessed in court to accepting nearly C200,000 to serve as a faculty adviser to more than 60 doctorate students between 1998 and 2005.

The professor said he needed the money to renovate his Hamburg mansion.

#131 dd on 08.23.09 at 12:23 pm

#116 lili

“the elite will happily provide via debt. Remember the Canadian depression-era miners that worked simply to pay back the company store”

Will they? What if they are not going to get their money back? Just look south sweatheart and you will find the answer. Real estate at this point in Canada has more downside risk than upside. There are bettter places to put hard earned money to use.

#132 JoeK on 08.23.09 at 12:39 pm

Garth….

Another of your book predictions is coming true – the first mainstream article I’ve seen on it. Now, I just have to wait to see the Canadian version:

“Is your suburb the next slum?”
http://realestate.msn.com/article.aspx?cp-documentid=21179977&GT1=35000

#133 Happy Days on 08.23.09 at 12:49 pm

Hey Garth that was your best post to date I enjoy hearing more real life stories rather than reading the stats. You combine them to make them intresting to people who are not really intrested in fiance. I imagine many young people have their feet firmly planted in the air like the Rays’ grandchild. I also enjoy the irony of the wealthy poop sucker vs the poor vegas glamour puss.The meek will inhert the earth because they were not in hock up to their eyeballs.
I have worked in a insulation factory for the past twenty years. In the fall our orders usally start increasing but not this year we are at about half capacity. This industry is much like the sewage industry in is a “we are here indicator”. Years ago we used to hire more people in the fall and lay them of in the spring. Fifteen years ago that all changed we went at break neck speed producing and adding capacity. Where was all this product going? The largest realestate expansion ever globally.
I believe you Garth the top is in or this as close as she gets. All families should be aware of this who still have ears to listen. I hope for the best but I have prepared for the worst. Your warnings about this realestate bubble have been a blessing to those who can take sound advice. The problem is that like Rays grandchild who can hear the good advice with all the other noise going of in a young persons mind. Now hear this as the “Man is going to stick it to yah!”

#134 Peter Wiener on 08.23.09 at 1:02 pm

# 111

It is because you avoid “people like me” in your business and personal life that you post as you do. Reality may be difficult for you to handle I guess and delusion is a softer, nicer place for an intellectual pansy such as yourself.

I did review your short and inappropriate response to my post under Subprimal part one, entry #145 where (by your own admission an investment banker) post an opinion that I seek therapy yet neglect to provide your accreditation as a qualified mental health professional. I only proffer information or advice in areas where I am not only extrememely well versed, but successfull. That is called being a responsible person – responsible for the argument that you are making and willing and able to back it up. With fact and precedence. Hence why I call you a dope.

Again, refute my arguments with facts or STFU, got it!

As I mentioned earlier – you would love for me to not post here as I provide a foil to the unbalanced nonsense you and some other financially naive posters spew. And for that reason I will continue to post as long as Garth, as moderator, deems it in the interest of the blog to do so. As I have yet to be censored for any posts, I presume he is ok with what I’m writing and if not, I’m sure he will let me know in no uncertain terms.

Perhaps the notion of free speech (unless it agrees with your viewpoint) runs counter to your true beliefs. It wouldn’t surprise me.

Again, have a nice day and leave it at that.

#135 David on 08.23.09 at 1:21 pm

All these indicators remind me of the stories of Roman generals trying to divine their fortunes in war by reading chicken entrails. Very few individuals or governments were prepared for the financial melt down of October 2008. My teenage daughters spent the summer of 2008 in Belfast and Dublin and by all accounts the Celtic Tiger was still roaring away. This morning I was reading the finance pages in the paper and Ireland has 15 % unemployment, the banking system has collapsed, the real estate bubble in Ireland is rapidly deflating and there is a real risk of default on sovereign debt. Bubbles behave the same way everywhere and thinking that Canada is granted immunity from the consequences of bubbles by virtue of having a banking oligopoly is both naive and dangerous. Too big to fail in a comforting cliché.

#136 Peter Wiener on 08.23.09 at 1:28 pm

# 123 rory

Her question presupposes that a particular event or cause that is required to collapse this housing bubble. Sometimes it is a CONFLUENCE of events and the TIMING of that confluence in and of itself that cause the reversal.

An underinflated tire in and of itself does not cause an auto accident, but said underinflated tire being driven at too fast a speed on a potholed road with the vehicle overloaded shortens the time frame of the catastrophic failure that will befall the tire’s structure. Drive that same tire on smooth pavement at low speeds will prolong its life, but ultimately the tire will fail. Any exogenous factor could potentially accelerate that process, given the right CONFLUENCE with other factors.

#137 Kelly McMae on 08.23.09 at 1:29 pm

#6 Nostradamus Le Mad Vlad on 08.21.09 at 10:28 pm

Everytime I see his post I quickly scroll down. Hurts my eyes! Can you write summarize relevant points versus cut and paste a long list of nothing?

Thank you.

X2

and I remember reading something painful and entertaining from LILI before, and she/he has gone and outdone her/himself. Keep gathering whatever certificates you need to adorn your parlor.

#138 Nostradamus jr. on 08.23.09 at 1:30 pm

West Vancouver is North America’s Cote d’Azur

…I challenge anyone who’s been to both locales to prove the above inacurate.

All I’m saying is, in times of turmoil, head for the place all the rich people are moving to.

…The wealthiest Americans and Asians are quietly relocating to West & North Vancouver.

Nostradamus jr.

#139 Peter Wiener on 08.23.09 at 1:43 pm

# 126 Got A Watch

I have yet to have the founder and moderator of this blog censor or delete ANY of my postings since day one. I cannot speak for others.

If even my poor writing style has not offended him to the point of censure by now, I presume that he is ok with it.

Garth Turner does NOt have the reputation of wall flower nor Milque Toast to my knowledge and I am quite certain that he will make known his displeasure should he decide that we are not adding to the discussion here in some way. He has done it before with Nosti and Republic when he felt that their postings were inappropriate and I assume he will continue that policy. Let’s let him be the judge – its his blog after all!

That said, I for one undertake to restrict my comments as much as I can to the RE market. However, I reserve the right to flame or make snide comments to those postings I feel are deliberately intended to attract such comment or to counter any attempt to pervert the truth.

#140 Kelly McMae on 08.23.09 at 1:45 pm

PS. – LILI – I take that back. When you begin to reference inequality and the regular folk just happy with the status quo you start to make sense. Though you’re connections to real estate prospects still seem off-side.

#141 Peter Wiener on 08.23.09 at 2:03 pm

# 138

Don’t make me laugh.
To refute your rather apples to oranges comparison and yes been there several times, most recently Sept 2007.

1) It doesn’t rain half the year in Cote

2) The criminal element is largely retired after pulling non-violent crimes elsewhere and do not foul their own nests in Cote

3) Historically, the wealthy AVOID high tax, high crime areas for obvious reasons (I’m referring to your little slice of heaven here)

4) The French Surete and other police do not tolerate brazen daylight drug dealing, murder and general breaking of the common peace.

5) Every person I know that has experienced both locales (and perhaps done some international travelling) , given the choice would choose the Cote d’Azur hands down.

I could go on and on about their diferences and French culture, etc., but the above 5 points alone indicate that these cities are incongruent.

#142 Manitoban on 08.23.09 at 2:24 pm

Thank you Garth as well as #125, 126 & 128 . I am positive & will remain that way no matter the outcome as I already have had a couple of years of extended grace. Am not looking for sympathy or approval but will look for some of that “perspective” from # 125 in whatever length of time I may be granted to continue
my pleasure read of this excellent blog. Am having a superb day, wish you all the same.

#143 jess on 08.23.09 at 2:25 pm

money and people are never in the same place. money is never quiet it is always talking.

#144 dd on 08.23.09 at 2:32 pm

#138 Nostradamus jr.

…All I’m saying is, in times of turmoil…

Your hood is going to cave like all others. The rich are being affected by this slowdown like all others.

#145 Mike Hunt on 08.23.09 at 2:33 pm

@Wiener – you are one angry little thing, aren’t you?

Trouble with reading and comrehension too, it seems – (I never said I was an investment banker anywhere – try and prove otherwise!).

Trying to debate with people like you is pointless as your type always ignore the facts and focuses on personal victories and vendettas. Nothing to gain in dealing with people like you.
You are clearly a fabricator of stories interested more in making us all believe you are a superstar than anything else.

You have proven to us all that you are a liar that can’t be trusted. Why not try and address that fact? Or will you just ignore it again because it suits you better?!

Back to the “posters to ignore” section you go…

#146 Smart on 08.23.09 at 2:39 pm

Most people still do not understand what is coming with so called “climate change” – it is pole shift . The Earth changes will continue to undermine mankind’s infrastructure( thunderstorm ‘Bill’ shows) and the weather will continue to create crop shortages, roads damage; economy will not recover in the near future. Authorities of course point to what they hope is a plausible explanation, a normal cause, hoping to keep the extent of the current Earth changes from the public for as long as possible.
Currently the establishment is controlling the population by the cover-up, and when this breaks and the truth can no longer be denied, they will bunker themselves. That is why Garth preparing the bunker for his family.

#147 rory on 08.23.09 at 3:09 pm

#138 Nostradamus jr.

Only 3 ways in by road – 2 by bridges and a 3rd thru the mountains down from Whistler…easy to control access and keep the riff-raff out …it is like one very large gated community …so he may be on to something.

#148 Evangeline on 08.23.09 at 3:33 pm

((Why? Why are we paying so much? We must be swimming in Hydro?

I don’t understand this at all. Demand down, supply of gas and hydro in abundance, shouldn’t the price go down? Is this not a free market…..
))

If fewer are people are buying, the oil corps have to up the price per unit to meet their bottom line. They have to break even at least or else go out of business.

#149 bigpictureguy on 08.23.09 at 4:02 pm

#91 Nostradamus Le Mad Vlad on 08.22.09 at 11:46 pm
#38 bigpictureguy on 08.22.09 at 8:48 am
#48 Peter Wiener on 08.22.09 at 10:26 am

Nostra Le Mad Vlad it’s one thing to simply cut and paste with wild abandon a laundry list of links with disparate topics.

It’s another thing to add value by reviewing third party sources, synthesize, relate and draw insight in your own words to a specific topic within the context of a Original or Reader Post.

In fact your posts are so generic that it can applied to any and every Garth or Reader post on this blog.

Yes. I was peacefully ignoring you since the start but I find every day I need to hold that scroll bar a little annoyingly longer because the dry cyborg like cut and paste links are beginning to engulf the precious Garth Turner Blogg Real Estate.

You get an A for quantity but F for quality and conciseness and coherence.

Garth it’s time to charge higher $/sq cm fee :) LOL

#150 Alex on 08.23.09 at 4:13 pm

A number of US-based finance blogs are abuzz with rumours about the Bank of Montreal…
http://whispersfromtheedgeoftherainforest.blogspot.com/2009/08/is-bank-of-montreal-about-to-fail.html

#151 North Van Dude on 08.23.09 at 5:11 pm

i have been to both West Van and Cote d’Azur. The two locales are actually quite different. Hollywood A-listers do not hang out in West Van, nor is there guaranteed sunshine 4 months of the year in West Van or a film festival to kick off the season.

#152 Híppos Purrós on 08.23.09 at 5:28 pm

You always have something worthwhile to say, Garth… But today’s piece was wonderfully crafted… Take some time out and try your hand at fiction.

#153 Dean-oh on 08.23.09 at 5:39 pm

Alex #150, thanks for the heads up. Time to buy some inverse bank etfs, ticker hfd!

#154 Peter Wiener on 08.23.09 at 5:48 pm

# 143
Mike Hunt

You won’t just let it go will ya’
Well thanks for another display of your immaturity.
How am a liar? References?
Where have I been factually wrong?
Oh yeah, I forgot facts mean nothing to the delusional.

I think it is your best idea yet to ignore my posts in future.

You know, I’d like to meet you somewhere a-hole , we could compare notes, net worths, all that good stuff and we’d see how you stack up. Get Garth to referee
if you want to be a real man and try me on – you talk the talk – I doubt you could walk the walk.

You just find it hard to believe that someone can accomplish a lot in life because maybe you didn’t.
Work out your self worth issues elsewhere – I simply won’t bother with your silly diatribes any longer.

Boohoo for you.

#155 Peter Wiener on 08.23.09 at 6:25 pm

# 143 Mike Hunt supplementary

Under the thread “Subprimal”, entry # 134 as archived you state in point 2 of your retort, and I quote;

” I now own a merchant bank which owns and has owned many businesses…”

In most people’s books that makes you an “Investment Banker” of sorts doesn’t it? Even using your weasley semantics, Investment banker ain’t far from “merchant banker, is it?

Further you add in a later post at item # 143 of the same Subprimal thread, last paragraph you say (again quoted verbatim) ;

” Regarding my SMALL merchant bank, we’re doing just fine thanks.”

So Mike, what do you do at your SMALL merchant bank then, if not invesment banking or a close approximation of it? Make donuts? Do laundry? No, I’d guess you do some investing in businesses and provide a banking function of some sort because you claim to have owned a lot of businesses in the first quote I provided and I take you at your word. Please do correct me if I’m wrong or provide clarification so we can all understand your lofty credentials.

I have never claimed to be a superstar in any capacity. Your charachterization, not mine. In fact, I have had to plod along a long time (decades) and do rather a lot to achieve my modicum of success. I don’t quite understand why this bothers you, perhaps you are easily intimidated, bitter or just a socialist at heart.

As asked before, how have I proven to be a “liar that can’t be trusted”. I’ve sought no one’s trust and to the best of my knowledge I haven’t misrepresented the truth in any way. What would be the point of posting if I made anything up – I certainly wouldn’t stoop to that to try and win an argument. Your assumption that I would indicates bad faith on your part.

As to being angry, where do you get that? I am literally laughing at every one of your retorts as I imagine you with steam coming out of your ears, sputtering away as you pound the keyboard in your desperate attempts to cobble together your replies to attempt to best me
in some way. I find that engenders humour in me, not anger.

#156 Peter Wiener on 08.23.09 at 6:28 pm

#149

Right on brother!

#157 Live Within Your Means on 08.23.09 at 6:42 pm

#148 Evangeline on 08.23.09 at 3:33 pm

((Why? Why are we paying so much? We must be swimming in Hydro?

I don’t understand this at all. Demand down, supply of gas and hydro in abundance, shouldn’t the price go down? Is this not a free market…..
))

If fewer are people are buying, the oil corps have to up the price per unit to meet their bottom line. They have to break even at least or else go out of business.

Or, ensure a 10% rate of return by the prov. when NS privitised NS Power. Unfortunatey, we could only afford to buy 200 shares at the time.

#158 Rural Rick on 08.23.09 at 7:11 pm

So I am thinking the genitalia guys are one and the same.
Perhaps he will consider therapy to integrate the multiple personalities.

#159 Nostradamus Le Mad Vlad on 08.23.09 at 7:37 pm

#105 Makeorbreak on 08.23.09 at 9:33 am — “Keep it up, Mr. le Mad Vlad.” — Thank you!
——
#88 Dean-oh on 08.22.09 at 11:24 pm — “There is an unseen hand in all of this. It is organized.”

Please expand on this, as it is interesting. Stephen Hawkins once remarked “. . . the universe is organized chaos”, so, along with Einstein, Newton et al, there is a lot more happening than we will ever comprehend.

I heard of the theory of multiple universes several years ago, but never studied it. I have had numerous out-of-body experiences throughout my life, so I already know what to expect when my lifecycle concludes.
——
#89 lili on 08.22.09 at 11:26 pm — “. . . what is the event that causes the dramatic wake-up call in, hmmm.. let’s say the Toronto or Montreal resale home market?”

Good question, but I would pluralize the word ‘event’. My guess is that will be several world-wide events, none of which can be pinpointed as being the cause.

The fed. deficit is running at a cool $50 bln., give or take and Carney wants more power — over what?

The prov. debt in BC is getting higher, and with a relatively small population, chances are it will not be paid off anytime soon, thereby leaving taxpayers on the hook for the lot and for a long time.

Add in the financial mess in the western world and one can see that RE, whether new or used is but a fraction of the total.

This — http://www.globalresearch.ca/index.php?context=va&aid=12007 — is the link I should have posted, as it is straight to the point: “Or is there a hidden agenda? ”

I figure the next major event to happen will be in addition to finances and will be drought, as it appears numerous areas are drying up and going through water shortages, restrictions, etc.

#160 taxpayer like you on 08.23.09 at 7:38 pm

“Inside the meltdown” Monday 10 pm CBC Newsworld. Probably a repeat, but I’ll watch.

150 Alex – “Whispers from the rainforest”? Gives Nosty Jr ammo that Vancouver could be the next….????

Does Cote d’Azur have mountain biking and skiing?

#161 Evangeline on 08.23.09 at 7:41 pm

#157
Live Within Your Means

((Or, ensure a 10% rate of return by the prov. when NS privitised NS Power. Unfortunatey, we could only afford to buy 200 shares at the time.))

Yes keeping investors happy is part of the cost of doing business. I’m glad you lived up to your moniker and didn’t borrow to invest.

#162 Mike Hunt on 08.23.09 at 7:43 pm

@Wiener

How can I put this delicately… I got it: You are a complete and utter moron.

An investment bank is not the same as a merchant bank (and vice versa), dumbass. They are two very different things. One provides capital markets services and the other makes principal investments. I thought you were well versed in finance? Another lie perhaps?

I have divulged about as much as I want about my personal situation. I don’t feel the need to hide behind my net worth. The fact that you do can only mean that you have little self worth. That is sad. I’m sorry that you had to put up with whatever you did growing up that has caused you to be this way – it must have been tough.

Hey, I have an idea… since you like to make such wild assumptions and generalizations about people you don’t know, why don’t I give your game a try! You’re really short aren’t you? Explains why you stand on your wallet. I bet you got beat up a lot growing up with your poor attitude and small stature (both physically and mentally). I don’t blame them – I probably would have done the same when I was younger. But I am older and wiser now and I don’t waste my time meeting with people like you as I am quite sure I have way more to lose than you.

But seriously, friend. All that is history. You’re an adult now, and those bullies are gone. Time to let all that anger go and move on…

By the way, this is a quote from you in the Subprimal post from last week:

“#138 Peter Wiener on 08.13.09 at 2:46 pm: […] The reason I am grateful to you is that you have reminded me that I am wasting my time here. As you mention very late in your post “…..(and your disrespectful tone – it brings out the worst in me)…”; I am getting criticized for my ‘tone’ by a guy that admits he is hot under the collar while posting. It is a great endorsement for my decision to not post here anymore.”

So, Wiener, tell us: are you a man of your word? Think real hard! I can’t wait to hear your explanation. I’m sure that with your character (or lack thereof), you will find no flaws at all with your credibility. But who will believe you?… ;-)

#163 Peter Wiener on 08.23.09 at 9:57 pm

# 162

Why oh why do you try so hard dear hypocrite?

So what is it you allegedly do then at your SMALL merchant bank then? Play with semantics, mr. goofball Mba (let me guess, you are NOT a Wharton grad)? And what are you afraid of revealing, pray tell? Perhaps you are a janitor at your fictional merchant bank with dreams of, oh so much more?

Your assumptions re my upbringing are laughable and the ferocity of your personal attack should be reflected upon by yourself and anyone unfortunate to have to deal with you. I think you may be thinking of yourself when ranting about an unpleasant childhood and using transference to try to make yourself look better, but hey, I’m not a mental health expert, so perhaps you should seek some help in sorting this out. You really sound disturbed. Why so pissed, buddy? And with a stranger, no less. Sheesh!

I can prove anything I may have claimed – you not so much I gather. I call you out and you fold – its called being a coward where I come from and that is what I am calling you now. Let’s get together and I’ll say it to your face – I guess the anonymity suits your kind of virtual cowardice.

You need a lesson in language comprehension as well, so follow along underachiever; – “It is a great endorsement for my decision to not post here anymore” can hardly be classified a “promise” as you charachterize the above statement. I did not promise to do or not do anything by that statement. Nor did I say that I decided definitively not to post, just that your responses lend reason to not post, should I so decide. I am in no way obligated to any course of action by that statement.

Furthermore, I am free to stop or resume posting at any point in time if I feel (as was the case) that subsequent postings by others called into question the veracity of my assertations and the factual nature of my postings to this blog.

So you ball-less wonder, until you are ready to reveal your firm, post your credentials or otherwise prove that you are not some shrill little boy fantasizing away your life in your parent’s basement, your representations are meaningless, probably a lot like your existence.

Put up or shut up dear boy!

Mike, face it, I’ll post here whenever and however I like until Mr. Turner decides otherwise. I believe that I have beenobserving the general rules of conduct, and, if I have breached any protocol, It is not for you to decide – last I checked, it wasn’t your blog.

I have generously proposed that you ignore my postings as they cause you so much stress trying to best me or discredit me and instead devote your blog time to posting content that is directed at RE, not my disparagement.

You seem hell bent on driving me off this blog. I’ll leave when I or Mr. Turner chooses and not before. Btw, do you have control issues?- I hope so, cause I just love winding up losers like you, especially when you don’t have the guts to counter my factual arguments nor to prove just who or what you are.

So, be a good boy and leave it alone and help the folks on this blog with your magnificent intellect. I’ll pass on making any other exchanges with you at this time and stick to the topic of this blog, regardless of the ph level of your vitriolic assaults.

So, do your worst pal!

And, oh yeah, have a nice evening.

#164 Mike Hunt on 08.23.09 at 10:56 pm

@Wiener a.k.a. lying angry boy…

Ok bigshot. I will tell you the name of my firm – just after you tell me yours… you dumbass lol…

The main reason I don’t want to divulge more about me is because you seem like a troubled person that could take things too far and I don’t want to chance you figuring out where my office is and doing something stupid – you have shown that you likely have the propensity.

BTW, I did not get my MBA from Wharton, but another ivy league school, so keep guessing, punk! Why do you hate MBAs so much, anyway? Couldn’t get in? I bet you didn’t even finish high school. Your lack of critical thinking skills smack of a classic underachiever trying to compensate for his shortcomings. You are likely a construction worker that’s flipped a few houses and made a few hundred grand and now you think you’re rich. You don’t understand what true wealth is, kid.

Oh, and you’re still a liar.

#165 dd on 08.23.09 at 10:58 pm

#147 rory

…easy to control access and keep the riff-raff out …
Did you happen to mention that Hasting and Main is the poorest postal code in the country. Yup, Nj always overlooks the issues.

#166 wayne on 08.23.09 at 11:37 pm

#146 – Smart –

I believe what you are saying 100%.

#167 Jay Currie on 08.24.09 at 3:19 am

Olympic fever!

Pop over to MLS and look up residential property listings in Whistler BC. This link might work: whistler.

#168 Peter Wiener on 08.24.09 at 8:55 am

# 164 Mike Hunt

You need help pal.
You are seriously paranoid.
I wonder why?

#169 Mike Hunt on 08.24.09 at 1:12 pm

Because you sound like a sicko.

Let’s just leave it at that. I will agree to leave you alone if you leave me alone.

Peace.

#170 char on 08.24.09 at 6:41 pm

Yes, the CDIC is a crown corporation (just as the FDIC was created by congress, backed by the “full faith of the US govt”). But it’s funded by premiums paid by member banks. We know that the ratio of cash kept on hand vs what’s been loaned out for mortgages, junk based on mortgages, etc is insane. The US has had lots of bank failures, but so far FDIC is holding, because they have way more banks total. We have 6 big ones.

So say BMO fails. My guess is that will exhaust the CDIC. There will then be a run at least on CIBC as our sense of security goes poof. The govt. will finance the shortfall with tax reciepts as the CDIC is crown, but there will be quickly nothing to tax as this thing snowballs, our cash in the banks being really an IOU loaned out for granite countertops. Yes the CDIC is “crown”, but that’s us. If our cash has vanished, how to we rescue cash ?

Jeez, I’m scaring myself. Probably won’t happen.

#171 Dorf on 08.25.09 at 8:02 pm

I hope the genital boys graduate from high school this year.

#172 Dorf on 08.25.09 at 8:16 pm

I bought a house and spent only just less than half of what the bank approved me for. My friends thought I was crazy to buy the older plain jane, when I could afford a nice new executive style home. I watch my friends: both working, mortgage poor, working just to hang onto their house, and realize the reasons why I did not go their route. I wanted something sustainable. I wanted something that I could afford if I lost my job, and had to get a paper route to pay for it.
Now, 12 years after buying, my house is valued at 247% of my purchase price and I am perfectly poised to buy our second house when the time is right.
But not at these prices, I don’t care how low the interest rates are. Remember what I said about sustainability ?
On the other side of the coin, some friends just sold their executive style home, and bought a home worth about 1.6 times as much, and they were already mortgage poor, and working extra jobs to keep it all paid for. They took a 40 year amortization on the new place and I was floored.
What are they thinking ?